NTELOS Holdings Corp. Announces Agreement to Acquire Fiber Assets from Allegheny Energy, Inc.

Acquisition Will Nearly Double NTELOS’ Current Fiber Route Miles
Transaction EBITDA and Free Cash Flow Accretive for NTELOS

WAYNESBORO, VA – October 6, 2009 – NTELOS Holdings Corp. (NASDAQ: NTLS), a leading provider of wireless and wireline communications services (branded as NTELOS) in Virginia and West Virginia, announced today that it has executed an agreement to purchase certain fiber optic and network assets and related transport and data service revenues from Allegheny Energy, Inc. 

The purchase includes approximately 2,200 route miles of fiber located primarily in central and western Pennsylvania and West Virginia, with portions also in Maryland, Kentucky and Ohio.  There are currently two points of interconnection between the existing NTELOS fiber network and the transaction fiber assets, one each in Virginia and West Virginia.

“The purchase of these fiber assets and related revenues is significant for NTELOS as we continue to re-position our wireline business from a provider of voice access lines to a provider of high-bandwidth data products,” said Frank L. Berry, NTELOS executive vice president and president of wireline operations.  “In addition to meaningful contributions from the customer base already in place, the expanded market area will provide NTELOS with many opportunities for new business within our core competency and consistent with our focus on strategic data and transport products.”

Projected 2009 service revenues, including revenues from NTELOS, and adjusted EBITDA, pro forma for the terms and conditions of the agreement, on this 2,200 route mile fiber network are approximately $8.0 million and $4.5 million respectively.  Based on the run rate for the first six months of 2009, NTELOS’ competitive wireline segment currently generates an annualized adjusted EBITDA of approximately $27 million, utilizing its current 2,300 route mile fiber network.

NTELOS is a current customer on portions of the assets to be purchased and, as such, will achieve immediate expense synergies of approximately $0.5 million annually upon closing.  These synergies, together with the revenue generation of the assets, result in the transaction being immediately accretive to adjusted EBITDA and free cash flow for NTELOS.

The purchase price for the transaction assets is approximately $27 million. NTELOS intends to fund the purchase from available cash on hand and the transaction is not contingent upon financing.  Closing, which is expected by year-end 2009, is subject to regulatory approvals and customary closing conditions.

For additional details related to the proposed transaction, including a map of the network assets, (click here).

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About NTELOS

NTELOS Holdings Corp. is an integrated communications provider with headquarters in Waynesboro, VA. NTELOS provides products and services to customers in Virginia, West Virginia, Kentucky, Ohio, Tennessee, Maryland and North Carolina, including wireless phone service, local and long distance telephone services, IPTV–based video services and data services for internet access and wide area networking. Detailed information about NTELOS is available at www.ntelos.com

Allegheny Energy

Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit the company’s Web site at www.alleghenyenergy.com.

Non-GAAP Measures

Adjusted EBITDA is defined as net income attributable before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, loss on interest rate swap agreement, net income attributable to noncontrolling interests, other income, non-cash compensation charges and voluntary early retirement charges. Free cash flow is defined as adjusted EBITDA less capital expenditures.  Adjusted EBITDA and free cash flow, are non-GAAP financial performance measures.  They should not be considered in isolation or as an alternative to measures determined in accordance with GAAP.

SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, as a result of our acquisition of the Allegheny Energy fiber assets, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Reports filed on Forms 10-K.