1010286--3/12/2010--FiberTower

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Risks Related to our Business Operations We expect to incur operating and net losses and negative cash flows for the next few years. We may require significant funds in the future, which may not be available to us to operate and expand our business. We may be unable to successfully execute any of our currently identified business opportunities or future business opportunities that we determine to pursue. We may experience difficulties in constructing, upgrading and maintaining our network, which could adversely affect customer satisfaction, increase carrier turnover and reduce revenues. We are a relatively new entrant into a highly concentrated market with few potential customers. Two customers accounted for 59% of our revenues in 2009. The success of our business strategy relies on the continued growth of the mobile wireless services industry and high-bandwidth broadband mobile applications in the U.S. Our revenues depend on the sale of backhaul circuits for mobile wireless carriers. We operate in a highly competitive environment and may not be able to compete successfully, which could materially and adversely affect our ability to attract customers and maintain and increase our sales. An economic or wireless telecommunications industry slowdown may materially and adversely affect our business. Competitors or customers may acquire radio spectrum for the purpose of offering similar fixed wireless services, which could impact our growth and negatively affect our operating results. We depend on third parties to help deploy and maintain our infrastructure and equipment to deliver our services. Interruption or failure of information technology and communications systems could impair our ability to provide services, which could damage our reputation and harm our operating results. If our data security measures are breached, our reputation and business may be harmed. The industry in which we operate is continually evolving. Our services may become obsolete, and we may not be able to develop competitive products or services on a timely basis or at all. We depend on the continued availability of leases or licenses for our communications facilities. We do business with an affiliated third party and may not have obtained the same terms as from an unaffiliated provider. To be successful, we must attract, retain and motivate key employees, and the inability to do so could seriously harm us. The loss of key personnel could adversely affect our business because these individuals are important to our continued growth. We have little experience with customer renewal rates and it is difficult to predict the extent of customer renewals for our services. We have experienced growth in recent periods. If we fail to manage future growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately. Acquisitions could result in operating difficulties, dilution and distractions from our core business. We are subject to comprehensive and continually evolving regulation that could increase our costs and adversely affect our ability to successfully implement our business plan. Risks Related to an Investment in FiberTower We have never paid dividends on our common stock and do not anticipate paying dividends in the foreseeable future. Our quarterly results of operations have fluctuated in the past and may fluctuate in the future. As a result, we may fail to meet or exceed the expectations of securities analysts or investors, which could cause the trading price of our common stock to decline. Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, operating results and stock price. Future sales of our common stock in the public market or the issuance of securities senior to our common stock could adversely affect the trading price of our common stock and our ability to raise funds in the future. Changes in the composition of our stockholders, including those resulting from the issuance of common stock in the Mandatory Redemption, are likely to limit our ability to use our net operating losses. Provisions in our charter documents and Delaware law may delay or prevent an acquisition of FiberTower. Additional Risks Related to our FCC licenses If we do not retain, obtain or maintain rights to use licensed spectrum in one or more markets, we may be unable to operate in these markets, which could harm our business and our ability to execute our business strategy. The FCC may cancel or revoke our licenses for past or future violations of the FCC's rules, which could limit our operations and growth. The value of our FCC licenses could decline, which could materially affect our ability to raise capital, and could have a material adverse effect on our business and results of operations. We may be required to make certain FCC filings in the future and may be subject to fines and or sanctions for failure to file in the past. Our FCC licenses may not be renewed upon expiration in the future, which could limit the expansion of our business and our ability to serve our customers and could harm our operating results Our reliance upon spectrum licensed by the FCC includes additional risks. The FCC or state regulatory bodies may determine that we are subject to common carrier regulation, which could increase our costs and result in a decline in our operations, revenues and profitability. FCC Regulation of radio frequency emissions and radio frequency environments may increase our costs and/or limit our operations. FCC, Congressional or State action that requires Incumbent Local Exchange Carriers (ILECs) to artificially lower and cap their special access transport pricing could result in pricing pressure on FiberTower. Additional Risks Related to our Indebtedness To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. Our substantial level of indebtedness could materially adversely affect our financial condition and prevent us from fulfilling our obligations under the Notes due 2016 and the Notes due 2012 and any other indebtedness. We are a holding company, and therefore our ability to make any required payments on our indebtedness depends upon the ability of our subsidiaries to pay dividends or to advance funds. Despite our substantial level of indebtedness, we may still incur significantly more debt, which could exacerbate any or all of the risks described above. The Notes due 2016 contain restrictive covenants that limit our operational flexibility. The repurchase rights in the Notes due 2016 triggered by a fundamental change could discourage a transaction that could be beneficial to the holders of our common stock.

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1010286--3/12/2010--FiberTower_CORP