Good morning everyone and welcome to the Shenandoah Telecommunications Second Quarter of 2011 Earnings Conference Call. Today’s conference is being recorded. At this time I would now like to turn the conference over to Mrs. Adele Skolits, CFO. Please go ahead, Ma’am.

Good morning, and thank you for joining us. The purpose of today's call is to review Shentel’s results for the quarter ended June 30, 2101. Our results were announced in a press release distributed Friday evening and the presentation we’ll be reviewing is included on our website at www.shentel.com. Please note that a replay of the call will be made available later today. The details were set forth in a press release announcing this call. With us on the call today are Christopher French, our President and Chief Executive Officer; and Earle MacKenzie, our Executive Vice President and Chief Operating Officer. After our prepared remarks, we'll conduct a question-and-answer session. I'll begin on slide two of the presentation. While we don’t give guidance with respect to specific future financial results, we caution that this call may contain forward-looking statements, which involve a number of known and unknown risks and uncertainties. These may cause our actual results to differ materially from these statements. Shentel provides a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. You’re cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement. Also, in an effort to provide useful information to investors, we note on slide three that our comments today include non-GAAP financial measures. Details of these measures, including why we use them and reconciliations to the most comparable GAAP measures, are included in our SEC filings. I'll turn the call over to Chris now.

Thank you, Adele. We appreciate everyone joining us this morning. This quarter we continue to execute on our plans to create future value for our shareholders by expanding our prepaid wireless customer base, continuing the upgrade of the cable properties purchased last year, building the Shentel brand within our new cable markets and growing our cable customer base. As expected all these efforts have resulted in lower operating income than in the same period of 2010. But we have achieved positive results on all of these objectives. Slide 5 lists the highlights of the results on our wireless segment. We again had positive net wireless additions in both our postpaid and prepaid services with a number of total customers up 4% in this quarter and up 10% over the year-end 2010 number. Prepaid contributed nearly 80% of the net customer growth adding over 11,000 net customers. Since we began offering prepaid products in June of 2010, we have added over 41,000 net customers. We also had solid growth in postpaid adding over 3000 net customers. Specific cable segment highlights are shown on Slide 6. The total number of revenue generating units rose to 131,000 at June 30th. The segment had gains in digital video, high speed internet and voice. These gains were offset by seasonal loss of video customers due to the students moving out of college and university communities we serve and the (inaudible) Virginia. Major upgrades in the markets we acquired from JetBroadband began in April of this year and we have now completed upgrades to approximately 10% of the (inaudible) by these systems. Financial results on a consolidated basis shown on Slide 7, were negatively impacted by the significant cost associated with depreciation and amortization on the acquired businesses and by the interest expense related to the debt required to fund the acquisitions. We are reporting net income of $3 million for the quarter compared to 4.6 million from the second quarter of 2010. Despite the impact on earnings we continue to believe our cable acquisitions and our entry into prepaid represent great opportunities for us to create long-term growth and shareholder value. I’ll now turn the call back to Adele to review the details of our financial results.

Thank you, Chris. I’ll begin on Slide 9. Adjusted operating income before depreciation and amortization or OIBDA for Q2 ’11 was $23 million or up $2.6 million from Q2 ’10. In order to better under the forces driving this change I have provided the OIBDA results by segment on Slide 10. Here you get a picture of how the segments results are contributing to the consolidated financial results. In a moment I’ll go into this segments OIBDA changes in depth. What you see from this table is that adjusted wireless OIBDA has increased despite the fact that significant incremental costs were incurred associated with the growth in prepaid customers. In the cable segment the impact of the incremental OIBDA from the JetBroadband business is been offset by the significant incremental cost acquiring customers in the cable business. As we will see in a moment the wireline segments adjusted OIBDA dropped due to the sale of the directory in the third quarter of 2010. On Slide 11, I’ve analyzed the changes in the wireless OIBDA results between Q2 ’10 and Q2 ’11. Postpaid revenues continue to grow as a result of the continued steady growth in its customer base. The prepaid business has already begun to make a meaningful contribution with $5.3 million in new revenue related to prepaid customers. As you may recall the service fee charged by Sprint Nextel in the postpaid business rose from 8.8% to 2% as of June 1st, 2010. This change increased service fees by $1.1 million in Q2 ’11. Acquiring prepaid customers involves additional expenses related to handset subsidies, commissions, marketing and other sales related cost, as a result of our success in acquiring prepaid customers, there are $3.5 million of new prepaid costs in Q2 ’11. We also paid separate fees to strengthen…

Thank you, Adele. Slide 15, shows that the positive momentum that we have had in the postpaid wireless sales continued into the second quarter. We ended the quarter with 240,862 postpaid customers or 6% increase in the past 12 months. As shown on Slide 16 during the second quarter we added 14,673 postpaid gross adds compared to 14,740 in the second quarter of 2010. Due to the improvement of our quarterly postpaid churn to 1.6% we had net postpaid adds of 3,037, a 4% increase over the same quarter last year. Postpaid gross billed revenue is shown on Slide 17. For the second quarter in a row we had an increase in total postpaid gross billed revenue. The second quarter 2011 gross billed revenue was $57.06, an increase of $2.18 from the same quarter last year, and a $1.01 increase from the first quarter of 2011. The data portion has increased $4.29 in the past year and $1.30 from the prior quarter. A primary reason is the additional $10 per month paid by all new smartphone users since the end of January 2011. The reconciliation of our postpaid gross billed revenue to postpaid net service revenue reported on our financial statements is shown on Slide 18. Gross billed increased approximately 10% from the second quarter of 2010, to $41 million. On customer growth of 6%. The net service revenue increased 8%. The amount of bad debt continues its downward trend from 2010 and was flat compared to the first quarter of 2011. Service credits increased by approximately 500,000 which included some one-time promotional credits given to new customers. The net service fee percentage paid to spread increase from 8.8 to 12% on June 1st, 2010. So, 2011 reflects a full quarter of the higher rate compared to only one month…

This concludes our prepared remarks, [Minnie] would you now review the instructions for posing your questions.

(Operator Instructions) Our first question comes from Ric Prentiss of Raymond James. Your line is open.

(Inaudible) that several of the carriers this quarter, when you think of smartphones the [thesis] many people had was that ARPU would up reaching that churn will come down seem pretty reasonable. And that the CapEx that will be required to end all the data will be manageable to make a return on the invested capital. Are you guys comfortable that that formula is working, what’s the variable you are most concerned about as you watch that just play out?

You are absolutely correct and that we are seeing a lower churn on the smartphone users. We have looked at that activity since January, churn on smartphone users is about 1.1% where churn on other users is up 1.8. So, there is a distinguishable difference. As you heard from our comments we are adding some CapEx for EVDO growth. I think if we look at the future, one of the things I think that we are most concerned about is what will add average usage per customer be, what kind of capital expenditures we will need to make and equally what kind of backhaul requirement we need for each sale site in order to be able to do that. At this point we have been able to manage it. We still believe that we are making a very good return, but I think it's really uncertain at this point exactly what that usage may grow to. And very honestly whether Sprint makes a decision to put some caps on usage.

And then as you think 4G Sprint discussed at least a bit about their 4G LTE strategy, can you update as far as what requirement there might be on your balance sheet as far as deploying LTE and what kind of cost might be involved?

We are still working through that and I think we see a couple of different alternatives. We are talking to Sprint about mirroring their move towards network vision. But that’s not our only alternative, our other alternative is to do a 4G which is in much less dramatic and would be more of an add on to our existing network rather than the significant upgrade or change out that they are doing as part of network vision. So, we r continuing to have our discussions with Sprint, we hope to conclude those in a reasonable amount of time and makes some final decision so that we will actually be able to move forward on a 4G strategy starting next year.

Any color on what a 4G only kind of build out would require like a price (inaudible) ballpark thought, (inaudible) lower end will be?

We are still talking to Alcatel-Lucent about that. I really don’t have some good numbers yet because it's just a different configuration than really any other carrier has, because of the frequencies that we use and we could actually use the existing 30 megahertz of spectrum that we have. So, as soon as we do have those number we will share them with everyone.

Your next question comes from Greg Burns with Sidoti. Your line is open.

Just wanted to dig into the incremental interest expense this quarter it was little higher than we were looking for, maybe give us a little color on that Adele.

Yes, there are two things is what we are seeing about. One is that we have hedged one-third of the debt that we have outstanding and that’s required by the debt facility. And because the value of the hedge changed during the quarter, we recorded about $400,000 prepaid loss if you will on the value of that hedge. We also have modest adjustment to the capitalized interest, both of those things affected the interested charges this month. We are paying about 3.2% LIBOR plus 3, right now.

Okay. And in terms of D&A up a little bit this quarter. I’m assuming that was some of the incremental investments you were making, but can you give us what the amortization expense on the Virgin Mobile acquisition is going to be for this year and next year?

The amortization expense has a run rate of about $200,000 right now. By the year-end it will be down to about $150,000 per month. And that’s scheduled as we have discussed before, it's scheduled to decline, it's the number of customer turned.

And on the gross margin, it looks like you are starting to gain a little leverage on the prepaid business now that the subscription are approaching 100,000, I mean is that the case, should we expect increased leverage in margin expansion going forward?

Yes, we hit that inflection point as we have discussed before, the much anticipated inflection point with the prepaid customers.

Okay. And in terms of cable RGUs where is that inflection point on the cable side of the business?

We haven’t really given that number out yet, because an awful lot of it has to depend on the mix. What we are finding is that a lot more demand for our phone and internet than we anticipated as a ratio to video. The good news is that the margin on the internet and voice is much better than on video. The other thing that really hasn’t kicked in yet is kind of the fixed cost because we owned and operate much of our own fiber backbone. Our costs are relatively fixed up to a point on that backhaul, we have gotten, we will have all of that in place by the end of this year. And so what you are going to see is that revenues will continue to increase but there will be a very modest increase in the amount of additional cost for that backbone for internet and phone. The other part that we are doing is we are converting when we bought Jet, they were using a third-party to provide their phone services net to phone. By the end of August we will have all of those customers migrated on to our own [meta switch], using our own backhaul. And so we will see significantly better margins in our voice business.

Our next question comes from Barry Sine of Drexel Hamilton. Your line is open.

I wonder if you are zeroing on that 310 RGU increase in the cable business. And I know you mentioned that that’s largely due to the fact you have a number of universities with seasonality in the area. So, I want to take that a step further, does that imply that we add back shortfall in RGUs in the third quarter, plus get back to a kind of a normal first quarter run rate, which would imply somewhere close to a 5000 RGU addition in 3Q. Is that I mean I think that’s the right way?

We don’t give forward-looking numbers, but I’ll talk about the student portion of that. The answer is yes, on the student portion. In most college towns and these are typical, there are (inaudible) complexes and homes that are pretty much designated as student housing, not officially but unofficially. And that’s where we saw the big losses in [Radford and Farmdale]. We anticipate and have talked to the landlords, they are expecting god leasing as both of these are schools that actually have growing student basis. So, we expect the losses that we saw in this quarter being recovered in the August, September timeframe.

And then two other factors also on cable RGUs. One, I believe there is some overlap in your footprint with the upgrade (inaudible) doing on their fiber-to-the-home build. And then another factor, I don’t know do expect you are seeing this, but it seems that college students have a lower and lower propensity to take both voice and video services while still taking internet. Can you talk about the impact of both of those trends?

On the build out that (inaudible) is doing, there is some overlap, but the monies that they got for the stimulus was to build the unserved portions of (inaudible) county that didn’t have high speed internet. I believe their plans are also to overbuild some or all of us to, but the parts of they have been concentrating on initially is the unserved portions. We understand that we will have competition there, but we have upgraded that network since we purchased it so that we offer a very competitive voice and video line up. And we can offer 25 megs of internet there. And so from a competitive standpoint we believe that we will be very competitive not as competitive as we might be against 3 megs of DSL in other areas, but we have not changed our overall strategy as a result of their plans. Your other question was related to?

In this student markets, just the propensity to take multiple RGUs?

There never was much voice in these markets, so voice is really not something that we focused on really for a number of years, even in our conversed services business. But what we have seen from the early sign ups is not a significant difference in video because students still want the sports and some of the other programming that they can’t get through Hulu and Netflix, but what we are seeing definitely is increased speed that they are requesting. So, even in properties where the landlord provides a basic amount of internet speed, high percentage of those students are actually upgrading to pay us on a retail basis 4, 5 or 10 meg of internet when 1.5 or 3 might be offered by the property.

(Operator Instructions) Our next question comes from Will Lauber of Sterling Capital Management. Your line is open.

How much CapEx are you pushing out into 2012 from 2011?

That was about $8 million of CapEx spending in cable that we pushed out from Q4 2011 to Q1 2012.

What was the reasoning behind that?

Well primarily, Will it's just how much e can get done this year, we already have a record level of CapEx plan for this year and when the decision was made, that we needed to add some additional EVDO capacity to our wireless network. The decision was to take some of the projects that we had planned for the fourth quarter of this year and pushed them into first quarter of next year.

If you could elaborate a little bit more on the 4G, when you said mirroring, that would mean you would basically be doing whatever Sprint would be doing on the Network Vision?

Yes. They have announced a plan to basically renovate or redo their network with some fairly innovative approaches to networking. And we are looking at that as one possibility, the other possibility, one where we would just add some additional equipment to the network that we have, that we were weighing the cost and the pros and cons of all those alternatives as we look forward to. And what’s the best way to position ourselves not just for next year or two, but for the next five or six years.

I mean if you would mirror, would there be any negotiations with third parties, like LightSquared? I guess I’m confused. Every time I think I realize what Sprint is doing, I get kind of further confused because it seems like they have changed so much. But how would LightSquared would they figure into your decision at all?

I really can’t speak for LightSquared the discussions that we have had with Sprint they have always included the affiliates in any contract negotiations that they have done on a national basis. And although we have not been (inaudible) to the details of the LightSquared conversations, the discussion I have had with Sprint they assure me that the affiliate areas have been included in their discussions with LightSquared.

Sprint has been losing a lot an awful lot of the Nextel customers. How does that figure in with you at some point getting those Nextel customers in your territory? Do you know how much that is down to about now?

We don’t have access to the number of customers that Nextel customers that are actually in our footprint. One of the things that we have been discussing with Sprint there would be some transaction plan that they would have on a national basis, even if they turn off the Nextel network and obviously, they would want to include us in that process in order to migrate those customers in our footprint. But they have not gives us any details as the number of those customers within our 2.3 million pop area.

On the cable business, did I miss it, or are you guys quantifying how many customers you lost due to the colleges?

We didn’t give a specific number, because it's almost impossible to track it specifically because we don’t have a category called college student. So, we try to estimate it based on the addresses and knowing what complexes students normally live in. And so rather than giving a number that we thought would be inaccurate, we decided the best thing to do is not to give a number.

Okay. For the areas that you are upgrading, can you give us kind of any indication of how sales are going, whether we are going to reach an inflection point on the Cable business as you guys do these upgrades?

As we stated only 10% of the homes passed in Virginia or 10 or 20% of total homes passed. So, only about 11,000 homes have been completely upgraded at this point where we expect 4 or 5 or 6 times that between now and the end of the year. So, it’s been very early, but in the markets where we have upgraded and some of those have only been a couple of weeks since we finished that upgrade. We have seen a significant uptick in RGU sales in those markets, but the ones that we upgraded first were the Jet markets that were the most challenged. And so we expected that we would get some good lift there. We may not get the same percentage in some of the other ones because they were already operating internet and in some cases even voice. So, that those services have been available, we just know that there will be a lot more reliable and robust once we finish the upgrade and expect to be able to build on that.

So what is your sales still door to door, or?

We are using a combination, we do have door to door. We are doing direct mail, we are doing telemarketing, we also are using our customer service group as a sales on force. That is a different culture for us, because historically telephone companies have not used their customer service group as the sales organization, but we are have given them training and we continue to work with them to get them comfortable in asking existing customers primarily for additional services. Obviously, somebody who calls us, who lose into the area, they are very comfortable in signing them up with their initial service, it's giving them comfortable with asking, I see that you have our internet service cause I interest in our phone and video as an example.

Then the final question on the wireless, with the AT&T, T-Mobile merger you see a lot of analysts and I guess pundits saying that Sprint’s only shot is to use their data and become the low-cost provider. I guess with you guys having to upgrade the network, I guess the question becomes, since you pretty much have to follow Sprint’s plans, if they stay with this without capping the data plans, I guess what is your capacity?

Capacity is really just down to a sell side by sell side analysis. So, it's really not an abbey. You can drown in an average here. So, as we look at our network, we are adding $9 million of additional EVDO expenditures for this year, but it is really only impacting about a third of our geography is where most of that capacity is being put, which is where we also have the highest voice usage. So, when we look forward, it's difficult to have come up with an exact model we are constantly estimating where growth is going to be, but they don’t know what will be Sprint’s long-term strategy relative to pricing and data caps. And at this point you are absolutely correct, they are the only carrier that doesn’t have some caps and we have seen growth in our data usage but I think every wireless carrier has seen significant growth in their data usage, primarily driven by smartphones. Somebody who goes from a regular phone to a smartphone will start using different applications then they did prior to having the phone. So, it's an awful lot so it's going to be driven by the different application that continue to be developed by third parties.

I know a lot in the major cities a lot of the carriers are looking at WiFi offloading. Would that be anything that you guys would look into at some point?

That’s already available, I mean you can buy equipment and phones today from Sprint that use the WiFi as an additional network. So, the answer is absolutely, we will and we are.

Okay. That was more of like a third party; I guess there’s a few third party players that will build out WiFi networks rather than just someone’s home WiFi or their office WiFi.

I’m sure that at this point what we have seen in wireless for over the last 25 years is that smaller markets follow the big markets on trends. So, I think that trend certainly is a reasonable one.

Our final question comes from Ric Prentiss with Raymond James. Your line is open.

Yes, I wanted to follow-up on a couple of things. First on the $10 bolt-on for smartphones, can you talk about what effect that has on your adds? Have you seen it dampen adds? Just wondering how that $10 is being embraced given some sluggish economy out there.

Rick, we have absolutely seen zero impact of adding the $10, I mean you can see that we have been giving smartphone sales and penetrations for quite few quarters in a row. And this quarter we had the highest both in new activations and in upgrades that we have ever had. And so talking to this folks in my own stores are the agents that we have the relationship with and being I the best buy stores and radio shacks and asking the folks that are talking to the customers, they that just does not seem to be an issue at all.

Okay. I think Sprint made mention of a mail-in rebate that they would switch back to being or maybe they were thinking of switching it off of mail-in to be or it was instant rebates and they were switching back to mail-in. Where is that status in your markets?

We exactly mirror whatever Sprint’s promotion is, so they have had the switch credits, they have had the mail-in rebate that we have been doing that obviously when you have a mail-in rebate there is more breakage. So, there from a cost standpoint, there is some advantage to us, but Sprint continues to drive that decision and we mirror.

Right now, is it a mail-in or is it instant right now marketplace in your markets?

Right now it's instant.

Instant? Okay. When you think about smartphone cost, that is one of the other variables there to making the formula work. Where is the typical or the average cell phone or smartphone cost to you these days? Some of the other carriers have suggested that they will have sub-$200 handsets by year-end. One carrier even suggested a $100 handset cost to them by year-end on a smartphone. What are you seeing as far as the costs go?

We pay this exact same cost as Sprint does, there is no markup than our relationship with them. So, when you look at the mix of the various phones that Sprint is selling, and their contribution (inaudible) cost of growth should add, we are paying the same. So, and generally it's in the couple $100 range is what our subsidy is at this point. Obviously, if we can get down to a $100 smartphone that would be great.

Is that like a year away, do you think? Or what kind of it has got to be the nirvana for you guys, getting it down to there. But how long do you think you have to wait for it?

I really don’t know, because we are not involved in those negotiations with the manufacturers. So, we basically have some foresight, but normally it's just a couple of months ahead of where the market sees the pricing. So, I really don’t have a lot of insight.

Not to put you guys in a box but when you think of an iPhone out there at two of the largest carriers attracting a lot of customers for adds and retention; but the cost of the iPhone is just pretty dramatic too. How would you view the possibility of getting an iPhone, given what could be very nice on gross add churn but pretty costly on the subsidy side?

We are actually very pleased with the Android we have right now and especially as more and more apps have been written for it. I think it would be nice to have the iPhone, but if you would ask me just a couple of years ago, I probably would have been little more desperate in my answer, but I think that where we are as far as cost versus gross adds, we have been pretty pleased with the Android product.

Okay, and what percent of your base upgraded in the quarter?

Approximately 3% of our base upgrades every quarter.

Is that the total base or is that just the postpaid?

Just postpaid, we have some upgrades in prepaid, but we really don’t have enough history to know what that’s going to be long-term. We just now hit the one year mark on that. And we believe like the first 6 months or 7 months probably was not a very good indication because we had virtually such a low base. If you look at where we are now, we see the upgrade in the prepaid being lower than postpaid but you probably have much better information from other carriers than what we have.

As far as tone of business, July, how did that feel? There's some people getting nervous about the economy. Obviously the market is being pretty much whipped around these days as well. Consumer confidence looks like it's probably getting shaken. How do July go? And how do you think things are looking?

Assume you mean relative to wireless?

No; both sides or all sides.

Okay. On wireless postpaid it looks like a pretty typical month for us, nothing significantly different, we did see lower activity on the prepaid, but that’s probably also contributed by seasonal. As far as on our telephone business really noting no change there. And on cable we had a pretty good month of July particularly in the internet and voice of it, as we continue to rollout speeds that are faster than the comparable DSL. Customers are looking at us as especially as we are building a brand, you got to remember that in many of these markets Shentel wasn’t a known entity a year ago, and so as we are building the brand and the world is giving out about the quality. But I won’t deny that the economy I do believe has an overhang and I think our growth could be great, better if there was a more robust economy, but the good news is that we have seen growth in every one of our product lines except for access lines which we continue to lose at about 2% a year.

Which is still considered I believe lower than most ILECs.

Thank you. I’m showing no further question in the queue at the this time.

All right well, thank you for participating. Please let me know if there are additional details you would like to see on future calls. Our Q will be released at the close of the market today, and my contact information was provided on the press release announcing our earnings in the call. Thank you.

And again ladies and gentlemen this concludes today’s conference, we thank you for your participation, you may now all disconnect.