This management's discussion and analysis includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions as they relate to Shenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regarding Shenandoah Telecommunications Company's expected future financial position and operating results, business strategy, financing plans, forecasted trends relating to the markets in which Shenandoah Telecommunications Company operates and similar matters are forward-looking statements. We cannot assure you that the Company's expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company's actual results could be materially different from its expectations because of various factors, including those discussed below and under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2008. The following management's discussion and analysis should be read in conjunction with the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2008, including the financial statements and related notes included therein.

General

Overview. Shenandoah Telecommunications Company is a diversified telecommunications company providing both regulated and unregulated telecommunications services through its wholly owned subsidiaries. These subsidiaries provide local exchange telephone services and wireless personal communications services (as a Sprint PCS Affiliate of Sprint Nextel), as well as cable television, video, Internet and data services, long distance, sale of telecommunications equipment, fiber optics facilities, paging and leased tower facilities. The Company has the following three reporting segments, which it operates and manages as strategic business units organized by lines of business:

· Wireless, which provides wireless personal communications services, or PCS, as a Sprint PCS Affiliate of Sprint Nextel, through Shenandoah Personal Communications Company, and tower facilities for personal communications services, leased to both affiliated and non-affiliated entities through Shenandoah Mobile Company;

· Wireline, which involves the provision of regulated and non-regulated telephone services, Internet access, and leased fiber optic facilities, primarily through Shenandoah Telephone Company, ShenTel Service Company, and Shenandoah Network Company, respectively, and long-distance and CLEC services through Shenandoah Long Distance Company, ShenTel Communications Company and Shentel Converged Services of West Virginia, Inc.; and

· Cable TV, which involves the provision of cable television services, through Shenandoah Cable Television Company in Shenandoah County, Virginia, and since December 1, 2008, in Alleghany County, Virginia and various locales throughout West Virginia, through Shentel Cable Company.

The Other category includes the provision of investments and management services to its subsidiaries, through Shenandoah Telecommunications Company.

In September 2008, the Company announced its intention to sell its Converged Services operation, and the related assets and liabilities were reclassified as held for sale in the consolidated balance sheet and the historical operating results were reclassified as discontinued operations. Depreciation and amortization on long-lived assets was discontinued.

The Company began an auction process with respect to the sale of the Converged Services assets in the fourth quarter of 2008. The Company determined, both at September 30, 2008 and December 31, 2008, based on its analysis of similar transactions, comparable values for other companies in the industry, and the broad range of values indicated by potential buyers during the early stages of the auction process, that no write-down of the carrying value of the net assets held for sale was required.

Subsequently, in connection with the preparation of the Company's first quarter 2009 financial statements, based upon changes in the marketplace for this type of asset and further developments in the auction process, the Company determined that the fair value of Converged Services had declined from earlier estimates. Accordingly, the Company recorded an impairment loss of $17.5 million ($10.7 million, net of taxes) to reduce the carrying value of these assets to their estimated fair value less cost to sell as of March 31, 2009. At June 30, 2009, negotiations to complete the sale continue, and there has been no change in the estimated fair value of the assets.

Additional Information About the Company's Business

The following table shows selected operating statistics of the Company for the
three months ending on, or as of, the dates shown:

                                            June 30,      Dec. 31,      June 30,      Dec. 31,
                                              2009          2008          2008          2007

Retail PCS Subscribers                        216,067       211,462       200,397       187,303
PCS Market POPS (000) (1)                       2,324         2,310         2,308         2,297
PCS Covered POPS (000) (1)                       1967         1,931         1,838         1,814
PCS Average Monthly Retail Churn % (2)           2.07 %        1.87 %        1.74 %        2.32 %
CDMA Base Stations (sites)                        432           411           364           346
EVDO-enabled sites                                278           211            93            52
EVDO Covered POPS (000) (1)                     1,858         1,663         1,041           624
Towers (100 foot and over)                        108           103           101           101
Towers (under 100 foot)                            17            15            15            14
Telephone Access Lines                         24,046        24,209        24,325        24,536
Total Switched Access Minutes (000)            83,488        90,460        92,917        92,331
Originating Switched Access Minutes (000)      23,903        25,425        27,235        26,128
Long Distance Subscribers                      10,769        10,842        10,840        10,689
Long Distance Calls (000) (3)                   7,923         7,981         8,891         7,944
Total Fiber Miles - Wireline                   47,654        46,733        39,260        35,872
Fiber Route Miles - Wireline                      767           756           674           647
DSL Subscribers                                10,526        10,038         8,951         8,136
Dial-up Internet Subscribers                    4,417         5,151         6,287         7,547
Cable Television Subscribers (4)               25,260        25,369         8,193         8,303
Employees (full time equivalents)                 465           445           414           411

1) POPS refers to the estimated population of a given geographic area and is based on information purchased from third party sources. Market POPS are those within a market area which the Company is authorized to serve under its Sprint PCS affiliate agreements, and Covered POPS are those covered by the network's service area.

2) PCS Average Monthly Retail Churn is the average of the three monthly subscriber turnover, or churn, calculations for the period.

3) Originated by customers of the Company's Telephone subsidiary.

4) The increase at December 31, 2008 is primarily a result of the acquisition of cable customers from Rapid Communications, LLC, on December 1, 2008.

Results of Operations

Three Months Ended June 30, 2009 Compared with the Three Months Ended June 30, 2008

Consolidated Results

The Company's consolidated results from continuing operations for the second
quarter of 2009 and 2008 are summarized as follows:

                                          Three Months Ended
(in thousands)                                 June 30,                    Change
                                           2009          2008          $             %

Operating revenues                      $   40,140     $ 36,309     $  3,831        10.6
Operating expenses                          28,503       22,731        5,772        25.4
Operating income                            11,637       13,578       (1,941 )     (14.3 )
Other income (expense)                           6           23          (17 )     (73.9 )
Income tax expense                           4,828        5,596         (768 )     (13.7 )
Net income from continuing operations   $    6,815     $  8,005     $ (1,190 )     (14.9 )

Operating revenues

For the three months ended June 30, 2009, operating revenue increased $3.8 million, or 10.6%, primarily due to increased service revenue in the Wireless segment and the additional revenue from the Shentel Cable acquisition in late 2008. For the quarter ended June 30, 2009, Wireless operating revenues increased $1.7 million, or 6.3%, while Cable TV segment operating revenues increased $2.5 million. All other Company revenues decreased by $0.4 million, compared to the three months ended June 30, 2008.

Operating expenses

For the quarter ended June 30, 2009, operating expenses increased $5.8 million, or 25.4%, compared to the 2008 period. The incremental costs of the Shentel Cable operations accounted for $3.7 million of the year over year increase. Additional depreciation expense on improvements to the Company's fiber optic network and to support expanded wireless coverage and additional services, specifically EVDO high speed wireless internet data access availability, added $1.3 million to operating expenses, while other costs in the Wireless segment increased $1.2 million.

Income tax expense

The Company's effective tax rate on income from continuing operations increased from 41.1% in the second quarter of 2008 to 41.5% in the second quarter of 2009 due to changes in the allocation of taxable income to higher tax states.

Net income from continuing operations

For the three months ended June 30, 2009, net income from continuing operations decreased $1.2 million, as operating expenses increased faster than operating revenues.

Wireless

The Company's Wireless segment provides digital wireless service to a portion of a four-state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, through Shenandoah PCS Company ("PCS"), a Sprint PCS Affiliate of Sprint Nextel. This segment also leases land on which it builds Company-owned cell towers, which it leases to affiliated and non-affiliated wireless service providers, throughout the same four-state area described above, through Shenandoah Mobile Company ("Mobile").

PCS receives revenues from Sprint Nextel for subscribers that obtain service in PCS's network coverage area. PCS relies on Sprint Nextel to provide timely, accurate and complete information to record the appropriate revenue for each financial period. Revenues received from Sprint Nextel are recorded net of two fees, totaling 16.8% of net billed revenue as defined, retained by Sprint Nextel.

PCS had 432 PCS base stations in service at June 30, 2009, compared to 364 base stations in service at June 30, 2008. As of June 30, 2009, PCS had 278 EVDO-enabled sites, up from 93 EVDO-enabled sites operating as of June 30, 2008, covering 94% of our currently covered population. Approximately 50 additional base stations and 50 additional EVDO-enabled sites are expected to be added by year end 2009.

The Company's average PCS retail customer turnover, or churn rate, was 2.07% in the second quarter of 2009, compared to 1.74% in the second quarter of 2008. As of June 30, 2009, the Company had 216,067 retail PCS subscribers compared to 200,397 subscribers at June 30, 2008. The PCS operation added 3,013 net retail customers in the second quarter of 2009 compared to 6,292 net retail subscribers added in the second quarter of 2008.

Mobile owned 123 towers at June 30, 2009, up from 114 at June 30, 2008. Mobile expects to complete 10 or more new towers during the remainder of 2009. At June 30, 2009, Mobile had 185 leases for non-affiliate cell sites, and 120 affiliate leases, compared to 173 non-affiliate and 111 affiliate leases as of June 30, 2008.

                               Three Months Ended
 (in thousands)                     June 30,                     Change
                               2009          2008            $              %

Segment operating
revenues
 Wireless service revenue   $   25,701     $  22,510     $   3,191          14.2
 Tower lease revenue             1,755         1,610           145           9.0
 Equipment revenue               1,169         1,511          (342 )       (22.6 )
 Other revenue                     435         1,710        (1,275 )       (74.6 )
 Total segment operating
revenues                        29,060        27,341         1,719           6.3
Segment operating
expenses
Cost of goods and
services, exclusive of
depreciation and
amortization shown
separately below                 8,904         8,181           723           8.1
Selling, general and
administrative, exclusive
of depreciation and
amortization shown
separately below                 3,948         3,634           314           8.6
Depreciation and
amortization                     4,971         4,261           710          16.7
 Total segment operating
expenses                        17,823        16,076         1,747          10.9
Segment operating income    $   11,237     $  11,265     $     (28 )        (0.2 )

Operating revenues

Wireless service revenue increased $3.2 million, or 14.2%, for the three months ended June 30, 2009, compared to the comparable 2008 period. Average subscribers increased 8.6% in the current quarter compared to the 2008 second quarter, while subscribers upgrading to higher revenue plans also added to revenue growth. Total credits against gross billed revenue decreased 10.1% to $3.3 million, while bad debt write-offs declined 10.7% to $1.6 million, compared to the second quarter of 2008.

The increase in tower lease revenue resulted primarily from additional cell site leases to non-affiliates, while other revenue in 2008 included $0.9 million in a one-time pass-through of Universal Service Fund fees from Sprint Nextel.

The decrease in equipment revenue consists of $0.1 million in lower handset revenue due to fewer handsets sold, and $0.2 million less commission revenue due to fewer sales of phones that operate on the iDEN network, for which the Company is paid a commission for each phone sold.

Cost of goods and services

Cost of goods and services increased $0.7 million, or 8.1%, in 2009 from the second quarter of 2008. Costs of the expanded network coverage and roll-out of EVDO coverage resulted in a $0.5 million increase in network costs and a $0.2 million increase in maintenance costs. Network costs include rent for additional tower and co-location sites, and power and backhaul line costs. Handset costs increased $0.1 million in 2009 over 2008, principally due to higher cost phones with new and expanded features.

Network costs are expected to increase in future periods as additional EVDO sites are brought on-line, and as new towers and base stations are added to expand our network coverage and capacity.

Selling, general and administrative

Selling, general and administrative expenses increased $0.3 million in 2009 from the second quarter of 2008, due to an increase in commissions paid to third parties and increased spending on advertising.

Depreciation and amortization

Depreciation and amortization increased $710 thousand in 2009 over 2008, due to capital projects for EVDO capability and new cell sites placed in service beginning in 2008 and into early 2009. Depreciation is expected to continue to increase as additional sites are brought on-line in 2009.

Wireline

The Wireline segment is comprised of several subsidiaries providing
telecommunications services. Through these subsidiaries, this segment provides
regulated and unregulated voice services, dial-up and DSL internet access, and
long distance access services throughout Shenandoah County, Virginia, and leases
fiber optic facilities throughout the northern Shenandoah Valley of Virginia,
northern Virginia and adjacent areas along the Interstate 81 corridor, including
portions of West Virginia and Maryland.

                               Three Months Ended
 (in thousands)                     June 30,                     Change
                               2009          2008            $              %

Segment operating
revenues
Service revenue             $    3,524     $   3,430     $      94           2.7
Access revenue                   2,795         2,895          (100 )        (3.5 )
Facilities lease revenue         3,251         3,410          (159 )        (4.7 )
Equipment revenue                   53            58            (5 )        (8.6 )
Other revenue                    1,350         1,328            22           1.7
Total segment operating
revenues                        10,973        11,121          (148 )        (1.3 )
Segment operating
expenses
Cost of goods and
services, exclusive of
depreciation and
amortization shown
separately below                 4,212         3,842           370           9.6
Selling, general and
administrative, exclusive
of depreciation and
amortization shown
separately below                 1,770         1,958          (188 )        (9.6 )
Depreciation and
amortization                     2,183         1,864           319          17.1
Total segment operating
expenses                         8,165         7,664           501           6.5
Segment operating income    $    2,808     $   3,457     $    (649 )       (18.8 )

Operating revenues

Operating revenues declined slightly in the second quarter of 2009 compared to the second quarter of 2008.

Cost of goods and services

Cost of goods and services increased $0.4 million, due primarily to increase in various network costs.

Selling, general and administrative

Selling, general and administrative expenses decreased $0.2 million, due to small reductions in marketing and selling costs.

Depreciation and amortization

Depreciation and amortization expense increased $0.3 million, due to capital projects placed in service in 2008 and early 2009 relating to fiber related upgrades and redundancy projects, and improvements to our DSL plant to increase customer connection speeds.

Cable Television

The Cable TV segment provides analog, digital and high-definition television signals under franchise agreements within Shenandoah County, Virginia, and since December 1, 2008, in various locales in West Virginia and in Alleghany County, Virginia. As of June 30, 2009, it served 25,260 customers, up from 8,193 subscribers served as of June 30, 2008. Essentially all of the increase resulted from the acquisition of cable assets and customers from Rapid Communications, LLC, completed December 1, 2008. Since the acquisition, the Company has been working to upgrade a number of the acquired systems, and has completed upgrades in the Alleghany County, Virginia, market. The Company introduced expanded service offerings in the Alleghany County market late in the second quarter of 2009, and expects additional expansion as markets in West Virginia are upgraded through 2010. The Company expects to spend approximately $23 million on these upgrades through 2010.

                               Three Months Ended
 (in thousands)                     June 30,                      Change
                               2009           2008            $              %

Segment operating
revenues
Service revenue             $     3,549     $   1,197     $   2,352         196.5
Equipment and other
revenue                             272           123           149         134.2
Total segment operating
revenues                          3,821         1,320         2,501         189.5

Segment operating
expenses
Cost of goods and
services, exclusive of
depreciation and
amortization shown
separately below                  3,089           932         2,157         231.4
Selling, general and
administrative, exclusive
of depreciation and
amortization shown
separately below                  1,275           331           944         285.2
Depreciation and
amortization                        874           262           612         233.6
Total segment operating
expenses                          5,238         1,525         3,713         243.5
Segment operating loss      $    (1,417 )   $    (205 )   $  (1,212 )         n/m

Operating revenues and expenses

The increases in operating revenues and expenses shown above primarily reflect the impact of the acquisition from Rapid Communications, LLC.

Six Months Ended June 30, 2009 Compared with the Six Months Ended June 30, 2008

Consolidated Results

The Company's consolidated results from continuing operations for the six months
ended June 30, 2009 and 2008, respectively, are summarized as follows:

                                          Six Months Ended
(in thousands)                                June 30,                  Change
                                          2009         2008           $           %

Operating revenues                      $ 80,241     $ 69,896     $ 10,345       14.8
Operating expenses                        56,592       46,830        9,762       20.8
Operating income                          23,649       23,066          583        2.5
Other income (expense)                      (984 )       (555 )       (429 )     77.3
Income tax expense                         9,693        9,106          587        6.4
Net income from continuing operations   $ 12,972     $ 13,405     $   (433 )     (3.2 )

Operating revenues

For the six months ended June 30, 2009, operating revenue increased $10.3 million, or 14.8%, primarily due to increased service revenue in the Wireless segment and the additional revenue from the Shentel Cable acquisition in late 2008. For the 2009 period, Wireless operating revenues increased $6.1 million, or 11.8%, while the incremental Shentel Cable revenues in the Cable TV segment totaled $5.1 million for 2009. All other Company revenues decreased by $0.9 million, compared to the six months ended June 30, 2008.

Operating expenses

For the six months ended June 30, 2009, operating expenses increased $9.8 million, or 20.8%, compared to the 2008 period. The incremental costs of the Shentel Cable operations accounted for $6.8 million of the year over year increase. Additional depreciation expense of $2.0 million on improvements to the Company's fiber optic network and to support expanded wireless coverage and additional services, specifically EVDO high speed wireless internet data access availability, and the associated additional $1.3 million of operating costs for rent and power, accounted for the remainder of the increase in operating expenses.

Other income (expense)

The change of $0.4 million reflected in other income (expense) reflects losses on investments held by the Company, including several investments in technology-related development stage companies.

Income tax expense

The Company's effective tax rate on income from continuing operations increased from 40.5% in the first six months of 2008 to 42.8% in the first six months of 2009 primarily due to revisions to certain tax estimates recorded in the first quarter of 2009, and the allocation of taxable income to higher tax states.

Net income from continuing operations

For the six months ended June 30, 2009, net income from continuing operations decreased $0.4 million, due primarily to losses on investments and increased taxes.

Wireless

                               Six Months Ended
(in thousands)                     June 30,                     Change
                              2009          2008            $              %

Segment operating
revenues
Wireless service revenue    $  51,061     $  43,562     $   7,499          17.2
Tower lease revenue             3,456         3,191           265           8.3
Equipment revenue               2,439         2,811          (372 )       (13.2 )
Other revenue                     908         2,184        (1,276 )       (58.4 )
Total segment operating
revenues                       57,864        51,748         6,116          11.8
Segment operating
expenses
Cost of goods and
services, exclusive of
depreciation and
amortization shown
separately below               17,939        17,147           792           4.6
Selling, general and
administrative, exclusive
of depreciation and
amortization shown
separately below                8,115         8,268          (153 )        (1.9 )
Depreciation and
amortization                    9,843         8,544         1,299          15.2
Total segment operating
expenses                       35,897        33,959         1,938           5.7
Segment operating income    $  21,967     $  17,789     $   4,178          23.5

Operating revenues

Wireless service revenue increased $7.5 million, or 17.2%, for the six months ended June 30, 2009, compared to the comparable 2008 period. Average subscribers increased 9.9% in the first half of 2009 compared to the 2008 first half, while subscribers upgrading to higher revenue plans also added to revenue growth. Total credits against gross billed revenue decreased 1.5% to $7.1 million, while bad debt write-offs declined 23.0% to $3.3 million, compared to the first half of 2008.

The increase in tower lease revenue resulted primarily from additional cell site leases to non-affiliates.

The decrease in equipment revenue consists of $0.2 million in lower handset revenue due to fewer handsets sold, and $0.2 million less commission revenue due to fewer sales of phones that operate on the iDEN network, for which the Company is paid a commission for each phone sold.

The decrease in other revenue reflects a one-time pass through of certain Universal Service Fund fees from Sprint Nextel in the second quarter of 2008, combined with subsequent declines in recurring Universal Service Fund fees.

Cost of goods and services

Cost of goods and services increased $0.8 million in 2009's first half from the first half of 2008. Costs of the expanded network coverage and roll-out of EVDO . . .