UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

For Annual and Transition Reports to Section 13 or 15(d) of the
Securities Exchange Act of 1934

~~(Mark~~ý ~~one~~Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

ý	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the calendar year ended December 31, 2004
or
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required)
For the transition period from to
Commission file number 0-28362

For the calendar year ended December 31, 2005

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required)

For the transition period from to

Commission file number 0-28362

ClearComm, L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware		66-0514434
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
City View Plaza-Suite 700 No. 48 of Road 165
Guaynabo, Puerto Rico		00968
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (787) 620-0140

City View Plaza-Suite 700 No. 48 of Road 165 Guaynabo, Puerto Rico		00968
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (787) 810-5757

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange
Title of Each Class on Which Registered
Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest

(Title of class)

Indicate by check mark ~~whether~~if the registrant: ~~(1) has filed~~is ~~all~~a ~~reports~~well-known ~~required~~seasoned toissuer, beas ~~filed~~defined byin ~~Section~~Rule 13405 ~~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 ý No o~~

~~Indicate~~o byYes ~~check~~ý mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. oNo

Indicate by check mark ~~whether~~if the registrant is ~~an accelerated~~not ~~filer~~required ~~(as~~to ~~defined~~file inreports ~~Rule~~pursuant to Section ~~12b-2~~13 or Section 15(d) of the Act). ~~Yes o No ý~~

~~The~~o ~~Registrant’s~~Yes ~~outstanding~~ý securities consist of units of limited partnership interests which have no readily ascertainable market value since there is no public trading market for these securities on which to base a calculation of aggregate market value.No

~~Documents~~Note ~~incorporated~~– byChecking ~~reference. None.~~the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Note.—If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

ClearComm, L.P.

CLEARCOMM, L.P. (THE “PARTNERSHIP”) RESTATED ITS CONSOLIDATED FINANCIAL STATEMENTS FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2001. OUR PRIOR INDEPENDENT ACCOUNTANTS, ARTHUR ANDERSEN LLP, ARE NOT ABLE TO REISSUE THEIR REPORT RELATING TO THE PARTNERSHIP’S FINANCIAL STATEMENTS FOR 2001 OR TO AUDIT THE RESTATEMENT ADJUSTMENTS BECAUSE THEY CEASED OPERATIONS IN 2002. THE PARTNERSHIP BELIEVES THAT THE EFFECT OF THE ADJUSTMENTS MADE IN THE RESTATED FINANCIAL STATEMENTS, AND THE NATURE OF THE ACCOUNTING ISSUES ADDRESSED BY THOSE ADJUSTMENTS, DO NOT HAVE A MATERIAL EFFECT ON THE PARTNERSHIP’S FINANCIAL POSITION AS A WHOLE OR ON THE PARTNERSHIP’S INVESTORS, CREDITORS, SUPPLIERS, EMPLOYEES OR CUSTOMERS. THEREFORE, THE PARTNERSHIP BELIEVES THAT A RE-AUDIT OF THE PARTNERSHIP’S 2001 CONSOLIDATED FINANCIAL STATEMENTS IS UNNECESSARY. ACCORDINGLY, OUR CONSOLIDATED FINANCIAL STATEMENTS FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2001 IS RESTATED AND UNAUDITED.

THE RESTATEMENTS OF THE PARTNERSHIP’S CONSOLIDATED FINANCIAL STATEMENTS FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2001 IS DESCRIBED IN DETAIL WITHIN ITEM 7, “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”.

IN ADDITION, THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE CALENDAR YEARS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 HAVE BEEN RESTATED TO REFLECT THE CHANGE IN INVENTORY PRICING METHODOLOGY. THESE RESTATEMENTS ARE ALSO DESCRIBED IN DETAIL WITHIN ITEM 7, “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”.

TABLE OF CONTENTS

Part I		3
Item 1.	~~Business~~	3Business
Item 2.	~~Properties~~	8Properties
Item 3.	~~Legal Proceedings~~	8Legal Proceedings
Part II		9
Item 4		Submission of matters to a vote of limited partners
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters	9
Part II
Item 6.	Selected Financial Data	9
Item 5.		Market for Registrant’s Common Equity and Related Stockholder Matters
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 6.		Selected Financial Data
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 8.	Financial Statements and Supplementary Data	21
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	55
Item 8.		Financial Statements and Supplementary Data
Item 9A.	Controls and Procedures	55
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Part III
Item 9A.		Controls and Procedures
Item 10.	Directors and Executive Officers of the Registrant	55
Part III
Item 11.	Executive Compensation	57
Item 10.		Directors and Executive Officers of the Registrant
Item 12.	Security Ownership of Certain Beneficial Owners and Management	58
Item 11.		Executive Compensation
Item 13.	Certain Relationships and Related Transactions	59
Item 12.		Security Ownership of Certain Beneficial Owners and Management
Part IV
Item 13.		Certain Relationships and Related Transactions
Item 14.	Principal Accounting Fees and Services	59
Part IV
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	60
Item 14.		Principal Accounting Fees and Services
SIGNATURES		62
Item 15.		Exhibits, Financial Statement Schedules, and Reports on Form 8-K
SIGNATURES

Part I

FORWARD-LOOKING STATEMENTS

This Form 10-K and future filings by the Partnership on Form 10-Q and Form 8-K and future oral and written statements by the Partnership may include certain forward-looking statements, including (without limitation) statements with respect to anticipated future operating and financial performance, growth opportunities and growth rates, acquisition and divestiture opportunities, and other similar forecasts and statements of expectation. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements by the Partnership are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. The Partnership disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise.

Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Partnership as a result of a number of important factors. Examples of these factors include, without limitation, rapid technological developments and changes in the telecommunications industry; ongoing deregulation (and the resulting likelihood of significantly increased price and product/service competition) in the telecommunications industry as a result of the Telecommunications Act of 1996 and other similar federal and state legislation and the federal and state rules and regulations enacted pursuant to that legislation; regulatory limitations on the Partnership’s ability to compete in the telecommunications services industry; and continuing consolidation in the telecommunications services industry. In addition to these factors, actual future performance, outcomes and results may differ materially because of other, more general, factors including, without limitation, general industry and market conditions and growth rates, domestic and international economic conditions, governmental and public policy changes and the continued availability of financing in the amounts, at the terms and on the conditions necessary to support the Partnership’s future business.

ITEM 1. BUSINESS

General

ClearComm, L.P., a Delaware limited partnership (the “Partnership” or “ClearComm”), was formed on January 24, 1995 under the name PCS 2000, L.P., to own and operate broadband personal communications services (“PCS”) licenses to be acquired in auctions conducted by the Federal Communications Commission (the “FCC”). The Partnership competed for PCS licenses in frequency Block C, set aside for “designated entities” (“Entrepreneurs”) that met certain financial and equity structure requirements and that qualify for certain benefits under rules, regulations and policies of the FCC and related statutory provisions (“FCC Rules”).

The Partnership, through its majority-owned subsidiary, NewComm Wireless Services, Inc. (“NewComm”), owns and operates a state-of-the-art PCS network in Puerto Rico (the “Puerto Rico Network”). The Partnership directly or indirectly through NewComm owns two 15 MHz C-Block PCS licenses covering the entire island of Puerto Rico (the “Puerto Rico Licenses”) and owned four 15 MHz licenses in California (the “California ~~Licenses,” and together with the Puerto Rico~~ Licenses, ~~the “Licenses~~”~~). The California~~ ~~Licenses~~which ~~have~~were ~~been~~ sold ~~and~~in ~~the~~a transaction ~~was~~ approved by the FCC).

~~The~~On November 30, 2005, the Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”) ~~provides~~was ~~that~~amended to extend the date the Partnership will terminate onto December 31, ~~2005~~2010. The Partnership will dissolve on such date (unless terminated earlier or unless the Partnership Agreement is amended to change such date). The Partnership Agreement also provides for a reasonable time to wind-up the affairs of the Partnership in case of termination. The Partnership’s General Partner, SuperTel Communications Corporation, is considering alternatives to dissolution, including an extension of the Partnership’s termination date that would require the consent of the Partnership’s partners.

NewComm

InUnder ~~August 2004,~~ the Partnership’s ~~retained~~direction, the ~~services~~Board of Directors aof ~~consulting~~the ~~firm~~Company ~~(other~~terminated ~~than~~TEM ~~its~~as manager under the management ~~external~~agreement ~~auditors)~~on toOctober 28, ~~audit~~2004. TEM alleged unlawful and wrong termination of the ~~operations~~technology and ~~performance~~management agreement. The Partnership on behalf of ~~NewComm~~the Company ~~under~~was proactively seeking compensation for damages caused by the ~~management~~mismanagement of ~~Telefónica~~TEM ~~Moviles,~~either Sby settlement or within the arbitration process.A. (“On April 21, 2005, the Company and its shareholders entered into a Settlement Agreement and Mutual Release with TEM”) in which all the parties resolved all outstanding disputes. As a result Telefónica no longer provides management services to NewComm but has extended significant financial support in the form of guarantees / lines of credit (see The ~~results~~Settlement Agreement below).

of the audit were reported to the Board of Directors of NewComm on September 30, 2004 with the conclusion that TEM had not performed adequately. Under the Partnership’s direction, the Board of Directors of NewComm terminated TEM as Manager under the Management Agreement on October 28, 2004. Arbitration proceedings have begun in accordance to the Joint Venture Agreement. See discussion below at The Puerto Rico Network and Legal Proceeding sections.

The Puerto Rico Network

The Partnership and NewComm started building its Puerto Rico Network during the first quarter of 1999 and the system commenced commercial operations on September 24, 1999. The Partnership was the fifth entrant into the Puerto Rico wireless telecommunications market. It currently provides wireless coverage in the areas where 95% of the Puerto Rico wireless traffic occurs and expanding. The Partnership has established points of sale in all major shopping districts and has over 200 points of sale throughout Puerto Rico. The Partnership believes that it currently has approximately 8% of the Puerto Rico wireless market.

ToThe ~~build~~Partnership’s ~~and operate its~~ Puerto Rico ~~network,~~Network ~~the~~operates ~~Partnership~~under ~~entered into an agreement, dated February 4, 1999 (~~the ~~“TLD~~image ~~Agreement”)~~and ~~with~~brand ~~Telefónica~~name ~~Larga Distancia de Puerto Rico, Inc. (~~“~~TLD”)~~MoviStar.” ~~TLD~~MoviStar is athe ~~wholly~~PCS ~~owned subsidiary~~brand ofname ~~Telefónica Internacional, S.A. which is a member~~ of the Telefónica, ~~S.A. group (Ticker: TEF) (the “Telefónica~~ Group~~”),~~ in Spain’s ~~largest traded company~~ and ~~one~~certain ofother ~~the~~countries ~~world’s~~in ~~largest~~Latin ~~telecommunication companies~~America. ~~Telefónica~~ ~~Móviles~~As ~~(Ticker: TEM), the wireless communications affiliate~~ part of ~~Telefónica, currently has approximately 32~~ ~~million subscribers worldwide. Pursuant to~~ the ~~terms~~Settlement ~~of the TLD~~ Agreement, the Partnership transferred the Puerto Rico Licenses (including its related debt) and associated business plans and studies to NewComm. TLD provided NewComm a loan of approximately $19.96 million and received a secured convertible promissory note (the “Note”) which entitles TLD to select a director for one of the five NewComm board of director seats (the “Board”). The Note was assigned to TEM ~~on September 23, 2003. The Note is convertible into 49.9% of NewComm’s equity. The Note cannot be converted without FCC authorization. NewComm and TEM~~ entered into a ~~management~~License ~~agreement~~Brand ~~whereby TEM provided day-to-day management services for NewComm, subject to the supervision of NewComm’s Board. Pursuant to a certain Stock Purchase~~ Agreement ~~dated as of March 12, 2002, by and between the~~with Partnership and TLD, the Partnership had agreed to sell 0.2% control interest at market value to TEM. The transfer of this control interest was approved by the FCC during 2004. As part of the requirements of the Stock Purchase Agreement, TEM (and Telefónica Internacional, S.A., its parent company) had agreed to issue their corporate guarantee as collateral for long-term financing of NewComm ofthat ~~approximately $110~~allows ~~million. Together with~~ the ~~Stock Purchase~~use ~~Agreement and as part~~ of the ~~transaction~~MoviStar abrand ~~Shareholders’~~name ~~Agreement~~free ~~and a Sale Agreement were executed between the parties. The Shareholders’ Agreement provides for a great number~~ of ~~general~~cost ~~and specific protections and rights~~ for ~~the Partnership~~5 ~~as a minority shareholder in NewComm~~years. The Sale Agreement provides for a convenient exit for the Partnership from NewComm. Under the Joint Venture Agreement the Partnership’s principal means of exiting from NewComm was by exercising Registration Rights against TEM. Due to Telefónica’s re-organization and new market conditions, the possibility of publicly registering an exclusive wireless service company limited to the Puerto Rico market is very unlikely. However, under the Sale Agreement, the Partnership can force the sale of NewComm to TEM and/or third parties.

The ~~Sale~~Puerto ~~Agreement~~Rico ~~provides~~Network ~~that~~is ~~from and after May 12, 2003, either party (the Partnership or TLD) may trigger~~ a ~~shareholder~~ ~~obligation to sell NewComm. Within 30 days~~ state-of-the-art aCDMA ~~notice of sale, TEM~~ (or“Code ~~the~~Division ~~Partnership~~Multiple ~~as the case may be~~Access”) ~~would have the right to purchase the Partnership’s (or TEM’s) interest~~network. ~~The~~ ~~purchase~~Pursuant ~~price~~ to ~~be paid at that time would be based on~~ a ~~valuation performed by an internationally recognized~~ ~~investment-banking~~roaming ~~firm~~agreement ~~selected~~with bySprint ~~both~~PCS, ~~parties. If~~MoviStar ~~TEM~~customers ~~does~~have ~~not~~mainland ~~exercise its right to buy out~~U.S. ~~the~~coverage ~~Partnership’s~~Lucent ~~interest~~Technologies, Inc. ~~TEM~~(“Lucent”) isbuilt ~~bound, together with~~ the ~~Partnership,~~Puerto toRico ~~proceed~~Network ~~with~~on ~~the~~behalf ~~sales process to attempt a sale~~ of NewComm. ~~TEM~~ ~~and~~The ~~the~~ Partnership ~~are~~continues ~~bound~~optimizing ~~to accept~~ the ~~highest price proposed by an interested buyer, which price must be payable~~network into ~~cash~~maintain ~~or freely tradable securities, or a combination thereof,~~ and ~~which~~offer ~~must be~~better ~~for~~quality aservice ~~price not less than the valuation prepared by the investment banker. At the closing of the sale the Management Agreement and the Technology Transfer Agreement originally held by TLD (and assigned~~ to ~~TEM)~~its ~~will terminate without compensation, and no premium for controlling interest or discount for holding a minority interest in NewComm will apply~~customers.

The Sale Agreement will continue in full force and effect even if the Stock Purchase Agreement with TEM, for whatever reason, does not close. The Stock Purchase Agreement and the Sale Agreement are currently subject to arbitration proceedings that were filed by TEM upon TEM’s termination as manager of NewComm. See Legal Proceedings section below.

The Partnership’s Puerto Rico Network operates under the image and brand name “MoviStar.” MoviStar is the PCS brand name of the Telefónica Group in Spain and certain other countries in Latin America. The Puerto Rico Network is a state-of-the-art CDMA (“Code Division Multiple Access”) network. Pursuant to a roaming agreement with Sprint PCS, MoviStar customers have mainland U.S. coverage.

Lucent Technologies, Inc. (“Lucent”) built the Puerto Rico Network on behalf of NewComm. The Partnership continues optimizing the network to maintain and offer better quality service to its customers.

The Puerto Rico Market

The Partnership believes that the Puerto Rico market provides many unique advantages for telecommunications companies. Puerto Rico is politically stable, as it has been a territory of the United States for over 100 years and its economy is fully integrated with that of the United States mainland. It has the Caribbean’s best-educated, most skilled labor force and the most sophisticated manufacturing and transportation infrastructure. Puerto Rico has a solid base of major manufacturers, which includes Hewlett-Packard Company, Microsoft Corporation, BASF Corporation, Colgate-Palmolive, Johnson & Johnson, Amgen, Pharmacia, and Pfizer Pharmaceutical. Along with its U.S.-linked stability, Puerto Rico offers the advantage of emerging market type growth and significant cash based economy. The Partnership believes that current per capita income and consumption in Puerto Rico, combined with continued economic growth will support continued demand for high quality telephone services, which NewComm is offering.

Competition in Puerto Rico

The continued success of the Partnership’s PCS business in Puerto Rico will depend upon its ability to compete with five other wireless operators (including Verizon, Sprint PCS, SunCom, Centennial and Cingular) and potential future wireless communications providers in the Puerto Rico market. All wireless operators compete in the optimization of their networks to provide a better service for their customers. As wireless use increases, wireless operators compete more directly with traditional landline telephone service providers and other technologies including mobile satellite systems and cable operators offering voice communications. In addition, the availability of new spectrum and resale of ~~existing~~ existing spectrum and the entry of new participants may result in increased competition in the Puerto Rico market. At the end of 2004, Puerto Rico had a wireless market penetration of approximately 4751% while the United States mainland ended the same year with an approximate market penetration of 5770%.

Markets

The following table sets forth, as of December 31, 2004, with respect to each Market in which the Partnership owns a PCS license, the estimated persons of population (“POPs”).

Market Name		2004 POPs*
San Juan, PR		2,364,414
Mayaguez-Aguadilla, PR		1,444,196

* Based on US Census Bureau ~~2000~~2004 figures.

Internet Surfing Stores of Puerto Rico, Inc

On April 16, 2002, the Partnership entered into a Shareholders’ Agreement to form a joint venture with eMilios International, L.L.C., a Florida limited liability company, to promote and establish in Puerto Rico the eMilios concept (described below). The joint venture was formed under a Puerto Rico corporation named Internet Surfing Stores of Puerto Rico, Inc. (“ISS”). The Partnership owns 49% and eMilios International owns 51% of ISS.

The eMilios concept involves internet communication galleries that are geared towards educating people in the use of computers and the internet, and acts as a communication and recreational center as well. The broadband connectivity that is offered at eMilios allows the stores to efficiently offer internet communications and also access to a great variety of interactive content, such as cyber games, as well as software and tools for free lancers and small business entities. The service is provided and collected with a proprietary smart card and software application. The Partnership is responsible for the management and day to day operations of ISS. ISS opened its first store with 48 computer stations on October 23, 2002. A second store with 40 computer stations was inaugurated on January 11, 2003 to serve the western part of Puerto Rico. The Partnership has decided to concentrate its operations on the San Juan area and decided to close the store located in ~~Mayaguez~~Mayagüez effective December 31, 2004. As a result, the Partnership has written down its investment in the subsidiary by $165,306 to reflect the change. ~~The~~ ~~investment~~During ~~has~~2005, anthe ~~exit mechanism~~remaining ~~whereby~~portion atof ~~any time after 2003,~~ the Partnership investment ~~can~~or ~~force~~$217,459 ~~the acquisitions~~was ofentirely ~~its~~written ~~shares~~off indue ~~ISS~~to or the ~~sale~~uncertainty of the San ~~whole~~Juan ~~company~~store’s future profitability.

Regulation

Overview

In 1993, Congress adopted the Omnibus Budget Reconciliation Act of 1993 (the “Reconciliation Act”) which, among other things, mandated auctions for the award of certain FCC licenses, including PCS licenses. Pursuant to authority granted to the FCC by the Reconciliation Act, the FCC awarded PCS licenses through a process of competitive bidding auctions in which there were multiple applications for the same license (the “Auctions”).

PCS is a radio-based transmission technology, which, like cellular technology, uses the same frequencies repeatedly in a multiple-transmitter cell design. PCS is a digital technology, capable of numerous advanced service features, including caller-ID, voice-prompting, voice-recognition, scrambled (secure) calling, message and image delivery, intelligent call transfer and follow-me calling, single number service (the same number can be assigned to multiple PCS telephones in different locations) and auto-trace of crank callers. The Partnership has been offering E-mail and internet access from its handsets since June of 2000. ~~The~~ ~~Partnership~~The Partnership began offering wireless banking services in October of 2000. ~~The~~ The Partnership also pioneered in the Puerto Rico market short text messaging services from its handsets in October of 2001. An average of ~~600~~900,000 text messages per month is being sent by subscribers from their handsets.

Frequency Blocks

The FCC divided PCS into six frequency blocks, designated Blocks A through F, such that there are six overlapping licenses in each market in each geographic area of the country. Blocks A, B and C are 30 MHz blocks, and Blocks D, E and F are 10 MHz blocks. The FCC has created new C2 blocks of 15 MHz in certain markets including Puerto Rico.

Entrepreneur Classes and Economic Preferences

Block C and F licenses were reserved for Entrepreneurs meeting certain limiting criteria set forth in FCC Rules. Entrepreneurs were granted a set of economic preferences in the Auctions. Under FCC Rules, an “Entrepreneur” is defined as an entity that, together with ~~its~~ its affiliates and persons or entities that holds attributable ~~interests~~interest in such entity and their affiliates, has less than (i) $500 million of assets and (ii) $125 million of annual gross revenue over the prior two years. In addition, FCC Rules define ~~three~~ three classes of Entrepreneurs, with each class eligible for different ~~economic~~ economic preferences in the Blocks C and F Auctions. The Partnership’s Entrepreneur qualification is as a “Small Business,” which is an entity that at the date of grant of the license had less than $40 million of aggregate annual gross revenue averaged over the last three years.

Small Businesses were entitled to make interest-only payments for the first six years and can amortize interest and principal over the remaining four years of the license term. The interest rate applicable to Small Businesses is the 10-year ~~treasury~~ treasury note rate at the date of grant of the license. In addition, Small Businesses were entitled to a bidding credit of 25%. In March 1997, the FCC issued an order suspending indefinitely interest payments on all Block C licenses; however, interest continued to accrue. Ultimately, in accordance with the FCC ~~procedures~~ procedures specified in the FCC’s March 24, 1998 Order on Reconsideration of the Second Report and Order (the “Reconsideration Order”), the Partnership commenced interest payments during July, 1998. The Partnership originally owed $51.3 million exclusively in connection with the Puerto Rico License. As of December 31, ~~2004~~2005 the Partnership owes the FCC the principal amount of $3317.65 million.

During the year ended December 31, 2004, the Partnership paid the amount of $11,009,302 including interest and principal. The payment due in October 2004 was not made and was accumulated with its related interest and penalty charge of approximately $122,000. The subsequent payment due in January 2005 was not made. As a result of the Settlement Agreement entered into in April 2005, payments due to the FCC have been made and kept current. As part of the Settlement Agreement a Telefonica Group guaranteed line of credit for $40 million was established for NewComm to draw from to secure payment of the licenses to the FCC.

Build-Out Requirements

The Partnership has complied with its build out requirements for the Puerto Rico Licenses.

Employees

The Partnership, including its majority owned subsidiary NewComm, had approximately ~~378~~420 employees at the end of ~~2004~~2005. ~~On November of 2004, approximately 35 employees were terminated as part of an organizational restructuring plan.~~

Available Information

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to these reports, and other information with the Securities and Exchange Commission (“SEC”). The public ~~may~~ may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1800-SEC-0330. The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We also make available, free of charge, ~~through~~ through our Internet website (www.clearcommlp.com), our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and if available, amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the ~~Securities~~SEC.

Exchange Act of 1934, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

ITEM 2. PROPERTIES

The Partnership leases office space in Hato Rey and Guaynabo, Puerto Rico. In connection with the Partnership’s Puerto Rico Network, NewComm leases sites where its telephone switching equipment, relay stations and other equipment are located, as well as sites and kiosks in malls and shopping centers where it sells its services to the public.

ITEM 3. LEGAL PROCEEDINGS

InThe ~~August 2004, the~~Company ~~Partnership~~has ~~retained~~entered ~~the~~into ~~services of~~ a ~~consulting~~formal ~~firm (other than its~~arbitration ~~external~~process ~~auditors)~~with toTLD, ~~audit~~a ~~the~~Telefonica ~~operations~~S.A. ~~and~~subsidiary, ~~performance~~to ofresolve ~~NewComm~~a ~~under~~claim ~~the management~~ of ~~TEM~~$13,356,098. ~~The~~18. This ~~results~~claim ofis ~~the audit~~for ~~were~~services ~~reported~~rendered prior to the ~~Board~~termination of ~~Directors~~the ~~of NewComm on September 30,~~management ~~2004,~~agreement with the ~~conclusion~~Telefonica ~~that~~Group. ~~TEM~~The ~~had~~process ~~not~~is ~~performed~~in ~~adequately. Under~~an ~~the~~advanced ~~Partnership’s~~stage ~~direction,~~and ~~the Board~~is ofexpected ~~Directors~~to ofbe ~~NewComm~~concluded ~~terminated~~during ~~TEM as~~ the ~~Manager~~month of ~~NewComm~~May ~~under the Management Agreement on October 28, 2004~~2006.

~~TEM filed~~The ~~for~~Company ~~arbitration~~is ~~proceedings~~a defendant in ~~accordance~~a ~~with~~lawsuit ~~the~~brought ~~Joint Venture~~by ~~Agreement~~Atento de Puerto Rico, Inc. ~~TEM~~ ~~alleges~~(Atento) ~~unlawful~~alleging ~~and~~breach of contract, damages, ~~wrongful~~and ~~termination~~collection of ~~the~~amounts ~~Technology~~for ~~and~~services ~~Management Agreements~~rendered. ~~The~~ ~~Partnership,~~Atento onis ~~behalf~~another ofwholly ~~NewComm~~owned Telefonica, ~~intends to~~S.A. ~~proactively~~subsidiary ~~demand~~that ~~and~~had ~~seek~~a ~~compensation~~contract ~~for~~to ~~damages~~provide ~~caused~~call bycenter ~~what the~~services ~~Partnership~~to ~~believes~~NewComm. ~~was~~The ~~TEM’s~~plaintiff ~~nonperformance~~is ~~and~~seeking ~~breach~~$665,540 ($934,812 of ~~the~~this ~~Technology~~amount ~~and~~was owed ~~Management~~and ~~Agreements.~~accrued ~~Javier~~by O.NewComm ~~Lamoso~~as ~~has~~of ~~assumed~~December 31, ~~responsibility~~2005) for ~~the~~services already ~~day-~~rendered to~~-day~~ ~~management~~the ofCompany ~~NewComm~~and ~~since~~$1,760,000 ~~the~~for ~~termination~~breach of ~~the~~contract. ~~Technology~~At ~~and~~this time an ~~Management~~outcome ~~Agreements~~can not be predicted.

~~From~~The ~~time~~Company tois ~~time~~also the ~~Partnership~~defendant isin ~~involved~~several inlegal cases ~~litigation~~related to former employees, arising ~~from~~in the ordinary course of business,. ~~some~~In the opinion of ~~which~~management, isafter ~~ongoing.~~consultation ~~The~~with ~~General~~legal ~~Partner~~counsel, ~~does~~the ~~not~~ultimate disposition ~~believe~~of ~~that~~these ~~any~~matters ~~litigation involving the Partnership~~ will not have a material adverse effect on the ~~Partnership~~ Company’s ~~business~~financial orposition ~~financial~~and ~~condition~~results of operations.

8ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS

~~Part~~On September II16, 2005 the Partnership’s General Partner, SuperTel Communications Corp., initiated a consent solicitation among its partners proposing to extend the Partnership’s termination date until December 31, 2010. By November 30, 2005, the final day of the solicitation period, a total of 2,072.7 Partnership Units were voted representing 74.96% of the 2,765.20 Partnership Units outstanding and entitled to vote. Of the Partnership Units voted, 1,920.6 Partnership Units (92% of the participants) voted in favor of the extension, 129.3 Partnership Units voted against the extension and 22.8 abstained. As a result, the Partnership’s partners approved the amendment to the Partnership’s Agreement of Limited Partnership, as previously amended, to extend the latest date on which the Partnership will dissolve from December 31, 2005 to December 31, 2010.

~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS~~6

There is no trading market for the Units, and it is unlikely that a trading market will exist at any time in the future. Any transfer of the Units is severely restricted by certain conditions outlined in the Partnership Agreement, and requires the consent of the Partnership’s General Partner, SuperTel Communications Corp., which can be withheld in the General Partner’s sole reasonable discretion.Part II

AsThere ofis ~~December 31,~~no ~~2004~~trading market for the Units, and it is unlikely that a trading market will exist at any time in the ~~General~~future. ~~Partner~~Any transfer of the Units is severely restricted by certain ~~holds~~conditions ~~one~~outlined ~~general~~in ~~partnership~~the ~~interest~~Partnership Agreement, and ~~approximately~~requires ~~1,445~~the ~~investors~~consent ~~hold~~of anthe ~~aggregate~~Partnership’s ofGeneral 2Partner,~~765.20~~ ~~Units~~SuperTel ofCommunications ~~limited~~Corp., ~~partnership~~which ~~interest. There~~can ~~are~~be withheld ~~3.3~~in ~~Units~~the ~~held~~General asPartner’s ~~treasury~~sole reasonable discretion.

~~There~~During ~~have been no cash distributions to~~ the ~~Investors to~~months ~~date. The following summary~~ of ~~certain~~ ~~allocation~~May and ~~provisions~~ June of ~~the Partnership Agreement is entirely~~ ~~qualified~~2004, ~~by reference to~~ the Partnership ~~Agreement,~~conducted ~~which~~a ~~was~~voluntary ~~previously attached~~tender asoffer anprogram ~~Exhibit~~ to ~~the Partnership’s Form 10-K, filed March 31,~~all ~~1997. As~~partners aholding ~~general~~less ~~rule,~~than ~~the~~2 ~~General Partner~~Units. ~~shall~~The ~~cause~~program ~~the~~was ~~Partnership~~available to ~~make~~over ~~distributions~~1, ~~if any, of cash flow~~100 ~~received~~partners. ~~from~~The ~~operations~~price ofper ~~the~~Unit ~~Partnership~~offered ~~which~~was ~~the General Partner~~$8, ~~in its sole discretion, determines to distribute to Investors (“Cash Flow”)~~500. ~~All~~00. ~~distributions~~A ~~will~~total beof ~~made~~130 ~~75% to the~~Unit-holders ~~Investors~~tendered ~~and~~their ~~25%~~Units, toamounting ~~the General Partner. Distributions~~ to ~~the~~approximately ~~Investors~~140 ~~shall~~Units bere-purchased ~~made in proportion to the number~~and ofrepresenting ~~Units~~approximately ~~held~~a by5% ~~each~~reduction ~~Investor on the last day~~ of ~~the~~outstanding ~~calendar~~partnership ~~quarter to which such distribution relates~~Units.

~~The~~As ~~availability~~ of ~~Cash~~December 31, ~~Flow for distribution to the~~2005, ~~Investors is dependent upon~~ the ~~Partnership~~General ~~earning~~Partner ~~more~~holds ~~than~~one ~~its expenses. No~~general ~~assurance~~partnership ~~can be given that income in any given year will be sufficient to generate Cash Flow for distribution to the Investors or that there will not be cash deficits. Further~~interest, ~~because~~ ~~operating expenses are subject to increases,~~ and ~~increases in revenue~~approximately ~~from~~1,445 ~~Partnership~~investors ~~operations~~hold ~~may~~an beaggregate ~~subject~~of ~~to market limitations~~2,768.20 ~~income~~Units ~~from the~~of ~~Partnership~~limited ~~in any year may not be sufficient to generate Cash Flow~~partnership interest.

~~Net~~There ~~losses~~have ~~from~~been ~~operations~~no ofcash distributions to the ~~Partnership~~investors ~~will~~to ~~be allocated~~date. asThe ~~follows:~~following ~~first,~~summary toof certain allocation provisions of the ~~Investors~~Partnership toAgreement ~~offset~~is ~~any~~entirely ~~profits~~qualified ~~previously~~by ~~allocated~~reference to the ~~Investors~~Partnership ~~and second~~Agreement, ~~75%~~which towas ~~the~~previously ~~Investors~~attached inas ~~accordance~~an ~~with~~Exhibit to the ~~number~~Partnership’s ofForm 10-K, ~~Units~~filed ~~held~~March 31, by1997. ~~each~~As ~~Investor~~a ~~and~~general ~~25% to~~ rule, the General Partner~~. The~~ ~~gain~~shall ~~from~~cause athe ~~financing,~~Partnership ~~refinancing~~to make distributions, ~~sale~~if any, orof ~~other~~cash ~~disposition~~flow received from operations of the Partnership’s ~~assets~~which ~~(or~~the ~~from~~General Partner, ~~similar~~in ~~capital transactions)~~its ~~(collectively~~sole discretion, ~~“Capital~~determines ~~Transactions~~to distribute to investors (“Cash Flow”). All distributions will be ~~allocated~~made 75% to the ~~Investors~~investors and 25% to the General Partner. ~~The~~ ~~loss~~Distributions ~~from~~to athe ~~Capital~~investors ~~Transaction~~shall ~~will~~ be ~~allocated~~made in ~~the~~proportion ~~same way~~to ~~that net losses from~~ the ~~Partnership’s~~number ~~operations~~of ~~are~~Units ~~allocated. Further~~held ~~adjustments~~by toeach ~~capital~~investor ~~accounts~~on ~~may be~~the ~~required~~last ~~and~~day ~~are~~of ~~authorized by~~ the ~~Partnership~~calendar quarter ~~Agreement~~ to ~~comply~~which ~~with~~such ~~the provisions~~distribution ~~of any future Internal Revenue Service regulations~~relates.

The ~~Partnership~~availability ~~may~~of ~~realize net proceeds (that is,~~Cash ~~proceeds~~Flow ~~available~~for ~~after~~distribution to the ~~payment~~investors ofis ~~certain~~dependent ~~fees~~upon ~~and~~the ~~expenses including~~Partnership ~~payments~~earning tomore ~~the~~than ~~General Partner or~~ its ~~affiliates) from a Capital Transaction~~expenses. No assurance can be given~~, however,~~ asthat toincome ~~the~~in ~~availability~~any given ofyear awill ~~Capital~~be ~~Transaction~~sufficient orto ~~the~~generate ~~amount~~Cash ofFlow ~~net cash~~for ~~proceeds~~distribution ~~therefrom. Any~~to ~~amounts received by~~ the ~~Partnership~~investors or ~~which~~that ~~constitute~~there ~~amounts~~will ~~derived~~not ~~from~~be acash ~~Capital Transaction~~deficits. Further, ~~will~~because beoperating ~~treated~~expenses are assubject ~~being~~to ~~received~~increases, ~~from~~and ~~operations~~increases ofin ~~the~~revenue from Partnership ~~and~~ ~~will~~operations may be subject ~~distributed~~ to ~~Investors~~market ~~only~~limitations, ifincome from the ~~General~~Partnership ~~Partner~~in ~~determines~~any toyear may not dobe sosufficient to generate Cash Flow.

~~ITEM~~Net 6losses from operations of the Partnership will be allocated as follows: first, to the investors to offset any profits previously allocated to the investors and second, 75% to the investors in accordance with the number of Units held by each investor and 25% to the General Partner. ~~SELECTED~~The ~~FINANCIAL~~gain ~~DATA~~from a financing, refinancing, sale or other disposition of the Partnership’s assets (or from similar capital transactions) (collectively, “Capital Transactions”) will be allocated 75% to the investors and 25% to the General Partner. The loss from a Capital Transaction will be allocated in the same way that net losses from the Partnership’s operations are allocated. Further adjustments to capital accounts may be required and are authorized by the Partnership Agreement to comply with the provisions of any future Internal Revenue Service regulations.

The ~~following~~Partnership ~~table~~may realize net ~~summarizes~~proceeds ~~selected~~(that ~~consolidated financial~~is, ~~data~~proceeds ofavailable after the ~~Partnership~~payment ~~from~~of certain fees and expenses including payments to the ~~period~~General Partner or its affiliates) from ~~January 1~~a Capital Transaction. No assurance can be given, ~~2002~~however, as to ~~December 31,~~the availability ~~2002,~~of ~~from~~a ~~January 1,~~Capital ~~2003~~Transaction toor ~~December 31,~~the ~~2003~~amount ~~and~~of net cash proceeds there from. ~~January 1,~~Any ~~2004~~amounts toreceived ~~December 31,~~by ~~2004. This~~the Partnership which constitute amounts derived from a ~~information~~Capital ~~should~~Transaction, will be ~~read~~treated inas ~~conjunction~~being ~~with~~received ~~the~~from ~~Partnership’s~~operations ~~audited~~of the ~~consolidated~~Partnership ~~financial~~and ~~statements~~will ~~and~~be ~~related~~distributed ~~notes~~to ~~thereto~~investors ~~and~~only ~~management~~if the General Partner ~~discussion~~determines ~~contained~~to ~~herein~~do so.

StatementsITEM of6. OperationsSELECTED DataFINANCIAL DATA

	December 31,			December 31,			December 31,			Percent Increase/Decrease (-)
	2004			2003			2002			2004 vs 2003		2003 vs 2002
Revenues:
Service revenues	$	100,336,047		$	101,557,423		$	99,779,656		-1	%	2	%
Handsets and accessories sales	4,665,889			7,336,689			8,177,441			-36	%	-10	%
Total Revenues	105,001,936			108,894,112			107,957,097			-4	%	1	%
Expenses:
Operating expenses	107,644,333			100,086,717			103,734,297			8	%	-4	%
Income (loss) from operations	(2,642,397		)	8,807,395			4,222,800			-130	%	109	%
Interest expense	(9,470,793		)	(13,312,468		)	(16,212,644		)	-29	%	-18	%
Depreciation and amortization	(17,811,034		)	(17,272,191		)	(14,171,258		)	3	%	22	%
Loss before other income (expense)	(29,924,224		)	(21,777,264		)	(26,161,102		)	37	%	-17	%
Other Income (expense)
Gain on sale of California Licenses	4,168			—			—			—		—
Gain on sale of investment in stock of subsidiary	—			—			13,000,000			—		-100	%
Equity in net loss of subsidiary	(115,382		)	(140,608		)	(114,746		)	-18	%	23	%
Interest income	126,827			213,369			249,661			-41	%	-15	%
Other	1,292			337			1,113			283	%	-70	%
Write-down of investment in subsidiary	(165,306		)	—			—			-100	%	—
Realized loss on sale of investment in securities	(56,518		)	—			—			-100	%	—
Loss on write-off of inventories	—			(4,742,559		)	—			-100	%	-100	%
Write-off of discount on note payable to FCC	—			(3,913,661		)	—			-100	%	100	%
Net loss	$	(30,129,143	)	$	(30,360,386	)	$	(13,025,074	)	-1	%	133	%
Net loss attributable to General Partner	$	(30,129,143	)	$	(30,360,386	)	$	(13,025,074	)	-1	%	133	%
Net loss attributable to Limited Partners	$	—		$	—		$	—		—		—

The following table summarizes selected consolidated financial data of the Partnership from the period from January 1, 2001 to December 31, 2001, from January 1, 2002 to December 31, 2002, from January 1, 2003 to December 31, 2003, from January 1, 2004 to December 31, 2004 and from January 1, 2005 to December 31, 2005. This information should be read in conjunction with the Partnership’s audited consolidated financial statements and related notes thereto and management discussion contained herein.

10Statements of Operations Data

Balance Sheets Data

December 31,

2005

2004

2003

2002

2001

(Restated)

(Restated and
Unaudited)

Revenues:

Service revenues

84,041,902

100,336,047

101,557,423

99,779,656

112,025,407

Handsets and accessories sales

4,882,359

4,665,889

7,336,689

8,177,441

11,710,520

Total Revenues

88,924,261

105,001,936

108,894,112

107,957,097

123,735,927

Expenses:

Operating expenses

98,750,982

127,160,343

117,358,908

117,905,555

136,940,300

Income (loss) from operations

(9,826,721

)

(22,158,407

)

(8,464,796

)

(9,948,458

)

(13,204,373

)

Interest expense

(14,340,849

)

(9,470,793

)

(13,312,468

)

(16,212,644

)

(20,172,216

)

Loss before other income (expense)

(24,167,570

)

(31,629,200

)

(21,777,264

)

(26,161,102

)

(33,376,589

)

Other Income (expense)

Gain on sale of California Licenses

—

4,168

—

Gain on sale of investment in stock of subsidiary

—

13,000,000

—

Equity in net loss of subsidiary

(30,000

)

(115,382

)

(140,608

)

(114,746

)

—

Interest income

675,473

126,827

213,369

249,661

548,002

Gain on sale of Visalia-Porterville license

—

4,814,337

Other

—

1,292

337

1,113

—

Write-down of investment in subsidiary

(217,959

)

(165,306

)

—

Realized loss on sale of investment in securities

—

(56,518

)

—

Write-off of discount on note payable to FCC

(3,913,661

)

Net loss

(23,740,056

)

(31,834,119

)

(25,617,827

)

(13,025,074

)

(28,014,250

)

Net loss attributable to General Partner

(23,740,056

)

(31,834,119

)

(25,617,827

)

(13,025,074

)

(28,014,250

)

Net loss attributable to Limited Partners

—

Net loss per unit attributable to Limited Partners

—

(9,035

)

(5,725

)

	December 31,			December 31,			December 31,			Percent Increase/Decrease (-)
	2004			2003			2002			2004 vs 2003		2003 vs 2002
ASSETS:
Cash and cash equivalents	$	10,612,430		$	1,007,353		$	22,709,786		953	%	-96	%
Cash in escrow account	—			1,500,000			—			-100	%	100	%
Accounts receivable, net	7,909,573			12,297,162			11,594,949			-36	%	6	%
Accounts receivable, other	4,204,524			7,457,028			6,483,255			-44	%	15	%
Insurance claim receivable	403,657			—			270,002			100	%	-100	%
Interest receivable	20,000			14,000			8,000			43	%	75	%
Inventories	1,304,392			3,908,736			10,461,112			-67	%	-63	%
Prepaid expenses	841,750			672,406			625,610			25	%	7	%
Investment in Securities	—			7,338,288			10,000,000			-100	%	-27	%
Leasehold rights, net	3,314,144			—			—			100	%	0	%
Investment in Subsidiary	247,959			397,980			277,254			-38	%	44	%
PCS licenses, net	46,750,449			57,517,974			57,517,974			-19	%	0	%
Deferred financing costs	635,824			774,363			901,235			-18	%	-14	%
Note receivable from officer	100,000			100,000			100,000			0	%	0	%
Property and equipment, net	80,546,773			90,753,422			101,931,922			-11	%	-11	%
	$	156,891,475		$	183,738,712		$	222,881,099		-15	%	-18	%
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT):
Accounts payable and accrued Liabilities	$	53,900,719		$	40,224,333		$	47,022,094		21	%	-14	%
Notes payable — short-term	122,548,553			113,816,297			82,647,544			20	%	38	%
Notes payable — long-term	99,423,894			117,390,809			150,505,987			-23	%	-22	%
Unitholders’ capital (deficit) 2,765.20 Units in 2004, 2,906.1 Units in 2003, 2002, and 1 general Partnership interest	(118,981,691		)	(87,692,727		)	(57,294,526		)	36	%	53	%
	$	156,891,475		$	183,738,712		$	222,881,099		-15	%	-18	%
BOOK VALUE PER UNIT	$	(43,013	)	$	(30,165	)	$	(19,708	)	36	%	53	%

11Balance Sheets Data

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	December 31,			December 31,			December 31,			December 31,			December 31,
	2005			2004			2003			2002			2001
													(unaudited
				(restated)			(restated)						and restated)
ASSETS:
Cash and cash equivalents	$	6,609,074		$	10,612,430		$	1,007,353		$	22,709,786		$	10,241,902
Cash in escrow account	—			—			1,500,000			—			—
Accounts receivable, net	6,127,025			7,909,573			12,297,162			11,594,949			19,099,986
Accounts receivable, other	1,851,278			4,204,524			7,457,028			6,483,255			—
Insurance claim receivable	—			403,657			—			270,002			1,496,324
Interest receivable	—			20,000			14,000			8,000			2,000
Inventories	2,953,707			4,341,975			8,651,295			10,461,112			10,305,254
Prepaid expenses	1,389,516			841,750			672,406			625,610			652,279
Investment in Securities	—			—			7,338,288			10,000,000			—
Leasehold rights, net	3,465,685			3,314,144			—			—			—
Investment in Subsidiary	—			247,959			397,980			277,254			—
PCS licenses, net	46,750,449			46,750,449			57,517,974			57,517,974			57,517,974
Deferred financing costs	658,660			635,824			774,363			901,235			906,731
Note receivable from officer	—			100,000			100,000			100,000			100,000
Property and equipment, net	68,676,259			80,546,773			90,753,422			101,931,922			102,095,953

	$	138,481,653		$	159,929,058		$	188,481,271		$	222,881,099		$	202,418,403

LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT):
Accounts payable and accrued Liabilities	$	37,256,948		$	48,810,130		$	40,224,333		$	47,022,094		$	41,642,052
Notes payable — short-term	14,162,119			136,836,780			113,816,305			82,647,544			133,321,837
Notes payable — long-term	143,705,806			90,226,258			117,390,809			150,505,987			81,723,962

Unitholders’ capital (deficit)
2768.2 in 2005, 2765.2 in 2004, 2906.1 in 2003, 2002 and 2001, and 1 General Partnership interest	(56,643,220		)	(115,944,108		)	(82,950,176		)	(57,294,526		)	(54,269,448		)

	$	138,481,653		$	159,929,058		$	188,481,271		$	222,881,099		$	202,418,403

BOOK VALUE PER UNIT	$	(50,026	)	$	(41,930	)	$	(28,534	)	$	(19,708	)	$	(18,668	)

~~Introduction~~9

~~The~~ITEM ~~Partnership was formed in January 1995 and is managed by its General Partner, SuperTel Communications Corp~~7. ~~The~~ ~~Partnership~~MANAGEMENT’S ~~was~~DISCUSSION ~~organized~~AND toANALYSIS ~~acquire, own,~~OF ~~consult~~FINANCIAL ~~and~~CONDITION ~~operate~~AND ~~personal~~RESULTS ~~communication~~OF services (PCS) licenses in the Block C band and to take advantage of the benefits that the FCC has set aside for Entrepreneurs. The Partnership is the controlling entity of NewComm, which in turn owns and operates two 15 MHz PCS licenses covering Puerto Rico (“the Puerto Rico Licenses”).OPERATIONS

The Partnership owned certain PCS licenses in California. On August 28, 2000, the Partnership entered into a Purchase and Sale Agreement with Leap Wireless International (“Leap Wireless”), pursuant to which the Partnership sold the Visalia-Porterville license to Leap Wireless in exchange for a $9,500,000 cash payment. The sale was approved by the FCC and closed on June 8, 2001.Introduction

OnThe ~~November~~Partnership was formed in January ~~26,~~1995 ~~2003,~~and ~~the~~is ~~Partnership~~managed ~~entered into~~by aits ~~Purchase~~General ~~and~~Partner, ~~Sale~~SuperTel Communications ~~Agreement~~Corp. ~~with~~The ~~Metro~~Partnership ~~PCS~~was ~~pursuant~~organized to ~~which~~acquire, ~~the~~own, consult and ~~Partnership~~operate ~~sold~~personal ~~all~~communication ofservices ~~its~~(PCS) ~~remaining~~licenses ~~California~~in ~~Licenses. The~~the ~~sale~~Block ~~was~~C ~~approved~~band byand to take advantage of the ~~FCC~~benefits ~~and~~that the FCC has set aside for Entrepreneurs. ~~licenses~~The ~~were~~Partnership ~~transferred~~is tothe ~~Metro~~controlling ~~PCS~~entity onof ~~April 15~~NewComm, ~~2004~~which ~~for~~in aturn ~~$10,900,000~~owns and ~~cash~~operates ~~payment. The~~two ~~Partnership~~15 ~~has~~MHz ~~no other~~PCS licenses incovering ~~California~~Puerto Rico (“the Puerto Rico Licenses”).

~~The~~NewComm ~~Partnership~~and ~~commenced~~the ~~commercial~~Partnership ~~operations~~entered ofinto ~~its~~agreements ~~PCS~~with ~~network~~the inTelefónica ~~Puerto~~Group, ~~Rico~~whereby onTEM ~~September 24,~~would ~~1999,~~design ~~when~~and itoperate ~~began offering~~a ~~wireless~~state-of-the-art ~~services~~PCS network (constructed by Lucent) in Puerto Rico; tomanage the ~~public.~~ ~~Prior~~Company tofor ~~that~~a ~~date,~~fee; provide its ~~revenues~~MoviStar ~~had consisted of interest income~~brand ~~only. Since~~name; ~~the~~design ~~Partnership commenced commercial operations in 1999,~~ the ~~comparisons~~network; ~~presented~~and ~~below~~provide ~~may~~long ~~not~~distance ~~be indicative of future operations~~services.

The ~~Partnership~~Company ~~established~~commenced ~~its~~operations ~~Puerto~~in ~~Rico network by~~September 1999 ~~forming~~and agrew ~~wholly~~rapidly. ~~owned~~By ~~subsidiary~~2003, ~~NewComm,~~the onCompany ~~January 29,~~had ~~1999. On February 4~~175,000 ~~1999,~~subscribers ~~the~~with ~~Partnership and~~$109 ~~NewComm~~million ~~entered~~in ~~into~~revenues. anFrom ~~agreement~~this ~~with TLD~~peak, ~~whereby~~ the ~~Partnership~~Company ~~contributed its~~started ~~two Puerto Rico Licenses~~ to ~~NewComm~~lose ~~and TLD provided NewComm a $19~~subscribers,~~960,000~~ ~~loan~~revenue toand ~~develop~~cash ~~the Puerto Rico Licenses~~flow. ~~TLD’s~~ ~~loan~~Concerned isabout ~~pursuant~~the todeclining aresults, ~~secured convertible promissory note (~~the ~~“Note”)~~Board ~~which~~canceled isthe ~~convertible~~management ~~into~~and ~~49.9%~~operating ofagreements ~~NewComm’s~~with ~~equity. The~~TEM ~~Note~~in ~~could not be converted without FCC~~October 2004 ~~authorization,~~and ~~which~~installed ~~was~~the ~~granted~~current inmanagement ~~2004~~team.

~~The~~Current ~~Partnership~~management ~~has~~took ~~agreed~~steps to ~~sell~~reduce ~~shares~~expenses including inbringing ~~NewComm to~~core ~~TEM~~functions in-house: ~~sufficient~~Customer ~~amount~~Call toService ~~provide TEM~~ (formerly with anAtento, ~~additional~~a ~~0.2%~~subsidiary ~~share interest~~of inTelefónica); ~~NewComm,~~Logistics ~~enabling~~(formerly ~~TEM~~with toBrightStar); and ~~have~~Collections a(NCO ~~total~~and ofDun & ~~50.1%~~Bradstreet); ~~control~~and ~~interest~~migrated inall data ~~NewComm. The~~center ~~transaction~~operations ~~involves~~to a ~~Stock~~ ~~Purchase~~location ~~Agreement,~~other athan ~~Shareholders~~TLD. ~~Agreement~~In addition, ~~and~~management undertook aan ~~Sale~~audit ~~Agreement. A~~of ~~summary~~the ofcustomer base which resulted in the ~~terms~~disconnection of several ~~the~~thousand ~~sale~~lower-quality customers; reestablished and ~~these~~tightened credit ~~agreements~~policies isto ~~provided~~reduce ~~below~~bad debt and customer fraud; and enhanced cash management systems.

~~The~~Management ~~Stock~~believes ~~Purchase~~that ~~Agreement~~these corrective measures have better positioned the Company in the market place. Telefónica no longer provides management services to the Company but has extended significant financial support in the form of guarantees / lines of credit.

~~The purchase price for the 0.2% share interest in~~ NewComm ~~will be determined after all conditions to closing are obtained. The principal conditions for this closing are~~’s ~~the~~Settlement closing of the long term financing for NewComm and the final approval by the FCC, which was granted in 2004. At such time, the Partnership and TEM will select an internationally recognized investment-banking firm who will perform a valuation of the shares to be sold. The investment banker will have an agreed upon period of time to prepare the valuation of the shares. After delivery of the valuation, a closing will occur.Agreement

~~The~~Under ~~investment~~the ~~banking~~Partnership’s ~~firm~~direction, ~~will~~the ~~use~~Board ~~a combination~~ of ~~various~~Directors ~~methodologies~~of ~~for~~the ~~its~~Company ~~valuation,~~terminated ~~including: discounted~~TEM ~~cash~~as ~~flows,~~manager ~~comparable~~under the management ~~transactions~~agreement ~~and~~on ~~trading~~October 28, ~~prices~~2004. ofTEM ~~comparable~~alleged ~~transactions,~~unlawful and ~~trading prices~~wrongful termination of ~~comparable~~the ~~publicly~~technology ~~held~~and ~~companies;~~management ~~and~~agreement. inThe ~~the~~Partnership ~~application~~on behalf of ~~such~~the Company was proactively seeking compensation for damages caused ~~methodologies~~by ~~will~~the ~~use~~mismanagement ~~acceptable~~of ~~industry~~TEM ~~standards. Payment~~either ~~will~~by besettlement inor ~~cash~~within the arbitration process.

12On April 21, 2005, the Company and its shareholders entered into a Settlement Agreement and Mutual Release with TEM in which all the parties resolved all outstanding disputes. The parties agreed to the following:

~~The~~• A mutual ~~Shareholders~~waiver ~~Agreement~~and release between all parties.

~~In consideration~~ • Payment of ~~the~~$4,392,978.55 ~~sale of a controlling interest~~ in ~~NewComm~~full asatisfaction ~~new Shareholders Agreement will become effective upon the closing~~ of the ~~Stock~~technology ~~Purchase~~transfer ~~Agreement. The Shareholders~~fee ~~Agreement~~due ~~will~~to ~~incorporate all of the rights and benefits~~ TEM under the ~~current~~ ~~Joint~~technology ~~Venture~~transfer ~~Agreement,~~agreement ~~which~~through ~~include~~issuance ~~rights~~ of ~~first~~a ~~refusal,~~convertible ~~pre-emptive~~promissory ~~rights,~~note ~~drag-along~~(subsequently ~~rights,~~converted ~~registration~~to ~~rights, piggy back rights, financial reporting and other rights~~capital).

~~In addition to the above, the Partnership will have~~• Payment ~~approval rights with respect to a number~~ of ~~NewComm’s actions including the following: any transaction between NewComm and a shareholder or an affiliate of such shareholder~~$2,239,492.21 other than the Management Agreement and the Technology Transfer Agreement; the annual strategic business plan and operating budgets for each calendar year and any variations or modifications which individually or in ~~the~~full ~~aggregate~~satisfaction ~~exceed 10 percent~~ of the ~~operating~~management ~~budget~~fee ~~for~~due ~~such annual period; the appointment of the general manager, the director of finance and all directors of each division of NewComm, as well as the compensation of each such person, consent~~ to ~~which~~TEM ~~shall not be unreasonably withheld; the engagement of~~under ~~a new marketing consultant and~~ the ~~employment~~management ofagreement ~~marketing~~through ~~strategies,~~issuance ~~promotions, advertising and product development different from those in effect on the date hereof, consent to which shall not unreasonably be withheld; any modification to the Certificate~~ of ~~Incorporation or Bylaws of NewComm that would have an adverse effect on any rights granted to~~ a ~~shareholder~~convertible ~~thereunder~~promissory ornote ~~under~~(subsequently ~~applicable~~converted ~~law; and any amendments or modifications~~ to ~~the Management Agreement or the Technology Transfer Agreement in effect as of the Effective Date~~capital). ~~The Partnership will have the right to appoint four directors and TEM will have the right to appoint five directors.~~

13• Payment to ClearComm and TEM of $11,447,758.28 and $11,396,338.88 respectively in full satisfaction of the loans granted for purposes of meeting the matured portion of the FCC debt through issuance of a convertible promissory note (subsequently converted to capital).

~~The~~• In addition, ~~Sale~~$62.4 ~~Agreement~~million in other notes and interest payable to TEM were converted to capital, for a total $80.5 million. Upon conversion of all convertible promissory notes, TEM Puerto Rico Inc. received an aggregate amount of shares of the Company equal to 49.9% and the other stockholders hold an aggregate amount of shares of the Company equal to 50.1%.

~~The new Sale Agreement provides that the Partnership~~• Forgiveness ~~(or~~by TEM) ~~may trigger a shareholder obligation to sell NewComm. Within 30 days~~ of ~~a notice of sale~~$1, ~~TEM (or the Partnership as the case may be) would have the right to purchase the Partnership’s (or TEM’s) interest~~859,068. ~~The purchase~~97 ~~price~~corresponding to beall ~~paid~~amounts atoutstanding ~~that~~with ~~time~~TMmas ~~would be based on~~ (a ~~valuation performed~~ byTEM ~~the~~affiliate) ~~investment-banking firm that prepared the valuation~~ under the ~~Stock Purchase~~SCL ~~Agreement~~agreements.

If• Agreement on ~~TEM~~premium ~~does not exercise its right~~ to ~~buy~~be ~~out~~paid ~~the Partnership’s~~by ~~interest,~~TEM/TEM ~~the~~Puerto ~~shareholders~~Rico ~~will~~Inc. ~~be bound~~ to ~~proceed~~the ~~with~~other ~~the~~shareholders ~~sales~~upon ~~process~~a topotential ~~attempt~~liquidation or a ~~sale~~change ofin ~~NewComm~~control. ~~All~~ ~~shareholders~~TEM ~~are bound to cooperate~~ and/or ~~undertake~~TEM ~~all~~Puerto ~~that is~~Rico ~~necessary in that effort~~Inc. ~~Further,~~ ~~the shareholders~~shall ~~are~~pay ~~bound~~a topremium ~~accept~~from the ~~highest~~liquidation/sale ~~price~~proceeds ~~proposed~~that ~~by an interested buyer, which price must be payable~~ in ~~cash~~any ~~or freely tradable securities, or a~~event ~~combination~~will ~~thereof, and which must be for a price~~ not ~~less~~exceed ~~than~~16.6% ~~the~~of ~~valuation prepared by~~ the ~~investment~~equity ~~banker~~valuation.

Some additional points are that at the closing of the sale of NewComm the Management Agreement and the Technology Transfer Agreement held now by TEM will terminate. Also, no premium for controlling interest or discount for holding a minority interest in NewComm will apply.10

~~The~~• In the ~~Sale~~event ~~Agreement~~that ~~shall~~as ~~continue~~of September 30, 2006, NewComm’s net income, as determined in ~~full~~accordance ~~force~~with U.S. generally accepted accounting principles and ~~effect~~measured ~~even~~on ifthe basis of EBITDA for the ~~Stock~~twelve-month ~~Purchase~~period ~~Agreement~~then ~~with~~ended, is less than $10,970,000, TEM may require that the Partnership, ~~for~~and ~~whatever~~NewComm’s shareholders, ~~reason~~together with TEM Puerto Rico, ~~does~~sell their respective interest in ~~not~~NewComm ~~close~~to a third party.

~~Project~~• Amend the ~~Finance~~Stock ~~Facility~~Purchase Agreement in order to extend by 3 ½ years, to approximately October 2008, TEM Puerto Rico’s option to buy a majority interest in NewComm and to clarify the procedures that would apply upon the sale of NewComm to a third-party purchaser in the event that neither TEM Puerto Rico, nor the Partnership exercised its rights under the Sale Agreement to purchase NewComm.

~~With~~• As part of the ~~signing~~Settlement ofAgreement, ~~the~~TEM ~~Stock~~entered ~~Purchase~~into ~~Agreement,~~a License Brand ~~ABN/AMRO~~Agreement ~~(the~~with ~~“Bank”)~~NewComm ~~has~~that ~~proceeded~~allows tothe ~~work~~use ~~towards~~of ~~providing~~the aMoviStar ~~$110~~brand ~~million Project~~name ~~Finance~~free ~~Facility~~of cost for ~~NewComm~~5 years.

~~An agreement restructuring Lucent’s outstanding debt has been attained and it was executed on June 4, 2003.~~ The ~~now~~effectiveness ~~outstanding~~of ~~debt~~the toSettlement ~~Lucent~~Agreement iswas ~~$48.5 million~~conditioned ~~and~~upon isthe ~~payable~~satisfaction ~~over~~of ~~a six-year~~certain ~~period at 8% annual interest rate. On June 20~~events, ~~2003,~~including anthe ~~agreement restructuring Alcatel’s debt was executed. Alcatel’s credit is now $2.5 million at 6.5% payable over a three year period.~~following:

~~California~~• TEM Puerto ~~Licenses~~Rico becoming the holder of 49.9% of NewComm’s common capital stock;

~~On August 28, 2000,~~ • the ~~Partnership entered into~~ atermination ~~Purchase~~of ~~and~~the ~~Sale~~Joint ~~Agreement~~Venture ~~with Leap Wireless International (“Leap Wireless”)~~Agreement, ~~pursuant~~ ~~to which~~ the ~~Partnership~~Management ~~sold~~Agreement, ~~the~~and ~~Visalia-Porterville license to Leap~~the ~~Wireless~~Technology inTransfer ~~exchange for a $9~~Agreement,~~500,000~~ ~~cash~~each ~~payment. The~~of ~~sale~~which ~~was~~involved ~~approved~~NewComm ~~by the FCC~~ and ~~closed~~included TEM onas ~~June 8,~~a ~~2001.~~party;

On• the amendment ~~November 26,~~of ~~2003,~~ the ~~Partnership~~Stock ~~entered into a~~ Purchase ~~and~~Agreement, the Sale Agreement, ~~with~~dated ~~Metro~~March 12, 2002 ~~PCS pursuant to which~~ (the ~~Partnership~~ ~~sold~~“Sale ~~all~~Agreement”), ofamong ~~its~~NewComm, ~~remaining~~TEM ~~California~~Puerto ~~Licenses. The~~Rico, ~~sale~~the ~~was~~Partnership, and ~~approved~~the byother ~~the~~shareholders ~~FCC~~of NewComm, and the ~~licenses~~ ~~were~~Shareholders ~~transferred~~Agreement, todated ~~Metro~~March 12, 2002 ~~PCS~~(the on“Shareholders ~~April 15~~Agreement”), ~~2004~~among ~~for~~the aPartnership, ~~$10~~NewComm,~~900,000 cash~~ ~~payment. The~~TEM ~~Partnership~~Puerto Rico, ~~has~~and nothe other ~~licenses~~ inshareholders ~~California.~~of NewComm; and

~~Critical~~• TEM’s ~~Accounting~~entry ~~Policies~~into a line of credit to be used to pay the balance of NewComm’s indebtedness to the FCC; and an extension or refinancing of NewComm’s bridge loan from ABN Amro Bank, N.V.

~~The consolidated financial statements are prepared in~~Project ~~accordance~~Finance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership has no off-balance sheet arrangements and believes that of its significant accounting policies (see Note 3 to the consolidated financial statements), the following may involve a higher degree of judgment and complexity.Facility

WeDuring ~~rely~~June 2003, onNewComm ~~the~~and ~~use~~Lucent ofentered ~~estimates~~into ~~and~~a ~~make~~Senior ~~assumptions~~Credit ~~that~~Agreement ~~impact~~which ~~our~~refinanced ~~financial~~the ~~condition~~existing ~~and~~promissory note ~~results. These~~balance ~~estimates~~due ~~and~~under ~~assumptions are~~the ~~based~~CDMA onnetwork ~~historical~~construction ~~results~~payable. ~~and~~The ~~trends~~interest asrate ~~well~~was set asat ~~our~~8% ~~forecasts~~per asannum toand ~~how these~~the ~~might~~maturity ~~change~~date inwas ~~the~~extended ~~future~~to September 2009. ~~Some~~ The ofnote ~~the~~payable ~~most~~is ~~critical~~guaranteed ~~accounting~~by ~~policies~~a ~~that~~security ~~might~~agreement ~~materially~~covering ~~impact~~most ~~our~~of the Company’s ~~results~~assets, ~~include:~~as defined.

On July 1, 2005, Lucent assigned and transferred to D.B Zwirn Special Opportunities Fund, LTD (“D.B Zwirn”) 100% of Lucent’s rights and obligations under the original credit agreement. On July 14, the Company signed a Forbearance Agreement with D.B Zwirn. On August 25, 2005 NewComm and D.B Zwirn entered into a Senior Credit Agreement with an outstanding principal balance on the closing date due on the note amounting $54,480,486.02 including some accrued and unpaid interest and $4,000,000.00 in additional principal made available at the time of closing. The facility bears interest at a rate per annum equal to LIBOR + 700 basis points. Additionally, the facility will accrue pay-in-kind (PIK) interest on the aggregate principal amount, payable upon maturity, acceleration or repayment. The PIK interest is based on a grid that ranges from 2% to 4%, depending on quarterly EBITDA results. The maturity date on the facility was January 31, 2006.

~~Valuation~~The ofSenior Credit Agreement with D.B Zwirn included ~~Accounts~~various ~~Receivable~~affirmative, ~~Inventories~~negative and financial covenants. As of December 31, 2005, ~~Long~~the Company was in compliance with all the requirements under such covenants except the failure to comply with the cumulative end of period subscribers under section 6.04 of the credit agreement. D.B Zwirn accepted to forbear the exercise of remedies to cure the non-~~lived~~compliance ~~Assets~~under ~~and~~the mentioned ~~Intangibles~~covenant.

~~Allowance for~~On ~~Doubtful Accounts - Estimates used in determining our provision for doubtful accounts are based on our historical collection experience~~February 16, ~~current trends~~2006, ~~credit~~NewComm ~~policy~~ and ~~a percentage of our accounts receivable by aging category~~D. ~~In determining~~B ~~these percentages, we look at historical write-offs of our~~Zwirn ~~receivables~~amended and ~~our~~restated ~~history is limited. We also look at current trends in~~ the ~~credit~~Senior ~~quality~~Credit ofAgreement. ~~our~~The ~~customer base~~new asoutstanding ~~well as changes in the credit policies.~~ principal ~~Under~~balance ~~NewComm’s~~is ~~credit policy~~$60,539,828, ~~customers~~including ~~who~~some doaccrued ~~not~~and ~~meet~~unpaid ~~certain~~interest, ~~credit~~and ~~criteria are required to make a deposit ranging from~~ $705,000,000.00 toin ~~$250~~additional ~~that~~principal ~~could~~made ~~be credited~~available ~~against~~at ~~future billings, to control credit exposure. If~~ the ~~estimates~~time ~~are~~of ~~insufficient for any~~closing. ~~reason,~~The ~~our~~maturity ~~operating~~date ~~income,~~is ~~earnings before interest~~March 31, ~~taxes, depreciation and amortization (“EBITDA”) and available cash would be reduced~~2007.

~~Write-down of~~Critical ~~Refurbished~~Accounting Policies and ~~Excess or Obsolete Inventories~~ Off- WeBalance ~~currently~~Sheet ~~have written-down refurbished handset inventories to the lower of cost or market value (which approximates cost to refurbish or replace the handsets). We currently have written-down excess or~~Arrangements

15The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (US GAAP), which require the Partnership to make estimates and assumptions. The Partnership has no off-balance sheet arrangements and believes that of its significant accounting policies (see Note 4 to the consolidated financial statements), the following may involve a higher degree of judgment and complexity.

~~obsolete~~We ~~handset accessories~~rely toon ~~net~~the ~~realizable~~use ~~value. As~~of anestimates ~~inducement~~and tomake ~~obtain~~assumptions ~~new~~that ~~customers,~~impact ~~the~~our ~~Partnership~~financial ~~may~~condition ~~sell~~and ~~handsets to~~results. ~~customers~~These ~~for~~estimates aand ~~price~~assumptions ~~that~~are isbased ~~less~~on ~~than~~historical ~~cost.~~ results and trends as ~~Until~~well ~~December 31,~~as ~~2002,~~our ~~the~~forecasts ~~loss~~as onto ~~such~~how ~~sales~~these ~~was~~might ~~recognized~~change at in the ~~time~~future. Some of ~~sale. We~~the most ~~continue~~critical toaccounting ~~monitor the~~policies ~~depletion~~that ofmight ~~our~~materially ~~current~~impact ~~inventory~~our ~~levels.~~results include:

Effective January 1, 2003 we changed our method to account for the loss on sale of handsets to customers, from the recognition of such loss at the time of sale, to the establishment of an inventory reserve to account for that loss at the end of each accounting period.11

~~Long-lived Assets~~Valuation - We continually evaluate long-lived assets to determine whether current events and circumstances warrant adjustment to the carrying values or amortization periods. The Partnership measures impairment whenever events or changes in circumstances indicate that the carrying amount of anAccounts ~~asset may not be recoverable. In performing the review for recoverability~~Receivable, an estimate of the future cash flows expected to result from the use of the asset and its eventual disposition must be made. If the sum of the future cash flows (undiscounted and without interest charges) is less than the carrying amount of the assetInventories, ~~an impairment~~Long-lived ~~loss~~Assets is recognized. The impairment loss, if any, is determined based on projected discounted future operating cash flows using a discount rate reflecting the Partnership’s average cost of funds. No impairment loss was recognized during 2004, 2003 and ~~2002. If the estimates used to measure impairment are insufficient for any reason, our net income or loss would be reduced or increased, respectively.~~Intangibles

~~Valuation~~Allowance for Doubtful Accounts of- ~~Intangibles~~Estimates ~~(PCS~~used ~~Licenses)~~in –determining ~~Because~~our ofprovision ~~the~~for ~~adoption~~doubtful ~~by the~~accounts ~~Partnership~~are ofbased on ~~SFAS~~our ~~142~~historical ~~(Goodwill~~collection ~~and~~experience, ~~other~~current ~~Intangible~~trends, ~~assets)~~credit ~~imposed~~policy byand a ~~the~~percentage ~~FASB~~of ~~for~~our ~~calendar~~accounts ~~years~~receivable ~~commencing~~by ~~after~~aging ~~December 31,~~category. ~~2001,~~In ~~PCS~~determining these ~~Licenses~~percentages, ~~are~~we nolook ~~longer~~at ~~amortized~~historical ~~and~~write-offs ~~instead~~of ~~they~~our ~~are~~receivables ~~subject~~and ~~to periodic~~our ~~impairment~~history ~~testing~~is limited. ~~Based~~ onWe ~~analysis~~also ~~of future~~look ~~cash~~at ~~flows~~current ~~and~~trends ~~other~~in ~~related~~the ~~variables,~~credit wequality ~~determined~~of ~~that no impairment~~our ~~adjustment~~customer ~~was~~base ~~necessary~~as ~~for~~well ~~the~~as ~~years~~changes ~~ended~~in ~~December 31,~~the ~~2004,~~credit ~~2003 and 2002~~policies. We ~~will~~Under ~~perform~~NewComm’s ~~the impairment~~credit ~~test~~policy, atcustomers ~~least~~who ~~every~~do ~~quarter~~not ormeet ascertain ~~soon~~credit ascriteria ~~anything~~are ~~comes~~required to ~~our~~make a ~~attention~~deposit ~~that could~~ranging ~~cause~~from us$70 to ~~believe~~$250 that ~~the~~could ~~recorded~~be ~~balance~~credited ofagainst ~~the~~future billings, ~~PCS~~to ~~Licenses~~control ~~may~~credit ~~be affected~~exposure. If the estimates ~~used to measure impairment~~ are insufficient for any reason, our ~~net~~operating income, orearnings ~~loss~~before interest, taxes, depreciation and ~~would~~amortization be(“EBITDA”) ~~reduced~~and oravailable ~~increased,~~cash ~~respectively~~would be reduced.

~~Revenue~~Write-down of Refurbished and Excess or ~~Recognition~~Obsolete Inventories - We currently have written-down refurbished handset inventories to the lower of cost or market value (which approximates cost to refurbish or replace the handsets). We currently have written-down excess or obsolete handset accessories to net realizable value. As an inducement to obtain new customers, the Partnership may sell handsets to customers for a price that is less than cost. Until December 31, 2002, the loss on such sales was recognized at the time of sale. We continue to monitor the depletion of our current inventory levels.

WeLong-lived ~~recognize~~Assets ~~post~~-~~paid~~ ~~PCS~~We ~~service~~continually ~~revenue~~evaluate ~~from~~long-lived ~~our~~assets ~~customers~~to asdetermine ~~they~~whether ~~use~~current events and circumstances warrant adjustment to the ~~service~~carrying values or amortization periods. ~~Prepaid~~ ~~PCS~~The ~~service~~Partnership ~~revenue~~measures isimpairment ~~recognized~~whenever events or changes in ~~based~~circumstances onindicate ~~estimates~~that the carrying amount of ~~usage.~~an asset may not be ~~Additionally,~~recoverable. weIn ~~provide~~performing athe ~~reduction~~review offor ~~recorded~~recoverability, ~~revenue~~an ~~for~~estimate ~~billing~~of the ~~adjustments~~future cash flows expected to result from the use of the asset and ~~billing~~its ~~corrections. We~~eventual ~~record~~disposition ~~equipment~~must ~~revenue~~be ~~for~~made. If the ~~sale~~sum of ~~handsets~~the ~~and~~future ~~accessories~~cash toflows ~~customers~~(undiscounted and inwithout ~~our~~interest ~~retail~~charges) ~~stores~~is ~~and~~less ~~through~~than ~~our~~the ~~third~~carrying ~~party~~amount ~~dealers. If~~of the ~~estimate~~asset, ~~used~~an impairment toloss ~~recognize~~is ~~prepaid~~recognized. ~~PCS~~The impairment loss, if any, is determined based ~~service~~on ~~revenue~~projected ~~usage~~discounted ~~varies~~future ~~from~~operating ~~actual~~cash ~~results~~flows orusing ifa discount rate reflecting the ~~estimate~~Partnership’s average cost of ~~certain~~funds. No impairment loss was ~~revenue~~recognized ~~adjustments~~during is2005, ~~inaccurate~~2004 and 2003. If the estimates used to measure impairment are insufficient for any reason, our ~~revenues~~net income or loss would be reduced ~~adjusted~~or ~~accordingly~~increased, respectively.

~~Results~~Valuation of ~~Operations~~Intangibles -(PCS ~~2004~~Licenses) ~~Compared~~– Because of the adoption by the Partnership of SFAS 142 (Goodwill and other Intangible assets) imposed by the FASB for calendar years commencing after December 31, 2001, PCS Licenses are no longer amortized and instead they are subject to periodic impairment testing. Based on analysis of future cash flows and other related variables, we determined that no impairment adjustment was necessary for the years ended December 31, 2005, 2004 and 2003. We will perform the impairment test at least every quarter or as soon as anything comes to our attention that could cause us to believe that the recorded balance of the PCS Licenses may be affected. If the estimates used to measure impairment are insufficient for any reason, our net income or loss would be reduced or increased, respectively.

~~The~~Revenue Partnership’s Consolidated revenues for the year ended December 31, 2004, which amounted to $105,001,936 ($108,894,112 in 2003), included $100,336,047 ($101,557,423 in 2003) in service revenues and $4,665,889 ($7,336,689 in 2003) in handset and accessories sales generated from NewComm’s wireless operations. The 36% decrease in handsets and accessories revenues is mainly due to handset unit pricing adjustments. The 1% decrease in service revenues is related to a reduction of the subscriber base which was mostly offset by airtime consumption of existing customers and to a shifting of the customer base from prepaid customers to contract customers. The Partnership’s operations are not materially affected by inflationary increases. Any inflationary impact on the cost of products and services offered by the Partnership’s subsidiary, NewComm, is offset by pricing adjustments to the retail prices of handsets, accessories, and various offers available to the customers.Recognition

~~Expenses~~We recognize post-paid PCS service revenue from our customers as they use the service. Prepaid PCS service revenue is recognized based on estimates of usage. Additionally, we provide a reduction of recorded revenue for billing adjustments and billing corrections. We record equipment revenue for the sale of handsets and accessories to customers in our retail stores and through our third party dealers. If the estimate used to recognize prepaid PCS service revenue usage varies from actual results or if the estimate of certain revenue adjustments is inaccurate, our revenues would be adjusted accordingly.

~~Consolidated~~Restatement ~~Operating~~of ~~expenses~~Financial ~~for the year ended December 31, 2004 totaled $107,644,333, as compared to $100,086,717 for the same period in 2003, as shown on the following table:~~Statements

16Management restated the Partnership’s financial statements for 2001, as described in Note 2 to the audited consolidated financial statements included as part of the 2003 Annual Report on Form 10-K. Our prior independent accountants are not able to reissue their report relating to the Partnership’s financial statements for 2001 or to audit the restatement adjustments described in Note 2 because they ceased operations in 2002. Our successor independent accountants, Kevane Soto Pasarell Grant Thornton LLP, have not audited such year and do not issue an opinion on the financial statements for the calendar year ended December 31, 2001. Our successor independent accountants have only audited our financial statements for the calendar years ended December 31, 2005, 2004, 2003 and 2002 and have issued the Independent Auditor’s report included herein.

	2004		2003		Variances
Cost of handsets and accessories sold	$	24,352,074	$	22,523,576	8	%
Salaries and benefits	15,642,745		15,169,673		3	%
Provision for doubtful accounts	14,762,108		8,907,241		66	%
Salesmen and dealers commissions	11,652,417		8,375,695		39	%
Advertising expense	6,936,679		7,353,590		-6	%
Rent expense	6,922,312		6,755,926		2	%
Network operation and maintenance expense	4,479,139		5,559,349		-19	%
Taxes, other than income	3,952,175		4,945,218		-20	%
Interconnection expense	2,798,991		4,245,415		-34	%
Services rendered by related parties	4,930,413		3,621,826		36	%
Legal and consulting fees rendered by related parties	536,213		469,000		14	%
Legal and professional services	2,700,917		2,682,232		1	%
Other expenses	7,978,150		9,477,976		-16	%
Total operating expenses	$	107,644,333	$	100,086,717	8	%

Accordingly, our financial statements for the calendar year ended December 31, 2001 is restated and unaudited.

~~The~~As ~~increase~~explained in ~~expenses of~~detail 8%on ~~during~~Note ~~2004,~~2 ~~as compared~~ to ~~2003, is mainly due to~~ the Consolidated ~~increase~~Financial inStatements, the ~~provision~~ ~~for~~Partnership’s ~~doubtful~~management ~~accounts~~restated ~~which resulted in additional $6 million~~its ~~reserves~~financial ~~and~~statements isfor ~~directly related to~~ the ~~full~~years ~~implementation~~ended ofDecember 31, ~~the~~2004 ~~new billings~~ and ~~collections~~2003 ~~software migration. The~~to ~~increase~~reflect ina ~~salesmen~~change ~~and~~in ~~dealers~~the ~~commissions~~inventory ispricing ~~related~~methodology toafter ~~the~~consultation ~~shifting during~~with ~~the~~staff ~~year~~accountants from ~~prepaid~~the ~~customer~~SEC ~~accounts~~and toits ~~contract~~Independent ~~customers that triggers higher commissions~~Auditors. The ~~19%~~change ~~decrease in~~results ~~network~~in ~~operation~~the ~~and~~elimination ~~maintenance~~of ~~expense~~an isinventory ~~related~~reserve tofor ~~operational efficiencies obtain at~~ the ~~subsidiary~~loss ~~level~~inherent ~~and~~ to the sale of ~~12 network~~ ~~towers~~the tohandsets aunder ~~third~~its ~~party~~cost ~~during~~and establishes the ~~fourth~~recognition ~~quarter~~ of ~~2004~~such asloss ~~explained~~at ~~in Note~~the 11time of ~~the~~sale ~~combined~~to ~~financial~~its ~~statements~~customers.

Net losses of $30,129,143 for 2004 and $30,360,386 for 2003 reflect the costs of competing in the Puerto Rico market against existing and new cellular and PCS operators in order to continue to develop and maintain a strong subscriber base. Such losses include certain non recurring other income and expense items. For instance, the loss before other income and expenses for 2004 totaled $29.9 million compared to $21.8 million in 2003. The 37% increase in said losses is primarily attributed to the $6 million increase in the provision for doubtful accounts and the $3.8 million decrease in total revenues netted by a 29% reduction in the interest expense account.12

~~Interest~~Impact expense for the year ended December 31, 2004, totaled $9,470,793 as compared to $13,312,468 for the same period in 2003. The decrease in interest expense during 2004 is primarily attributable to the restructuring of ~~the~~Unaudited ~~Partnership’s Notes~~Financial Payable (refer to Notes 12, 14 and 15 to the accompanying consolidated financial statements) and to downward trends of interest rates in the markets. In 2004, the Partnership had interest income of $126,827, as compared to $213,369 in 2003.Statements

~~Liquidity~~As explained above and in Note 2 to the audited consolidated financial statements for the calendar years ended December 31, 2003 and ~~Capital~~2002, ~~Resources~~our consolidated financial statements for the calendar year ended December 31, 2001 have been restated. Our prior independent accountants are not able to reissue their report relating to the Partnership’s financial statements for 2001 or to audit the restatement adjustments described in Note 2 because they ceased operations in 2002. We believe that the effect of the adjustments made in the re-stated financial statements, and the nature of the accounting issues addressed by those adjustments, do not have a material effect on the Partnership’s financial position as a whole or on the Partnership’s investors, creditors, suppliers, employees or customers. Therefore, we believe that a re-audit of the Partnership’s 2001 consolidated financial statements is unnecessary. Accordingly, our consolidated financial statements for the calendar year ended December 31, 2001 is restated and unaudited. Our audited consolidated financial statements for the calendar years ended December 31, 2005, 2004 and 2003 are included as part of this Annual Report on Form 10-K.

AsResults of ~~December 31,~~Operations ~~2004,~~- ~~the~~2005 ~~Partnership~~Compared ~~had cash and cash equivalents amounting~~ to ~~$10,612,430, which resulted from the sale of the California Licenses to an independent group of investors as described in Item 7.~~2004

AsThe ~~part~~Partnership’s ofConsolidated revenues for the ~~agreement~~year ~~with~~ended ~~TEM~~December 31, ~~NewComm~~2005, ~~entered into~~which aamounted ~~contract~~to ~~with~~$88,924,261 ~~Lucent~~($105,001,936 in ~~Technologies~~2004), ~~Inc.~~ included $84,041,902 (~~“Lucent”~~$100,336,047 in 2004) ~~that~~in ~~required Lucent~~service torevenues ~~build~~and a$4,882,359 ($4,665,889 in ~~network~~2004) ~~that~~in ~~uses~~handset and ~~Code~~accessories ~~Division~~sales ~~Multiple~~generated ~~Access~~from ~~(“CDMA”) protocol~~NewComm’s wireless operations. The ~~total~~5% decrease ~~cost~~in ~~was~~handsets ~~approximately~~and ~~$125~~accessories ~~million. On~~revenues ~~June 4,~~is ~~2003,~~mainly ~~Lucent’s~~due ~~outstanding~~to handset unit ~~debt~~pricing ~~was~~adjustments. ~~restructured~~The ~~for~~16% adecrease ~~six-year~~in ~~term~~service ~~with~~revenues anis ~~interest~~related ~~rate~~to a reduction of ~~eight percent~~the ~~(8%)~~subscriber ~~annually~~base and ~~due~~to ina ~~September 2009. As~~shifting of ~~December 31,~~the ~~2004,~~customer ~~$48,470,205~~base ~~was~~from ~~outstanding~~prepaid ~~under~~customers ~~this~~to ~~financing~~contract ~~agreement~~customers. ~~(refer~~The toPartnership’s ~~Note~~operations ~~15(a) to~~are ~~the~~not ~~accompanying~~materially ~~consolidated~~affected ~~financial~~by ~~statements)~~inflationary increases. ~~During~~ ~~2004~~Any ainflationary ~~total~~impact on the cost of $3products ~~million~~and ~~were~~services ~~paid~~offered by the Partnership’s subsidiary, NewComm, asis ~~principal~~offset ~~payments~~by pricing adjustments to the retail prices of handsets, accessories, and various offers available to the customers.

Alcatel USA International Marketing, Inc. (“Alcatel”) was contracted to build part of the CDMA network. On June 20, 2003, NewComm and Alcatel entered into Amendment No. 2 to Promissory Agreement and Note dated as of December 28, 2001. The final maturity date on the 6.5% annual interest rate note is December 20, 2005. During 2004Expenses

17Consolidated Operating expenses for the year ended December 31, 2005 totaled $98,750,982 as compared to $127,160,343 for the same period in 2004.

$2,075,000 where paid for principal payments and $2,461,029 is outstanding as of December 31, 2004.

	2005		2004		Variances
Cost of handsets and accessories sold	$	15,317,082	$	26,057,050	-41	%
Salaries and benefits	15,160,520		15,642,745		-3	%
Provision for doubtful accounts	11,754,279		14,762,108		-20	%
Salesmen and dealers commissions	5,863,377		11,652,417		-50	%
Depreciation	18,046,423		17,811,034		1	%
Advertising expense	3,213,290		6,936,679		-54	%
Rent expense	7,640,309		6,922,312		10	%
Network operation and maintenance expense	7,270,016		4,479,139		62	%
Taxes, other than income	3,593,236		3,952,175		-9	%
Interconnection expense	617,990		2,798,991		-78	%
Services rendered by related parties	3,255,318		4,930,413		-34	%
Legal and consulting fees rendered by related parties	302,743		536,213		-44	%
Legal and professional services	1,924,729		2,700,917		-29	%
Other expenses	4,791,670		7,978,150		-40	%

Total operating expenses	$	98,750,982	$	127,160,343	-22	%

InThe ~~addition,~~22% atreduction ~~December 31,~~in expenses during 2005 as compared to 2004, ~~the~~is directly related to efficiencies ~~Partnership~~obtained ~~owes~~under the ~~United~~new ~~States~~administration ~~Federal~~and ~~government~~the ~~approximately~~reversal ~~$33.6 million~~of ~~plus~~various accrued expenses ~~interest~~forgiven atunder 6the settlement agreement.5% The decrease in ~~connection~~cost ~~with~~of handsets ~~the~~and ~~acquisition~~accessories sold of ~~its Puerto~~41% ~~Rico~~in ~~PCS~~2005 ~~licenses. In~~as ~~accordance~~compared to the same period in ~~industry~~2004 ~~practices~~is ~~the~~due ~~note~~to ~~payable~~an ~~was~~overall ~~recorded~~reduction ~~net~~in ofthe asubscriber ~~discount~~base ~~that~~and ~~has~~to handset ~~been~~pricing ~~amortized~~adjustments which resulted in ~~prior~~$5.5 ~~years~~million reduction in that account. ~~Due~~ toIn addition, the ~~refinancing~~reduction ofin ~~the~~cost ~~debt~~of ~~that~~handsets iswas ~~expected~~due to beadditional ~~completed~~efficiencies in ~~before~~logistics ~~December~~ operations and inventory handling. The 54% reduction in advertising expense during 2005, as compared to 2004 resulted from a shift in the ~~discount~~marketing ~~balance~~strategy offocusing ~~$3,913,661~~on asa ofspecific ~~December 31,~~target ~~2003~~market ~~was~~and ~~written off~~customer service. The decrease in salesmen and ~~reflected~~dealers ascommissions ~~interest~~resulted ~~expense~~from a change in the ~~other~~utilization ~~expenses~~of ~~section~~ direct channels instead of ~~the~~indirect channels to ~~accompanying~~distribute ~~statement~~products ofand ~~operations~~services. ~~(Refer~~Direct tochannels ~~Note~~include ~~15(c) to~~commissions ~~the~~in ~~accompanying~~salaries ~~consolidated~~and ~~financial~~benefits ~~statements)~~rather than commissions paid to dealers. ~~During~~The ~~the~~reduction ~~current~~in 2005 ~~year,~~related to the ~~Partnership~~ ~~paid~~interconnection $9expense account,~~073,831~~ which resulted in ~~principal~~a ~~and~~78% decrease ~~interest~~in ~~related~~such account is mainly due to ~~this~~adjustments to settlement charges ~~note~~among other carriers. ~~Quarterly~~ ~~interest~~The 62% increase in network operations and ~~principal~~maintenance ~~payments~~expense ~~due~~in at2005 when compared to the ~~subsidiary~~same ~~level~~period ~~total~~in ~~$3.7~~2004 ~~million~~is related to the implementation of additional cell sites which provide added coverage throughout the Island and ~~are~~additional ~~funded~~electricity ~~through~~charges as well as rent for the recently ~~contributions~~added cell sites. The overall decrease in legal expenses in 2005 compared to 2004 is related to accomplishments made byon the ~~Partnership~~settlement ~~and~~agreement ~~amounts~~that ~~loaned~~was executed byduring ~~TEM~~the first few days of the Partnership’s second quarter operations.

The Partnership has a secured promissory note payable to TLD (now TEM), which bears interest at the floating rate of 90-day LIBOR plus 1.5% and was originally due in March 2004. On January 1, 2004, this secured promissory note was amended to be due in December 2004, and to bear interest at 1%. In addition, in January 2000 the joint venture agreement with TLD was amended to provide NewComm a revolving line of credit of approximately $30 million for working capital from TLD. This loan was paid-off in December 2000 by means of a $60 million bridge loan (the “Bridge Loan Facility”) to NewComm from ABN-AMRO and BBVA (the “Banks”). The original Bridge Loan Facility bore interest at 1.5% over 90-day LIBOR, which was originally supposed to expire on March 15, 2001, and was then extended until March 17, 2002, with an interest rate of .75% over 90-day LIBOR. The Bridge Loan is now guaranteed by Telefónica Internacional, S.A. (“TISA”) and was extended again until April 30, 2005. It is expected that the bridge loan will be replaced with a permanent Project Finance Facility of approximately $110 million.13

~~The~~Net ~~Partnership,~~losses ~~by means~~ of ~~Syncom~~$23, ~~and TLD~~740, ~~each~~056 ~~contributed~~for ~~$15~~2005 ~~million~~and of$31,834,119 ~~additional~~for ~~capital. Syncom~~2004 ~~now~~reflect ~~has~~the ~~ownership~~costs of ~~8.02%~~competing ofin ~~NewComm~~the ~~after~~Puerto Rico ~~having~~market ~~contributed~~against ~~a total~~existing ofand ~~$25~~new ~~million~~cellular ofand ~~capital. On~~PCS ~~March 2, 2002,~~operators ~~the~~in ~~Partnership~~order ~~sold~~to continue ato ~~portion~~develop ~~its~~and ~~equity~~maintain ~~interest~~a ~~equal~~strong tosubscriber 4base.~~08%~~ ~~(on~~Such alosses include ~~fully~~certain ~~diluted~~non ~~basis)~~recurring inother ~~NewComm~~income toand aexpense ~~group~~items. ofFor ~~investors~~instance, ~~led~~the ~~by Fleet~~loss ~~Development~~before ~~Ventures~~other ~~for~~income ~~$13~~and ~~million. The~~expenses ~~Partnership~~for ~~believes~~2005 ittotaled ~~has~~$21.3 ~~obtained~~million ~~sufficient~~compared ~~funds,~~to ~~together with~~$31.6 ~~TLD,~~million toin ~~provide~~2004. ~~NewComm~~The ~~with~~30% ~~the~~decrease ~~capital~~in ~~necessary~~losses ~~for~~is ~~the~~directly ~~Project~~proportional ~~Finance Facility and~~ to ~~fully~~the ~~fund~~25% reduction ~~NewComm’s~~overall ~~operations~~expenses.

~~Once~~Interest ~~TEM~~expense isfor ~~able~~the year toended ~~convert~~December 31, ~~its~~2005 ~~debt~~totaled $14,340,849 as compared to ~~49.~~$9%,470,793 for ofthe same period in 2004. The increase in interest expense during 2005 is ~~NewComm,~~primarily ~~and~~attributable to the restructuring of the Partnership’s ~~concedes~~Notes Payable (refer to Notes 13, 14 and 15 to the ~~sale~~accompanying ~~of 0~~consolidated financial statements).2% ~~control~~In ~~stock~~2005, the Partnership ~~will~~had ~~own 38.3%~~interest income of ~~NewComm~~$675,473, ~~equity~~as compared to $126,827 in 2004.

~~The~~Liquidity ~~Partnership anticipates that earnings~~ and ~~cash distributions~~Capital derived from its Puerto Rico Network once it matures, interim and permanent financing and, if necessary, additional capital calls from its Investors or accessing the public capital markets, should provide it with the liquidity to meet its obligationsResources

~~Results~~ As of ~~Operations~~December 31, -2005, the ~~2003~~Partnership ~~Compared~~had cash and cash equivalents amounting to ~~2002~~$6,609,074, which resulted from the sale of the California Licenses to an independent group of investors as described in Item 7.

~~The~~As ~~Partnership’s~~part of ~~Consolidated~~the agreement ~~revenues~~with ~~for~~TEM, ~~the~~NewComm ~~year ended~~entered ~~December 31,~~into ~~2003~~a contract with Lucent Technologies, Inc. (“Lucent”) ~~which~~that ~~amounted~~required Lucent to ~~$108,894,112~~build ~~($107,957,097~~a innetwork that uses Code Division ~~2002~~Multiple Access (“CDMA”), ~~included~~protocol. The total cost was approximately $~~101~~125 million. On June 4,~~557,423~~ ~~($99~~2003,~~799,656~~ inLucent’s ~~2002)~~outstanding indebt ~~service~~was ~~revenues~~restructured ~~and~~for a ~~$7,336,689~~six-year ~~($8,177,441~~term inwith ~~2002)~~an ininterest ~~handset~~rate ~~and~~of ~~accessories~~eight ~~sales~~percent ~~generated~~(8%) ~~from NewComm’s~~annually ~~wireless~~and ~~operations~~due in September 2009. ~~The~~ ~~increase~~As inof ~~service~~December 31, ~~revenues~~2004, is$48,470,205 ~~primarily~~was ~~due~~outstanding tounder anthis ~~increase~~financing agreement ~~during~~(refer ~~2003~~to ofNote 15(b) to the ~~subscriber~~ ~~base. The~~accompanying ~~decrease~~consolidated ~~in handset~~financial ~~and~~statements). ~~accessories~~During ~~revenues~~2004 isa ~~related~~total toof a$3 ~~reduction~~million inwere ~~the~~paid ~~retail~~as ~~pricing~~principal ~~of handsets~~payments.

~~Expenses~~Alcatel USA International Marketing, Inc. (“Alcatel”) was contracted to build part of the CDMA network. On June 20, 2003, NewComm and Alcatel entered into Amendment No. 2 to Promissory Agreement and Note dated as of December 28, 2001. The final maturity date on the 6.5% annual interest rate note is December 20, 2005. During 2004, $2,075,000 was paid in principal payments and $2,461,029 is outstanding as of December 31, 2004.

~~Consolidated~~In ~~Operating~~addition, ~~expenses~~at ~~for the year ended~~ December 31, ~~2003~~2005, ~~totaled~~the ~~$100,086,717,~~Partnership asowes ~~compared~~the toUnited States Federal government approximately $~~103,734,297~~17.5 million ~~for~~plus ~~the~~accrued ~~same~~interest ~~period~~at ~~in 2002~~6. ~~During~~5% ~~2003,~~in connection with the ~~Partnership’s expenses~~acquisition ~~included $~~of ~~22,523,576~~its ~~($20,297,712~~Puerto ~~for~~Rico ~~2002)~~PCS inlicenses. ~~costs~~In ofaccordance ~~handset~~to ~~and~~industry ~~accessories,~~practices $the ~~15,169,673~~note payable ~~($15,662,484~~was ~~for~~recorded ~~2002)~~net inof ~~salaries~~a ~~and~~discount ~~benefits,~~that $has ~~2,682,232~~been ~~($9,915,770~~amortized ~~for 2002)~~in ~~for~~prior ~~legal~~years. ~~and~~The discount ~~professional~~balance ~~services,~~of $173,~~272~~913,~~191~~661 ~~($14~~as of December 31,~~171,258~~ ~~for~~2003 ~~2002) in~~was ~~depreciation~~written off and reflected ~~amortization,~~as ~~$8,907,241~~interest ~~($9,854,591~~expense ~~for~~in ~~2002)~~the inother ~~provision~~expenses section of the ~~for~~accompanying ~~doubtful~~statement ~~accounts,~~of ~~$46,713,169~~operations. (~~$41,933,902~~Refer ~~for~~to ~~2002~~Note 15(d) to ~~in interconnection,~~the ~~network~~accompanying ~~maintenance,~~consolidated ~~sales~~financial ~~commissions,~~statements). ~~advertising,~~During ~~rent,~~the ~~taxes~~current ~~and~~year, ~~other~~the ~~expenses,~~Partnership ~~$4,165,826~~paid ($59,~~808~~073,~~374~~831 ~~for~~in ~~2002)~~principal ~~for~~and ~~services~~interest ~~rendered~~related byto ~~related~~this note. Quarterly ~~parties~~interest and $principal ~~282,280~~payments ~~($262,164~~due ~~for~~at ~~2002)~~the ~~for~~subsidiary ~~management~~level ~~fees~~total ~~paid~~$3.7 ~~to the~~million ~~general~~and ~~partner.~~are ~~Variances~~funded inthrough ~~expenses~~contributions ~~such~~made asby ~~legal~~the ~~and~~Partnership ~~professional~~ and ~~services~~ ~~rendered~~amounts loaned by ~~related parties~~TEM.

18The Partnership has a secured promissory note payable to TLD (now TEM), which bears interest at the floating rate of 90-day LIBOR plus 1.5% and was originally due in March 2004. On January 1, 2004, this secured promissory note was amended to be due in December 2004, and to bear interest at 1%. In addition, in January 2000 the joint venture agreement with TLD was amended to provide NewComm a revolving line of credit of approximately $30 million for working capital from TLD. This loan was paid-off in December 2000 by means of a $60 million bridge loan (the “Bridge Loan Facility”) to NewComm from ABN-AMRO and BBVA (the “Banks”). The original Bridge Loan Facility bore interest at 1.5% over 90-day LIBOR, which was originally supposed to expire on March 15, 2001, and was then extended until March 17, 2002, with an interest rate of .75% over 90-day LIBOR. The Bridge Loan is now guaranteed by Telefónica Internacional, S.A. (“TISA”) and was extended again until April 30, 2008.

~~are~~The ~~due~~Partnership, ~~to reclassification~~by means of Syncom, ~~accounts~~and atTLD, ~~the~~each ~~subsidiary~~contributed ~~level~~$15 ~~and~~million ~~are~~of ~~not~~additional ~~related~~capital. toSyncom now ~~actual~~has ~~variations~~ownership inof ~~such accounts~~8. ~~The decrease~~02% inof ~~expenses~~NewComm ~~during~~after ~~2003,~~having ascontributed ~~compared~~a tototal ~~2002,~~of ~~is primarily associated~~$25 ~~with~~million anof ~~overall~~capital. ~~decrease~~On inMarch 2, ~~operating~~2002, ~~expenses~~the ofPartnership ~~$3.6~~sold ~~million~~a ~~resulting~~portion ~~from~~of its ~~cost~~equity ~~control~~interest ~~management~~equal ~~implemented~~to at4.08% ~~the~~(on ~~Partnership~~a ~~and~~fully ~~subsidiary level. The~~diluted ~~increase~~basis) in ~~salaries~~NewComm ~~and~~to a group ~~benefits~~of ~~was~~investors ~~offset~~led by aFleet ~~decrease~~Development inVentures ~~legal~~for ~~and~~$13 ~~professional~~million. ~~services~~The ~~and~~Partnership believes ait has obtained sufficient funds, together with TLD, to provide ~~reduction~~NewComm inwith the ~~provision~~capital necessary for ~~doubtful~~the ~~accounts,~~Project ~~due~~Finance toFacility ~~better~~and ~~collection~~to ~~efforts~~fully ~~and~~fund ~~tighter~~NewComm’s ~~credit policy~~operations.

~~Net~~On ~~losses of $30~~August 4,~~360,386~~ ~~for~~2005 ~~2003~~NewComm ~~and~~executed ~~$13,025,074~~a ~~for~~Series A ~~2002,~~Convertible ~~reflect~~Participating ~~the~~Preferred ~~costs~~Stock ofbetween ~~competing~~itself ~~in the Puerto Rico market against existing~~ and ~~new~~its ~~cellular~~investors ~~and PCS operators~~ in ~~order to continue to develop and maintain~~ awhich ~~strong~~it ~~subscriber~~raised ~~base. The~~additional ~~increase of~~capital ~~the net loss as compared to the prior year is primarily due to the fact that the 2002 loss was reduced by a $13 million gain on the sale~~ of ~~stock. Accordingly, the operational loss for 2002 was~~ $~~26 million. The net loss of $30,360,386 for 2003 includes nonrecurring losses amounting to $8.6 million, such as the loss of $~~4,~~742~~445,~~559~~000 ~~on the write off of inventory and the $3,913,661 write-off of the discount on note payable~~ to ~~the~~fund ~~FCC~~cash ~~which resulted from the debt restructuring which should be finalized during 2004~~flow. ~~Therefore,~~(See ~~the adjusted~~Note ~~net loss for 2003 would be $21.8 million compared to the adjusted $26~~1 ~~million in 2002. Therefore, the net loss for 2003 shows a reduction of approximately $4 million which is directly proportional~~ to the ~~reduction~~consolidated infinancial ~~operating expenses as described above~~statements).

~~Interest~~The ~~expense~~Partnership ~~for the year ended December 31,~~anticipates ~~2003,~~that ~~totaled~~earnings ~~$13,312,468~~and ascash ~~compared~~distributions toderived ~~$16,212,644~~from ~~for~~its ~~the~~Puerto ~~same~~Rico ~~period~~Network inonce ~~2002. The~~it ~~decrease~~matures, ininterim ~~interest~~and ~~expense during~~permanent ~~2003~~financing isand, ~~primarily~~if ~~attributable~~necessary, ~~to the restructuring of the Partnership’s~~additional ~~Notes~~capital ~~Payable~~calls ~~(refer~~from toits ~~Notes~~investors ~~12,~~or 14accessing ~~and 15 to~~ the ~~accompanying~~public ~~consolidated financial~~capital ~~statements) and to downward trends of interest rates in the~~ markets~~. In 2003~~, ~~the Partnership had~~ ~~interest~~should ~~income~~provide ofit ~~$213,369,~~with asthe ~~compared~~liquidity to ~~$249,661~~meet inits ~~2002~~obligations.

~~Contractual Obligations~~14

AsResults of ~~December 31,~~Operations - 2004 ~~the~~Compared ~~Partnership’s contractual~~to ~~obligations including payments due by period, are as follows:~~2003

	Payments due by Periods
			Less than		1-3		3-5		More than
	Total		1 yr		years		years		5 years
Rental Commitments (1)	$	26,075	$	26,075	$	—	$	—	$	—
Operating Lease Agreement (2)	19,123,987		6,362,828		4,051,337		7,044,469		1,665,353
Sales-Leaseback (3)	5,705,800		578,400		1,156,800		1,735,200		2,235,400
Notes Payable (4)	—		—		—		—		—
Lucent	48,470,205		6,000,000		14,500,000		25,929,632		2,040,573
Alcatel	2,461,029		2,461,029		—		—		—
FCC	33,620,245		16,133,067		17,487,178		—		—
TEM	62,097,930		36,769,293		25,328,637		—		—
Total Contractual Obligations	$	171,505,271	$	68,330,692	$	62,523,952	$	34,709,301	$	5,941,326

The Partnership’s Consolidated revenues for the year ended December 31, 2004, which amounted to $105,001,936 ($108,894,112 in 2003), included $100,336,047 ($101,557,423 in 2003) in service revenues and $4,665,889 ($7,336,689 in 2003) in handset and accessories sales generated from NewComm’s wireless operations. The 36% decrease in handsets and accessories revenues is mainly due to handset unit pricing adjustments. The 1% decrease in service revenues is related to a reduction of the subscriber base which was mostly offset by airtime consumption of existing customers and to a shifting of the customer base from prepaid customers to contract customers. The Partnership’s operations are not materially affected by inflationary increases. Any inflationary impact on the cost of products and services offered by the Partnership’s subsidiary, NewComm, is offset by pricing adjustments to the retail prices of handsets, accessories, and various offers available to the customers.

~~(1). Rental commitments represent the balance due on the Partnership’s General Partner office lease which finalizes in July 2005.~~Expenses

~~(2).~~ Consolidated Operating expenses ~~Lease~~for ~~Agreement~~the isyear ~~related~~ended December 31, 2004 totaled $127,160,343 as compared to $117,358,908 for the ~~minimal~~ ~~annual~~same ~~rental~~period ~~commitments~~in of2003, ~~the~~as ~~Partnership’s~~shown ~~subsidiary~~on atthe ~~Guaynabo.~~following table:

(3). Sales-Leaseback includes the principal and imputed interest payments on the lease agreement with Mountain Union for the lease of certain space on 12 towers. Under the lease agreement, NewComm was granted a license to install, maintain and operate its wireless communications equipment and accessories on the towers for a 10 year period.

	2004		2003		Variances
Cost of handsets and accessories sold	$	26,057,050	$	22,523,576	16	%
Salaries and benefits	15,642,745		15,169,673		3	%
Provision for doubtful accounts	14,762,108		8,907,241		66	%
Salesmen and dealers commissions	11,652,417		8,375,695		39	%
Depreciation	17,811,034		17,272,191		3	%
Advertising expense	6,936,679		7,353,590		-6	%
Rent expense	6,922,312		6,755,926		2	%
Network operation and maintenance expense	4,479,139		5,559,349		-19	%
Taxes, other than income	3,952,175		4,945,218		-20	%
Interconnection expense	2,798,991		4,245,415		-34	%
Services rendered by related parties	4,930,413		3,621,826		36	%
Legal and consulting fees rendered by related parties	536,213		469,000		14	%
Legal and professional services	2,700,917		2,682,232		1	%
Other expenses	7,978,150		9,477,976		-16	%

Total operating expenses	$	127,160,343	$	117,358,908	8	%

~~(4)~~The increase in expenses of 8% during 2004, as compared to 2003, is mainly due to the increase in the provision for doubtful accounts which resulted in additional $6 million reserves and is directly related to the full implementation of the new billings and collections software migration. ~~Notes~~ ~~payable~~The ~~include~~increase in salesmen and dealers commissions is related to the ~~principal~~shifting during the year from prepaid customer ~~installments~~accounts ~~due~~to bycontract ~~period~~customers onthat ~~Lucent,~~triggers ~~Alcatel,~~higher ~~FCC~~commissions. The 19% decrease in network operation and ~~TEM~~maintenance ~~Notes~~expense is related to operational efficiencies obtain at the subsidiary level and to the sale of 12 network towers to a third party during the fourth quarter of 2004 as explained in Note 12 of the combined financial statements.

~~ITEM~~Net 7Alosses of $31,834,119 for 2004 and $25,617,827 for 2003 reflect the costs of competing in the Puerto Rico market against existing and new cellular and PCS operators in order to continue to develop and maintain a strong subscriber base. Such losses include ~~QUANTITATIVE~~certain ~~AND~~non ~~QUALITATIVE~~recurring ~~DISCLOSURES~~other ~~ABOUT~~income ~~MARKET~~and ~~RISK~~expense items. For instance, the loss before other income and expenses for 2004 totaled $31.6 million compared to $21.8 million in 2003. The 45% increase in said losses is primarily attributed to the $6 million increase in the provision for doubtful accounts and the $3.8 million decrease in total revenues netted by a 29% reduction in the interest expense account.

Interest expense for the year ended December 31, 2004, totaled $9,470,793 as compared to $13,312,468 for the same period in 2003. The decrease in interest expense during 2004 is primarily attributable to the restructuring of the Partnership’s Notes ~~exposure~~Payable (refer to ~~market~~Notes ~~risk~~13, ~~through~~14 ~~derivative~~and 15 to the accompanying consolidated financial ~~instruments~~statements) and ~~other~~to ~~financial~~downward ~~instruments~~trends of interest rates in the markets. In 2004, the Partnership had interest income of $126,827, as compared to $213,369 in 2003.

1915

isResults ~~not material because the Partnership does not use derivative financial instruments and does not have foreign currency exchange risks. The Partnership invests cash balances in excess~~ of ~~operating~~Operations ~~requirements in short~~-~~term money~~ ~~market~~2003 ~~funds. As~~Compared ofto ~~December 31, 2004, the Partnership had cash equivalents and short-term investments of $10,612,430 consisting of cash and highly liquid, short-term investments in money market funds.~~2002

The Partnership’s ~~cash and cash equivalents will~~ ~~increase~~Consolidated orrevenues ~~decrease~~for bythe anyear ~~immaterial~~ended ~~amount if market interest rates increase or decrease~~December 31, ~~and therefore~~2003, ~~its~~which ~~exposure to interest rate changes has been~~amounted ~~immaterial. The Partnership’s loans payable~~ to ~~the~~$108,894,112 ~~FCC~~($107,957,097 ~~have~~in a2002), ~~fixed~~included ~~interest~~$101,557,423 ~~rate~~($99,799,656 ~~of 6.5% and therefore are not~~in ~~exposed~~2002) toin ~~interest~~service ~~rate~~revenues ~~risks. The TLD Note relating to indebtedness of NewComm bears interest at the floating rate of the 90-day LIBOR plus 1%~~ and ~~is due six months from date of issuance but can be extended for periods of six months~~$7, ~~thereafter. Lucent’s debt was restructured on June 4~~336, ~~2003~~689 ~~to a six-year term credit facility with an interest rate of eight percent~~ ($8~~%) annually. As of December 2004~~, ~~the~~177,441 ~~outstanding~~in ~~principal~~2002) ~~balance~~in ~~owed~~handset ~~to Lucent was $48.5 million.~~ and ~~The~~accessories ~~Bridge~~sales ~~Loan~~generated ~~bears~~from anNewComm’s ~~interest~~wireless ~~rate of 0~~operations.~~75%~~ ~~over~~The ~~90-day~~increase ~~LIBOR~~in ~~and~~service revenues is ~~now~~primarily ~~guaranteed~~due ~~by TISA. As part of this arrangement the Partnership agreed~~ to ~~pay~~ an ~~annual~~increase ~~fee~~during of2003 ~~2% over half~~ of ~~this guarantee (or $30 million), or provide an equivalent cash collateral to~~ the ~~Banks~~subscriber base. ~~This~~ ~~loan~~The ~~guarantee~~decrease ~~fee is not due until the sale of the Partnership’s interest~~ in ~~NewComm. The~~handset ~~Bridge~~and ~~Loan~~accessories ~~Facility~~revenues ~~has~~is ~~been~~related ~~extended again~~ to ~~April 30,~~a reduction ~~2005,~~in ~~with~~ the ~~option~~retail topricing ~~extend by one or more additional periods~~ of ~~30 days with the lender’s prior consent~~handsets.

20Expenses

~~ITEM~~Consolidated Operating expenses for the year ended December 31, 2003 totaled $117,358,908 as compared to $117,905,555 for the same period in 2002. During 2003, the Partnership’s expenses included $ 22,523,576 ($20,297,712 for 2002) in costs of handset and accessories, $ 15,169,673 ($15,662,484 for 2002) in salaries and benefits, $ 2,682,232 ($9,915,770 for 2002) for legal and professional services, $17,272,191 ($14,171,258 for 2002) in depreciation and amortization, $8,907,241 ($9,854,591 for 2002) in provision for doubtful accounts, $46,713,169 ($41,933,902 for 2002) in interconnection, network maintenance, sales commissions, advertising, rent, taxes and other expenses, $4,165,826 ($5,808,374 for 2002) for services rendered by related parties and $ 282,280 ($262,164 for 2002) for management fees paid to the general partner. Variances ~~FINANCIAL~~in ~~STATEMENTS~~expenses ~~AND~~such ~~SUPPLEMENTARY~~as ~~DATA~~legal and professional and services rendered by related parties are due to reclassification of accounts at the subsidiary level and are not related to actual variations in such accounts. The decrease in expenses during 2003, as compared to 2002, is primarily associated with an overall decrease in operating expenses (excluding depreciation expense) of $3.6 million resulting from cost control management implemented at the Partnership and subsidiary level. The increase in salaries and benefits was offset by a decrease in legal and professional services and a reduction in the provision for doubtful accounts, due to better collection efforts and tighter credit policy.

~~ClearComm,~~Net ~~L.P.~~losses ~~Report~~ of ~~Independent~~$25,617,827 for ~~Public~~2003 ~~Accountants~~and ~~— December 31~~$13, ~~2004~~025,074 ~~2003~~for 2002, ~~and~~reflect ~~2002~~the ~~Consolidated~~costs ~~Balance~~of ~~Sheets~~competing -in ~~December~~the ~~31,~~Puerto Rico ~~2004,~~market ~~2003,~~against existing and ~~2002~~new ~~Consolidated~~cellular ~~Statements~~and ofPCS ~~Operations~~operators ~~for~~in ~~the~~order ~~years~~to continue ~~ended~~to -develop ~~December~~and ~~31,~~maintain ~~2004,~~a ~~2003,~~strong ~~and~~subscriber ~~2002~~base. ~~Consolidated~~The ~~Statements~~increase of ~~Changes~~the net inloss ~~Partners’~~as ~~Deficit~~compared ~~for~~to the ~~years~~prior ~~ended~~year -is ~~December~~primarily ~~31,~~due ~~2004,~~to ~~2003,~~the ~~and~~fact that the 2002 ~~Consolidated~~loss ~~Statements~~was ofreduced ~~Cash~~by ~~Flows~~a ~~for~~$13 ~~the~~million ~~years~~gain ~~ended~~on -the ~~December~~sale ~~31,~~of ~~2004,~~stock. ~~2003~~Accordingly, the ~~and~~operational loss for 2002 ~~Notes~~was to$26 ~~Consolidated~~million. ~~Financial~~The ~~Statements~~net ~~SuperTel~~loss ~~Communications~~for ~~Corp.~~2003 ~~Report~~includes nonrecurring losses such as the $3,913,661 write-off of ~~Independent~~the ~~Public~~discount ~~Accountants~~on –note payable ~~December~~to ~~31,~~the ~~2004,~~FCC ~~2003,~~which ~~and~~resulted ~~2002~~from ~~Balance~~the ~~Sheets~~debt -restructuring ~~December~~which ~~31,~~should be finalized during 2004,. ~~2003~~Therefore, ~~and~~the ~~2002~~adjusted ~~Statements~~net ofloss ~~Income~~for ~~and~~2003 ~~Accumulated~~would ~~Deficit~~be ~~for~~$21.8 million compared to the ~~years~~adjusted ~~ended~~$26 ~~December~~million ~~31,~~in ~~2004~~2002. Therefore, the net loss for 2003, ~~and~~shows ~~2002~~a ~~Statements~~reduction of ~~Cash~~approximately ~~Flows~~$4 ~~for~~million ~~the~~which ~~years~~is ~~ended~~directly proportional ~~December~~to ~~31,~~the ~~2004,~~reduction ~~2003,~~in ~~and~~operating ~~2002~~expenses ~~Notes~~as todescribed ~~Financial Statements~~above.

~~All~~Interest ~~financial~~expense ~~schedules~~for the ~~have~~year ~~been~~ended ~~omitted~~December 31, ~~because~~2003, ~~they~~totaled ~~are~~$13,312,468 ~~not~~as ~~applicable~~compared orto $16,212,644 ~~because~~for the ~~information~~same period in 2002. The decrease in interest expense ~~required~~during 2003 is ~~included~~primarily inattributable to the restructuring of the Partnership’s Notes Payable (refer to Notes 13, 14 and 15 to the accompanying consolidated financial statements) orand ~~notes~~to ~~thereto~~downward trends of interest rates in the markets. In 2003, the Partnership had interest income of $213,369, as compared to $249,661 in 2002.

21Contractual Obligations

~~Report~~As of ~~Independent~~December 31, ~~Public~~2005 ~~Accountants~~the Partnership’s contractual obligations including payments due by period, are as follows:

To the Partners of CLEARCOMM L.P. AND SUBSIDIARY:

	Payments due by Periods
			Less than		1-3		3-5		More than
	Total		1 yr		years		years		5 years

Operating Lease Agreement (1)	$	38,797,833	$	8,696,145	$	16,446,081	$	6,798,601	$	6,857,006
Sales-Leaseback (2)	4,068,548		895,395		1,560,609		1,341,600		2,612,700
Notes Payable (3)
Lucent/DB Zwirn	54,480,486		54,480,486		—		—		—
Alcatel	286,029		286,029		—		—		—
FCC	17,487,178		13,876,090		3,611,088		—		—
TEM	224,203		224,203		—		—		—

Total Contractual Obligations	$	115,344,277	$	78,458,348	$	21,617,778	$	8,140,201	$	9,469,706

~~We have audited the accompanying consolidated balance sheets of CLEARCOMM L.P.~~ (~~a Delaware Limited Partnership~~1) Operating ~~AND SUBSIDIARY (together,~~Lease ~~“the~~Agreement ~~Company”)~~is ~~as of December 31, 2004, 2003 and 2002, and the~~ related ~~consolidated~~to ~~statements of operations, changes in partners’ deficit, and cash flows for~~ the ~~years~~minimal ~~then~~annual ~~ended. These~~rental ~~consolidated~~commitments ~~financial statements are the responsibility~~ of the ~~Company~~ Partnership’s ~~management. Our~~ ~~responsibility~~subsidiary isat ~~to express~~Guaynabo anand ~~opinion~~at onvarious ~~these~~stores ~~financial~~and ~~statements~~site ~~based on our audits~~locations.

We(2) Sales-Leaseback ~~conducted~~includes ~~our audits in accordance with auditing standards generally accepted in~~ the ~~United~~principal ~~States of America as establish by the Auditing Standards Board of the American Institute of Certified Public Accountants. Those standards require that we plan~~ and ~~perform~~ ~~the~~imputed ~~audit~~interest topayments ~~obtain~~on ~~reasonable assurance about whether~~ the ~~financial statements~~lease ~~are free of material misstatement.~~ agreement Anwith ~~audit~~Mountain ~~includes~~Union ~~consideration of internal control over financial reporting as a basis~~ for ~~designing audit procedures that are appropriate in~~ the ~~circumstances,~~ ~~but~~lease ~~not~~of ~~for~~certain ~~the~~space ~~purpose~~on of12 ~~expressing~~towers. anUnder ~~opinion on~~ the ~~effectiveness~~lease ~~of the Company’s internal control over financial reporting. Accordingly~~agreement, weNewComm ~~express~~was nogranted ~~such~~a ~~opinion. An~~license ~~audit~~to ~~also includes examining~~install, onmaintain ~~a test basis, evidence supporting the amounts~~ and ~~disclosures in the financial~~operate ~~statements,~~its ~~assessing~~wireless ~~the~~communications ~~accounting~~equipment ~~principles used~~ and ~~significant~~accessories ~~estimates made~~on ~~by management, as well as evaluating~~ the ~~overall~~towers ~~financial~~for ~~statement presentation. We believe that our audits provide~~ a ~~reasonable basis for our~~10 ~~opinion~~year period.

In(3) Notes ~~our~~payable ~~opinion,~~include the ~~consolidated~~principal ~~financial~~installments ~~statements~~due ~~referred~~by toperiod ~~above~~on ~~present fairly, in all material respects, the financial position of ClearComm, L~~D.PB. ~~and Subsidiary as of December 31~~Zwirn, ~~2004~~Alcatel, ~~2003~~ FCC and ~~2002,~~TEM ~~and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America~~Notes.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring operating losses, has a working capital deficit and a partners’ capital deficit, and has not yet obtained permanent financing for the cost of its network and its working capital needs which matters raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.16

~~As discussed~~ITEM ~~in Note 3(h), effective January 1, 2003, the Company changed its method of accounting for the amount of loss incurred on the sale of handsets to customers~~7A. In ~~addition,~~QUANTITATIVE ~~and~~AND asQUALITATIVE ~~discussed in~~DISCLOSURES ~~Note~~ABOUT ~~3(k),~~MARKET ~~effective January 1, 2002, the Company changed its method for assessing the recoverability of its intangible assets.~~RISK

~~San~~The ~~Juan,~~Partnership’s ~~Puerto~~exposure to ~~Rico,~~market risk through derivative financial instruments and other financial ~~February~~instruments is not material because the Partnership does not use derivative financial instruments and does not have foreign currency exchange risks. The Partnership invests cash balances in excess of operating requirements in short-term money market funds. As of December 931, 2005, the Partnership had cash equivalents and short-term investments of $6,609,074 consisting of cash and highly liquid, short-term investments in money market funds.

22The Partnership’s cash and cash equivalents will increase or decrease by an immaterial amount if market interest rates increase or decrease, and therefore, its exposure to interest rate changes has been immaterial. The Partnership’s loans payable to the FCC have a fixed interest rate of 6.5% and therefore are not exposed to interest rate risks. The TLD Note relating to indebtedness of NewComm bears interest at the floating rate of the 90-day LIBOR plus 1% and is due six months from date of issuance but can be extended for periods of six months, thereafter. On July 1, 2005, Lucent assigned and transferred to D.B Zwirn Special Opportunities Fund, LTD (“D.B Zwirn”) 100% of Lucent’s rights and obligations under the original credit agreement. On July 14, the Company signed a Forbearance Agreement with D.B Zwirn. On August 25, 2005 NewComm and D.B Zwirn entered into a Senior Credit Agreement with an outstanding principal balance on the closing date due on the note amounting $54,480,486.02 including some accrued and unpaid interest and $4,000,000.00 in additional principal made available at the time of closing. The facility bears interest at a rate per annum equal to LIBOR + 700 basis points. Additionally, the facility will accrue pay-in-kind (PIK) interest on the aggregate principal amount, payable upon maturity, acceleration or repayment. The PIK interest is based on a grid that ranges from 2% to 4%, depending on quarterly EBITDA results. The maturity date on the facility was extended to March 2007. The Bridge Loan bears an interest rate of 0.75% over 90-day LIBOR and is now guaranteed by TISA. As part of this arrangement the Partnership agreed to pay an annual fee of 2% over half of this guarantee (or $30 million), or provide an equivalent cash collateral to the Banks. This loan guarantee fee is not due until the sale of the Partnership’s interest in NewComm. The Bridge Loan Facility has been extended again to April 30, 2008, with the option to extend by one or more additional periods of 30 days with the lender’s prior consent. The Telefonica Guarantee can be extended at the sole discretion of NewComm for another 2 year period until 2010.

~~ClearComm, L.P.~~17

ConsolidatedITEM Balance8. SheetsFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ClearComm, L.P. Report of Independent Public Accountants — December 31, 2005, December 31, 2004 (Restated), and 2003 (Restated) Consolidated Balance Sheets – December 31, 2005, December 31, 2004 (Restated), and ~~2002~~2003 (Restated) Consolidated Statements of Operations for the years ended –December 31, 2005, December 31, 2004 (Restated), and 2003 (Restated) Consolidated Statements of Changes in Partners’ Deficit for the years ended – December 31, 2005, December 31, 2004 (Restated), and 2003 (Restated) Consolidated Statements of Cash Flows for the years ended – December 31, 2005. December 31, 2004 (Restated), and 2003 (Restated) Notes to Consolidated Financial Statements SuperTel Communications Corp. Report of Independent Public Accountants – December 31, 2005, 2004, and 2003 Balance Sheets - December 31, 2005, 2004, and 2003 Statements of Income and Accumulated Deficit for the years ended December 31, 2005, 2004, and 2003 Statements of Cash Flows for the years ended December 31, 2005, 2004, and 2003 Notes to Financial Statements

	2004			2003			2002
CURRENT ASSETS:
Cash and cash equivalents	$	10,612,430		$	1,007,353		$	22,709,786
Cash in escrow account	—			1,500,000			—
Accounts receivable, net of allowance for doubtful accounts of $9,429,779, $15,032,114 and $18,627,970, respectively	7,909,573			12,297,162			11,594,949
Accounts receivable, other	4,204,524			7,457,028			6,483,255
Insurance claims receivable	403,657			—			270,002
Interest receivable	20,000			14,000			8,000
Inventories, net	1,304,392			3,908,736			10,461,112
Prepaid expenses	841,750			672,406			625,610
Total current assets	25,296,326			26,856,685			52,152,714
INVESTMENT IN SECURITIES	—			7,338,288			10,000,000
INVESTMENT IN 49% OWNED SUBSIDIARY, AT EQUITY, net	247,959			397,980			277,254
PCS LICENSES	46,750,449			57,517,974			57,517,974
LEASEHOLD RIGHTS, net	3,314,144			—			—
DEFERRED FINANCING COSTS	635,824			774,363			901,235
NOTE RECEIVABLE FROM OFFICER	100,000			100,000			100,000
PROPERTY AND EQUIPMENT, net	80,546,773			90,753,422			101,931,922
Total assets	$	156,891,475		$	183,738,712		$	222,881,099
LIABILITIES AND PARTNERS’ DEFICIT
CURRENT LIABILITIES:
Current portion of notes payable	$	61,363,389		$	42,510,010		$	22,647,544
Bridge Loan Facility	61,000,000			61,000,000			60,000,000
Capital lease obligation - current portion	185,164			—			—
Accounts payable and accrued liabilities	27,838,987			23,631,877			23,430,433
Accounts payable to related parties	20,785,979			16,592,457			16,700,443
Option deposit - PCS Licenses	—			1,500,000			—
Accrued interest	1,579,002			921,902			4,977,700
Deferred income	1,907,103			2,390,750			1,913,514
Total current liabilities	174,659,624			148,546,996			129,669,634
NOTES PAYABLE TO TELEFONICA MOVILES, S.A.	10,987,284			5,493,642			—
LONG-TERM NOTES PAYABLE, net of current portion	85,286,020			117,390,809			150,505,987
CAPITAL LEASE OBLIGATION, net of current portion	3,150,590			—			—
DEFERRED INCOME, net of current portion	1,789,648			—			—
Total liabilities	275,873,166			271,431,447			280,175,621
PARTNERS’ DEFICIT:
Limited partners’ capital (2,765.2, 2,906.1, 2,906.1 units issued and outstanding, respectively)	71,841,976			73,039,616			73,039,616
General partner’s capital (1 unit issued and outstanding)	100,000			100,000			100,000
Other comprehensive loss	—			(37,827		)	—
Accumulated losses	(190,923,667		)	(160,794,524		)	(130,434,138		)
Total partners’ deficit	(118,981,691		)	(87,692,735		)	(57,294,522		)
Total liabilities and partners’ deficit	$	156,891,475		$	183,738,712		$	222,881,099

All financial schedules have been omitted because they are not applicable or because the information required is included in the financial statements or notes thereto.

~~The accompanying notes are an integral part of these consolidated statements.~~18

23Report of Independent Public Accountants

ClearComm, L.P.To the Partners of

~~Consolidated~~CLEARCOMM ~~Statements~~L.P. ~~of Operations~~AND ~~for the years ended~~SUBSIDIARY:

We have audited the accompanying consolidated balance sheets of CLEARCOMM, L.P. (a Delaware Limited Partnership) AND SUBSIDIARY (“the Company”) as of December 31, ~~2004~~2005, 2004 and 2003, ~~2002~~and the related consolidated statements of operations, changes in partners’ deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

	2004			2003			2002
REVENUES:
Service revenues	$	100,336,047		$	101,557,423		$	99,779,656
Handset and accessories sales	4,665,889			7,336,689			8,177,441
Total revenue	105,001,936			108,894,112			107,957,097
OPERATING EXPENSES:
Cost of handsets and accessories sold	24,352,074			22,523,576			20,297,712
Salaries and benefits	15,642,745			15,169,673			15,662,484
Provision for doubtful accounts	14,762,108			8,907,241			9,854,591
Salesmen and dealers commissions	11,652,417			8,375,695			4,241,827
Advertising expense	6,936,679			7,353,590			8,461,265
Rent expense	6,922,312			6,755,926			7,766,611
Network operation and maintenance expense	4,479,139			5,559,349			8,057,442
Taxes, other than income	3,952,175			4,945,218			1,262,577
Interconnection expense	2,798,991			4,245,415			4,916,771
Services rendered by related parties	5,466,626			4,090,826			6,070,538
Legal and professional services	2,700,917			2,682,232			9,915,770
Other expenses	7,978,150			9,477,976			7,226,709
Total operating expenses	107,644,333			100,086,717			103,734,297
INCOME FROM OPERATIONS	(2,642,397		)	8,807,395			4,222,800
INTEREST EXPENSE	(9,470,793		)	(13,312,468		)	(16,212,644		)
DEPRECIATION AND AMORTIZATION	(17,811,034		)	(17,272,191		)	(14,171,258		)
LOSS BEFORE OTHER INCOME (EXPENSE)	(29,924,224		)	(21,777,264		)	(26,161,102		)
OTHER INCOME (EXPENSE):
Gain on sale of California License	4,168			—			—
Gain on sale of investment in stock of subsidiary	—			—			13,000,000
Realized loss on sale of investment in securities	(56,518		)	—			—
Equity in net loss of 49% owned subsidiary	(115,382		)	(140,608		)	(114,746		)
Interest income	126,827			213,369			249,661
Write-down of investment in subsidiary	(165,306		)	—			—
Loss on write-off of inventories	—			(4,742,559		)	—
Write-off of discount on note payable to FCC	—			(3,913,661		)	—
Other	1,292			337			1,113
NET LOSS	$	(30,129,143	)	$	(30,360,386	)	$	(13,025,074	)
NET LOSS ATTRIBUTABLE TO GENERAL PARTNER	$	(30,129,143	)	$	(30,360,386	)	$	(13,025,074	)
NET LOSS ATTRIBUTABLE TO LIMITED PARTNERS	$	—		$	—		$	—
NET LOSS PER UNIT ATTRIBUTABLE TO LIMITED PARTNERS	$	—		$	—		$	—

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~The~~In ~~accompanying~~our ~~notes~~opinion, the consolidated financial ~~are~~statements anreferred ~~integral~~to ~~part~~above present fairly, in all material respects, the financial position of ~~these~~ClearComm, ~~consolidated~~L.P. ~~statements~~and Subsidiary as of December 31, 2005, 2004 and 2003, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

24The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring operating losses, has a working capital deficit and a partners’ capital deficit, and has not yet obtained permanent financing for the cost of its network and its working capital needs which matters raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~ClearComm~~As discussed in Note 2 to the accompanying consolidated financial statements, the Partnership has restated its Lconsolidated financial statements as of and for the years ended December 31, 2004 and 2003 (presented herein as restated).P.

~~Consolidated~~/s/ ~~Statements~~Kevane ofSoto ~~Changes~~Pasarell inGrant ~~Partners’~~Thornton LLP San Juan, Puerto Rico, February 3, 2006, except for Notes 1(~~Deficit~~b) and 15(b), for which the ~~years~~date ~~ended~~is February 16, 2006.

~~December 31, 2004, 2003, 2002~~19

										Other
	Limited Partners					General				Comprehensive
	Units		Amount			Partner				Loss			Total
BALANCES, December 31, 2001	2,906.1		$	—		$		(54,269,448	)	$	—		$		(54,269,448	)
DILUTION GAIN			7,500,000			2,500,000				—			10,000,000
										—
NET LOSS - 2002	—		(7,500,000		)	(5,525,074			)	—			(13,025,074			)
BALANCES, December 31, 2002	2,906.1		—			(57,294,522			)	—			(57,294,522			)
COMPREHENSIVE LOSS:
Net loss for the year	—		—			(30,360,386			)	—			(30,360,386			)
Unrealized holding loss in investment securities	—		—			—				(37,827		)	(37,827			)
Net comprehensive loss	—		—			(30,360,386			)	(37,827		)	(30,398,213			)
BALANCES, December 31, 2003	2,906.1		—					(87,654,908	)		(37,827	)			(87,692,735	)
Net loss for the year	—		—			(30,129,143			)	—			(30,129,143			)
Realized holding loss in investment in securities	—		—			—				37,827			37,827
Reacquired partner’s units	(140.90	)	—			(1,197,640			)	—			(1,197,640			)
BALANCES, December 31, 2004	2,765.20		$	—		$	(118,981,691		)	$	—		$	(118,981,691		)

ClearComm, L.P.

~~The accompanying notes~~Consolidated ~~are~~Balance ~~an integral part of these consolidated statements.~~Sheets

25December 31, 2005, 2004 (Restated), and 2003(Restated)

ClearComm, L.P.

	2005			2004			2003
				(restated)			(restated)
CURRENT ASSETS:
Cash and cash equivalents	$	6,609,074		$	10,612,430		$	1,007,353
Cash in escrow account	—			—			1,500,000
Accounts receivable, net of allowance for doubtful accounts of $7,761,062, $9,429,779 and $15,032,114, respectively	6,127,025			7,909,573			12,297,162
Accounts receivable, other	1,851,278			4,204,524			7,457,028
Insurance claims receivable	—			403,657			—
Interest receivable	—			20,000			14,000
Inventories, net	2,953,707			4,341,975			8,651,295
Prepaid expenses	1,389,516			841,750			672,406

Total current assets	18,930,600			28,333,909			31,599,244
INVESTMENT IN SECURITIES	—			—			7,338,288

INVESTMENT IN 49% SUBSIDIARY, AT EQUITY, net	—			247,959			397,980

PCS LICENSES	46,750,449			46,750,449			57,517,974

LEASEHOLD RIGHTS, net	3,465,685			3,314,144			—

DEFERRED FINANCING COSTS	658,660			635,824			774,363

NOTE RECEIVABLE FROM OFFICER	—			100,000			100,000

PROPERTY AND EQUIPMENT, net	68,676,259			80,546,773			90,753,422

Total assets	$	138,481,653		$	159,929,058		$	188,481,271

LIABILITIES AND PARTNERS’ DEFICIT
CURRENT LIABILITIES:
Current portion of notes payable	$	14,162,119		$	61,363,389		$	42,510,010
Bridge Loan Facility	—			61,000,000			61,000,000
Capital lease obligation - current portion	447,700			185,164			—
Accounts payable and accrued liabilities	18,962,981			27,838,987			23,631,877
Accounts payable to related parties	14,280,617			20,785,979			16,592,457
Option deposit - PCS Licenses	—			—			1,500,000
Accrued interest	1,913,880			1,579,002			921,902
Deferred income	1,651,770			1,907,103			2,390,750

Total current liabilities	51,419,067			174,659,624			148,546,996

LONG-TERM NOTES PAYABLE, net of current portion	138,174,365			96,273,304			122,884,451
CAPITAL LEASE OBLIGATIONS, net of current portion	3,620,848			3,150,590			—
DEFERRED INCOME, net of current portion	1,910,593			1,789,648			—

Total liabilities	195,124,873			275,873,166			271,431,447

PARTNERS’ DEFICIT:
Limited partners’ capital (2,768.2, 2,765.2, 2906.1 units issued and outstanding, respectively)	71,916,986			71,841,976			73,039,616
General partner’s capital (1 unit issued and outstanding)	100,000			100,000			100,000
Other comprehensive loss	—			—			(37,827		)
Accumulated losses	(128,660,206		)	(187,886,084		)	(156,051,965		)

Total partners’ deficit	(56,643,220		)	(115,944,108		)	(82,950,176		)

Total liabilities and partners’ deficit	$	138,481,653		$	159,929,058		$	188,481,271

~~Consolidated~~The accompanying ~~Statements~~notes ofare ~~Cash Flows~~an ~~for~~integral ~~the~~part of ~~years~~these ~~ended~~consolidated statements.

~~December 31, 2004, 2003, 2002~~20

	2004			2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(30,129,143	)	$	(30,360,386	)	$	(13,025,074	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities-
Depreciation and amortization	17,811,034			17,050,319			13,958,465
Equity in losses of unconsolidated subsidiary	115,382			140,608			114,746
Amortization of loan origination fees	—			221,872			212,793
Amortization of discount on note payable to FCC	—			2,404,215			3,388,039
Write-off on discount of note payable to FCC	—			3,913,661			—
Realized loss on sale of investment in securities	56,518
Inventory Reserve	—			4,742,559			—
Bad debt expense	14,762,108			8,907,241			9,854,591
Write-down of investment in subsidiary	165,306			—			—
Gain on sale of property and equipment and California License	(10,666		)	—			—
Changes in operating assets and liabilities-
Increase in interest receivable	(288,067		)	(4,000		)	(6,000		)
Increase in accounts receivable, before write-offs	(7,197,016		)	(10,660,227		)	(8,833,805		)
Decrease (increase) in insurance claims receivable	(403,657		)	270,002			1,226,322
Decrease (increase) in inventories	2,604,344			1,809,817			(155,858		)
Decrease (increase) in prepaid expenses	(169,341		)	(46,796		)	26,673
Decrease (increase) accounts payable and accrued liabilities	1,860,195			201,443			(3,798,100		)
Increase (decrease) in accounts payable to related parties	4,268,522			(32,986		)	3,826,632
(Decrease) increase in accrued interest	1,836,597			(978,843		)	6,516,694
Decrease in checks drawn in excess of bank balance	(82,469		)	—			—
(Decrease) increase in deferred income	(682,098		)	477,236			362,848
Total adjustments	34,646,692			28,416,121			26,694,040
Net cash provided by (used in) operating activities	4,517,549			(1,944,265		)	13,668,966
CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of investment securities	7,319,598			2,616,584			—
Payment for the purchase of investment securities	—			—			(10,000,000		)
Acquisition of property and equipment	(5,876,171		)	(5,864,516		)	(13,794,432		)
Proceeds from the sale of property and equipment and California License	13,651,421			—			—
Payment for the investment in subsidiary	(130,667		)	(261,334		)	(392,000		)
Net cash provided by (used in) investing activities	14,964,181			(3,509,266		)	(24,186,432		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of shares of NewComm	$	—		$	—		$	10,000,000
Proceeds from issuance of note payable to Telefonica Moviles	5,493,642			5,493,642			—
Principal payments of capital lease obligations	(23,813		)	—			—
Payments for deferred financing costs	—			(95,000		)	(207,297		)
Payments made to reacquire partner’s units	(1,197,650		)	—			—
Proceeds from extension of note payable to ABN/AMRO	—			1,000,000			—
Proceeds from issuance of notes payable to TLD	—			—			18,960,080
Payment of note payable to Lucent	(3,000,000		)	(11,102,065		)	—
Payment of note payable to Alcatel	(2,075,000		)	(2,900,000		)	(5,767,433		)
Payment of notes payable to FCC	(9,073,832		)	(8,645,479		)	—
Net cash provided by (used in) financing activities	(9,876,653		)	(16,248,902		)	22,985,350
NET INCREASE IN CASH AND CASH EQUIVALENTS	9,605,077			(21,702,433		)	12,467,884
CASH AND CASH EQUIVALENTS, beginning of year	1,007,353			22,709,786			10,241,902
CASH AND CASH EQUIVALENTS, end of year	$	10,612,430		$	1,007,353		$	22,709,786
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
INTEREST PAID	$	7,916,260		$	11,887,096		$	6,314,000

ClearComm, L.P.

~~The~~Consolidated ~~accompanying~~Statements ~~notes are an integral part~~ of ~~these~~Operations ~~consolidated~~for ~~statements.~~the years ended

26December 31, 2005, 2004 (Restated), and 2003 (Restated)

ClearComm, L.P.

	2005			2004			2003
				(restated)			(restated)
REVENUES:
Service revenues	$	84,041,902		$	100,336,047		$	101,557,423
Handset and accessories sales	4,882,359			4,665,889			7,336,689

Total revenue	88,924,261			105,001,936			108,894,112

OPERATING EXPENSES:
Cost of handsets and accessories sold	15,317,082			26,057,050			22,523,576
Depreciation and amortization	18,046,423			17,811,034			17,272,191
Salaries and benefits	15,160,520			15,642,745			15,169,673
Provision for doubtful accounts	11,754,279			14,762,108			8,907,241
Salesmen and dealers commissions	5,863,377			11,652,417			8,375,695
Advertising expense	3,213,290			6,936,679			7,353,590
Rent expense	7,640,309			6,922,312			6,755,926
Network operation and maintenance expense	7,270,016			4,479,139			5,559,349
Taxes, other than income	3,593,236			3,952,175			4,945,218
Interconnection expense	617,990			2,798,991			4,245,415
Services rendered by related parties	3,558,061			5,466,626			4,090,826
Legal and professional services	1,924,729			2,700,917			2,682,232
Other expenses	4,791,670			7,978,150			9,477,976

Total operating expenses	98,750,982			127,160,343			117,358,908

INCOME FROM OPERATIONS	(9,826,721		)	(22,158,407		)	(8,464,796		)

INTEREST EXPENSE	(14,340,849		)	(9,470,793		)	(13,312,468		)

LOSS BEFORE OTHER INCOME (EXPENSE)	(24,167,570		)	(31,629,200		)	(21,777,264		)

OTHER INCOME (EXPENSE):
Gain on sale of California License	—			4,168			—
Realized loss on sale of investment in securities	—			(56,518		)	—
Equity in net loss of 49% owned subsidiary	(30,000		)	(115,382		)	(140,608		)
Interest income	675,473			126,827			213,369
Write-down of investment in subsidiary	(217,959		)	(165,306		)	—
Write-off of discount on note payable to FCC	—			—			(3,913,661		)
Other	—			1,292			337

NET LOSS	$	(23,740,056	)	$	(31,834,119	)	$	(25,617,827	)

NET LOSS ATTRIBUTABLE TO GENERAL PARTNER	$	(23,740,056	)	$	(31,834,119	)	$	(25,617,827	)

NET LOSS ATTRIBUTABLE TO LIMITED PARTNERS	$	—		$	—		$	—

NET LOSS PER UNIT ATTRIBUTABLE TO LIMITED PARTNERS	$	—		$	—		$	—

~~Notes~~The toaccompanying ~~Consolidated~~notes ~~Financial~~are an integral part of these consolidated ~~Statements~~statements.

~~December 31, 2004, December 31, 2003, and December 31, 2002~~21

~~(1) Reporting entity:~~ClearComm, L.P.

~~The~~Consolidated ~~Reporting~~Statements ~~Entity for purposes~~ of ~~these~~Changes ~~financial~~in ~~statements~~Partners’ ~~is ClearComm, L.P., a Delaware limited partnership~~ (~~the “Partnership”~~Deficit)~~, together~~ ~~with~~for ~~its subsidiary Newcomm Wireless Services, Inc., a Puerto Rico corporation (“NewComm” and, together with~~ the ~~Partnership,~~years ~~the “Company”).~~ended

~~The Partnership was organized on January~~December 2431, ~~1995~~2005, ~~under~~2004 ~~the laws of the state of Delaware. The Partnership was created to file applications with the Federal Communications Commission~~ (~~FCC~~Restated) ~~under personal communications service (PCS) frequency Block C~~, ~~originally restricted to minorities, small businesses~~ and ~~designated entities, to become a provider~~2003 of broadband PCS. The Partnership is scheduled to terminate on December 31, 2005, or earlier, upon the occurrence of certain specific events as detailed in the Partnership Agreement. The Partnership’s General Partner is considering alternatives to dissolution, including an extension of the Partnership’s termination date that would require the consent of the Partnership’s partners.(Restated)

SuperTel Communications Corp., a Puerto Rico corporation (“SuperTel”), is the Partnership’s General Partner and its share of the income and losses of the Partnership is 25% in accordance with the Partnership Agreement. Approximately 1,600 limited partners also invested in the Partnership through a private placement. On January 22, 1997, the Partnership was granted the PCS Block C licenses for Puerto Rico and certain cities in California.

									Accumulated
									Other
	Limited Partners					General			Comprehensive
	Units		Amount			Partner			Loss			Total

BALANCES, December 31, 2002	2,906.10		$	—		$	(57,294,522	)	$	—		$	(57,294,522	)

COMPREHENSIVE LOSS:

Net loss for the year	—		—			(25,617,827		)	—			(25,617,827		)

Unrealized holding loss in investment securities	—		—			—			(37,827		)	(37,827		)

Net comprehensive loss	—		—			(25,617,827		)	(37,827		)	(25,655,654		)

BALANCES, December 31, 2003 (Restated)	2,906.10		—			(82,912,349		)	(37,827		)	(82,950,176		)

Net loss for the year	—		—			(31,834,119		)	—			(31,834,119		)

Realized holding loss in investment securities	—		—			—			37,827			37,827

Reacquired partners’ units	(140.90	)				(1,197,640		)				(1,197,640		)

BALANCES, December 31, 2004 (Restated)	2,765.20		—			(115,944,108.00		)	—			(115,944,108.00		)

SETTLEMENT AGREEMENT AND MUTUAL RELEASE TRANSACTION	—		—			80,515,944			—			80,515,944

DILUTION GAIN	—		—			2,450,000			—			2,450,000

Reissuance of partners’ units	3.00		75,000			—			—			75,000

NET LOSS - 2005	—		(75,000		)	(23,665,056		)	—		`	(23,740,056		)

BALANCES, December 31, 2005	2,768.20		$	—		$	(56,643,220	)	$	—		$	(56,643,220	)

OnThe ~~February 4, 1999,~~accompanying ~~the~~notes ~~Partnership~~are ~~entered into~~ an ~~agreement~~integral ~~(the Joint Venture Agreement) with Telefónica Larga Distancia de Puerto Rico,~~part ~~Inc. (“TLD”) to jointly develop and operate certain PCS licenses in Puerto Rico. Some relevant provisions~~ of ~~this~~these ~~agreement~~consolidated ~~are the following:~~statements.

• The Partnership transferred all of its Puerto Rico licenses including its related debt with the FCC (the Partnership’s contribution) to its subsidiary NewComm, a newly organized Puerto Rico corporation owned by the Partnership, in exchange for all of NewComm’s issued and outstanding common stock. Subsequently, the Partnership sold part of its investment in NewComm, and since December 31, 2002, the Partnership owned 76.89% of NewComm’s issued and outstanding common stock.22

~~• TLD~~ClearComm, ~~lent approximately $20 million to NewComm by means of a secured convertible promissory note payable (the Promissory Note)~~L. Payment of the Promissory Note is collateralized through the provisions of a separate agreement pursuant to which a security interest was imposed upon NewComm’s assets and a pledge and guaranty agreement issued by the PartnershipP.

~~• Once~~Consolidated ~~certain~~Statements ~~regulatory and other requirements are met, the Promissory Note may be converted into a certain number~~ of ~~shares~~Cash ofFlows ~~NewComm’s~~for ~~common stock corresponding to approximately 49.9% of NewComm. On March 12, 2002,~~ the ~~Partnership~~years agreed to sell an additional 0.2% of its shares in NewComm to TLD to bring TLD’s (now assigned to TELEFONICA MOBILES, S.A. or TEM) ownership to 50.1%; this transaction is subject to a third party valuation of NewComm’s stock and approval by the FCC. During 2004, the Partnership and TLD received the approval from the FCC, but the conversion and additional sale of participation has not been consummated.ended

~~• NewComm~~December 31, ~~and~~2005, ~~TLD~~2004 ~~entered~~(Restated), ~~into certain management~~ and ~~technology transfer agreements.~~ 2003 ~~These agreements were terminated effective October 28, 2004.~~(Restated)

• The Partnership and TLD entered into Shareholders and Sale Agreements. The Shareholders’ agreement provides for general and specific protections and rights for the Partnership as a minority shareholder in

	2005			2004			2003
				(restated)			(restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,740,056	)	$	(31,834,119	)	$	(25,617,827	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities-
Depreciation and amortization	18,046,423			17,811,034			17,050,319
Equity in losses of unconsolidated subsidiary	30,000			115,382			140,608
Amortization of deferred financing costs	1,317,523
Amortization of loan origination fees	—			—			221,872
Amortization of discount on note payable to FCC	—			—			2,404,215
Write-off on discount of note payable to FCC	—			—			3,913,661
Write-off on note receivable from officer	100,000			—			—
Write-off on interest receivable from officer	20,000
Write-off of accrued interest balance	(452,900		)	—			—
Realized loss on sale of investment in securities	—			56,518
Bad debt expense	11,754,279			14,762,108			8,907,241
Write-down of investment in subsidiary	217,959			165,306			—
Gain on sale of property and equipment and California License	(833,067		)	(10,666		)	—
Forgiveness of debt due to affiliate	(1,240,520		)
Capitalized interest	389,195
Other non-cash transactions	8,120
Changes in operating assets and liabilities-
Increase in interest receivable	—			(288,067		)	(4,000		)
Increase in accounts receivable, before write-offs	(7,160,440		)	(7,197,016		)	(10,660,227		)
Decrease (increase) in insurance claims receivable	403,657			(403,657		)	270,002
Decrease (increase) in inventories	1,016,027			4,309,320			1,809,817
Decrease (increase) in prepaid expenses	(690,451		)	(169,341		)	(46,796		)
Decrease (increase) accounts payable and accrued liabilities	(5,828,633		)	1,860,195			201,443
Increase (decrease) in accounts payable to related parties	(7,262		)	4,268,522			(32,986		)
(Decrease) increase in accrued interest	5,466,084			1,836,597			(978,843		)
Decrease in checks drawn in excess of bank balance	—			(82,469		)	—
(Decrease) increase in deferred income	(295,230		)	(682,098		)	477,236
Total adjustments	22,260,764			36,351,668			23,673,562
Net cash provided by (used in) operating activities	(1,479,292		)	4,517,549			(1,944,265		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of investment securities	—			7,319,598			2,616,584
Acquisition of property and equipment	(5,565,364		)	(5,876,171		)	(5,864,516		)
Proceeds from the sale of property and equipment and California License	497,906			13,651,421			—
Payment for the investment in subsidiary	—			(130,667		)	(261,334		)
Net cash provided by (used in) investing activities	(5,067,458		)	14,964,181			(3,509,266		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of note payable to Telefonica Moviles	—			5,493,642			5,493,642
Principal payments of capital lease obligations	(295,033		)	(23,813		)	—
Payments for deferred financing costs	(1,241,573		)	—			(95,000		)
Payments made to reacquire partner’s units	—			(1,197,650		)	—
Proceeds from extension of note payable to ABN/AMRO	—			—			1,000,000
Proceeds from issuance of notes payable to D.B. Zwirn	4,000,000
Proceeds from issuance of preferred stock	2,255,000
Payment of note payable to Lucent	—			(3,000,000		)	(11,102,065		)
Payment of note payable to Alcatel	(2,175,000		)	(2,075,000		)	(2,900,000		)
Payment of notes payable to FCC	—			(9,073,832		)	(8,645,479		)
Net cash provided by (used in) financing activities	2,543,394			(9,876,653		)	(16,248,902		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	(4,003,356		)	9,605,077			(21,702,433		)
CASH AND CASH EQUIVALENTS, beginning of year	10,612,430			1,007,353			22,709,786
CASH AND CASH EQUIVALENTS, end of year	$	6,609,074		$	10,612,430		$	1,007,353

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
INTEREST PAID	$	7,168,049		$	7,916,260		$	11,887,096

27The accompanying notes are an integral part of these consolidated statements.

NewComm. The Sale Agreement provides for an exit for the Partnership from NewComm at any time after May 12, 2003. At the closing of the sale, the management and technology transfer agreements between the Company and several related entities (TEM and TISA) will terminate. See Note (16).23

~~• In August 2004~~ClearComm, ~~the Partnership retained the services of a consulting firm (other than its external auditors), to audit the operations and performance of NewComm under the management of TEM~~L. ~~The results of the audit were reported to the Board of Directors of NewComm on September 30, 2004, with the conclusion that TEM had not performed adequately~~P. ~~Under~~ ~~the Partnership’s direction, the Board of Directors of NewComm terminated TEM as manager under the management agreement on October 28, 2004. TEM has alleged unlawful~~ and wrongful termination of the Technology and Management Agreements. The Partnership, on behalf of NewComm, is proactively seeking compensation for damages caused by what the Partnership believes was TEM’s nonperformance and breach of the Technology and Management Agreements.Subsidiary

~~• The~~Notes Partnership and TLD’s sale agreement shall continue in full force and effect even if the Stock Purchase agreement (“SPA”) with TEM, for whatever reason, does not close. Notwithstanding, the SPA and the sale agreement are subject to ~~the arbitration proceedings that were filed by TEM~~Consolidated ~~upon~~Financial ~~their termination as manager of NewComm.~~Statements

~~The Company commenced commercial operations in September~~December ~~1999~~31, ~~providing~~ ~~communications services to its customers. Prior to that date~~2005, it2004 ~~was~~(Restated) onand ~~its~~2003 ~~development stage.~~(Restated)

~~On August 28, 2000, the Partnership entered into a Purchase and Sale Agreement with Leap Wireless International~~ (~~Leap Wireless~~1), Reporting ~~pursuant to which the Partnership sold the Visalia, California license to Leap Wireless in exchange for a $9,500,000 cash payment. The transaction closed on June 8, 2001.~~entity:

~~NewComm~~(a) The ~~received~~reporting anentity ~~aggregate~~for ~~equity~~purposes ~~investment~~ of ~~$25~~these financial statements is ClearComm,~~000~~ L.P.,~~000~~ a ~~($10~~Delaware ~~million~~limited inpartnership ~~2000~~(the “Partnership”), $5together with its ~~million~~subsidiary inNewComm ~~2001~~Wireless Services, Inc., a Puerto Rico corporation (“NewComm” and, ~~$10~~together ~~million~~with inthe ~~2002)~~Partnership, ~~from~~the ~~Syndicated~~“Company”). ~~Communications~~The ~~Venture~~Partnership was ~~Partners~~organized IVon January 24, L1995, under the laws of the state of Delaware.P. The Partnership was created to file applications with the Federal Communications Commission (~~“Syncom”~~FCC) under personal communications service (PCS) frequency Block C, originally arestricted ~~third~~to ~~party~~minorities, insmall ~~exchange~~businesses ~~for~~and designated entities, to become a 15provider of broadband PCS.~~39%~~ The ~~ownership~~Partnership successfully completed a consent solicitation process whereby it extended its termination date to December 31, 2010.

OnSuperTel ~~March 2~~Communications Corp. (SuperTel), ~~2002~~a Puerto Rico corporation, is the Partnership’s General Partner and its share of the income and losses of the Partnership ~~sold~~is ~~approximately~~25% 4in accordance with the Partnership Agreement.~~08%~~ ofApproximately ~~its~~1,600 ~~investment~~limited partners also invested in ~~NewComm~~the toPartnership through a private placement. On January 22, ~~group~~1997, ofthe ~~investors~~Partnership ~~led~~was bygranted ~~Fleet~~the ~~Development~~PCS ~~Ventures~~Block C licenses for ~~$13~~Puerto ~~million~~Rico and certain cities in California.

~~During~~On ~~2004~~February 4, 1999, the Partnership ~~sold~~entered into ita ~~California~~joint ~~PCS~~venture agreement (the “Joint Venture Agreement”) with Telefónica Larga Distancia de Puerto Rico, Inc. (“TLD”) to jointly develop and operate the Puerto Rico licenses. Consequently, the parties organized the Company in order to aconsummate ~~third~~the ~~party~~Joint Venture Agreement. ~~See~~ ~~note~~The ~~(9)~~Company commenced commercial operations in September 1999, providing communications services to its customers. Prior to that date, the Company was in the development stage.

AsAmong ofthe ~~December 31, 2004,~~most ~~2003 and 2002, common stockholders of NewComm (Class A and Class C)~~important ~~and~~subsequent ~~their~~events ~~percentages~~are ofthe ~~ownership were~~following:

ClearComm, L.P.	76.89	%
Syndicated Communications Venture Partners IV, L.P.	15.39	%
Fleet Development Ventures, LLC	2.97	%
Opportunity Capital Partners IV, L.P.	2.97	%
Power Equities, Inc.	1.78	%
	100.00	%

• The Partnership transferred all of its Puerto Rico PCS licenses including its related debt with the FCC to NewComm, a newly organized Puerto Rico corporation, in exchange for all of NewComm’s issued and outstanding common stock. The Company recorded the Partnership’s contribution of the licenses at the Partnership’s basis in the licenses, in accordance with Generally Accepted Accounting Principles in the United States.

• TLD loaned approximately $20 million to the Company by means of a secured convertible promissory note payable (2the “Promissory Note”) ~~Going~~. The Promissory ~~concern~~Note ~~issues~~is subject to an agreement pursuant to which a security interest is imposed upon the Company’s assets, and ~~financing~~a ~~arrangements:~~pledge and guaranty agreement issued by the Partnership. Once certain regulatory and other requirements were met, the Promissory Note was converted to NewComm’s common stock corresponding to approximately 49.9% of NewComm’s ownership at the time of the conversion. On March 12, 2002, the Partnership agreed to sell 0.2% of its shares in NewComm to TLD to bring TLD’s ownership to 50.1%; this transaction will be consummated after a third party valuation of NewComm’s common stock and is subject to the approval of the FCC. During 2004, the Company and TLD received approval from the FCC, but the conversion and related sale of participation has not yet been consummated.

• The ~~accompanying consolidated financial statements have been prepared~~ ~~on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The~~ Company ~~commenced operations in September 1999~~ and ~~has~~TLD ~~incurred~~entered ~~net~~into ~~losses~~certain ofmanagement ~~approximately $30.1 million in 2004, $30.4 million in 2003~~ and ~~$13.0~~technology ~~million in 2002.~~ transfer ~~It also has a working capital deficiency and a stockholders’ deficit of $149 million, and $119 million, respectively, as of December 31, 2004~~agreements. The Company is likely to continue incurring losses until such time as its subscriber base generates revenue in excess of the Company’s expenses. Development of a significant subscriber base is likely to take time, during which the

28• The Partnership and TLD entered into a Shareholders and a Sale Agreement. The Shareholders’ agreement provides for general and specific protections and rights for the Partnership as a minority shareholder in NewComm. The Sale agreement provides for an exit of the Partnership from NewComm at any time after May 12, 2003. At the closing of the sale, the management and technology transfer agreements between the Company and several related entities (TEM and TISA) will terminate.

• Under the Partnership’s direction, the Board of Directors of the Company ~~must~~terminated TEM ~~finance~~as ~~its~~manager ~~operations~~under relevant provisions of the management agreement executed on October 28, 2004. TEM has alleged unlawful and wrongful termination of the technology and management agreement. The Partnership on behalf of the Company was proactively seeking compensation for damages caused by ~~means~~the mismanagement ~~other~~of ~~than~~TEM ~~its~~either ~~revenues~~by settlement or through an arbitration process.

As part of the agreement with TLD, NewComm entered into a contract with Lucent Technologies, Inc. (“Lucent”) that requires Lucent to build a network that uses Code Division Multiple Access (“CDMA”) protocol. NewComm has incurred approximately $119 million in the construction of this network. During 2000, NewComm’s management and Lucent agreed on formally extending the payment of up to $61 million of the total amount of network construction costs, at the time, under a formal financial agreement. On June 4, 2003, NewComm entered into a Senior Credit Agreement with Lucent, which extends the maturity date of the $61 million to September 30, 2009, with interest at 8% annually. See Note 15(a).24

~~Alcatel USA International Marketing, Inc. (“Alcatel”) was contracted to build part of the CDMA network.~~ On ~~December~~April 1821, ~~2001~~ 2005, ~~NewComm~~the ~~had~~Company ~~outstanding invoices~~ and ~~past due interest to Alcatel~~its ~~totaling~~shareholders ~~$14,361,732. On that day, NewComm and Alcatel~~ entered into a ~~Promissory~~Settlement Agreement and ~~Note~~Mutual ~~for~~Release ~~said~~with ~~amount~~TEM ~~at an~~in ~~interest~~which ~~rate~~all ofthe ~~14%,~~parties ~~and~~resolved anall ~~original~~outstanding ~~maturity date of March 25, 2002~~disputes. ~~This~~ ~~Promissory~~The ~~Agreement~~parties ~~and~~agreed Note was amended with an extension of payment until November 25, 2002. On May 23, 2002, NewComm paid Alcatel $6 million, including interest of $646,000. On June 20, 2003, the Promissory Note was amended to ~~provide for~~ the orderly repayment of the principal and accrued interest on the Note, extending its maturity to December 20, 2005 and decreasing the interest rate to 6.5%. In June 2003, NewComm repaid $2 million of principal and $337,372 of accrued interest owed. During 2004, NewComm repaid $2,075,000 of principal and $234,439 of accrued interest owed. See Note 15(b).following:

~~During~~• A ~~November 2000,~~mutual ~~NewComm~~waiver entered into a $60 million bridge loan agreement (the “Bridge Loan Facility”) with a commercial bank (originally it was two commercial banks). The Bridge Loan Facility is guaranteed by Telefónica Internacional, S.A. (“TISA”), and ~~a maturity~~release ~~date has been fixed at April 30, 2005, with the option to extend by one or more additional periods of 30 days with the lender’s prior consent. By means of letter agreement~~ between ~~and amongst~~all ~~the Partnership, Telefónica Móviles S~~parties.A. (TEM) and Telefónica, S.A. (TEF), the latter two have agreed to issue a corporate guarantee to cover the refinancing of this Bridge Loan and $42.6 million owed to the FCC. During 2003, NewComm received an additional $1 million advance under the terms of this facility. This arrangement provides for no amortization of principal until the fifth anniversary of the facility and was subject to the FCC issuing an approval order authorizing the sale to TLD of a .2% ownership interest in NewComm. Such approval was issued during 2004.

~~During~~• Payment ~~2004~~of ~~and 2003, NewComm received~~ $54,~~493~~392,~~642~~978 ~~each~~in ~~year~~full insatisfaction ~~advances~~of ~~from Telefónica~~the ~~Móviles,~~technology ~~S.A.,~~transfer tofee ~~comply~~due ~~with~~to TEM under the ~~payment~~technology ~~requirements~~transfer onagreement ~~the~~through ~~FCC~~issuance of a convertible ~~debt. See~~promissory ~~Note~~note 14(subsequently converted to capital).

~~Management~~• Payment ~~believes~~of ~~that the Company has complied with all the requirements for obtaining the permanent financing arrangements discussed above and believes that cash and cash equivalents on hand~~$2, ~~anticipated growth in revenues~~239,492 ~~vendor financing and this permanent financing will be adequate to fund its operations, at a minimum, through the end of 2005. However,~~ in ~~the absence~~full ofsatisfaction ~~improved operating results and cash flows, and the closing~~ of ~~this contemplated permanent financing,~~ the ~~Company~~management ~~may~~fee ~~face~~due ~~liquidity problems~~ to ~~fund~~ ~~its~~TEM ~~operations~~under ~~and meet its obligations.~~ the ~~However,~~management ~~and~~agreement ~~because~~through ofissuance ~~the existence~~ of ~~these matters, substantial doubt exists as to the Company’s ability to continue operating as~~ a ~~going concern. The~~convertible ~~accompanying~~promissory ~~financial~~note ~~statements~~(subsequently doconverted ~~not~~to ~~include any adjustments that might result should permanent long-term financing not be obtained~~capital).

~~(3) Summary~~• Payment to ClearComm and TEM of ~~significant~~$11,447,758 ~~accounting~~and ~~policies:~~$11,396,338 respectively in full satisfaction of the loans granted for purposes of meeting the matured portion of the FCC debt through issuance of a convertible promissory note (subsequently converted to capital). See Notes (11) and (12).

~~The~~• In ~~following~~addition, ~~summarizes~~$62.4 ~~the~~million ~~most~~in ~~significant~~other ~~accounting~~notes ~~policies~~and ~~followed~~interest inpayable to TEM were converted to capital, for a total capital conversion of $80.5 million. Upon conversion of all convertible promissory notes, TEM Puerto Rico Inc. received an aggregate amount of shares of the Company equal to 49.9% and the other ~~preparation~~stockholders hold an aggregate amount of shares of the ~~accompanying~~Company ~~financial~~equal ~~statements:~~to 50.1%.

• Forgiveness by TEM of $1,859,068 corresponding to all amounts outstanding with TMmas (a~~) Principles~~ TEM ofaffiliate) ~~consolidation –~~under the SCL agreements.

~~The accompanying~~• Agreement ~~consolidated~~on ~~financial~~premium ~~statements~~to ~~include~~be ~~the~~paid ~~accounts~~by ofTEM/TEM Puerto Rico Inc. to the ~~Partnership~~other ~~and~~shareholders ofupon ~~its~~a ~~majority-owned~~potential ~~subsidiary,~~liquidation ~~NewComm. All~~or ~~significant~~a ~~intercompany~~change ~~accounts~~in control. TEM and/or ~~transactions~~TEM ~~have~~Puerto ~~been~~Rico ~~eliminated~~Inc. shall pay a premium from the liquidation/sale proceeds that in ~~consolidation~~any event will not exceed 16.6% of the equity valuation.

~~(b) Investment~~• In the event that as of September 30, 2006, NewComm’s net income, as determined in ~~securities –~~accordance with generally accepted accounting principles in the United States and measured on the basis of EBITDA for the twelve-month period then ended, is less than $10,970,000, TEM may require that the Partnership, and NewComm’s shareholders, together with TEM Puerto Rico, sell their respective interest in NewComm to a third party.

~~The~~• Amend ~~Company~~the ~~classifies~~Stock ~~its~~Purchase ~~securities~~Agreement asin ~~available-for-sale. The~~order ~~securities~~to ~~consist~~extend by 3 ½ years, to approximately October 2008, TEM Puerto Rico’s option to buy a majority interest in NewComm and to clarify the procedures that would apply upon the sale of ~~income~~NewComm ~~funds~~to a third-party purchaser in the event that neither TEM Puerto Rico, ~~which~~nor the Partnership exercised its rights under the Sale Agreement to purchase NewComm.

29• As part of the Settlement Agreement , TEM entered into a License Brand Agreement with NewComm that allows the use of the MoviStar brand name free of cost for five years.

~~are~~The ~~stated~~effectiveness atof ~~fair value, with net unrealized gains or losses on~~ the ~~securities~~Settlement ~~recorded~~Agreement ~~as accumulated other~~was ~~comprehensive~~conditioned ~~income~~upon ~~(loss) in partners’ capital. Realized gains and losses are included in earnings and are calculated using~~ the ~~specific~~satisfaction ~~identification~~of ~~method~~certain ~~for determining~~events, ~~the~~including ~~cost of~~ the ~~securities.~~following:

~~(c) Investment~~• TEM inPuerto ~~subsidiary~~Rico atbecoming ~~equity –~~the holder of 49.9% of NewComm’s capital stock;

~~The~~• the ~~Partnership’s~~termination ~~investment~~of inthe ~~Internet~~Joint ~~Surfing~~Venture ~~Store of Puerto Rico~~Agreement, ~~Inc.~~ ~~(“ISS”) is accounted for under~~ the ~~equity~~Management ~~method~~Agreement, ofand ~~accounting whereby~~ the ~~investment~~ isTechnology ~~carried~~Transfer atAgreement, ~~the~~each ~~cost~~ of ~~acquisition~~which ~~adjusted~~involved ~~for~~NewComm ~~the~~and ~~Partnership’s~~included ~~share of~~TEM ~~ISS’s~~as ~~earnings~~a ~~or losses since the date of acquisition.~~party;

• the amendment of the Stock Purchase Agreement, the Sale Agreement, dated March 12, 2002 (dthe “Sale Agreement”) ~~Comprehensive~~, among NewComm, TEM Puerto Rico, the Partnership, ~~income –~~and the other shareholders of NewComm, and the Shareholders Agreement, dated March 12, 2002 (the “Shareholders Agreement”), among the Partnership, NewComm, TEM Puerto Rico, and the other shareholders of NewComm; and

~~The~~• TEM’s ~~Company~~entry ~~follows~~into ~~the~~a ~~provisions~~line of ~~Statement~~credit ofto ~~Financial~~be ~~Accounting~~used ~~Standards (SFAS)~~to ~~No. 130~~pay ~~Reporting~~the ~~Comprehensive~~balance ~~Income. Comprehensive~~of ~~income represents operational~~NewComm’s ~~net~~indebtedness ~~income~~to ~~plus~~the ~~all~~FCC; ~~other~~and ~~changes~~an inextension ~~net~~or ~~assets~~refinancing ~~from~~of ~~non-owner~~NewComm’s ~~sources. SFAS No. 130 requires presentation of~~bridge ~~comprehensive~~loan ~~income~~from ~~and~~ABN ~~its~~Amro ~~components~~Bank, inN.V.(See ~~the~~Note ~~financial statements~~13.d).

~~During~~On August 28, 2000, the ~~year~~Partnership ~~ended~~entered ~~December 31,~~into ~~2003,~~a ~~the~~Purchase ~~Company’s~~and ~~comprehensive~~Sale ~~loss~~Agreement ~~was~~with Leap Wireless ~~limited~~International to(Leap ~~its~~Wireless), ~~investment~~pursuant into ~~available-for-sale~~which ~~securities.~~the ~~This~~Partnership ~~loss~~sold ~~was~~the ~~realized~~Visalia, ~~during~~California ~~the~~license ~~year~~to ~~ended~~Leap ~~December 31,~~Wireless ~~2004,~~in ~~when~~exchange ~~the~~for ~~securities~~a ~~were~~$9,500,000 cash ~~redeemed~~payment. The transaction closed on June 8, 2001.

NewComm received an aggregate equity investment of $25,000,000 (e$10 million in 2000, $5 million in 2001 and $10 million in 2002) ~~Cash~~ ~~and~~from ~~cash~~Syndicated ~~equivalents –~~Communications Venture Partners IV, L.P. (“Syncom”), a third party, in exchange for a 15.39% ownership.

~~For~~On March 2, 2002, the ~~purpose~~Partnership ofsold ~~the~~approximately ~~statement~~4.08% of ~~cash~~its ~~flows, the Company considers all highly liquid~~ investment ~~instruments~~in ~~purchased~~NewComm ~~with~~to a ~~maturity~~group ~~at acquisition~~ of ~~three~~investors ~~months~~led orby ~~less~~Fleet toDevelopment beVentures ~~cash~~for ~~equivalents~~$13 million.

During 2004, the Partnership sold it California PCS licenses to a third party. (fSee Note 9.) ~~Accounts receivable –~~

Accounts receivable consist principally of trade accounts receivable from customers and are generally unsecured and due within 30 days. Credit losses relating to these receivables consistently have been within management’s expectations. Expected credit losses are recorded as an allowance for doubtful accounts.25

(gb) ~~Allowance~~On April 21, 2005 the NewComm reorganized its capital structure by ~~for~~collapsing ~~doubtful~~its ~~accounts –~~many classes of common stock into a single class of common stock.

~~Allowance for~~As ~~doubtful accounts provides for estimated losses on accounts receivable. The allowance is established based upon a review~~ of ~~the aggregate accounts~~December 31, ~~historical write-off experience~~2005, ~~economic~~ ~~condition,~~NewComm’s ~~aging of the accounts receivable balances, and other~~common ~~pertinent~~stockholders ~~factors. Account~~(Class A) ~~losses are charged~~ and ~~recoveries~~their ~~are~~percentage ~~credited to the allowance for doubtful accounts. The collection policies and procedures~~ of ~~the Company~~ownership ~~vary by credit class and prior payment history of subscribers.~~were:

(h) Inventories –

	Shares	%		Shares Fully Diluted	%
ClearComm, L.P.	793.063	39.27	%	804.147	39.34	%
SynComm Venture Partners IV, L.P.	145.68	7.21	%	149.847	7.33	%
Fleet Development Ventures, LLC	28.077	1.39	%	30.299	1.48	%
Opportunity Capital Partners IV, L.P.	28.077	1.39	%	34.251	1.68	%
Power Equities, Inc.	16.846	0.83	%	17.895	0.88	%
TEM Puerto Rico Inc.	1007.704	49.90	%	1007.704	49.30	%

	2,019.447	100.00	%	2,044.143	100.00	%

~~The Company~~On ~~maintains~~August 5, ~~inventories~~2005, NewComm ofexecuted ~~wireless~~a ~~handsets~~Series A ~~and~~Convertible ~~accessories~~Participating ~~held~~Preferred ~~for~~Stock ~~sale~~purchase agreement between itself and its investors to ~~customers. Inventories~~fund ~~are~~cash flow ~~recorded~~deficiencies. atThe ~~the~~Company ~~lower~~raised of$4,445,000 ~~average~~in ~~cost~~exchange ~~(which~~for ~~approximates~~an ~~first-in,~~aggregate ~~first-out~~of (i) 12.371 orshares ~~market~~of ~~(which~~the ~~approximates~~Company’s ~~replacement~~series A-1 ~~cost~~convertible ~~from~~participating ~~suppliers~~preferred stock and (ii) 12. As323 anshares ~~inducement~~of tothe ~~obtain~~Company’s ~~new~~series A-2 ~~customers, the~~convertible ~~Company~~participating ~~may~~preferred ~~sell~~stock. ~~handsets~~Both toseries A-1 ~~customers~~and ~~for~~A-2 awill ~~price~~generate ~~that~~a contingent isdividend ~~less~~rate ~~than~~yield ~~cost. The~~of ~~loss~~9% onin ~~such~~case ~~sales~~of isa ~~recognized~~voluntary ator ~~the time~~involuntary ofliquidation, dissolution, sale, intransfer ~~accordance~~or ~~with~~merger ~~practice~~of ~~in the industry~~NewComm.

~~Effectively January~~On February 1,16 ~~2003~~2006, NewComm ~~the~~executed ~~Company~~another ~~changed~~Series A Convertible Participating Preferred Stock purchase agreement between itself and its ~~method~~investors to ~~account~~fund cash flow deficiencies. The Company raised $5,000,000.00 in exchange for ~~the~~an ~~loss~~aggregate onof (i) 25,645.165 ~~sale~~shares of ~~handsets~~the toCompany’s ~~customers,~~series A-3 ~~from~~convertible ~~the~~participating ~~recognition~~preferred stock ofand ~~such~~(ii) 24,354.835 ~~loss~~shares atof the ~~time~~Company’s ofseries A-4 ~~sale,~~convertible toparticipating ~~the~~preferred ~~establishment~~stock. ofBoth anseries A-3 ~~inventory~~and ~~reserve~~A-4 towill generate ~~account~~a ~~for~~contingent ~~that~~dividend ~~loss~~rate ~~at the~~equal ~~end~~to a yield of ~~each~~9% ~~accounting~~in ~~period.~~ case of a ~~Management~~voluntary ~~believes~~or ~~that~~involuntary ~~this~~liquidation, ~~new~~dissolution, ~~method~~sale, ~~better~~transfer ~~matches~~or ~~costs~~merger ~~and~~of ~~revenues~~NewComm.

~~In accordance~~Upon ~~with Accounting Principle Board Opinion No. 20, “Accounting Changes”,~~ the ~~change~~occurrence ~~in accounting method explained above, requires the determination~~ of ~~the cumulative effect, as if the newly adopted method had been~~a ~~applied~~liquidation ~~during~~event ~~all~~(voluntary ~~periods~~or ~~affected. In this~~involuntary ~~specific situation~~liquidation, ~~the retroactive application and determination of pro-forma information is impracticable~~dissolution, ~~because the effects are not~~sale, ~~determinable~~transfer, ~~since it requires assumptions about management’s intent in prior period~~merger), ~~and significant management estimates. The effect of~~ the ~~change~~investors onholding ~~net income for the year ended December 31, 2003 was $4,742,559.~~Series:

30(a) A-4 Convertible preferred stock shall be entitled to receive out of the assets of the corporation or other proceeds from the liquidation an amount per share equal to the sum of four (4) times the original cost of such share plus any accumulated and unpaid dividend on such share to the date of payment. If the assets of the corporation or any other proceed is insufficient to pay the holders of shares series A-4, the holders of series A-4 shall share ratably in any distribution.

~~Allowance~~(b) A-3 Convertible ~~for~~preferred ~~inventory~~stock ~~losses~~shall ~~provides~~be ~~for~~entitled ~~estimated~~to ~~losses~~receive on(after ~~inventory~~payment ~~for obsolescence~~of ~~and~~the ~~for~~Series A-4) out of the ~~lower~~assets of ~~cost~~the corporation or ~~market~~other ~~method. The~~proceeds ~~allowance~~from isthe ~~established~~liquidation ~~based~~an amount ~~upon~~per ~~a review~~share ofequal ~~existing~~to ~~array~~the sum of ~~inventory~~six ~~models,~~(6) times the ~~average~~original ~~selling~~cost ~~prices~~of ~~aggregate~~such ~~accounts~~share plus any accumulated and ~~other~~unpaid ~~pertinent~~dividend ~~factors.~~ on such share to the date ~~Account~~of ~~losses~~payment. ~~are~~If ~~charged~~the assets of the corporation or any other proceed is insufficient to pay the ~~inventory~~holders ~~reserve~~of ~~accounts~~shares series A-3, the holders of series A-3 shall share ratably in any distribution.

(ic) ~~Deferred~~ A-2 Convertible ~~financing~~preferred ~~costs –~~stock shall be entitled to receive (after payment of the Series A-3) out of the assets of the corporation or other proceeds from the liquidation an amount per share equal to the sum of three (3) times the original cost of such share plus any accumulated and unpaid dividend on such share to the date of payment. If the assets of the corporation or any other proceed is insufficient to pay the holders of shares series A-2, the holders of series A-2 shall share ratably in any distribution.

~~Represents~~(d) A-1 Convertible ~~debt~~preferred ~~financing~~stock ~~costs~~shall ~~capitalized~~be entitled to receive (after payment of the Series A-2) out of the assets of the corporation or other proceeds from the liquidation an amount per share equal to the sum of two (2) times the original cost of such share plus any accumulated and ~~amortized~~unpaid asdividend ~~interest~~on ~~expense~~such ~~over~~share to the date ~~terms~~of payment. If the assets of the ~~underlying~~corporation ~~obligations~~or any other proceed is insufficient to pay the holders of shares series A-1, the holders of series A-1 shall share ratably in any distribution.

~~(j) PCS~~Immediately ~~licenses –~~after the closing of the February 16, 2006 transaction, the authorized capital of the NewComm is:

~~This amount represents costs primarily incurred to acquire Federal Communications Commission (FCC) licenses to provide wireless services~~1. ~~The licenses expire in January 2007 unless renewed. However~~ 50, ~~FCC rules provide for renewal expectancy provisions~~024. ~~The~~695 ~~Company~~shares ~~expects~~of topreferred ~~exercise~~convertible ~~the~~stock ~~renewal~~of ~~provisions.~~which:

The Puerto Rico licenses were being amortized over a time period of twenty years. The Company capitalized the interest related to the debt pertaining to the Puerto Rico licenses during the development stage, which amounted to $• 12~~,174,000~~. ~~However,~~372 ~~such capitalization was discontinued~~shares, indesignated ~~September~~as Series ~~1999~~A-1 ~~when~~convertible ~~the~~participating ~~commercial~~preferred ~~operations started.~~stock

~~Effective with the adoption of Statement of Financial Accounting Standards (SFAS) No~~• 12. ~~142 on~~323 ~~January 1~~shares, ~~2002, these licenses costs, no longer being amortized, are~~ ~~subject~~designated toas ~~impairment~~Series A-2 ~~testing~~convertible ~~(See~~participating ~~note~~preferred ~~3 (k)).~~stock

~~(k) Adoption~~• 25,645.165 shares, ofdesignated ~~Statement~~as ofSeries A-3 ~~Financial~~convertible ~~Accounting~~participating ~~Standard~~preferred ~~(SFAS) No. 142 –~~stock

~~Effective January 1~~• 24,354.835 ~~2002~~shares, ~~the Company adopted~~ ~~SFAS~~designated ~~No. 142, “Goodwill and Other Intangible Assets” which established new standards related to how acquired goodwill and other intangible assets are to be recorded upon their acquisition,~~ as ~~well~~Series A-4 asconvertible ~~how~~participating ~~they~~preferred ~~are to be accounted for after they have been initially recognized in the financial statements.~~stock

~~Effective with the adoption of this standard~~2. 52, the Company reassessed the useful lives of previously recognized intangible assets, which consist primarily of FCC licenses that provide the Company with exclusive rights to utilize a certain radio frequency spectrum to provide wireless communications services044. ~~While~~142 ~~FCC licenses are issued for only a fixed~~shares ~~period~~ of ~~time,~~common ~~generally ten years~~stock, ~~such licenses are subject to renewal by the FCC~~2,019. ~~Renewals~~447 of ~~FCC~~which ~~licenses~~are ~~have occurred~~issued ~~routinely~~ and atoutstanding aand ~~nominal cost~~50,024. 695 ~~Moreover,~~reserved ~~the~~for ~~Company~~issuance ~~has~~upon ~~determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit~~ the ~~useful~~ ~~lives~~conversion of ~~its FCC licenses. As a result,~~ the ~~FCC licenses will be treated as an indefinite-lived intangible asset under the provisions of SFAS No.~~Series ~~142~~A ~~and will not be amortized but~~Convertible ~~rather~~Preferred ~~will be tested for impairment annually or when events and circumstances warrant~~Stock.

~~The Company~~As ~~has elected to test for the FCC license impairment as~~ of December ~~31st of each year. The Company utilizes a fair value approach~~31, ~~incorporating discounted cash flows~~2005, topreferred ~~complete~~dividends ~~the~~in ~~test. The~~arrears ~~discounted~~amounted ~~cash~~to ~~flow~~approximately ~~model estimates~~$164,465 ~~the~~or ~~required resources and eventual returns from the build-out of an operational network and acquisition of customers~~$6,660 ~~starting~~on ~~with~~a ~~only~~per ~~FCC licenses. In~~share ~~this matter~~basis, ~~the cash flows~~on ~~are isolated as specifically pertaining to~~ the ~~FCC~~9% ~~licenses~~cumulative ~~(present~~preferred ~~value of free cash flow attributable to the licenses)~~stock.

~~The Company has completed its 2004 testing and has determined that there has been no license impairment.~~26

(l2) ~~Property and~~ Restatement ~~equipment –~~of prior year’s financial statements:

~~Property~~The Partnership’s previously issued financial statements as of and for the years ended December 31, 2004 and ~~equipment~~2003 ~~are~~have ~~recorded~~been atrestated ~~cost~~to correct the accounting for the method used to record the amount of loss incurred on the sale of handsets to customers. Effective January 1, 2003, the Partnership ~~Major~~changed ~~replacements~~its ~~and~~method ~~improvements~~of ~~are~~accounting ~~capitalized~~for ~~while~~the ~~general~~loss on the sale of handsets to ~~repairs~~customers, ~~and~~from ~~maintenance~~the ~~are~~recognition ~~charged~~of such anticipated future loss at the time of sale, to ~~expense~~the establishment of an inventory reserve account for that loss at the end of each accounting period. Management believed that this method was consistent with the stipulations of Accounting Research Bulletin (ARB) No. 43 “Inventory Pricing” as ~~incurred~~to the requirements of recognizing identifiable future losses on the disposal of inventories as a loss provision in the current period.

~~Depreciation is~~After ~~computed~~discussions ~~using~~with ~~the~~staff ~~straight-line~~members ~~method~~from ~~over~~ the ~~estimated~~Securities ~~useful~~and ~~life of~~Exchange Commission (SEC), the ~~asset~~Partnership’s ~~commencing~~management ~~from~~has ~~the~~decided ~~time~~to itre-establish isthe previous ~~placed~~method ~~into~~for ~~service~~inventory orpricing. Under the ~~term~~re-established ofmethod, the ~~lease,~~loss ifon ~~shorter,~~handset ~~for~~sales ~~leasehold~~is recognized at the time of sale.

The effect of this change on the Partnership’s consolidated financial statements as of and for the years ended December 31, 2004 and 2003, is summarized as follows:

improvements. Upon retirement or sale, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income.

	As of December 31, 2004						As of December 31, 2003
	As originally presented			As restated			As originally presented			As restated

Balance Sheets:
Inventory	$	1,304,392		$	4,341,975		$	3,908,736		$	8,651,295

Accumulated losses	$	(190,923,667	)	$	(187,886,084	)	$	(160,794,524	)	$	(156,051,965

Partners’ deficit	$	(118,981,691	)	$	(115,944,108	)	$	(87,692,735	)	$	(82,950,1760	)

(m) Software capitalization –

	As of December 31, 2004						As of December 31, 2003
	As originally presented			As restated			As originally presented			As restated

Statements of Operations:
Cost of handsets and accessories sold	$	24,352,074		$	26,057,050		$	22,523,576		$	22,523,576

Loss on write-off of inventories	$	—.		$	—.		$	(4,742,559	)	$	—.

Net loss (all attributable to general partner)	$	(30,129,143	)	$	(31,834,118	)	$	(30,360,386	)	$	(25,617,827	)

~~The Company~~(3) Going ~~capitalizes~~concern ~~certain~~issues ~~direct development costs associated with internal use software, including external direct cost of materials~~ and ~~services,~~financing and internal payroll costs for employees devoting time to software development. These costs are included in property and equipment and are amortized beginning when the software is substantially ready for use. Costs incurred during the preliminary project stage, as well as maintenance and training costs are expensed as incurred. The Company also capitalizes initial operating-system software costs and amortizes them over its useful life.arrangements:

~~(n) Accounting~~The ~~for~~accompanying ~~impairment~~consolidated financial statements have been prepared ofon ~~long-lived~~a going concern basis, which contemplates the realization of assets –and the satisfaction of liabilities in the normal course of business. The Company commenced operations in September 1999 and has incurred net losses of approximately $23.7 million in 2005, $31.8 million in 2004, and $25.6 million in 2003. It also has a working capital deficiency and a stockholders’ deficit of $32.5 million, and $56.6 million, respectively, as of December 31, 2005. The Company is likely to continue incurring losses until such time as its subscriber base generates revenue in excess of the Company’s expenses. The Company’s management believes that it has taken actions which should ensure that operating expenses before depreciation and amortization do not exceed revenues generated from operations. However, if earnings from regular operations do not generate sufficient cash flow for the Company to meet its network investment strategies, the Company must finance its capital investments necessities by means other than from its revenues until the time when revenues generated from regular operations generate sufficient cash flow to fund them.

~~The Company~~Management ~~continually~~believes ~~evaluates~~that ~~its long-lived~~cash ~~assets,~~and ~~based~~cash equivalents on ~~the requirements of SFAS No. 144~~hand, ~~“Accounting for~~anticipated ~~the~~growth ~~Impairment~~in ~~or Disposal of Long-Lived Assets”~~revenues, tocapital ~~determine~~contributions ~~whether current events~~ and ~~circumstances warrant adjustment of~~ the ~~carrying values or~~proceeds ~~amortization~~from ~~periods. The~~the ~~Company measures~~additional ~~impairment~~indebtedness ~~whenever~~incurred ~~events~~with orD.B. ~~changes~~Zwirn in(See ~~circumstances~~Note ~~indicate~~15(b)) ~~that~~will ~~the~~be ~~carrying~~adequate ~~amount~~to offund anits ~~asset~~operations, ~~may~~at ~~not~~a beminimum, ~~recoverable. In~~through ~~performing~~ the ~~review~~end ~~for~~of ~~recoverability~~2006. However, anin ~~estimate~~the absence of ~~the~~improved ~~future~~operating results and cash flows, ~~expected~~the toCompany ~~result~~may face significant ~~from~~liquidity ~~the~~problems ~~use~~to offund ~~the asset and~~ its ~~eventual~~operations ~~disposition~~and ~~must~~meet beits ~~made~~obligations. If Because of the ~~carrying~~existence ~~amount~~ of athese ~~long-lived~~matters, ~~asset is~~substantial ~~not~~doubt ~~recoverable~~exists ~~from~~as ~~its~~to ~~projected~~the Company’s ~~future~~ability ~~undiscounted~~to ~~cash~~continue ~~flows,~~operating anas ~~impairment loss~~a isgoing ~~recognized~~concern. The ~~impairment loss,~~accompanying iffinancial ~~any,~~statements isdo ~~determined~~not asinclude ~~the~~any ~~difference~~adjustments ~~between~~that ~~the~~might ~~carrying~~result ~~amount and fair~~should ~~value of~~ the ~~asset. No~~Company ~~impairment~~face ~~loss was~~liquidity ~~recognized~~issues ~~during~~to ~~the~~fund ~~years~~its ~~ended~~operations ~~December 31, 2004, 2003~~ and ~~2002~~meet its obligations.

~~(o) Revenue recognition –~~27

~~The Company earns service revenues by providing access to its wireless network~~ (~~access revenue~~4) Summary ~~and for usage~~ of ~~its~~significant ~~wireless~~accounting system (airtime revenue). Access revenue is billed in advance and recognized ratably over the service period. Airtime revenue, including roaming revenue and long-distance revenue, for postpaid customers is billed in arrears based on minutes used and is recognized when the service is rendered. Prepaid airtime sold to customers is recorded as deferred revenues prior to the commencement of services, and revenue is recognized when airtime is used or expires. Access and airtime provided are billed throughout the month according to the billing cycle in which a particular subscriber is placed. As a result of billing cycle cut-off times, the Company is required to make estimates for service revenues earned but not yet billed at the end of each month.policies:

~~These estimates are based primarily upon actual and historical minutes of use.~~ The ~~Company~~following ~~defers~~summarizes ~~revenue~~the ~~based~~most ~~on an~~significant ~~estimate~~accounting ofpolicies ~~the~~followed ~~portion~~in ofthe ~~minutes~~preparation ~~expected to be utilized prior to expiration. The Company’s estimate~~ of ~~expected~~ ~~future~~the ~~revenue~~accompanying ~~is primarily based on historical experience as to~~financial ~~minutes of use.~~statements:

~~Roaming revenues~~(a) Principles ~~include~~of ~~revenues~~consolidation from certain customers who roam outside their selected home coverage area, referred to as “incollect” roaming revenues, and revenues from other wireless carriers for roaming by their customers on the Company’s network, referred to as “outcollect” roaming revenues.–

The accompanying ~~Company~~consolidated ~~offers~~financial ~~enhanced~~statements ~~services~~include ~~including~~the ~~caller~~accounts ~~ID,~~of ~~call~~the ~~waiting,~~Partnership ~~call~~and ~~forwarding,~~of ~~three-way~~its ~~calling~~subsidiary, noNewComm. ~~answer/busy~~All ~~transfer,~~significant ~~text~~intercompany ~~messaging~~accounts and ~~voice~~transactions ~~mail. Generally,~~have ~~these~~been ~~enhanced features~~eliminated ~~generate~~in ~~additional~~consolidation. ~~revenues~~The ~~through~~Partnership ~~monthly subscription fees or~~has ~~increased~~determined ~~wireless~~that ~~usage~~the ~~through~~consolidation ~~utilization~~principles ofwill ~~these~~be ~~features. Other~~followed ~~optional~~even ~~services,~~though ~~such as unlimited~~its ~~mobile-to~~interest ~~mobile~~in ~~calling,~~NewComm’s ~~roadside~~common ~~assistance~~stock ~~and~~is ~~handset~~only ~~insurance,~~39% ~~may~~due ~~also be~~to ~~provided~~the ~~for~~fact athat ~~monthly fee. These~~the ~~enhanced~~Partnership’s ~~features~~Chief ~~and~~Executive ~~optional~~Officer ~~services~~is ~~may~~also bethe ~~bundled~~Chairman ~~with~~of ~~package~~the ~~rate~~Board ~~plans~~of orNewComm ~~sold~~and ~~separately. Revenue~~exercises ~~for~~substantial ~~enhanced services~~control ~~and~~over ~~optional~~NewComm’s ~~features~~operations ~~is recognized~~ as ~~earned~~a whole.

~~Equipment sales~~(b) Investment ~~consist~~in ~~principally~~securities of revenues from the sale of wireless mobile telephone handsets and accessories to new and existing customers and to agents and other third-party distributors. The revenue and related expenses associated with the sale of wireless handsets and accessories are recognized when the products are delivered and accepted by the customer, at this is considered to be a separate earnings–

32The Company classifies its securities as available-for-sale. The securities consist of income funds, which are stated at fair value, with net unrealized gains or losses on the securities recorded as accumulated other comprehensive income (loss) in partners’ capital. Realized gains and losses are included in earnings and are calculated using the specific identification method for determining the cost of the securities.

~~process~~(c) Investment ~~from~~in ~~the~~subsidiary ~~sale of wireless~~at ~~services.~~equity –

The Partnership’s investment in Internet Surfing Store of Puerto Rico, Inc. (p“ISS”) ~~Loyalty~~ ~~points~~is ~~program~~accounted –for under the equity method of accounting whereby the investment is carried at the cost of acquisition adjusted for the Partnership’s share of ISS’s earnings or losses since the date of acquisition.

~~In October 2003, the Company commenced a Loyalty Points Program~~ (~~the “Program”~~d) Comprehensive ~~for~~income its customers. The Company determined a redemption percentage of 15% to compute the end-of-year estimated liability for awards redemption. This percentage of redemption was re-evaluated during the year and remained the same. The Company charged the cost of operating the program to selling expenses and the estimated cost of award redemption to the cost of products available for redemption.–

~~Effective December 31,~~The ~~2004,~~Company follows the ~~loyalty~~provisions ~~points~~of ~~program~~Statement ~~was~~of Financial ~~eliminated~~Accounting ~~and~~Standards as(SFAS) aNo. 130 Reporting Comprehensive ~~consequence,~~Income. ~~management~~Comprehensive ~~has~~income ~~determined~~represents ~~that~~operational net income plus all ~~accumulated~~other changes ~~points~~in ~~have~~net toassets ~~be redeemed~~from ~~over~~non-owner asources. ~~period~~SFAS No. 130 requires presentation of 24comprehensive ~~months~~income ~~or,~~and ~~otherwise,~~its ~~will~~components bein ~~lost~~the financial statements.

~~(q) Advertising~~During ~~costs~~the –year ended December 31, 2003, the Company’s comprehensive loss was limited to its investment in available-for-sale securities. This loss was realized during the year ended December 31, 2004, when the securities were redeemed.

~~The Company~~(e) Cash ~~expenses production costs of print, radio~~ and ~~television~~cash ~~advertisements and~~equivalents ~~other advertising costs as such costs are incurred.~~–

~~(r) Income~~For ~~taxes~~the –purpose of the statement of cash flows, the Company considers all highly liquid investment instruments purchased with maturity at acquisition of three months or less to be cash equivalents.

~~Under U.S.~~(f) Accounts ~~tax~~receivable rules the Partnership is not subject to income tax; however, and only for Puerto Rico tax purposes, the Partnership and NewComm accounts for income taxes in accordance with the asset and liability method of accounting for income taxes prescribed by the Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. Under the asset and liability method of Statement No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry-forwards.–

~~(s) Fair~~Accounts ~~value~~receivable consist principally of ~~financial~~trade ~~instruments~~accounts –receivable from customers and are generally unsecured and due within 30 days. Credit losses relating to these receivables consistently have been within management’s expectations. Expected credit losses are recorded as an allowance for doubtful accounts.

~~The carrying amount of the Company’s financial instruments~~ (~~excluding~~g) Allowance ~~notes~~for ~~payable and~~doubtful ~~the Bridge Loan Facility): cash,~~ accounts ~~receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to the short period to maturity.~~–

~~Management~~Allowance for doubtful accounts provides for ~~believes,~~estimated ~~based~~losses on ~~current~~accounts ~~interest~~receivable. ~~rates,~~The ~~that~~allowance is established based upon a review of the ~~fair~~aggregate ~~value~~accounts, historical write-off experience, economic condition, aging of ~~its~~the ~~notes~~accounts receivable balances, and other pertinent factors. Account losses are charged and recoveries are credited to the ~~Bridge~~allowance ~~Loan~~for ~~Facility~~doubtful ~~approximates~~accounts. The collection policies and procedures of the ~~carrying~~Partnership ~~amount~~vary by credit class and prior payment history of subscribers.

(th) ~~Concentration of~~ Inventories ~~credit risk:~~–

~~Financial instruments~~The ~~that potentially expose the~~ Company tomaintains ~~concentration~~inventories of ~~credit risk~~wireless ~~include~~handsets ~~cash~~ and ~~accounts~~accessories ~~receivable. The~~held ~~Company~~for ~~maintains~~sale ~~its~~to ~~deposit~~customers. ~~accounts~~Inventories ~~with~~are ~~several high quality~~recorded ~~financial~~at ~~institutions. The~~the ~~funds deposited~~original inpurchase ~~these~~price ~~institutions~~plus ~~are~~fees ~~insured~~for byexcise ~~the~~tax, ~~Federal~~freight ~~Deposit~~and ~~Insurance~~marine ~~Corporation~~insurance ~~for~~(which ~~aggregate~~approximates ~~customer~~replacement ~~balances~~cost upfrom suppliers). As inducement to ~~$100,000. While~~obtain new customers the Company ~~attempts~~may sell handsets to ~~limit~~customers ~~any~~for a ~~financial~~price ~~exposure,~~that ~~its~~is ~~deposit~~less ~~balances~~than ~~may,~~cost. atThe ~~times,~~loss ~~exceed~~on ~~federally insured~~such ~~limits. The~~sales ~~Company~~are ~~has~~recognized ~~not~~at the time ~~experienced~~of ~~any~~sale ~~losses~~in onaccordance ~~such~~with ~~accounts~~practice in the industry.

~~The Company~~(i) Deferred ~~performs~~financing ~~ongoing~~costs credit evaluations of its customers’ financial condition and generally does not require collateral for accounts receivable arising during the normal course of doing business. Concentration of credit risk is limited due to the large number of customers comprising the Company’s customer base, but is highly dependent on the strong competition among the companies who provide personal communication services in Puerto Rico. No customer accounted for more than 10% of revenues in the years presented.–

~~The Company~~Represents ~~relies~~debt onfinancing ~~local~~costs ~~and~~capitalized ~~long-distance telephone companies~~ and ~~other~~ ~~companies~~amortized toas ~~provide~~interest ~~certain~~expense ~~communication~~over ~~services. Although~~the ~~management~~terms ~~believes alternative telecommunications facilities could be found in a timely manner, any disruption~~ of ~~these~~the ~~services~~underlying ~~could potentially have an adverse impact on operating results~~obligations.

~~The Company~~(j) PCS ~~relies~~licenses ~~on roaming agreements with other wireless carriers to permit the Company’s customers to use their networks in areas not covered by the Company’s networks. If these providers~~–

33This amount represents costs primarily incurred to acquire Federal Communications Commission (FCC) licenses to provide wireless services. The licenses expire in January 2007 unless renewed. However, FCC rules provide for renewal expectancy provisions. The Company expects to exercise the renewal provisions.

~~decide~~Originally, ~~not~~the toPuerto ~~continue~~Rico ~~those~~licenses were being ~~agreements~~amortized ~~due~~over a time period of twenty years. The Company capitalized the interest related to athe ~~change~~debt inpertaining ~~ownership~~to orthe ~~other~~Puerto ~~circumstances,~~Rico ~~this~~licenses ~~could~~during the ~~cause~~development astage, ~~loss~~which ofamounted ~~service~~to in$12,174,000. ~~certain~~However, ~~areas~~such ~~and~~capitalization was ~~possible~~discontinued ~~loss~~in ofSeptember 1999 ~~customers~~when the commercial operations started.

The Company’s inventories are currently acquired from only a few sources. If the suppliers are unable to meet the Company’s needs as it continues to sell service and handsets, delays and increased costs or losses of potential customers could result, which would adversely affect operating results.28

(uk) ~~Use~~ Adoption of ~~estimates~~ Statement of Financial Accounting Standard (SFAS) No. 142 –

~~In preparing~~Effective ~~financial~~January 1, ~~statements~~2002, inthe ~~conformity~~Company ~~with accounting principles~~adopted ~~generally~~SFAS ~~accepted in the United States of America~~No. 142, ~~management~~“Goodwill ~~is required to make estimates~~ and ~~assumptions~~Other ~~that~~Intangible ~~affect~~Assets” ~~the~~which ~~reported~~established ~~amounts of assets,~~new ~~liabilities~~standards ~~and~~related ~~disclosure~~to ofhow ~~contingent~~acquired ~~assets~~goodwill and ~~liabilities~~other atintangible ~~the~~assets ~~date~~are ofto ~~the~~be ~~financial~~recorded ~~statements,~~upon ~~and~~their ~~the~~acquisition, ~~reported~~as ~~amounts~~well ofas ~~revenues~~how ~~and~~they ~~expenses during~~are ~~the reporting periods. The most significant estimates relate~~ to ~~allowance for uncollectible accounts receivable, depreciation, and intangible asset valuation and useful lives. These estimates may~~ be ~~adjusted~~accounted ~~as more~~for ~~current~~after ~~information~~they ~~becomes~~have ~~available,~~been ~~and~~initially ~~any~~recognized ~~adjustment~~in ~~could~~the ~~be significant. Actual~~financial ~~results could differ from those amounts~~statements.

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