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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 20-F


                ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

         For the fiscal year ended                   Commission file
            December 31, 2002                         number 0-22828

                                ----------------

                      MILLICOM INTERNATIONAL CELLULAR S.A.
             (Exact name of Registrant as specified in its charter)

                            GRAND-DUCHY OF LUXEMBOURG
                 (Jurisdiction of incorporation or organization)

     75 Route de Longwy, Box 23, L-8080 Bertrange, Grand-Duchy of Luxembourg
                    (Address of principal executive offices)


        Securities registered pursuant to Section 12(b) of the Act: None

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

          Common Shares, par value $2.00 each, as of December 31, 2002
                                (Title of Class)

    Securities for which there is a reporting obligation pursuant to Section
                             15(d) of the Act: None

    Indicate the number of shares outstanding of each of the Issuer's classes
 of capital or common stock as of the close of the period covered by the annual
                                    report:

Common Shares with a par value of $2.00 each: 48,853,425 as of December 31, 2002
--------------------------------------------------------------------------------

     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 X           N
                               ---            ---

     Indicate by check mark which financial statement item the Registrant has
elected to follow:

                            Item 17         Item 18 X
                                ---             -----


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<PAGE>


                                Table of Contents

                         ------------------------------


                                                                            Page
                                                                            ----


FORWARD-LOOKING STATEMENTS.....................................................2

CERTAIN TERMS..................................................................2

PART I.........................................................................4
     ITEM 1.      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS........4
     ITEM 2.      OFFER STATISTICS AND EXPECTED TIMETABLE......................4
     ITEM 3.      KEY INFORMATION..............................................4
     ITEM 4.      INFORMATION ON THE COMPANY..................................12
     ITEM 5.      OPERATING AND FINANCIAL REVIEW AND PROSPECTS................43
     ITEM 6.      DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES..................55
     ITEM 7.      MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS...........58
     ITEM 8.      FINANCIAL INFORMATION.......................................62
     ITEM 9.      THE OFFER AND LISTING.......................................62
     ITEM 10.     ADDITIONAL INFORMATION......................................63
     ITEM 11.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK...69
     ITEM 12.     DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES......73

PART II.......................................................................73
     ITEM 13.     DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.............73
     ITEM 14.     MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
                    HOLDERS AND USE OF PROCEEDS...................73
     ITEM 15.     CONTROLS AND PROCEDURES.....................................73
     ITEM 16.     [RESERVED]..................................................74

PART III......................................................................74
     ITEM 17.     FINANCIAL STATEMENTS........................................74
     ITEM 18.     FINANCIAL STATEMENTS........................................74
     ITEM 19.     EXHIBITS....................................................74

SIGNATURES....................................................................75


<PAGE>


                           FORWARD-LOOKING STATEMENTS

     Certain of the statements made in this document may be considered to be
"forward-looking statements" as that term is defined in the U.S. Private
Securities Litigation Reform Act of 1995, such as statements that include the
words "expect", "estimate", "believe", "project", "anticipate", "should",
"intend", "probability", "risk", "may", "target", "goal", "objective" and
similar expressions or variations on such expressions. These statements appear
in a number of places throughout the document including, but not exclusively,
"Information on the Company", and "Operating and Financial Review and
Prospects". These statements concern, among other things, trends affecting the
Company's financial condition or results of operations, capital expenditure
plans, the potential for growth and competition in areas of the Company's
business and the supervision and regulation of the telecommunications' markets.
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties; actual results may differ materially as a
result of various factors.

     These factors include, but are not limited to:

     o    general economic conditions, government and regulatory policies and
          business conditions in the markets served by the Company and its
          affiliates;

     o    telecommunications usage levels, including traffic and customer
          growth;

     o    competitive forces, including pricing pressures, technological
          developments and the ability of the Company to retain market share in
          the face of competition from existing and new market entrants;

     o    regulatory developments and changes, including with respect to the
          level of tariffs, the terms of interconnection, customer access and
          international settlement arrangements, and the outcome of litigation
          related to regulation;

     o    the success of business, operating and financing initiatives, the
          level and timing of the growth and profitability of new initiatives,
          start-up costs associated with entering new markets, costs of handsets
          and other equipment, the successful deployment of new systems and
          applications to support new initiatives, and local conditions; and

     o    the availability, terms and use of capital, the impact of regulatory
          and competitive developments on capital outlays, the ability to
          achieve cost savings and realize productivity improvements, and the
          success of the Company's investments, ventures and alliances.

     Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Millicom International
Cellular S.A. undertakes no obligation to release publicly the result of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof, including, without limitation,
changes in Millicom International Cellular S.A.'s business or acquisition
strategy or planned capital expenditures, or to reflect the occurrence of
unanticipated events.


                                  CERTAIN TERMS

     Unless the context otherwise requires, the term "MIC" refers only to
Millicom International Cellular S.A., a stock corporation organized under the
laws of the Grand-Duchy of Luxembourg, and the terms the "Company", "we", "us"
or `our" refers to MIC and its subsidiaries, joint ventures and affiliates. The
term "MIC Cellular" refers to the operations of the Company, excluding those of
Tele2 AB (formerly named NetCom AB). Unless the context otherwise requires, when
used herein with respect to a licensed area, "persons", "population" and "pops"
are interchangeable and refer to the aggregate number of persons located in such
licensed area and "equity pops" refers to the number of such persons in a
licensed area multiplied by the Company's ownership interest in the licenses for
such licensed area. The term "Proportional Subscribers" refers to the Company's
share of the total subscribers in an operation. Persons, population and pops
data for 2002 have been extracted from the `CIA - The World Factbook' for 2002
for countries where the license area covers the entire country and have been
estimated by management for countries where the license area is less than the
entire country. Unless otherwise indicated, all financial data and


                                       2
<PAGE>


discussions thereon in this annual report are based upon financial statements
prepared in accordance with International Financial Reporting Standards ("IFRS")
and subscriber figures represent the total number of cellular subscribers of
systems in which the Company has an ownership interest.

     As a foreign private issuer, the Company is exempt from the proxy rules of
Section 14 under the Securities Act of 1934, as amended (the "Exchange Act"),
and the reporting requirements of Section 16 under the Exchange Act.




                                       3
<PAGE>



                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

ITEM 3.  KEY INFORMATION

Selected Financial Information

     The Company reports under International Financial Reporting Standards
("IFRS"). The following tables present comparative information under IFRS and
U.S. generally accepted accounting principles ("U.S. GAAP"). The principal
differences between the accounting policies applied by the Company under IFRS
and U.S. GAAP are discussed in Note 30 of the "Notes to the Consolidated Annual
Accounts".

     The following table sets-forth summary financial data of the Company as of
and for the years ended December 31, 2002, 2001, 2000, 1999 and 1998. The data
are based upon the Company's audited consolidated balance sheets as of December
31, 2002, 2001, 2000, 1999 and 1998 and audited consolidated statements of
profit and loss for the years then ended. The following information is qualified
in its entirety by, and should be read in conjunction with, such statements.

     Unless otherwise indicated all financial data and discussions therein in
this document are based upon financial statements prepared in accordance with
IFRS.


                                               SELECTED FINANCIAL DATA
<TABLE>

                         (Prepared under International Financial Reporting Standards) (1) (2)
                           (In thousands of U.S. dollars, except ratios and per share data)

                                                                       Year Ended December 31,
                                                      ------------------------------------------------------------
                                                       2002         2001          2000         1999          1998
                                                      -------      -------      -------       -------      -------
<S>                                                   <C>          <C>          <C>           <C>          <C>
Profit and Loss Statement Data:                                                           (restated)    (restated)
Revenues......................................        605,186      644,570      570,840       552,401      458,978
Operating profit .............................        122,313       92,786      (53,378)       (8,610)     120,835
(Loss) gain from investment securities........       (299,963)     (15,931)     665,262       144,296       73,899
(Loss) profit for the year from continuing
   operations (3).............................       (507,162)    (138,020)     408,468       (32,857)      50,347
(Loss) profit for the year....................       (385,143)    (138,053)     355,388       (42,303)      38,144
Basic (loss) earnings from continuing
   operations per common share................        $(31.08)      $(8.46)      $25.10        $(2.03)       $3.10
Basic (loss) earnings per common share........        $(23.60)      $(8.46)      $21.84        $(2.61)       $2.34
Average number of shares in basic computation
   (4)........................................         16,318       16,314       16,273        16,215       16,217
Diluted (loss) earnings from continuing
   operations per common share................        $(31.08)      $(8.46)      $24.76        $(2.03)       $3.09
Diluted (loss) earnings per common share......        $(23.60)      $(8.46)      $21.54        $(2.61)       $2.35
Average number of shares in diluted
   computation (4)............................         16,318       16,314       16,500        16,215       16,313
Dividends per share...........................          $nil         $nil         $nil          $nil         $nil
</TABLE>


                                                          4

<PAGE>


<TABLE>
                                                                         As of December 31,
                                                     ---------------------------------------------------------------
                                                        2002         2001          2000         1999          1998
                                                     ---------    ---------     ---------    ---------     ---------
<S>                                                   <C>          <C>          <C>           <C>          <C>
Balance Sheet Data:                                                                       (restated)    (restated)
Tangible assets, net.........................          458,933      512,236       577,501      499,579       489,371
Licenses, net................................           84,471      164,541       201,124      173,681       188,863
Investment in securities (5).................          321,926      676,829       816,211      407,978       281,457
Investments in associated companies..........            1,013       52,858             -      139,963         5,020
Total assets.................................        1,203,119    1,870,930     2,112,228    1,639,461     1,563,147
Current liabilities..........................          375,862      469,191       651,034      357,045       383,160
Non-current liabilities......................        1,098,783    1,322,583     1,112,331      983,292       946,154
Minority interest............................           23,733       10,262         7,672        4,295         2,531
Shareholders' equity ........................        (295,259)       68,894       341,191      294,829       231,302
</TABLE>

<TABLE>

                                          (Prepared under U.S. GAAP) (6)(7)
                           (In thousands of U.S. dollars, except ratios and per share data)

                                                                      Year Ended December 31,
                                                     ---------------------------------------------------------------
                                                        2002         2001          2000         1999          1998
                                                     ---------    ---------     ---------    ---------     ---------
<S>                                                    <C>          <C>           <C>          <C>           <C>
Profit and Loss Statement Data:                                (restated)    (restated)   (restated)    (restated)
Revenues.....................................          415,864      419,542       369,908      257,097       228,888
Operating (loss) profit......................         (33,848)       12,875      (26,373)       15,405       (1,284)
(Loss) gain from investment securities.......        (299,963)     (15,931)       665,262      144,296        73,899
   Profit (loss) for the year from continuing
   operations (3)............................        (330,357)    (126,180)       420,817     (15,697)      (10,516)
(Loss) profit for the year...................        (328,820)    (174,766)       370,573     (27,549)      (17,259)
  Basic (loss) earnings per common share from
   continuing operations.....................         $(20.24)      $(7.73)        $25.86      $(0.97)       $(0.65)
Basic (loss) earnings per common share.......         $(20.15)     $(10.71)        $22.77      $(1.70)       $(1.06)
            Average number of shares in basic
   computation (4)...........................           16,318       16,314        16,273       16,215        16,217
     Diluted (loss) earnings per common share
   from continuing operations................         $(20.24)      $(7.73)        $25.50      $(0.97)       $(0.65)
Diluted (loss) earnings per common share.....         $(20.15)     $(10.71)        $22.46      $(1.70)       $(1.06)
          Average number of shares in diluted
   computation (4)...........................           16,318       16,314        16,500       16,215        16,217

<CAPTION>

                                                                           As of December 31,
                                                     ---------------------------------------------------------------
                                                       2002         2001          2000         1999          1998
                                                     ---------    ---------     ---------    ---------     ---------
<S>                                                    <C>          <C>           <C>          <C>           <C>
Balance Sheet Data:                                            (restated)    (restated)   (restated)    (restated)
Tangible assets, net.........................          286,372      376,676       399,585      293,960       251,869
Licenses, net................................           20,407      137,910       173,921       92,261       116,190
Investment in securities (5).................          321,905      675,865       816,456      408,213       261,514
Investments in associated companies..........          111,622      131,616        77,130      136,483        54,469
Total assets.................................        1,123,194    1,724,439     1,902,814    1,314,816     1,229,147
Current liabilities..........................          329,055      339,311       485,706      193,681       194,274
Non-current liabilities......................        1,067,508    1,302,088     1,137,637      905,444       877,259
Minority interest............................           23,733       10,262         7,672        4,295         2,531
Shareholders' equity........................         (297,102)       72,778       271,799      211,396       155,083
</TABLE>


                                                          5
<PAGE>


(1)  The figures for 1998 and 1999, prepared under International Financial
     Reporting Standards, have been restated to reflect retrospective
     application of IFRS 38.

(2)  See Note 30 of the "Notes to the Consolidated Annual Accounts" for certain
     reconciliations between IFRS and U.S. GAAP.

(3)  Under IFRS, the MIC Systems and FORA group of companies have been reported
     as discontinuing operations in the consolidated financial statements. Under
     US GAAP, the MIC Systems group of companies, Liberty Broadband Limited
     (formerly Tele 2 (UK)) in the United Kingdom and Celcaribe S.A. in Colombia
     have been reported as discontinuing operations.

(4)  The average number of shares disclosed above has been adjusted for each
     year presented to reflect the reverse share split in February 2003 whereby
     three existing shares of a par value of $2 each were exchanged for one new
     share with a par value of $6 each. The average number of shares, which is
     calculated on a weighted average basis, does not include shares held by the
     Company that have no voting, dividend or other rights while held by their
     current holders (7,423,767 shares at December 31, 2002).

(5)  For the years ended December 31, 1999 to 2001, an amount of $5,027,000 has
     been reclassified from other non-current assets to investment in
     securities. This amount corresponds to the Company's investment in Great
     Universal.

(6)  The U.S. GAAP figures for 1998 to 2001 have been restated to reflect the
     correction of certain errors as described in Note 30 to the consolidated
     financial statements. The reconciliation between the previously reported
     net income (loss) and shareholders' equity under U.S. GAAP as of, and for
     the years ended December 31, 2001 and 2000 and the corresponding restated
     amounts is presented in Note 30. The U.S. GAAP figures for 1999 and 1998
     have been adjusted to reflect the correct application of the equity method
     of accounting of MIC's joint ventures under U.S. GAAP (see Item 16 in Note
     30). Other restatement items, as described in Note 30, only refer to 2001
     and 2000.

(7)  As described in Note 30 of the consolidated financial statements, under
     U.S. GAAP, the Company should consolidate its investment in Great Universal
     and Modern Holdings. The U.S. GAAP revenues and operating profit (loss) for
     each of the years presented in the table above do not include the effect of
     the consolidation. However, the effects of the consolidation on MIC's
     reported revenues and operating profit (loss) for each of the years ended
     December 31, 2002, 2001 and 2000 are disclosed in Note 30.

Risk Factors

   General Risks

     We have a history of losses and expect to incur losses in the future, and
we may be unable to achieve profitability. We experienced a net loss for each of
the years from 1998 to 2002, after excluding gains from investment securities.
For the year ended December 31, 2002 we incurred a net loss of $385,143,000. For
the year ended December 31, 2001 we made net losses of $138,053,000. For the
year ended December 31, 2000 we made net profits of $355,388,000. During 1999
and 1998, we made net losses of $42,303,000 and net profits of $38,144,000
respectively.

     We are not assured of achieving or maintaining profitability in the future,
nor are we sure that we will always have sufficient resources to make payments
on our indebtedness. Future performance will depend, in particular, on our
ability to generate demand and revenue for our services, to maintain existing
subscribers and customers and to attract new subscribers and customers. Costs in
connection with the acquisition of future licenses and the costs incurred in
order to commence and develop operations of cellular and related telecom systems
will also affect revenues and profitability. See "Operating and Financial Review
and Prospects."

     We have substantial outstanding debt, significant debt service obligations
and capital requirements and we are subject to restrictions on the withdrawal of
funds. As of December 31, 2002, we had total consolidated outstanding debt and
other financing of approximately $1,228,575,000. Of this amount, $967,557,000
represents MIC's indebtedness and $261,018,000 is our consolidated share of the
indebtedness of our ventures. Corporate


                                       6
<PAGE>

guarantees, cash deposits and standby letters of credit issued at the request of
and guaranteed by us secure liabilities of $189,395,000.

     In June 1996, we issued $962,000,000 principal amount of our 13 1/2% Senior
Subordinated Discount Notes, or our "Old Notes". The Old Notes were issued at
52.075% of their principal amount and the purchase discount on the Old Notes
accreted at a rate of 13 1/2% compounded semiannually from issuance until June
1, 2001. The net cash proceeds from the issuance of the Old Notes after
deducting discount and estimated expenses were approximately $483,433,000. The
Old Notes began accruing cash interest on June 1, 2001 and thereafter cash
interest continues to accrue until maturity on June 1, 2006 at a rate of 13 1/2%
per annum, payable semiannually in arrears on June 1 and December 1, commencing
December 1, 2001.

     In May 2003, we completed a successful exchange offer and consent
solicitation for approximately 85% of the Old Notes and issued approximately
$562 million of 11% Senior Notes (the "11% Notes") and approximately $64 million
of 2% Senior Convertible PIK (payment in kind) Notes due 2006 (the "2% Notes")
in exchange for approximately $781 million in principal amount of Old Notes. We
refer to the 11% Notes and the 2% Notes together as our "New Notes". Following
the completion of the exchange offer, (after additional repurchases by us and
related cancellations of Old Notes with a face value of $44 million in 2002),
there remained outstanding Old Notes with a face value of $137,080,000. We refer
to our Old Notes and our New Notes together as our "Notes".

     The Old Notes are redeemable at our option, in whole or in part, at any
time at redemption prices starting at 106.75% of the principal amount in year
2001 and decreasing to 100.00% in year 2004 plus accrued and unpaid interest at
the date of redemption. The New Notes are redeemable at our option, in whole or
in part, at any time prior to June 1, 2004 at a redemption price of 102.25% of
the principal amount then outstanding and at June 1, 2004 and thereafter at a
price of 100% of the principal amount then outstanding, in each case plus
accrued and unpaid interest at the date of redemption. In addition, with respect
to the 11% Notes, on each of June 1, 2004, December 1, 2004, June 1, 2005 and
December 1, 2005 we are required to redeem $17,5000,000 in principal amount of
11% Notes due to an amortization schedule set forth in the indenture governing
the 11% Notes.

     Upon the occurrence of a change of control triggering event, which is
defined in the indenture related to the Notes as a rating decline and change of
ownership, holders of the Notes may require us to purchase all or a portion of
the Notes at a purchase price of 101% of the stated principal amount of the
Notes, plus accrued and unpaid interest, if any, on the Notes to the date of
purchase.

     Under our indentures relating to the Notes we may not incur indebtedness
unless the `debt coverage ratio' would be less than 7 to 1. The debt coverage
ratio is the ratio of the consolidated principal amount of debt outstanding to
four times operating income. As at December 31, 2002 the ratio was 1.2 to 1. If
we cease to meet the debt coverage ratio requirement, it may incur debt under
several `debt baskets' as set forth in the indentures. External sources of
funding are expected to continue to play an important role in our financing. To
the extent we may not incur indebtedness we may not be able to repay our
existing obligations when they become due.

     Interest and principal payment obligations on such debt impose substantial
debt service obligations on us. In addition, we (including certain ventures in
which we have interests) are subject to certain covenants and restrictions that
pledge certain assets and restrict, among other things, the payment of
dividends, the disposition of assets and the use of borrowed funds and require
the maintenance of certain financial ratios. Furthermore, if, upon the
occurrence of a change of control triggering event, holders of the Notes require
us to purchase the Notes at a purchase price of 101% of the accreted value or
the stated principal amount of the Notes, as the case may be, we may not be able
to meet the obligations, which may cause lenders to accelerate their debt. Our
ability to meet our obligations will be dependent upon our future performance
and operating cash flows, which will be subject to prevailing economic
conditions and to financial business and other factors beyond our control. In
addition, we may have to sell certain assets to meet our obligations. There is a
risk that the value realized by these sales may be at lower than book value or
that lender consent for these sales may be required and that such consent may
not be obtained on acceptable terms or at all. Furthermore, we have pledged a
portion of our Tele2 AB shares to our creditors. As a result of the above and
other factors, our cash position may fluctuate significantly and there is a risk
that future cash flows generated will be insufficient to repay all our existing
debt


                                       7
<PAGE>

obligations as they become due. See "Operating and Financial Review and
Prospects--Liquidity and Capital Resources."

     Our ability to receive funds from, and to exercise management control over
our ventures is often dependent upon the consent of other participants who are
not under our control. Disagreements or unfavorable terms in the relevant
agreements could adversely affect our operations. As of December 31, 2002, we
participated in 17 cellular ventures in 16 countries. In February 2003, the
Company completed the divestment of its operation in Colombia, thereby reducing
its participation to 16 cellular ventures in 15 countries. Our participation in
each venture differs from market to market and we do not have a controlling
interest in some operations. Sometimes, our ability to withdraw funds, including
dividends, from our participation in, and to exercise management control over,
ventures and investments therein, depends on receiving the consent of the other
participants. While the precise terms of the arrangements vary, our operations
may be affected if disagreements develop with venture partners. See "Information
on the Company--Overall Business Strategy--Maximize Operating
Effectiveness--Retain Operational and Financial Control."

     We rely upon dividends and other payments from our ventures to generate the
funds necessary to meet our obligations. The ventures are legally distinct from
us and have no obligation to pay amounts due with respect to our obligations, or
to make funds available for such payments. Our ventures do not guarantee our
obligations. The ability of our ventures to make such payments to us will be
subject to, among other things, the availability of funds, the agreement of the
venture partner(s), the terms of each venture's indebtedness and applicable
local laws. The majority of our operations have entered into financing
facilities, some of which are guaranteed by us, which prohibit or restrict the
payment of dividends by those ventures to the Company. Claims of creditors of
our ventures, including trade creditors, will generally have priority over our
claims and the holders of our indebtedness. At December 31, 2002, the total debt
and other financing of the Company and each of the ventures, combining 100% of
each venture's debt, was $1,289,893,000. See "Information on the
Company--Financing of the Company's Business."

     We may face de-listing of our common stock. In January 2003 we faced a
de-listing of our common stock from the Nasdaq National Market due to the low
level of our stock price and our consolidated negative shareholders' equity. The
then imminent de-listing was averted following a reverse stock split in February
2003. We cannot make assurances that the value of our common stock will remain
stable and that we will not face de-listing again in the future.

     The terms of our loan agreements could prevent us from selling certain
assets, incurring debt or receiving dividends from our ventures. The financing
arranged through Toronto-Dominion Securities imposes constraints on the sale of
pledged Tele2 AB shares. The number of shares pledged under the new financing
agreement is adjusted on a monthly basis based upon the Tele2 class B shares'
market value. Tele2 shares pledged are not available for sale to offset any
operating losses or to meet our interest or principal payment obligations. As of
December 31, 2002, the new financing arrangement was collaterized by 6,184,293
of our Tele2 class B shares. The Notes also impose additional restrictions on
the incurrence of debt, the disposal of assets and the payment of dividends by
ventures.

     Certain insiders own significant amounts of our shares, giving them a
substantial amount of management control. Kinnevik, together with our
management, the estate of Jan H. Stenbeck, our former Chairman who passed away
in August 2002, and both the 1980 and 1985 Stenbeck Trusts, beneficially own a
significant percentage of the outstanding shares of MIC Common Stock. The estate
of Mr. Stenbeck is currently in probate in both Luxembourg and Sweden. Three
members of our Board of Directors are independent, consequently, this group of
insiders, acting together, can exercise control over our management and affairs,
including:

     o    the composition of our Board of Directors and through it, any
          determination with respect to our business direction and policies,
          including the appointment and removal of officers,

     o    the allocation of business opportunities that may be suitable for us,

     o    any determinations with respect to mergers, acquisitions or other
          business combinations,


                                       8
<PAGE>


     o    our acquisition or disposition of assets,

     o    our financing,

     o    incurrence of debt, pledge of our assets and the use of proceeds from
          any debt financing.

     There can be no assurance that the decisions of Kinnevik will be in the
best interests of the Company or its shareholders. See "Major Shareholders and
Related Party Transactions."

     Due to insufficient equity in MIC, there is a risk the Company may be
dissolved. Under Luxembourg company law, all companies must have losses less
than half their subscribed share capital. If this is not the case, the
shareholders must vote as to whether or not to dissolve the company. As of
December 31, 2002, MIC has losses equal to more than half its subscribed share
capital. At the Annual General Meeting held on May 27, 2003, the shareholders
elected to continue operations for the coming 12 months.

     U.S. investors will be subject to special tax rules if we are considered to
be a passive foreign investment company. Special U.S. tax rules apply to U.S.
taxpayers who own stock in a "Passive Foreign Investment Company" (a "PFIC") or
in a "Foreign Personal Holding Company" (a "FPHC"). There can be no assurance
that we presently are not, or will not become, a PFIC. Our status under the PFIC
rules for each year depends upon our income and assets from time to time during
that year. Our substantial investment in associated companies' securities and
other "passive assets", and the decline in the value of our stock, result in a
risk that we are a PFIC or could become a PFIC in the future. If we were
determined to be a PFIC, then shareholders who are U.S. persons under U.S. tax
laws would be subject to special unfavorable tax rules. See "Additional
Information--Taxation--United States Investors."

     We have investments whose value may fluctuate over time. As at December 31,
2002, the Company recorded the market value of its investment in Tele2 AB at
$265,571,000 (2001: $659,440,000, 2000: $800,070,000). The value of this
investment is subject to market fluctuations and may continue to fall.

     Potential dilution of existing shareholders following Old Note exchange. As
part of the Old Note exchange completed in May 2003, holders who exchanged Old
Notes received 2% Senior Convertible PIK (payment in kind) Notes due 2006. These
2% Notes are convertible at any time into MIC common stock at a conversion price
of $10.75. At maturity, the Company has the option to pay all, or a portion of,
the then outstanding principal amount of the 2% Notes in cash or in shares of
MIC common stock. At the date of the exchange, 2% Notes with a value of
$63,714,000 were issued. If they had been exchanged on that date, MIC would have
issued 5,926,800 new shares with rounding balances settled through cash
payments.

   Risks Related to Our Cellular Telephone Operations

     We face intense competition in the cellular telephone operator market. The
cellular systems in which we have interests face competition from the landline
telephone networks and other cellular telephone operators in the markets in
which they operate.

     We expect that other cellular telephone operators will obtain licenses in
some markets, including markets where we do not currently have a licensed
cellular telephone competitor. Moreover, additional licenses may be awarded in
markets where we already face competition from other communications technologies
that are being or may be developed and/or perfected in the future. The cellular
telephone systems in each market compete for customers principally on the basis
of services offered, quality of service, coverage area and price. Some of our
competitors have substantially greater capital resources than we do. Price
competition can be significant.

     In addition, new competitors, such as cable companies that are able to
leverage their existing networks, may enter the telecommunications markets. The
level of competition is influenced by the continuous and swift technological
advances that characterize the industry, the regulatory developments that affect
competition and alliances between market participants.

                                       9
<PAGE>


     The cellular telephone operations market is heavily regulated. The
licensing, construction, ownership and operation of cellular telephone systems,
and the grant, maintenance and renewal of cellular telephone licenses and radio
frequency allocations, are regulated by governmental entities in the markets
that we service. In addition, such matters and certain other aspects of cellular
telephone system operations, including rates charged to customers and the resale
of cellular telephone service, may be subject to public utility regulation in
the relevant market. Changes in the regulation of our activities, such as
increased or decreased regulation affecting prices, the terms of interconnect
arrangements with land-line telephone networks or requirements for increased
capital investments, could materially adversely affect us.

     We face substantial competition for obtaining and funding new telephone
licenses. We are continually seeking additional cellular telephone licenses in
new markets, primarily in developing countries. In each new market we face
competition for licenses from major international telecommunications entities as
well as from local competitors. While we have not typically paid significant
amounts for cellular licenses, the competition for the granting of the licenses
is increasingly intense. As such, we anticipate that we may have to pay
substantial license fees in certain new markets. There can be no assurance that
we will be successful in obtaining any new cellular telephone licenses, or if
licenses are awarded that they can be obtained on terms acceptable to us. If we
obtain further licenses, we may need to seek future funding through additional
borrowings or equity offerings and there can be no assurance that such funding
will be obtained on satisfactory terms or at all.

     Our markets are characterized by rapid technological change, which could
render our products obsolete and cause us to make substantial expenditures to
replace our products. Fixed network and other system equipment used in the
cellular telephone industry has a limited life and must be replaced because of
damage or as a result of ordinary wear and tear. As new technologies develop,
for example third-generation systems, equipment may need to be replaced or
upgraded or a cellular telephone system may need to be rebuilt in whole or in
part, at substantial cost, to remain competitive.

     In some of our markets, our licenses and frequency allocations are subject
to ongoing review, which may result in modification or early termination. The
continued existence and terms of cellular telephone licenses and frequency
allocations are subject to ongoing review and, in some cases, to modification or
early termination. Some licenses that we had in the past, for example those in
Costa Rica and Bombay have been cancelled. While we would not normally expect
any of our cellular telephone companies to be required to cease operations at
the end of the term of its license or permit, there can be no assurance that
licenses will be renewed at all, or on equivalent or satisfactory economic
terms. Upon termination, the license and the assets of the cellular telephone
company associated with the system may revert to the government or local
telecommunications agency, in some cases without any, or adequate, compensatory
payment being made to us.

     The current concerns about the actual or perceived health risks relating to
cellular phone handsets, as well as the attendant publicity or possible
resultant litigation, may have a negative effect on the market price of our
shares, our financial position or the results of our operations. There have been
concerns about the potential negative effect of electromagnetic emissions from
handsets on the health of mobile telephone users. There is also some concern
that the use of mobile telephone handsets may interfere with the operation of
certain electronic equipment, including automobile braking and steering systems.
The actual or perceived risk of mobile communications devices, or press reports
about these risks, or any related litigation, could adversely affect us by
reducing our subscriber growth rate, subscriber base or average use per
subscriber, and could have a negative impact on the market price of our shares.
Any such litigation could also have a materially adverse effect on our financial
position and results of operations.

   Country Risks

     We operate in some markets that are considered politically unstable, which
could negatively affect our operations. As of December 31, 2002, we had
interests in cellular telephone licenses in 16 countries around the world and
are subject to government regulation in each market. The governments of the 16
countries differ widely with respect to structure, constitution and stability,
and some of these countries lack mature legal and regulatory systems. To the
extent that our operations depend on governmental approval and regulatory
decisions, the operations may be adversely affected by changes in the political
structure or government


                                       10
<PAGE>


representatives in each of the markets in which we operate. Recent political and
economic changes have resulted in political and regulatory uncertainty in
certain countries in which we operate. No assurance can be given that factors
such as these will not have a material adverse effect on our operations in
particular countries.

     We operate in a number of jurisdictions, any of which could effect changes
to their laws that could unfavorably affect our financial status. We hold
interests in our cellular telephone companies through our subsidiaries and
affiliates in various jurisdictions in and outside Luxembourg. There can be no
assurance that the laws or administrative practices relating to taxation
(including the current position as to withholding taxes on dividends from the
ventures, and tax concessions in certain operations), foreign exchange or
otherwise in these jurisdictions will not change. Any such change could have a
material adverse effect on our financial affairs and on our ability to receive
funds from the ventures.

     Most of our ventures receive revenue that is denominated in the local
currency. In the future, any of the countries in which these ventures are
located could impose foreign exchange controls, which could restrict our ability
to receive funds from the ventures. Most of the cellular telephone systems in
which we have interests receive substantially all of their revenues in the
currency of the markets in which they operate. We expect to derive substantially
all of our revenues through funds generated by the ventures and, therefore, we
will rely on the ability of the ventures to transfer funds to us. Although there
are currently no foreign exchange controls in many of the countries in which our
cellular telephone companies operate which would significantly restrict the
ability of these ventures to pay interest and dividends and repay loans by
exporting cash, instruments of credit or securities in foreign currencies, in
some countries it may be difficult to convert large amounts of local currency
into foreign currency because of limited foreign exchange markets. The practical
effect of this is likely to be time delays in accumulating significant amounts
of foreign currency. In addition, a few countries in which we operate restrict
the export of cash in local currencies. There can be no assurance that
additional foreign exchange control restrictions will not be introduced in the
future or that our ability to receive funds from the ventures will not
subsequently be restricted.

     Currency fluctuations could reduce the amount of profit and assets that we
are able to report. Exchange rates for currencies of the countries in which our
ventures operate may fluctuate in relation to the U.S. dollar, and such
fluctuations may have a material adverse effect on our earnings or assets when
translating foreign currency into U.S. dollars. A relevant example for the
Company during 2002 was the devaluation of the guarani in Paraguay. In the years
ended December 31, 2002, 2001 and 2000, we suffered exchange losses of
$23,483,000, $17,313,000 and $23,015,000, respectively. To the extent that our
ventures distribute dividends in local currencies in the future, the amount of
U.S. dollars we will receive will be affected by fluctuations of exchange rates
for such currencies against the U.S. dollar. For each venture that reports in a
currency other than the U.S. dollar, a decrease in the value of that currency
against the U.S. dollar would reduce our profits while also reducing both our
assets and liabilities.

     Potential inflation in local economies may affect some customers' ability
to pay for our ventures' services, and it may also adversely affect the
stability of the cellular operations market in those areas. Our operations are
dependent upon the economies of the markets in which we have interests. These
markets are in countries with economies in various stages of development or
structural reform, some of which are subject to rapid fluctuations in terms of
consumer prices, employment levels, gross domestic product and interest and
foreign exchange rates. We may be subject to such fluctuation in the local
economies and to the effect of such fluctuations on the ability of customers to
pay for our ventures' services. In addition, these fluctuations may affect the
ability of the market to support our existing cellular telephone interests or
any growth in cellular telephone operations.

   The Ability of Investors to Enforce Civil Liabilities Under U.S. Securities
Laws May Be Limited

     MIC is incorporated under the laws of the Grand-Duchy of Luxembourg.
Substantially all of its directors and executive officers are residents of
Luxembourg or other countries other than the United States. All or a substantial
portion of our assets, and of the assets of such persons are located outside the
United States. As a result, it may not be possible for investors in MIC's shares
to effect service of process within the United States upon such persons or MIC
or to enforce in U.S. courts or outside the United States judgments obtained
against such persons outside the United States. In addition, it may be difficult
for investors to enforce, in original


                                       11
<PAGE>


actions brought in courts in jurisdictions located outside the United States,
liabilities predicated upon the civil liability provisions of the U.S.
securities laws. We have been advised by our Luxembourg counsel, Linklaters
Loesch, that the United States and Luxembourg do not have a treaty providing for
reciprocal recognition and enforcement of judgments in civil and commercial
matters. Therefore, a final judgment for the payment of money rendered by a
federal or state court in the United States based on civil liability, whether or
not predicated solely upon United States federal securities laws, would not be
enforceable in Luxembourg. However, if the party in whose favor such final
judgment is rendered brings a new suit in a competent court in Luxembourg, the
party may submit the final judgment that has been rendered in the United States
to a Luxembourg court for the purpose of recognition by such court and
enforcement in Luxembourg. A judgment by a federal or state court of the United
States against us will be regarded by a Luxembourg court only as evidence of the
outcome of the dispute to which such judgment relates, and a Luxembourg court
may choose to rehear the dispute ab intitio.

ITEM 4.  INFORMATION ON THE COMPANY

The Company

     In 2002, we continued to expand our position as a leading developer and
operator of cellular telephone services in the world's emerging markets, and
made notable progress as an investor in valuable telecommunications' assets. Our
operations grew significantly: proportional subscribers, excluding divested
operations, increased by 25% and the number of gross subscribers increased by
28%.

     We have evolved from being a purely cellular operator in emerging markets,
to being a company that owns a portfolio of high-value telecom assets.

     As at December 31, 2002, we had interests in 17 cellular systems in 16
countries, primarily in emerging markets in Asia, Latin America and Africa. We
establish an early presence in most of our markets and seek to be amongst the
first in a market to secure a cellular telephone license. As a result, we are
one of the leading cellular operators in the majority of our markets. In
addition, we provide high-speed wireless data services in five countries and
also, as of December 31, 2002, had a 6.8% interest in Tele2 AB, a leading
alternative pan-European telecommunications company offering fixed and mobile
telephony, data-network and Internet services to approximately 17 million people
in 22 countries.

     Our cellular license areas as of December 31, 2002, covered an estimated
391 million persons. Based on our percentage ownership in our operations, we
have approximately 301 million cellular equity pops. These figures do not
include subscribers in which we have an indirect ownership through our holding
in Tele2 AB.

     We have consistently achieved significant revenue and subscriber growth.
Since 1997, we have grown our proportional cellular subscriber base, excluding
divested operations and El Salvador, at a compound annual growth rate of over
55%. We have increased revenues at a compound annual growth rate of 11%. In 2002
compared to 2001, excluding divested operations and El Salvador, our total
cellular subscribers increased by 28% to 4,252,037 subscribers, while revenues
increased by 3% to $573,730,000.

     We have organized around three strategic operating entities with continued
financial and capital control at the parent level. These operating entities are
Sanbao Telecom (Asia), MIC Latin America and MIC Africa.

Recent Developments

     In January 2002, MIC announced the award of a nationwide license to provide
GSM wireless telephony in the Lao People's Democratic Republic. In April 2003,
MIC announced it had launched GSM services.

     In April 2002, MIC announced it had obtained all the GSM licenses required
under the terms of the sale of FORA Telecom to Tele2 AB and would, therefore,
receive an additional $30 million payment as specified in the agreement.

     In October 2002, Paktel, MIC's second cellular operation in Pakistan, was
granted a modification to its license and was awarded a GSM 900 spectrum.


                                       12
<PAGE>


     MIC completed the disposal of Multinational Automated Clearing House S.A.
("Mach"), the world's largest GSM clearing-house in November 2002, realizing a
gain of $87,655,000.

     In December 2002, MIC concluded the divestment of Extelcom, its business in
the Philippines, realizing a loss of $35,988,000.

     In 2002, MIC purchased 386,350 of its ordinary shares with a par value of
$2 each.

     As of December 31, 2002, MIC had total consolidated debt of approximately
$1,228,575,000 which required substantial free cash flows to finance the
interest. In addition, there was the risk that the cash flows generated would be
insufficient to repay all of the existing debt obligations as they became due.
Reflecting the risks involved with our leverage, the market price of the Old
Notes had traded significantly below par value. In order to reduce the extent of
our payments, on January 21, 2003, MIC made an exchange offer and consent
solicitation to bondholders of the Old Notes. On May 8, 2003, MIC announced the
closing of this offer with the tendering of approximately 85% of the Old Notes.
Under the terms of this exchange, holders of the Old Notes received $720 of our
newly issued 11% Senior Notes due 2006 and $81.70 of our newly issued 2% Senior
Convertible PIK Notes due 2006 per $1,000 of Old Notes. In addition, in
consideration for consenting to certain amendments to the indenture under which
the Old Notes were issued, eligible holders who consented to amendments of the
indentures of the Old Notes received $50.00 in cash for each $1,000 in principal
amount of Old Notes they tendered. Following the successful completion of the
exchange offer, MIC has significantly reduced its overall level of indebtedness
and interest burden, improved it's near-term liquidity position and created
greater ongoing financial and operating flexibility. For example, our interest
obligation under the Old Notes was $129,870,000 each year, while our interest
obligation under the New Notes is $81,624,000 each year. For a more detailed
description of the exchange offer and its terms, see "Item 10. Additional
Information - Material Contracts."

     In February 2003, an Extraordinary General Meeting approved a reverse stock
split of MIC's issued shares, exchanging three existing shares of a par value of
$2 each for one new share with a par value of $6.

     In February 2003, MIC completed the disposal of Celcaribe S.A., its
cellular operation in Colombia for consideration of $9,876,000, realizing a gain
of $1,819,000.

     Although it is not part of management's long-term strategy to sell Tele2 AB
shares, from time to time shares have been sold to help subsidize operations and
capital improvements. In the period from January 1, 2003, to June 20, 2003, the
Company has sold 1,044,129 class B shares for proceeds of approximately $34
million, reducing its investment in Tele2 AB to 6.1%.

History

     Millicom International Cellular S.A. ("MIC"), a stock corporation organized
under the laws of the Grand-Duchy of Luxembourg, was established in December
1990 by two of the cellular industry's early pioneers, Kinnevik and Millicom
Incorporated, a Delaware corporation ("Mil-Inc"), to hold certain of their
cellular interests in 12 countries. As of December 31, 2002, Kinnevik owned
approximately 36% of the existing share capital of MIC.

     Kinnevik is a diversified Swedish investment holding company with principal
activities in telecommunications, forestry and packaging materials. In 1988,
Kinnevik was awarded a nationwide GSM license for Sweden, which formed the basis
for Comviq GSM AB ("Comviq GSM"). Kinnevik also had an interest in a Norwegian
GSM license and was the controlling stockholder of Kinnevik Telecommunications
International S.A., an international telephone and data communications service
provider in Sweden.

     Mil-Inc was formed in 1979 to pursue opportunities in the nascent American
mobile telephone industry. In 1982, the U.S. Federal Communications Commission
(the "FCC") awarded Mil-Inc one of only three developmental licenses for
cellular telephony. Also in 1982, Mil-Inc founded, with Racal Electronics Plc, a
joint venture that evolved into Vodafone Group Plc, now the largest cellular
telephone operator in the world. The interest in this joint venture was sold to
finance Mil-Inc's further development. Mil-Inc, after initially pursuing

                                       13
<page>


U.S. cellular opportunities, decided in 1992 to concentrate on non-U.S. markets,
in which licenses generally could be obtained, at that time, without the cost of
acquiring interests in licenses awarded by the FCC lottery system.

     From early 1983, Kinnevik and Mil-Inc began jointly applying for cellular
telephone licenses internationally. The first successful joint application
resulted in the award of a cellular license for Hong Kong in 1983. In 1990,
after approximately seven years of co-operation, 12 successful license bids and
the establishment of cellular operations in a number of markets, Kinnevik and
Mil-Inc agreed to form MIC for the purposes of managing the development of these
operations and pursuing new licenses. At the date of formation, the common stock
of MIC was owned approximately 49% by Kinnevik and 46% by Mil-Inc. MIC
subsequently disposed of the joint venture in Hong Kong to fund its continuing
development. See "Directors, Senior Management and Employees."

     MIC's principal executive office is located at 75 Route de Longwy, Box 23,
L-8080 Bertrange, Grand-Duchy of Luxembourg, and its telephone number is + 352
27 759 101.

The Merger

     In 1993, it was determined that a merger of Mil-Inc and MIC could
accomplish goals sought by both companies.

     Pursuant to an Agreement and Plan of Merger and Reorganization (the "Merger
Agreement"), dated September 21, 1993, as amended, between MIC, MIC-USA Inc
("MIC-USA"), a wholly owned subsidiary of MIC, and Mil-Inc, Mil-Inc was merged
(the "Merger") with and into MIC-USA on December 31, 1993 (the "Effective
Date"). The outstanding shares of Mil-Inc common stock were exchanged for
approximately 46.5% of the common stock of MIC (the "MIC Common Stock"), par
value $2.00 per share (exclusive of the additional merger shares described
below). Kinnevik held the remaining 53.5% of MIC Common Stock.

     As a result, on December 31, 1993 (the "Effective Date"), the holders of
Mil-Inc common stock received approximately 1.287 shares of MIC Common Stock,
par value $2 each, for each share of Mil-Inc common stock held (an aggregate of
approximately 19,915,328 shares of MIC Common Stock, par value $2 each). In
addition, they were granted the non-transferable contingent right to receive a
maximum of approximately an additional 0.112 share of MIC Common Stock, par
value $2 each, for each share of Mil-Inc common stock held (an aggregate of
approximately 1,731,768 shares of MIC Common Stock, par value $2 each), subject
to adjustment. These additional shares were due to be distributed to Mil-Inc
stockholders in two installments:

     (a)  an interim installment, if any, approximately forty days following the
          Effective Date of the Merger, based upon an audit of certain assets
          and liabilities of Mil-Inc as of the Effective Date, and

     (b)  a final installment, if any, as soon as practicable or on the second
          anniversary of the Effective Date, based upon the payment after the
          Effective Date of certain tax liabilities of Mil-Inc.

     As of February 10, 1994, MIC had distributed an aggregate of 923,721 shares
of MIC Common Stock, par value $2 each, to former Mil-Inc stockholders as
additional merger shares per the distribution agreement (a) above. In October
2001, MIC completed the final distribution of its shares, amounting to 374,521
shares, par value $2 each.

     Immediately prior to the Merger, substantially all of the operations other
than the cellular telephone operations and certain related liabilities of
Mil-Inc were transferred to Great Universal Inc. ("GU"), a Delaware corporation
at that date an indirect wholly owned subsidiary of MIC. Both MIC and GU have
separate management, and transactions between GU, both MIC and our affiliates
are subject to certain restrictions as described below.

     Following the Effective Date, MIC contributed to the capital of GU an
aggregate of 211,864 shares of MIC Common Stock, par value $2 each, calculated
at the time of issuance as having an aggregate value of $5,027,473.


                                       14
<PAGE>


   Merger Warrants

     Immediately prior to the Merger, Mil-Inc stockholders received from MIC-USA
warrants to purchase from MIC-USA 100% of the shares (3,867,287 shares) of GU
Common Stock for a purchase price equal to $1.30 per share (the "Warrants"). The
purpose of the warrant distribution was to afford Mil-Inc stockholders the
opportunity to participate in the future prospects of such non-cellular
businesses and to reduce or eliminate the Company's interests in such businesses
in the event the Warrants are exercised. The Warrants are not transferable
except in certain limited circumstances. They became exercisable on January 1,
1999 and expire six months after the registration of GU on a public market in
the United States, unless extended under certain circumstances (the "Warrant
Expiration Date").

     On December 31, 1993, GU and the Company entered into an agreement pursuant
to which, as an inducement to the Company to contribute MIC Common Stock to GU,
as described above, GU granted to MIC-USA an option (the "Put Option") to
require GU to purchase from MIC-USA the shares of GU Common Stock not acquired
by exercise of the Warrants. Additionally, the Company granted to GU the option
(the "Call Option") to purchase from MIC-USA the GU Common Stock. The purchase
price for the GU Common Stock upon exercise of either the Put Option or the Call
Option is an amount equal to the difference between the aggregate exercise price
of such Warrants ($5,027,473) and the actual aggregate exercise price of the
Warrants exercised prior to their expiration. The Put Option and the Call Option
are exercisable as to all, but not less than all, of the remaining GU Common
Stock for a period of twenty days commencing on the day following the Warrant
Expiration Date. GU may pay the purchase price for the GU Common Stock by
delivering to MIC-USA that number of the shares of MIC Common Stock which in the
aggregate equals the purchase price, based upon the last sale price of the MIC
Common Stock as quoted on the NASDAQ Stock Market on the Warrant Expiration
Date.

     If all of the Warrants are exercised or all of the shares of GU common
stock not acquired by exercise of the Warrants are repurchased by GU, the
Company would have no further ownership interest in GU. Certain of the Company's
management and shareholders, who became holders of Warrants as part of the
Merger, may become shareholders of GU or may participate in the management of GU
if they choose to exercise the Warrants. From December 30, 1993, the date the
Warrants were issued, until the Warrant Expiration Date, the Company will not
consummate a transaction with GU or any of GU's affiliates which involves the
sum of $1,000,000 or more unless the Company and GU shall have received an
opinion from an independent investment banker that such transaction is on terms
at least as favorable as those that can be obtained from an unrelated third
party. In the event that the Warrants are not exercised prior to the Warrant
Expiration Date, management will evaluate other plans to dispose of GU upon the
expiration of the Warrants.

     In June 1999, GU affected a reorganization of GU and its subsidiaries, in
which GU was merged with and into Great Universal LLC and operations were
spun-off into two separate businesses, being Great Universal Inc. and Modern
Holdings (formerly known as XSource Corporation). Great Universal Inc. holds the
subsidiaries in teleservices, television and media and specialized electronics
industries, and Modern Holdings holds the subsidiaries in the integrated network
services industries. Great Universal LLC holds 100% of common shares in Great
Universal Inc. and 53% of common shares in Modern Holdings. Following this
reorganization and pursuant to the Warrant agreement, each warrant now entitles
the holder to purchase one share of Great Universal Inc. common stock and 2.0721
shares of Modern Holdings common stock at an exercise price of $1.30 per
Warrant, subject to adjustment. Following this reorganization, the rights and
obligations of MIC-USA arising from the Warrants agreement and the Put Option
and the Call Option agreement referred to above were assigned to Great Universal
LLC. Under the terms of the Merger, Great Universal LLC continues to indemnify
MIC against certain contingent liabilities.

     On December 31, 1999, MIC-USA transferred its 100% ownership, and related
rights, in GU to Great Universal LLC 1999 Trust. At present, registration
statements relating to the shares of Great Universal Inc. and Modern Holdings
underlying the Warrants have not yet been filed with the U.S. Securities and
Exchange Commission.


                                      15
<PAGE>


     GU is contingently liable for any liabilities in respect of the
representations and warranties made by Mil-Inc to the Company under the Merger
Agreement and in respect of any United States federal, state and local income
tax in excess of $13,544,000 which may be payable by Mil-Inc for 1993 and prior
years. Up to September 30, 1995, $5,000,000 of any liability under this
indemnification was covered through a Guarantee Agreement dated January 1994
between the Company and Kinnevik (the "Kinnevik Guarantee"). As of September 30,
1995 the Kinnevik Guarantee ceased to be in effect pursuant to its own terms, as
GU then exceeded the minimum net equity threshold set forth in such guarantee.
See "Major Shareholders and Related Party Transactions."

Business

     Millicom International Cellular S.A. is a leading international operator of
cellular telephony services. The Group operates primarily in emerging markets
where the basic telephone service is often inadequate and where economic
development and change are creating new demand for communication services. MIC
has sought to establish an early presence in markets with little or no cellular
service by applying for cellular licenses, primarily through joint ventures with
prominent local business partners.

     MIC's portfolio of assets currently comprises 16 cellular operations in 15
countries in Asia, Latin America and Africa, covering a population under license
of approximately 382 million people. In addition, MIC provides high-speed
wireless data services in five countries and currently has a 6.1% interest in
Tele2 AB, the leading alternative pan-European telecommunications company
offering fixed and mobile telephony, data network and Internet services to over
17 million customers in 22 countries.

Introduction

     The following table shows certain information for each of MIC's cellular
systems as at December 31, 2002. See "Information on the Company - Operations
and Investments" for a more detailed description of each such venture.

<TABLE>

                                             Estimated     Number of                                                    Total
                                             Population   Subscribers   Approximate                     Start-Up      Number of
                     Method of                   of          as of       Change in                        Date         Licenses
       Market      Consolidation             Area under  December 31,   Subscribers                        of          Granted
                         (6)      Ownership License (1)    2002 (4)       in 2002     System (2)       Operations      For Area
                     -----------  --------- -----------  ------------   -----------   ----------       ----------     ---------
<S>                     <C>       <C>       <C>    <C>   <C>            <C>           <C>              <C>            <C>
Sanbao Telecom                   (percent)  (millions)                  (percent)
 Cambodia...........      JV        58.4%        12.8           325,264     63%                GSM       March 1997        10
 Lao People's
    Democratic
    Republic........      JV        78.0%         5.8                 -     N/a                GSM       April 2003         4
 Mauritius..........      JV        50.0%         1.2            97,137     10%                GSM         May 1989         2
 Pakistan - Pakcom..       S        61.3%       147.7           344,702     42%          TDMA/AMPS    December 1990         4
 Pakistan - Paktel..       S        98.9%         -             218,536     43%          TDMA/AMPS    November 1990         4
 Sri Lanka .........       S        99.9%        19.6           266,372     54%           GSM/TACS        June 1989         4
 Vietnam (5)......8)       S        40.0%        81.1           686,663     37%                GSM        July 1995         8
 MIC Latin America
 Bolivia ...........       S        100.0%        8.4           410,887     18%          TDMA/AMPS    November 1991         5
 Colombia (Northern
    Region) (3).....       S        95.4%         8.3           249,126     29%          TDMA/AMPS        September
                                                                                                               1994         2
 El Salvador........      INV       70.0%         6.4                 -      -           TDMA/AMPS     January 1993         3
 Guatemala .........      JV        55.0%        13.3           467,620     31%          TDMA/AMPS     October 1990         4
 Honduras...........      JV        50.0%         6.6           326,508     37%          CDMA/AMPS        September         1
                                                                                                               1996
 Paraguay ..........       S        96.0%         5.9           550,109     -3%          TDMA/AMPS      August 1992         5
 MIC Africa
 Ghana .............       S        100.0%       20.2            52,060     46%           GSM/TACS         May 1992         5
 Senegal ...........       S        75.0%        10.6            97,804     12%                GSM       April 1999         2
 Sierra Leone ......       S        70.0%         5.6            13,411     89%                GSM         May 2001         6
 Tanzania ..........      JV        57.0%        37.2           145,838      8%           GSM/TACS S  eptember 1994         5

                                            ----------------------------
 Grand Total........                            390.7         4,252,037
                                            ============================
</TABLE>


                                      16
<PAGE>


---------------------------------------
(1)  For countries where the license area covers the entire country, population
     figures have been extracted from CIA-The World Factbook.
(2)  "AMPS," Advanced Mobile Phone System, is the analogue standard developed
     for and used in North America and is used widely throughout the world.
     "TACS," Total Access Communications System, was initially the standard for
     the United Kingdom and is now used primarily in other Commonwealth
     countries. "GSM," Global System for Mobile Communications, is the digital
     standard developed for Europe. "TDMA", Time Division Multiple Access, is
     the system most widely used in North and South America.
(3)  Operation sold in February 2003.
(4)  Proportional subscribers as at December 31, 2002 were 3,021,873.
(5)  Comvik International (Vietnam) AB ("CIV"), a 80% owned subsidiary of the
     Company, and Vietnam Mobile Services Co have entered into a revenue sharing
     agreement to operate a national cellular GSM system in Vietnam
     ("Mobifone"). This revenue sharing agreement, which has a ten-year term
     from July 1, 1995, provides that CIV will be entitled to receive 50% of
     Mobifone's net revenues. In October 2000, the revenue sharing agreement was
     amended and stated that MIC would continue to receive 50% of net revenue in
     years six through ten of the contract agreement, up from the 40% as per the
     original agreement.
(6)  JV = Joint Ventures. Under IFRS, consolidated using the proportional method
     of accounting which combines the Company's assets, liabilities, income and
     expenses with the Company's share of the assets, liabilities, income and
     expenses of the joint ventures in which the Company has an interest.
     S = Subsidiary. Entities over which the Company has control are fully
     consolidated.
     INV = Investment in securities. As of December 31, 2001, following a
     dispute with the local shareholder, the entity was accounted for under the
     equity method and recorded in the balance sheet under the caption
     "Investments in associated companies". As of December 31, 2002, this
     dispute had still to be settled and as management felt it no longer
     exercised a significant influence in the operation it was considered more
     appropriate to classify its investment as a non-current asset under the
     caption "Investment in securities".
     The Company determines the existence of joint control by reference to the
     joint venture agreements, articles of association, structures and voting
     protocols of the Boards of Directors, as well as the influence the Company
     has over the day-to-day operations of the above ventures.

The Cellular Telephone Industry

   Cellular Telephone Industry Overview

     Cellular Telephone Technology. Cellular telephone systems are capable of
providing high quality, high capacity voice and data communications to and from
vehicle-mounted and hand-held radiotelephones. Cellular telephone systems are
capable of handling thousands of calls at any one time and providing service to
hundreds of thousands of subscribers in any particular area.

     Cellular telephone technology is based upon the division of a given
geographical area into a number of cells and the simultaneous use of radio
channels in non-contiguous cells within the system. Each cell contains a low
power transmitter/receiver at a base station that communicates by radio signal
with cellular telephones in that cell. Each cell is connected by wire-line or
microwave to a central switching point or mobile switching center ("switch")
that controls the routing of calls and which, in turn, is connected to the
public switched telephone network. It is the switch mobility software that
allows cellular telephone users to move freely from cell to cell while
continuing their calls through a process called hand-off.

     Cellular telephone systems generally offer subscribers the features offered
by the most up-to-date wire-line telephone services. Cellular telephone systems
are interconnected with both the wire-line telephone network and other cellular
networks. As a result, subscribers can receive and originate local,
long-distance and international calls from their cellular telephones. Cellular
telephone system operators therefore require an interconnect arrangement with
the local wire-line telephone companies and the terms of such arrangements are
material to the economic viability of the system.


                                      17
<PAGE>


     A cellular telephone system's capacity can be increased in various ways.
Increasing demand may be satisfied, in the first instance, by adding available
channel capacity to cells through the addition of extra transmitters. When all
available channels are used, further growth can be accomplished through a
process known as cell splitting. Cell splitting entails dividing a single cell
into a number of smaller cells, through the construction of additional base
stations, thereby allowing for greater channel reuse and hence increasing the
number of calls that can be handled in a given area.

     The Company uses analog and digital technologies that are widely used
throughout the world. As analog technology has matured, equipment prices have
decreased significantly, enabling the Company to develop its networks in a more
cost-effective manner. GSM is a digital standard for cellular telephone systems
that the majority of European Union countries have adopted as a common standard.
Commercial launch in several European countries commenced in 1992. GSM offers
increased value-added services and enables transmissions to be made in encrypted
form so that conversations cannot easily be intercepted. The GSM system allows
subscribers to use their cellular telephones in any country where the GSM system
has been adopted, providing increased mobility and flexibility. In addition to
Europe, GSM systems are being used in the Middle East, Australia, India, South
Africa, China, Southeast Asia and the Philippines. Advanced Mobile Phone System
("AMPS") is the analog standard developed for and used in North America, and is
used widely throughout the world. Total Access Communication System, or Time
Division Multiple Access ("TDMA"), is the system most widely used in North and
South America and works by dividing a radio frequency into time slots and then
allocating slots to multiple calls. TDMA is one of the world's most widely
deployed digital wireless systems and it provides a natural evolutionary path
for analog AMPS networks, and offers efficient coverage. In the United States, a
number of digital standards have been developed and are being deployed in
existing AMPS networks. Currently, no one technology has been adopted as the
common standard.

     Operating Characteristics. The cellular telephone industry is typically
characterized by high fixed costs and low variable costs. Until technological
limitations on total capacity are approached, additional cellular telephone
system capacity can normally be added in increments that closely match demand
and at less than the proportionate cost of the initial capacity. The industry
has also seen declining equipment prices in real terms. Once revenues exceed
fixed costs, incremental revenues are expected to yield a high incremental
operating profit, giving cellular telephone system operators an incentive to
stimulate and satisfy demand for service in the market. The amount of profit, if
any, under such circumstances is dependent on, among other things, prices and
variable marketing costs, which, in turn, are affected by the amount and extent
of competition. As competition increases in markets, prices have fallen with the
result that revenues and operating profits increase at a lower rate than
subscriber growth. In addition, as penetration rates increase there is a
tendency for a higher proportion of new subscribers to use prepaid cards.
Prepaid subscribers tend to have lower usage than credit subscribers, however,
the operating margin is generally higher than with credit subscribers as the
risk of bad debt is eliminated and there is no subsidizing of handsets.

   Development of the Cellular Telephone Industry

     Cellular Telephony in Developed Countries. The first cellular telephone
systems were introduced in Scandinavia in the early 1980s and experienced modest
growth for the first few years. Over the last 10 years, however, cellular
telephony has grown rapidly. The majority of developed countries now have
cellular telephone service and levels of penetration have increased
substantially in these countries. Worldwide subscribers at the end of February
2003 were approximately 821 million according to The GSM Association.

     Given the rapid growth of cellular telephone subscribers in developed
countries and high levels of penetration, particularly in large urban markets,
the industry is increasingly introducing new technology that will expand
capacity and improve service, including the introduction of digital cellular
telephone systems and the ability to access the Internet from handsets. In
industrialized nations, cellular operators are currently in the process of
introducing so-called `third generation' mobile technology that will permit
always-on faster access to the Internet and voice and data transmissions.

     Cellular Telephony in Developing Countries. While the cellular telephone
industry is well established in the developed world, the cellular telephone
industry in the developing world is still in its infancy. The Company


                                      18
<PAGE>


believes that cellular telephony has the potential to grow rapidly in
developing countries because of the poor quality of the existing wire-line
service, the unsatisfied demand for basic telephone service and the increasing
demand from users who want the convenience of cellular telephones. In some
countries the cellular telephone network provides significantly improved access
to the local and international wire-line network compared with the existing
wire-line service. In addition, developing countries are expected to benefit
both from better technology and lower equipment costs than those at comparable
stages of market development in developed countries.

     Wire-line networks involve extensive outside infrastructure in the form of
buried or overhead-cable networks, while cellular telephone systems require only
minimal construction activities. For developing countries, cellular telephone
systems can represent a faster and more cost-effective method of expanding
telecommunications infrastructure than traditional wire-line networks.

     The Company's operations are in countries whose economies are in various
stages of development or structural reform. Such economies may be subject to
rapid fluctuations in growth that may impact the growth of the Company's
cellular operations. Penetration rates (the number of subscribers per 100
people) can vary significantly from country to country and are substantially
lower in developing countries than in developed countries.

The Company's Activities

   Established in Attractive Markets

     Strong Growth Characteristics. The Company operates its cellular activities
mainly in developing markets which it believes offer long-term growth
characteristics superior to those in more developed markets due to the lower
penetration rates. The economic growth in these markets is characterized by an
expanding need for telecommunications services. In addition, this growth is
often disproportionately shared by the upper and expanding middle-classes. These
demographic groups typically represent the heaviest users of the Company's
cellular services and reside in suburban and urban areas where the Company
initially provides service.

     Favorable Competitive Environment. The Company has focused on markets that
it believes offer a favorable competitive environment. In many of its markets,
the Company was the first operator of cellular services, and as a result
maintains a first-to-market advantage. These factors contribute to the Company's
ability to establish a favorable competitive position within a short period of
time. The Company has found that the introduction of competition into a market
stimulates the overall growth of that market.

     Lower System Costs and Faster Break-even. The Company has established
service in markets that it believes offer compelling potential financial returns
and substantial operational flexibility. The Company has historically obtained
many of its licenses at little or no cost. Further, licenses in the Company's
markets typically require build-out of only the cities where the population
density and usage patterns are likely to support a profitable cellular
operation. The Company also has benefited from lower overall operating costs
(such as rents and personnel related expenses) available in developing markets.
These advantages, combined with the favorable competitive environment, generally
enable the Company to generate positive operating cash flow at relatively low
penetration levels. Historically, the Company's systems have typically generated
positive cellular operating profit before depreciation and amortization within
12 to 18 months of start up.

Overall Business Strategy

     MIC's strategy is to build the leading brand in each market by offering
low-cost services to its customers. This enables MIC to establish
price-leadership, providing a strong base for future growth.

     As a consequence of the rapid growth of its operations, the Company has
given greater operating authority to the management of its regional operations
in order to evolve the Company into a holding company. The operational
separation of the Company's strategic businesses is intended to allow for
greater operational focus and increased financial flexibility.


                                      19
<PAGE>


     The Company's strategic objective is to continue to expand its strong
position as a developer and operator of cellular systems to a broad set of
developing markets. The Company's primary operational objectives are to expand
its overall subscriber base through the rapid development and build out of its
existing systems and obtain new licenses.

   Continue Rapid Growth

     Expand Strong Market Position. The Company seeks to capitalize on its early
market entry and continue its pattern of rapid subscriber growth by adding
capacity and coverage to its existing license areas. This growth in capacity and
coverage improves the overall effectiveness and reach of the network, which in
turn increases market demand for the Company's cellular services. The Company
also seeks to leverage its local brand names by expanding its marketing and
distribution efforts. The Company seeks to stimulate subscriber growth through a
variety of customized pricing plans, reduced costs up front to new subscribers,
increased brand awareness and improved products and services.

     Pursue Attractive New License Opportunities. The Company seeks new
licensing opportunities in geographic areas that it considers possess attractive
market fundamentals. As part of its overall license acquisition strategy, the
Company plans to concentrate much of its efforts on markets that it believes
offer superior growth prospects and in some instances may also represent areas
that are contiguous to markets in which the Company currently operates.

     In seeking new licenses, the Company generally establishes a venture with
one or more prominent local business partners to apply for a cellular telephone
license. The Company considers that the selection of the local partner, the
technical and financial expertise that the Company provides to the license
application and the Company's successful track record as an international
provider of cellular telephone services are the critical factors for a
successful license bid. In most cases, the local partner is instrumental in
obtaining the license and maintaining contact with the local telecommunications
agency, post office (the "PTT"), or relevant government department or otherwise
plays an important role in ensuring the success of the venture company. In some
markets, after the award of the license, the local partner continues to take an
active interest in the management of the venture.

     Licenses are normally sought through a competitive application process in
which the license is awarded on the merits of the application. The Company has
generally avoided cash auctions for cellular telephone licenses, but in some
circumstances it has paid significant license fees to governments. In addition,
in some cases, the Company's ventures pay royalties on revenue or income to
governments, and all of the Company's cellular ventures pay interconnect fees to
PTT's during the license period. The Company anticipates that in the future it
may have to participate in auctions or pay substantial license fees to obtain
interests in certain markets. Although the pursuit of cellular telephone
licenses is usually highly competitive, the Company's venture companies have
been successful in obtaining licenses in preference to other ventures whose
participants have often included companies such as Bell Atlantic Corporation,
British Telecommunications PLC, Vodafone and other major telecommunications
companies.

     Develop Existing Systems. The Company's historical investment approach has
been to set up through a venture an initial system covering the central
population area (usually the capital or largest commercial city), to develop
that system to meet initial demand and then to increase coverage and capacity as
demand develops. Once a cellular telephone license has been awarded, the venture
establishes an initial operating system. In most cases the Company bears a
greater share of funding requirements than its shareholding interest would
require. See "Information on the Company -Financing of the Company's Business."

     This approach, which has been adopted in markets such as Sri Lanka,
Guatemala and Paraguay, provides a basis for expansion with internally generated
funds when bank debt is not possible. In more competitive and well-developed
markets or where the license requires greater start-up coverage such as
Pakistan, a larger initial equity investment has been necessary to construct
larger systems. A larger initial equity investment would also be required if the
Company had to pay a substantial license fee.


                                      20
<PAGE>


     Offer New Services. The Company will continue, wherever possible, to offer
new services to its customers. These include short-message servicing, voice over
Internet protocol and Internet service providers (ISP).

     Maintain Prepaid throughout Company. As of December 31, 2002, the Company
operated a prepaid program in all of its cellular ventures. The advantages to
the Company are twofold. First, prepaid customers produce lower revenue but
eliminate bad debts. Second, prepaid programs have opened up the market for
cellular services to customers who are denied access to normal subscriptions due
to credit constraints. Further significant levels of demand have been created
from business users and those customers who purchase prepaid credits in order to
control their overall telephone costs. The launch of a prepaid system has
enabled the Company to penetrate new market segments with higher rates of
financial returns.

   Maximize Operating Effectiveness

     Leverage Economies of Scale and Synergies. The Company seeks to continue to
benefit from the many synergies inherent in its multi-country operation and
increasing scale in its existing markets. Such synergies include the sharing of
information and experiences about services, technologies and marketing
strategies and the negotiation of supply contracts for network and subscriber
equipment from major equipment vendors. The Company employs best practices and
benchmarking techniques across its systems to continuously develop and improve
their performance. Where the Company has systems in contiguous markets, the
Company seeks to establish inter-country roaming agreements to enable customers
from one market to use their cellular telephones in another market.

     Maintain Strong Regional Management. In 1997, the Company undertook a
restructuring of its corporate operations and moved to a regionalized structure,
with a regional operating company established to manage the Company's operations
in each major region of the world. In 2002, this structure was amended with the
elimination of regional offices and the creation of a central office in
Singapore for operational matters. Reporting directly to the operational central
office, the Company created "Cluster Managers" who were responsible for certain
operations. This structure allows the Company to continue to maintain a high
degree of co-ordination and cooperation between the various regional companies
while providing a degree of regional responsibility that ensures quick and
effective local decision-making. The Company employs a matrix management
structure in which the managers at the individual venture levels report both to
the cluster managers and the operational central office as well as to the
Company's head office, based in Luxembourg on matters relating to financial
reporting and controls, engineering, corporate development and human resources.

     Retain Operational and Financial Control. The Company actively manages its
systems through:

     o    selection and recruitment of local management;

     o    development of system business plans in conjunction with local
          management;

     o    development of the cellular telephone network design and expansion
          plan with local technical management;

     o    standardized weekly and monthly reporting and review and an annual
          budgeting process;

     o    supervision and support by the Company's internal auditors and
          marketing and administrative personnel; and

     o    assignment of Company personnel to the systems.

     The Company seeks to obtain controlling ownership and management positions
in its systems. Where the Company holds less than a majority of the shares in an
operation, due for example to foreign investment restrictions, the Company
manages its operations through the appointment of local management,
stockholders' agreements or similar arrangements, special rights with respect to
board representation or special voting rights. Such provisions provide the
Company with the means to approve or disapprove actions proposed by its
partners.


                                      21
<PAGE>


In some cases the stockholders' agreements contain buyout, arbitration
or other procedures that can be invoked in the event of a fundamental
disagreement among the Company and its partners.

     The day-to-day management of the systems is the responsibility of the local
management. In all of the Company's cellular operations, the general manager and
other key personnel are appointed by the Company or in co-operation with its
partners. In addition, senior management of the systems also typically receive
Company stock options as part of their compensation and incentive packages.

     Manage Emerging Market Risks. The Company's management seeks to minimize
the currency, customer credit, repatriation of capital and political risks that
arise from operating cellular systems in developing markets. To reduce overall
exposure to currency movements, the Company bills subscribers in U.S. dollars in
certain markets and in many others regularly adjusts the local currency
denominated tariffs with changes in U.S. dollar exchange rates. To reduce
customer credit risk, the Company engages in a range of techniques including
pre-billing, credit card billing and the establishment of preset credit limits.
In addition, the Company seeks to utilize advanced anti-fraud software to
prevent and control unauthorized use. To reduce repatriation of capital risk,
before investing capital the Company obtains agreements, if necessary, from the
relevant governments to secure the ability to repatriate capital from local
markets. The Company believes that its broad diversification of cellular
licenses in countries across Asia, Latin America and Africa reduces the risk to
the Company from individual country and currency risks. The Company also selects
partners that are established and highly respected business leaders within their
local markets in order to help anticipate and manage the potential impact of
regulatory and other political changes.

Financing of the Company's Business

     The Company finances its operations at both the operational and parent
entity level.

   Operational Level Financing

     The Company finances its operations on a project-by-project basis. Once a
license is awarded, the Company makes an initial investment in the form of
equity and, in some cases, debt. The system typically is granted between 6 and
12 months to build out its initial cellular telephone network. During this
initial phase, the Company frequently supplements its investment with financing
provided by equipment suppliers for the purchase of network equipment.
Generally, such financing covers a period of 18 months to three years and is
often guaranteed by MIC. The Company seeks to refinance the vendor financing
with longer-term borrowing from commercial banks and international agencies.
Where practicable, the Company endeavors to obtain financing in local currencies
and without guarantees from MIC. However, MIC may guarantee such project
financing for an initial period until certain performance targets are achieved.
As of December 31, 2002, the Company reported total outstanding debt and other
financing of approximately $1,228,575,000. Of this amount $967,557,000
represents corporate level indebtedness and $261,018,000 is the Company's share
of the indebtedness of its ventures. As of December 31, 2002, the total debt and
other financing of the Company and each of the ventures, combining 100% of each
venture's debt, was $1,289,893,000, of which $106,606,000 was guaranteed by MIC.
Agencies such as the International Finance Corporation ("IFC") and Overseas
Private Investment Corporation ("OPIC") have provided such financing, often in
consortia with commercial banks. The Company intends to continue to pursue a
project-by-project approach to funding its systems. If additional investment is
required from the Company, the Company seeks, whenever possible, to fund such
investment through shareholder loans from the Company.

     When establishing its systems, the Company has sought and been granted
government approval, if necessary, to enable it to distribute dividends to the
parent. In addition, although dividends may be subject to withholding taxes, the
Company seeks to use tax-efficient mechanisms to repatriate such dividends to
the parent without paying additional taxes.


                                      22
<PAGE>


   MIC Level Entity Financing

     At the MIC level, the Company has completed two equity offerings in order
to fund its development. In 1994 and 1995, the Company raised approximately
$23,200,000 and $72,100,000, respectively, through the sale of new equity.

     On April 25, 1996, the Group signed a seven-year $200,000,000 Bank Credit
Agreement (the "Original Bank Credit Agreement") arranged by ABN-Amro Bank and
ING Bank. The main part of the facility was used to refinance existing short
term credit facilities at the Company level and for investments in existing and
new operations and for corporate and interest expenses. The financing was
subsequently amended in 1998 and 1999 and secured by a portion of MIC's shares
in Tele2 AB. The loan bore interest starting at LIBOR+1.75% but decreasing to
LIBOR+1% depending on the amount and value of the security put in place. The
facility was subject to the maintenance of various restrictive and financial
covenants such as not exceeding a certain ratio of certain consolidated debt to
earnings before interest, taxation, depreciation and amortization. This facility
was fully repaid on December 14, 2001.

     In June 1996, MIC raised approximately $483,433,000 (after deducting
discount and estimated expenses) through a private offering of Old Notes. The
Old Notes were issued at 52.075% of their principal amount and the purchase
discount on the Old Notes accretes from issuance until June 1, 2001. Cash
interest began to accrue on the Old Notes on June 1, 2001 at a rate of 131/2%
per annum until maturity on June 1, 2006. The Company undertook the offering of
Old Notes to fund the continued construction and expansion of its cellular
systems, working capital requirements and operating expenses. In addition, the
net proceeds of the offering have been used to fund the acquisition and
development of additional licenses or systems and to increase the Company's
ownership in its existing systems. See "Operating and Financial Review and
Prospects--Liquidity and Capital Resources."

     As of December 31, 2002, MIC had total consolidated debt of approximately
$1,228,575,000 which required substantial free cash flows to finance the
interest. In addition, there was the risk that the cash flows generated would be
insufficient to repay all of the existing debt obligations as they became due.
Reflecting the risks involved with our leverage, the market price of the Old
Notes had traded significantly below par value. In order to reduce the extent of
our payments, on January 21, 2003, MIC made an exchange offer and consent
solicitation to bondholders of the Old Notes. On May 8, 2003, MIC announced the
closing of this offer with the tendering of approximately 85% of the Old Notes.
Under the terms of this exchange, holders who tendered their Old Notes received
$720 of our newly issued 11% Senior Notes due 2006 and $81.70 of our newly
issued 2% Senior Convertible PIK Notes due 2006 per $1,000 of Old Notes. In
addition, in consideration for consenting to certain amendments to the indenture
under which the Old Notes were issued, eligible holders who consented to the
amendments of the Old Notes received $50.00 in cash for each $1,000 in principal
amount of Old Notes they tendered. Following the successful completion of the
exchange offer, MIC has significantly reduced its overall level of indebtedness
and interest burden, improved its near-term liquidity position and created
greater ongoing financial and operating flexibility. For example, our interest
obligations under the Old Notes was $129,870,000 each year, while our interest
obligation under the New Notes is $81,624,000 each year. For a more detailed
description of the exchange offer and its terms, see "Additional Information -
Material Contracts."

     In December 2001, the Group entered into an equity swap transaction with
Toronto-Dominion Securities for a maximum facility amount of SEK 1,855 million
(approximately $175 million as of December 31, 2001) to replace the Original
Bank Credit Agreement referred to above. In exchange for the facility, the Group
has pledged Tele2 AB class B shares. The facility bears an annual interest rate
calculated using the current STIBOR rate plus 2% payable on a monthly basis, and
must be fully repaid by November 2004. As of December 31, 2002, $54,638,000 was
outstanding under this facility collateralized by 6,184,293 Tele2 AB class B
shares. This transaction has been accounted for as a borrowing and the related
Tele2 AB class B shares are recorded as pledged securities in non-current assets
under the caption "Investment in securities". See "Operating and Financial
Review and Prospects--Liquidity and Capital Resources."

     A portion of the Company's venture indebtedness is secured by cash deposits
and standby letters of credit issued at the request of, and guaranteed by, the
Company.


                                      23
<PAGE>


Insurance

     The Company believes that it holds sufficient levels of insurance for the
prudent operation of its business.

Operations and Investments

     Millicom International Cellular S.A. is a developer and operator of
cellular telephone systems in emerging markets worldwide. The Company, as at
December 31, 2002, had interests in 17 cellular systems in 16 countries, in
emerging markets in Asia, Latin America and Africa. The Company establishes an
early presence in most of its markets and seeks to be the first in a market to
secure a cellular telephone license. As a result, the Company is one of the
leading cellular operators in the majority of its markets based on market share.
As at December 31, 2002, the Company also provided high-speed wireless services
in five countries. In addition, the Company also had a 6.8% interest in Tele2
AB, the leading alternative pan-European telecommunications company offering
fixed and mobile telephony, data-network and Internet services to approximately
17 million people in 22 countries.

     The Company has certain other related businesses, including an investment
in Tele2 AB. See "Information on the Company - Other Investments."

     Descriptions of the operations of each of the ventures and other related
businesses are provided below. The descriptions have been divided into the
following sub-sections:

          Sanbao Telecom (Asia), the Company's cellular operations in Asia,
     comprising Cambodia, Lao People's Democratic Republic, Mauritius,
     Pakistan, Sri Lanka and Vietnam.

          MIC Latin America, the Company's cellular operations in Latin America,
     comprising Bolivia, Colombia (divested in February 2003), El Salvador,
     Guatemala, Honduras and Paraguay.

          MIC Africa, the Company's cellular operations in Africa, comprises
     Ghana, Senegal, Sierra Leone and Tanzania.

          Other Investments, including the Company's investment in Tele2 AB and
     its high-speed wireless data services in Argentina, El Salvador, Paraguay,
     Peru and Cambodia.


                                      24
<PAGE>


                              SANBAO TELECOM (ASIA)

Background

     Sanbao Telecom comprises the Company's Asian cellular telephone operations
with interests in seven cellular operations in Cambodia, Lao People's Democratic
Republic, Mauritius, Pakistan, Sri Lanka and Vietnam. Sanbao Telecom also
operates an international gateway and a high-speed data business in Cambodia.
Sanbao Telecom's license areas cover approximately 268.2 million people as of
December 31, 2002, with an equity population of approximately 210.7 million.

     Sanbao Telecom operations showed the most significant numerical increase in
subscribers of all regions, adding 582,700 net new subscribers during 2002.
Sanbao Telecom showed the strongest increase in revenue of all regions in 2002,
reporting annualized growth of 14%. Once again the greatest contribution to this
growth came from Vietnam, MIC's largest operation. The increase in proportional
subscribers was also greatest in Sanbao Telecom at 41%: Cambodia's subscriber
base grew by more than 63% on an annualized basis and over 15,000 average
monthly gross additions were recorded in Vietnam during 2002. This was the
result of a sustained strategy of investment in network infrastructure,
provision of innovative services and expanded service offerings. Innovative and
competitively priced value-added services, such as SMS chat, logo downloads and
information services were introduced in most operations to enhance the basic
voice offering and to develop the breadth and depth of the market.

Cambodia

     The Company owns 58.4% of CamGSM Company Limited ("CamGSM"). The remaining
41.6% of CamGSM is owned by a Cambodian company and a private business partner.
On April 20, 1996, CamGSM was awarded, for no charge, a 35-year non-exclusive
license to operate a nationwide GSM cellular system in the Kingdom of Cambodia,
the first such license granted in that country. There have been a total of 10
licenses awarded in Cambodia, of which five are currently in commercial
operation.

     The annual charge on the license payable to the Ministry of Posts &
Telecommunications of Cambodia for the years 1999 to 2001 is 10% of gross
revenue, net of interconnection. This increased to 15% from 2002 onwards.

     Cambodia has a population of 12.8 million and there is currently an
unsatisfied demand for basic telephone service. The operation commenced
commercial service in Phnom Penh in March 1997, and its operations have been
expanded significantly during the last three years to cover five regional
capitals as well as all provinces and major towns. In 2002, coverage was
extended to a further 36 sites. The operation is currently the only operator
with coverage in all provinces and major towns.

     The operation had 325,264 subscribers as of December 31, 2002, an increase
of 63% in the year compared with the 199,916 subscribers as of December 31,
2001. As of December 31, 2002 the above number of total subscribers included
320,424 prepaid subscribers, compared with 188,858 at December 31, 2001.

     In January 2001, Wireless Broadband Services were launched commercially
following successful trials in late 2000. The operation offers subscribers
Internet connections at speeds of up to 1MB/second. The initial service covered
three main areas, Phnom Penh, Siem Reap and Battambang. In 2002 the service was
expanded to cover 3 major regional cities and further coverage expansion is
planned for 2003.

     In November 2000, the Company launched an international gateway, under the
name Royal Telecam International Limited ("Telecam"), facilitating both incoming
and outgoing international traffic. The license is for 25 years from August
1998, with a possibility of extending it for an additional 5 years. The Company
owns 57% of Telecam with the remaining 43% owned by a Cambodian company and a
private business partner. The license fee payable is 51% of gross revenues, net
of interconnection and accounting/settlement rates. As at December 31, 2002,
Telecam had 48,765 incoming users and 16,689 outgoing users.


                                      25
<PAGE>


     In April 2002, Modern Times Group, trading as Royal AsiaOne Limited
("AsiaOne"), was issued a license to operate a broadcast-to-air UHF television
station. AsiaOne is owned 100% by CamGSM. AsiaOne operates the Cambodian
Television Network ("CTN") with the Ministry of Information. AsiaOne owns 95% of
CTN. CTN became operational in March 2003, providing service to 1.5 million
people around Phnom Penh, and has built the first purpose-built modern
television studio in Cambodia.

Lao People's Democratic Republic

     In January 2002, MIC was awarded a 20-year GSM nationwide license to
operate in Lao People's Democratic Republic ("Laos"). The award is for
frequencies for a GSM 900 and GSM 1800 network and MIC is developing its
services in a joint venture with the Ministry of Communications, Transports,
Posts and Construction ("MCTPC"). The Company has a 78% shareholding with the
remainder held by MCTPC. Lao People's Democratic Republic has a population of
5.8 million, with one of the lowest mobile phone penetration rates in the world
(approximately 1% of population using this service). Operations commenced on
April 21, 2003 with coverage in Vientiane, the capital city; and the venture is
currently in the process of rolling out its network to other main urban centers,
having as a priority Luang Prabang and Savanakhet.

     There are currently three other mobile operators in Lao People's Democratic
Republic with a GSM network, two of those started services in 2002, after the
monopoly of the first operator (that currently has 75% market share) expired.
Amongst the four, Millicom, operating under the brand name Tango, is the first
private operator.

     Tango is offering pure prepaid services, matching the lowest prices already
existing in the market for airtime and offering cheaper prices than anyone for
connections.

     The venture is expecting revenue coming from active subscribers and also
from the advantage of being the first venture offering international roaming to
visitors coming from countries other than Thailand.

Mauritius

     The Company has a 50% equity interest in Emtel Limited ("Emtel"). A local
partner, Currimjee Jeewanjee & Co. Ltd., owns the remaining 50% of the share
capital. Emtel's present non-exclusive license, expiring in November 2014, which
allows it to operate a cellular telephone system covering the entire island, was
granted in January 1989 and the company commenced operations in May 1989.

     Competition from the Mauritius government-owned telecommunication's company
commenced during 1996.

     Emtel launched GSM services in November 1999. The TACS network was closed
down in April 2002.

     Emtel pays interconnection charges to Mauritius Telecom and pays license
fees to the Information and Communications Technologies Authority (ICTA)
(Regulatory Authority) based on the number of licenses held and frequencies used
by Emtel. Emtel's pricing structure is subject to the ICTA's prior approval. An
annual technical know-how fee is payable by Emtel to the Company equal to 5% of
Emtel's annual pre-tax profits.

     Mauritian resident companies are generally subject to corporate income tax
on their worldwide income at a rate of 25%. Emtel, however, as the holder of a
development certificate, is taxed at a rate of only 15% on its business profits.
In addition, tax allowances have historically been available to Emtel for
capital investments. Investment income, including interest, continues to be
taxed at 25%.

     Emtel's subscriber base increased 10% in 2002 to 97,137 subscribers as of
December 31, 2002 from 88,416 subscribers as of December 31, 2001. As of
December 31, 2002 the above number of total subscribers included 83,555 prepaid
subscribers, compared with 74,087 at December 31, 2001.


                                      26
<PAGE>


Pakistan - Pakcom

     The Company had at December 31, 2002, a 61.3% equity interest in Pakcom
Limited ("Pakcom"), which has a non-exclusive license granted in early 1990 to
operate a cellular telephone system throughout Pakistan. Commercial service was
launched in December 1990.

     The license is for a 15-year period and is renewable thereafter at the
government's option. The license granted to Pakcom required it to provide
cellular telephone services to the major cities of Islamabad/Rawalpindi, Karachi
and Lahore within 30 days of the grant, failing which the license was revocable.
Pakcom was not able to meet this requirement, although its operations have now
extended coverage to the specified cities.

     During 1998, a license for ISP services was granted to Pakcom. Pakcom was
also awarded licenses to operate digital services (TDMA) in 1999 and Wireless
Data in early 2001.

     Pakcom pays a royalty to the Pakistan Telecommunications Authority at the
rate of 1.5% of gross sales revenues (net of interconnect charges paid to the
Pakistan Telecommunication Company Limited ("PTCL")). This is payable quarterly
in arrears. Regulatory approval is required for Pakcom's tariffs.

     The Company's partners in Pakcom are Grand Canyon Corporation, Arfeen
International and members of the Arfeen family (collectively, "Arfeen"), which
together own 38.7% of the equity. On January 26, 1999, an amended joint venture
agreement was signed.

     There are currently three other cellular telephone operators in Pakistan,
Paktel (also owned by the Company), Pakistan Mobile Communications (Private)
Limited ("PMCL") and Pakistan Telecommunications Mobile Limited ("PTML"), a
subsidiary of PTCL, the local PTT. Although Pakcom and Paktel's original
licenses stipulated that no further licenses would be granted during their term,
complaints lodged by an unsuccessful applicant resulted in a third license to
operate a cellular telephone network being granted to PMCL in 1991. PMCL
launched commercial service in August 1994 in Lahore, and has extended coverage
to Karachi, Islamabad and other locations. During 1998 a fourth license was
awarded to PTML, which launched commercial operations in early 2001.

     In December 2000, the government of Pakistan implemented Calling Party
Pays, which means that the recipient of a phone call will no longer pay for that
call.

     Pakcom implemented the digitalization of its cellular network and launched
TDMA services in Karachi in October 2000. During 2001, digitalization of the
network was expanded. Network capacity was added to accommodate the strong
growth in subscribers. The coverage of the network was also expanded.

     Following the award of a wireless local loop ("WLL") license in 2000,
Pakcom was granted the frequency required to launch high-speed wireless data
services. This network has been built and is being run as a Mobile Virtual
Network Operator on the frequencies by Telecard.

     In Pakcom, growth in prepaid subscribers from 223,519 to 327,325 (an
increase of 46%) has resulted in an overall growth of 42% year-on-year (December
2001 to December 2002), resulting in an absolute increase to 344,702 subscribers
as of December 31, 2002, from 242,608 subs as of December 31, 2001.

Pakistan - Paktel

     In November 2000, MIC announced it had acquired a 98.6% shareholding in
Paktel Limited ("Paktel"). Paktel was granted a license in early 1990 to operate
a cellular telephony system throughout Pakistan. Commercial service was launched
in November 1990. During the course of 2001, MIC increased its shareholding to
98.9% through being the sole subscriber to a capital increase.

     The license is for a 15-year period and is renewable thereafter at the
government's option. The license granted to Paktel required it to provide
cellular telephone services to the major cities of Islamabad/Rawalpindi, Karachi
and Lahore within 30 days of the grant, failing which the license was revocable.
Paktel was not able to meet this requirement, although its operations have now
extended coverage to the specified cities.


                                      27
<PAGE>


     Paktel pays a royalty to the Pakistan Telecommunications Authority at the
rate of 1.5% of gross sales revenues (net of interconnect charges paid to the
PTCL). This is payable quarterly in arrears. Regulatory approval is required for
Paktel's tariffs.

     In April 2001, Paktel commenced to offer prepaid services.

     During 2002, major coverage improvements were achieved. Network capacity
was added to accommodate the strong growth in subscribers.

     In October 2002, Paktel's license was modified and it was awarded GSM 900
spectrum.

     In Paktel, growth in prepaid subscribers from 101,661 to 186,591 (an
increase of 84%) has resulted in an overall growth of 43% year-on-year (December
2001 to December 2002). This has resulted in an absolute increase to 218,536
subscribers as of December 31, 2002, versus 152,928 subscribers as of December
31, 2001.

Sri Lanka

     The Company has a 99.9% equity interest in Celltel Lanka (Private) Limited
("Celltel"), the remaining equity interest is held by four local individuals
holding one share each as at December 31, 2002. Celltel has a non-exclusive
license to operate a cellular telephone system covering the island of Sri Lanka
that expires in 2008. This license was a renewal of Celltel's initial license
that was granted in 1988 and expired in 1995. The present system covers almost
all the major towns in Sri Lanka, including the Greater Colombo area, Kandy,
Galle, Kurunegala and Nuwara Eliya.

     Celltel launched GSM services during 2000 and has 168,251 subscribers on
its GSM network as at December 31, 2002, compared with 82,011 subscribers as at
December 31, 2001.

     An annual license fee is payable to the Telecommunications Regulatory
Commission of Sri Lanka ("TRCSL") and Celltel also pays interconnection fees set
by TRCSL to Sri Lanka Telecom for use of its telecommunications network.
Following a previous similar arrangement with the Board of Investment that ran
from 1988, Celltel had previously obtained a tax-free holiday for seven years
from 1993. In 2000, Celltel was granted Flagship status by the Board of
Investment (BOI) and the tax holiday was further extended by an additional eight
years from 2000. Celltel has the option of applying for a further five-year
extension of the tax holiday.

     Two competitors now associated with Hutchison and Sri Lanka Telecom began
operations in Sri Lanka in 1992 and 1993, respectively. A third competitor,
which is associated with Telekom Malaysia, received a GSM license in 1995 and
has commenced operations.

     Celltel's total subscriber base increased by 54% in 2002 to 266,372
subscribers as of December 31, 2002 from 172,712 subscribers as of December 31,
2001. Included in these numbers are 250,063 prepaid subscribers as of December
31, 2002 compared with 147,805 prepaid subscribers as of December 31, 2001.

Vietnam

     Following our partner's decision to exercise his option to purchase 10% of
the operation, the Company currently has a 80% interest in Comvik International
(Vietnam) AB ("CIV") with the remaining 20% held by a private business partner.

     In 1994, CIV and Vietnam Mobile Services Co. ("VMS"), a government owned
company, entered into a revenue sharing agreement, a Business Cooperation
Contract ("BCC"), to operate a nationwide cellular GSM system in Vietnam
("Mobifone"). In May 1995, the State Committee gave final approval for this
revenue sharing agreement and the cellular license was issued. VMS owns the
non-exclusive license to provide cellular service throughout the entire country.
The revenue sharing agreement, which has a ten-year term from July 1, 1995,
provides that CIV will be entitled to receive 50% of Mobifone's net revenues for
the first five years of operation and 40% thereafter. In October 2000, the BCC
received an amended investment license that increased CIV's contribution to the
BCC by $15 million and maintained the 50% revenue sharing for the remaining five


                                      28
<PAGE>


years of the term of the BCC, to June 2005. In 2001, a further amended
investment license was received to increase the BCC's capital by $100 million.
Both CIV and VMS committed to contribute an additional capital of $50 million
each. Of the additional $65 million additional contribution required under the
amended investment licenses $18 million had been disbursed as of December 31,
2002. The revenue sharing agreement expires at the end of June 2005 and at that
time legal title to all equipment shall be transferred to VMS at a price of $1.
Negotiations are ongoing to extend the life of the revenue sharing agreement for
a significant period of time.

     Service commenced in July 1995 and covers all provinces, including the
important cities of Hanoi, Ho Chi Minh City and Da Nang. With the additional
investment of $50 million following the amended license issued in 2001, CIV has
agreed to invest a minimum of $192.8 million in the venture over the term of the
license. In 2002, 89 new sites were put into service and the main switching
platforms were upgraded to improve the efficiency of the network.

     A new prepaid product, Mobi4U, was launched in 2002, featuring a lower
prepaid airtime rate and a daily fee. By December 2002, almost 40,000 customers
had subscribed to this package.

     There are currently three other cellular operators in Vietnam; Call-link
(launched in May 1992, currently using an analogue DAMPS system, and currently
operated by Saigon Post and Telecommunication), Vinaphone (launched GSM services
in June 1996 and wholly owned by the government) and Saigon Postal (a business
cooperation contract between SK Telecom, LG Telecom and a private Vietnamese
company which plans to launch services using CDMA in July 2003). In addition,
VNPT has launched an urban cell-phone in Ho Chi Minh City and Hanoi City in
December 2002. Vietel, a government-owned operator currently providing Voice
Over Internet long-distance services, has also been awarded a GSM 900 mobile
communications license but has yet to indicate how or when the license will be
used.

     Vietnam has a total population of approximately 81.1 million and there is
currently an unsatisfied demand for basic telephone service.

     With the added impetus provided by the launch of prepaid services, Mobifone
continues to experience rapid growth and had 686,663 subscribers as of December
31, 2002, an increase of 37% compared to the 499,394 subscribers as of December
31, 2001. As at December 31, 2002, the above subscriber number includes 494,334
prepaid customers compared with the 365,678 prepaid customers reported at
December 31, 2001.




                                      29

<PAGE>


                                MIC LATIN AMERICA

Background

     MIC Latin America consists of the Company's cellular operations in Bolivia,
Colombia (divested February 2003), El Salvador, Guatemala, Honduras and
Paraguay. MIC Latin America's licenses cover approximately 49 million people as
of December 31, 2002, with an equity population of approximately 37 million.

     Total operating revenue for MIC Latin America was $277.6 million (excluding
El Salvador) at December 2002, which is a 7% decline from the prior year, mainly
due to currency devaluations in South America.

     During 2002, all operations implemented measures to control costs to offset
lower revenues during the year. Major savings were achieved through a headcount
reduction, the discontinuation of handset subsidies, the renegotiation of
certain contracts and the restructuring of distribution networks.

Bolivia

     The Company has a 100% equity interest in Telefonica Celular de Bolivia
S.A. ("Telecel"). Telecel has a non-exclusive license to operate a cellular
telephone system in the whole country, which has an estimated aggregate
population of 8.4 million. The license was renewed in September 1996, valid
retroactively from November 1995, for a 20-year term. Further renewals are
subject to negotiations with the government. Although the license was initially
awarded to cover only La Paz, on May 26, 1997, Telecel received an extension of
the license to cover the entire country. The license sets limits on subscriber
tariff rates and provides for charges on the use of frequencies and a payment of
1% of the monthly net recurring subscriber revenue to be paid to the
telecommunications authority. Telecel has entered into both interconnect and
calling party pay agreements for each of its license areas.

     Telecel's coverage includes 8 of the 9 districts in the country, including
La Paz, Santa Cruz (including Puerto Suarez), Cochabamba, Sucre, Beni, Potosi,
Taraija and Oruro.

     In the last quarter of 1996, Societa Finanziara Telefonica s.p.a., the
international telecommunications group, began providing cellular service. It
also owns a 50% interest in Bolivia's long distance telephone company. In 2000,
Western Wireless won a license for GSM that commenced service in 2001. Telecom
Italia also operates a GSM network in the 800 Mhz frequency as well as a TDMA
network. An additional two frequencies are expected to be offered when third
generation services are launched.

     In June 2001, Telecel signed an agreement for additional financing in the
amount of $25,000,000 with the IFC and $10,000,000 from the Nederlandse
Financierings-Maatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as
the Netherlands Development Finance Company. This financing bears interest at
LIBOR+3.00% and is repayable in installments starting in December 2002 until
December 2006. Among other things, the financing requires the company to
maintain certain financial covenants such as a debt ratio, long-term debt
service coverage, and debt to equity ratio. These investments were used to help
to fund the expansion and further digitalization of the Group's mobile cellular
telecommunications network in Bolivia. As of December 31, 2002, Telecel was in
breach of certain covenants on the IFC loan and the balance outstanding has been
classified as a short-term liability in the balance sheet.

     In November 2001, Bolivia deregulated its Long Distance market, and Telecel
signed a 40-year concession to provide long-distance services. In February 2002,
Telecel began offering both National and International Long Distance services.
In November 2001, Telecel signed a 40-year concession to provide data
transmission services throughout Bolivia.

     Telecel's subscriber base increased 18% in 2002 to 410,887 subscribers as
of December 31, 2002 from 348,683 subscribers as of December 31, 2001. Included
in these numbers are 387,837 prepaid subscribers as of December 31, 2002,
compared with 315,397 as of December 31, 2001.


                                      30
<PAGE>


Colombia

     The Company had a 95.4% equity interest in Empresa Regional de
Comunicaciones Celulares de la Costa Atlantica S.A., Celcaribe S.A.
("Celcaribe"), which in March 1994 obtained a non-exclusive license to operate a
cellular system in the northern region of the Republic of Colombia.

     The northern region of Colombia has a population of approximately 8.3
million, including the three large provincial capitals of Barranquilla,
Cartagena and Santa Marta. These cities are home to three of the country's four
major ports.

     In February 2003, MIC completed the sale of its interest in Celcaribe.

El Salvador

     The Company has a 70% equity interest in Telemovil El Salvador S.A.
("Telemovil"), which in July 1991 obtained authority to operate a non-exclusive
cellular telephone system in El Salvador. The formal license contract was signed
in September 1991. The license is for a 15-year period beginning September 1991.
The license is automatically renewable for successive five-year periods after
the initial 15-year period in the absence of default by Telemovil. Commercial
service commenced in January 1993 and the system currently covers the
metropolitan area of San Salvador, including Santa Tecla and the international
airport and the most important cities in the eastern and western regions. In May
1997, a prepaid card service was launched.

     The Company has a partner in Telemovil who holds a 15% interest and several
other partners who, together, hold an additional 15% interest.

     During the first quarter of 2001, an ongoing dispute arose with MIC's local
partners in Telemovil. Due to the nature of this dispute, MIC's management
determined that circumstances regarding its investment in Telemovil had changed,
so that proportional consolidation was no longer appropriate as of May 2001.
Therefore, as of May 2001, the entity was accounted for under the equity method.
As of December 31, 2002, this dispute has still to be settled and management no
longer feels it is able to exercise significant influence in the operation and
therefore believes it is more appropriate to show its investment as a
non-current asset in the balance sheet under the caption "Investment in
securities". Management hopes that this dispute will be resolved during the
course of 2003.

     Telemovil has entered into an agreement with the Company under which the
Company is entitled to a royalty of 5% of Telemovil's pre-tax profits for the
first ten years after the commencement of operations.

     In the first quarter of 1996, Telemovil signed a $20,000,000 Investment
Agreement with the IFC to finance part of the operations for a $45,000,000
two-year expansion program. This finance bears interest at LIBOR+4% and is
repayable in installments in the period between July 1999 and January 2003. As
of December 31, 2002 approximately $2,500,000 was outstanding. A commitment fee
of 0.5% per annum is paid on the unused portion of this facility. In connection
with this financing, the Company signed a keep-well agreement which provides
inter alia that (i) in the event of a payment default by Telemovil, the Company
will provide the necessary funds to Telemovil and (ii) the Company will not sell
or otherwise dispose of, or encumber or permit any lien to exist over, any of
the voting securities of Telemovil such that the Company would be a less than
51% shareholder of Telemovil.

     In total, there are currently two cellular licenses and one PCS license
issued in El Salvador.

Guatemala

     The Company has a 55% effective interest in Comunicaciones Celulares S.A.
("Comcel Guatemala") which has a non-exclusive license to operate a national
cellular system. Commercial service was launched in October 1990. The cellular
telephone network currently covers most of the country.

     Comcel Guatemala's other stockholders are Miffin Associates Corp., owning
35%, and Arkade International Inc. owning 10%.


                                      31
<PAGE>


     Comcel Guatemala had a concession to operate the 800 Mhz frequency band for
20 years from January 1990 to March 2003. In March 2003, Comcel Guatemala
purchased the license to operate the frequency band under an usufruct title, for
a period of 15 years ending 2018, which is renewable thereafter. Therefore, the
venture has canceled the concession on which it was required to pay royalties to
the government. Comcel Guatemala also has the usufruct title for 4Mhz (A' and
B') for a period ending 2013, which is renewable thereafter, and a license to
offer international long-distance services.

     Comcel Guatemala has entered into interconnect arrangements with Telgua,
the former PTT, and with the other 18 operators that offer their services in the
country. The interconnect charges are subject to adjustment by mutual agreements
between the parties.

     During 1999, an additional PCS license in the 1900 Mhz frequency was
awarded, generating a more competitive environment. By the end of 2001, the
cellular operators in the country included: Telgua, Telefonica, and Bell South,
all three with a nation-wide license.

     Comcel Guatemala is currently expanding the coverage of its network
throughout the country along the three major national highways. In June 1997, a
prepaid card service was launched. At the end of 1999, Comcel began the process
of digitalization of the network from AMPS to TDMA technology. A new prepaid
brand, Free, was launched in 2002. The plan has no bills or contracts and uses
automatic direct debit agreements to recharge balances.

     As of December 31, 2002, Comcel Guatemala had 467,620 subscribers, an
increase of 31% from 358,281 subscribers as of December 31, 2001. Its major
growth came from prepaid, obtaining a 52% increase over last year's customer
base.

     During the first quarter of 2003, two more cellular licenses were granted
to competitors through a bidding process. The licenses allow the purchaser to
provide cellular services nationwide.

Honduras

     The Company owns 50% of Telefonica Celular S.A. ("Celtel"), having
increased its ownership from 25% in January 2001. Celtel was awarded in 1996 a
non-exclusive AMPS cellular license for the Republic of Honduras, which has a
population of 6.6 million. The other stockholder is Motorola Inc., which owns
50%. Celtel paid a license fee of $5.1 million to the Honduran government for a
ten-year license. The license has since been extended until 2021. An additional
fee will be paid in 2006.

     Currently there is no other cellular operator in Honduras. The operation
commenced commercial service in September 1996. Competition is expected for year
2003.

     As of December 31, 2002 the operation had 326,508 subscribers compared with
the 237,629 subscribers as of December 31, 2001, an increase of 37% in the year.
As of December 31, 2002 the above number of total subscribers included 259,156
prepaid subscribers compared with 163,094 as of December 31, 2001.

Paraguay

     The Company owns 96% of Telefonica Celular del Paraguay S.A. ("Telecel
Paraguay"). One local partner owns the remaining 4% of Telecel Paraguay. In July
1991, Telecel Paraguay was awarded a license, as a result of a bidding process,
by Presidential decree to build, maintain and operate a cellular telephone
system and provide cellular telephone services within a 50-kilometer radius of
Asuncion, Paraguay's capital and largest city, and commenced operations in
August 1992. In addition, in March 1993 Telecel Paraguay's license was extended
to cover Ciudad del Este, the second largest city of the country located on the
Brazilian border, and began operations there in December 1993. In 1997, Telecel
Paraguay's license was extended to cover the entire country. Telecel Paraguay's
license was originally for a ten-year period ending 2001 and was not exclusive.
In December 2000, the license was renewed for a further five years, expiring in
September 2006.


                                      32
<PAGE>


     Paraguay has a free market in term of prices for telecommunication
services, only the changes in interconnection charges among cellular networks in
Paraguay's tariffs are subject to prior approval from the telecommunications
authority. The license arrangements include interconnect facilities to the
wire-line network at standard charges. Telecel Paraguay faces limited
cross-border competition in Ciudad del Este from a Brazilian operator and a
similar situation will occur in Encarnacion from an Argentinean operator.

     In December 1997, Telecel Paraguay was awarded the license for digital PCS.
The license covers the whole of Paraguay. The license was renewed in January
2003 for up to November 2007. A second cellular license plus a nationwide PCS
license has been awarded to a consortium including Telecom Italia that commenced
operations in June 1998. A third PCS license launched services beginning 1999,
and a fourth PCS license launched in March 2000.

     2002 was marked by a strong focus on prepaid services, including various
attractive plans with low prices. Also, strong price reductions were observed in
the market from the difficulty to maintain constant prices in U.S. dollars
terms, as well as impact of aggressive competition. A new prepaid brand, Free,
was launched. The plan has no bills or contracts and uses automatic direct debit
agreements to recharge balances. Currently, some 25,000 postpaid customers have
migrated to this plan, resulting in a considerable reduction in billing
collection costs.

     In 1998, the government of Paraguay introduced a foreign investment tax
incentive program. This initiative reduces the basic rate of income tax by 95%
on the incremental profits generated by new capital investment. The program was
backdated to January 1, 1997.

     SMS (Short Message Services) were expanded and new value added options now
includes chatting facilities, web messaging and premium packages (polls,
lotteries and journal advertisements).

     Telecel also provides Broadband and Dial Up Internet services. As at
December 31, 2002, Telecel was the third largest Internet provider in the
country, out of 14 operators, in terms of subscribers.

     Telecel Paraguay's subscriber base decreased 3% in 2002 to 550,109
subscribers as of December 31, 2002 from 564,512 subscribers as of December 31,
2001. This decrease is largely a result of the serious economic circumstances
that have hit the country during the year. Included in these numbers are 489,219
prepaid subscribers as of December 31, 2002, compared with 457,780 as of
December 31, 2001.












                                      33
<PAGE>


                                   MIC AFRICA

Background

     MIC Africa consists of the Company's cellular operations in Ghana, Senegal,
Sierra Leone and Tanzania. MIC Africa's licenses cover approximately 73.6
million people as of December 31, 2002, with an equity population of
approximately 53 million.

     Operating revenue in MIC Africa increased by 15%, reflecting positive
trends in Sierra Leone and Senegal during the year. Proportional cellular
subscribers increased by 27% to 217,928 at December 31, 2002. The main business
driver in Africa continued to be the growth in the number of pre-paid
subscribers, which, by December 2002, accounted for 98% of MIC Africa's total
customer base.

Ghana

     The Company now has a 100% equity interest in Millicom (Ghana) Ltd.
(operating under the trade name "Mobitel"). The Company increased its
shareholding from 70% to 100% in late 2002. Mobitel has a non-exclusive license
to operate analogue cellular services throughout Ghana and commenced operations
in May 1992. Mobitel also has a non-exclusive license to operate GSM cellular
services throughout the country and successfully launched its GSM network in
June 2002.

     Mobitel's license is of indefinite duration, while it's interconnect
agreement with Ghana Telecom, the local PTT, was for an initial five-year period
commencing in 1991. Although the interconnect agreement ended February 15, 1996,
this has not affected the system's service. The new interconnect rates and
settlement terms are in place and are revisited from time to time.

     During 1994 an additional cellular telephone license was awarded to a
competitor. This license holder commenced commercial operations in 1995. A third
license was awarded in 1996, with service commencing in November 1996, and a
fourth operator commenced operations in January 2001.

     Mobitel currently operates in Accra, Tema, Kumasi, Obuasi, Takoradi, and
Tamale. Further expansion is planned for mid-2003.

     As of December 31, 2002, Mobitel had a total of 52,060 subscribers,
representing an increase of 46% from 35,706 subscribers as of December 31, 2001.
As at December 31, 2002, the above subscriber numbers include 50,516 prepaid
subscribers, an increase of 51% compared with the 33,517 prepaid subscribers as
at December 31, 2001.

Senegal

     In July 1998, SentelGSM, a company owned 75% by the Company, was awarded a
nationwide GSM license for The Republic of Senegal. The Company's partner,
owning the remaining 25%, is a local businessman.

     The non-exclusive license, awarded for a period of 20 years, renewable
every five years thereafter, required no initial payment. However, there is an
annual administrative fee of approximately $85,000. The other cellular license
in the country, operated by Sonatel Mobile, a branch of Sonatel, the local
privatized PTT, commenced operations in September 1996. Currently, Sonatel is
owned 40% by France Telecom. A third license is currently in the process of
being granted.

     The population of The Republic of Senegal is approximately 10.6 million
people. The venture commenced operations in April 1999 with only a prepaid
product.

     As of December 31, 2002, the operation had 97,804 subscribers, an increase
of 12% over the 87,143 subscribers reported at December 31, 2001.


                                      34
<PAGE>


Sierra Leone

     In July 2000, the Company was awarded, through its subsidiary Millicom
Sierra Leone Limited ("MSL"), a nationwide license to provide GSM cellular
telephony in Sierra Leone. The license expires in August 2015. The Company owns
70% of MSL.

     Sierra Leone has a population of 5.6 million, with an estimated fixed-line
penetration of only 0.0024%. Initially, MSL has rolled-out the operation in
Freetown, the capital, with a population of 1.5 million. It commenced operations
in late May 2001 and operates a purely prepaid service.

     MSL introduced a Friends & Family service, giving a discount on a
customer's five most frequently called numbers, together with a similar service
for corporate customers giving discounted rates for international calls to the
five most called countries. These initiatives both proved very successful in
2001 and 2002. The company also offers Closed User Group to many major
organizations and associations, most notably the Medical Association of Sierra
Leone. During 2002, MSL offered a joint promotion with Sierra Leone Commercial
Bank, whereby potential mobile users can get a loan from the bank to buy a
handset and connection from MSL, this proved to be a big success.

     As at December 31, 2002, the operation had 13,411 subscribers, an 89%
increase from December 2001.

Tanzania

     MIC Tanzania Limited ("MIC Tanzania") was awarded a non-exclusive 15-year
license in November 1993 to install and operate a cellular telephone network in
the United Republic of Tanzania by the Tanzania Posts & Telecommunications
Corporation ("TP&TC") following a formal tender process. Service became
operational in September 1994.

      TP&TC was subsequently restructured to form Tanzania Telecommunications
Company Ltd. ("TTCL"), Tanzania Communications Commission and Tanzania Posts
Corporation. The Company owns a 57% equity interest in MIC Tanzania. TP&TC
originally owned 25% of the equity interest that was transferred to TTCL during
the restructuring process. This 25% interest was transferred to the Treasury
Registrar in 2000. Ultimate Communications Ltd., a private Tanzanian company,
owns 14%. The remaining 4% was scheduled to be transferred to TTCL on the
transfer of TTCL's regional licenses to MIC Tanzania in 1997. The conditions of
this transfer were not complied with by TTCL and the shares, although fully
paid, have not yet been issued.

     The initial cost of the license was $250,000 with an additional $696,000
paid in 1997 following a dispute as to whether the original license was for
nationwide coverage. On an annual basis MIC Tanzania pays a royalty of 5% of
airtime revenue and a license fee dependent upon the number of cell sites. The
license was re-issued in 2001 with additional frequency ranges.

     Under the interconnect agreement, MIC Tanzania pays interconnect charges at
the standard rate. In December 1995, the interconnect agreement was modified; a
"calling party pays" system was implemented by which MIC Tanzania no longer
charged its subscribers for incoming calls but collected revenue from TTCL
instead. The basis for charging interconnected traffic was disputed by TTCL from
January 1, 1999. In January 2001, this dispute was settled in favor of MIC
Tanzania and the dispute resolution documents were registered in the High Court
of Tanzania. Despite these documents, TTCL continued to refuse to pay components
of the interconnect and at December 31, 2002, approximately $13,000,000 is
contested by TTCL and in court proceedings. MIC Tanzania has won a court
injunction for TTCL to settle this amount. Currently, this remains unpaid and
subject to appeal processes.

     MIC Tanzania originally launched services using TACS technology. In
September 2000, MIC Tanzania launched a new GSM network that is being operated
concurrently with the original TACS network. Under the terms of a new license
issued in September 2001, MIC Tanzania may continue to operate the TACS network.
MIC Tanzania currently provides coverage to Dar es Salaam and the surrounding
area, Zanzibar and significant parts of the country. MIC Tanzania plans to add
eight new coverage sites and increase capacity in main regional centers.


                                      35
<PAGE>


     A competitor, Tritel, began operations in December 1995 but was unable to
expand business in line with the investment requirements. Being unable to face
its financial commitments under its license, Tritel stopped operations by the
end of 2002. In 1999 and 2000, three new licenses were issued, of which one,
Zantel, commenced operations on the island of Zanzibar in 1999. In 2000, Vodacom
commenced operations and have rapidly built-out their network to provide
coverage in most of the areas covered by MIC Tanzania. TTCL was privatized in
February 2001 and launched its own cellular operation through its subsidiary
Celtel in November 2001. Vodacom is now market leader in subscribers and
revenues following large network coverage roll out. Celtel and MIC Tanzania have
an equivalent proportion of the remaining subscriber base. Zantel has not
expanded its network on Tanzania mainland and for that reason, remains marginal
in terms of market share, but operates its own international gateway.

     MIC Tanzania is an approved enterprise under the Tanzania Investment Act,
1998, for a period of five years ending on December 31, 2003. Consequently, MIC
Tanzania can import equipment tax-free and can set-off any capital expenditure
against its taxable income in the year in which such expenditure is incurred.

     Further to the GSM network roll out, MIC Tanzania also introduced a number
of new value added services that further strengthened its position as the
leading innovator in the market.

     As of December 31, 2002 MIC Tanzania had 145,838 subscribers, including
140,265 prepaid, an 8% increase over the 134,578 subscribers as of December 31,
2001, including 131,237 prepaid subscribers.


























                                      36
<PAGE>


                                OTHER INVESTMENTS

Tele2 AB (formerly named NetCom AB)

     In January 1994, the Company obtained an option to acquire 20% of Comviq
GSM when Comviq GSM significantly increased its share capital. The Company
determined not to exercise its pre-emptive right to maintain its 20% equity
interest, which it previously owned, upon the increase in share capital and
converted its equity interest into an option to purchase from the other
shareholder, Tele2 AB (then known as NetCom, and previously known as NetCom
Systems AB), previously a subsidiary of Kinnevik, an interest equal to 20% of
the equity interest of Tele2 AB in Comviq GSM at the time the option was
exercised.

     In September 1996, the Company exchanged its option to acquire 20% of
Comviq GSM in return for shares in Tele2 AB. The value of the consideration
received by the Company represented the difference between the value of 20% of
Comviq GSM at the date of the exchange and the exercise price of the Company's
option in Comviq GSM at the date of the exchange. The exercise price of the
option was equal to 20% of the total equity of Tele2 AB in Comviq GSM
(calculated at the time of the exercise of the option) plus an annual rate of
return, related to the level of the Stockholm Inter-Bank Offering Rate
("STIBOR"), on such equity contribution. In addition, if the Company had
exercised the option, the Company would have been obligated to assume its pro
rata share of existing indebtedness and guarantees of Comviq GSM. There was no
cash consideration in the exchange transaction between the Company and Tele2 AB
and after the transaction the Company owned 7.65% of the fully diluted shares of
Tele2 AB. In March 1997, the Company's ownership in Tele2 AB was diluted to 7.5%
following an equity offering in which it did not participate.

     The Company initially accounted for its interest in Tele2 AB at a value of
$87,343,000, the value established at the time of the exchange transaction.
Between April 1998 and February 2000, the Company sold part of its investment,
leaving a net investment of 4.9%, realizing proceeds of $129,451,000 and a net
gain of $98,157,000. In 2001 and 2002, the Company sold additional shares for
proceeds of $125,195,000 and $167,238,000, respectively, realizing a net loss of
$15,931,000 and $168,818,000, respectively. In 2002, MIC also recognized an
other-than-temporary loss of $119,138,000.

     In July 2000, the Company announced it had accepted an offer from Tele2 AB
for the share capital of Societe Europeenne de Communication S.A. ("SEC"). In
the deal, Tele2 AB offered to exchange 11.5 SEC shares for one Tele2 AB share.
The Company exchanged its SEC shares on September 27, 2000. After the exchange,
the Company held 13.7% of the issued share capital of Tele2 AB.

     The Company's investment in Tele2 AB is carried at its market value.

     Tele2 AB is the leading pan-European telecommunications company offering
fixed and mobile telephony, data network and Internet services under the names
Tele2, Tango and Comviq to approximately 17 million people in 22 countries as at
December 2002. In addition, Tele2 AB operates Datametrix, which specializes in
systems integration; 3C Communications, operating public pay telephones and
public Internet services; Transac, providing billing and transaction processing
services; C cubed, offering branded prepaid calling cards. Tele2 AB also offers
cable television services under the Kabelvision brand name.

     Tele2 AB's Nordic operations cover Sweden, Norway, Denmark and Finland.
Tele2 AB provides cellular services in Sweden, while Denmark, Finland and Norway
are primarily fixed telephony operations. In October 2000, Tele2 AB became the
first mobile virtual network operator in Denmark. Tele2 AB has also been awarded
UMTS licenses in Sweden, Norway and Finland. During 2002, Tele2 AB reached
agreement for a Mobile Virtual Network Operator ("MNVO") in Norway, which is
intended to be launched during 2003.

     The Baltic and Eastern Europe operations cover the Baltics, Poland, Russia
and the Czech Republic. These are chiefly cellular operations. Tele2 AB intends
to launch fixed-line services in Poland during 2003.

     In central and southern Europe, Tele2 AB provides fixed telephony services
in Germany, the Netherlands, Switzerland, Austria, Belgium, Luxembourg,
Liechtenstein, France, Italy and Spain. In addition, Tele2 AB will


                                      37
<PAGE>


launch fixed-line services in Portugal, of which services were launched in
Spain in 2001. In addition, Tele2 AB provides cellular services in Austria,
Luxembourg, Liechtenstein, the Netherlands and Switzerland.

     In the fourth quarter 2001, Tele2 AB purchased MIC's cellular operations in
Russia.

     As at December 31, 2002, Tele2 AB had approximately 17 million subscribers,
an increase of 12% compared with the previous year. Of these, approximately 11.4
million are fixed-line telephony and Internet subscribers and 5.0 million are
cellular subscribers.

     Tele2 AB is listed on the Stockholm Stock Exchange under TEL2A and TEL2B,
and on the NASDAQ Stock Market under TLTOA and TLTOB.

     As at December 31, 2002, the Company held 6.8% of Tele2 AB with a market
value of $265,571,000.

Argentina

     In November 1998, the Company announced the award of a fixed wireless
license to provide data communication and value-added services in Argentina.
Millicom Argentina SA, in which MIC has a 65% equity interest, launched services
in May 2000. The license covers the six largest cities in Argentina, covering
approximately 90% of the urban population. The Company is focused on providing
Internet and communications for bandwidth intensive applications such as
high-speed data transmission and Internet access to small, medium and large
sized businesses and home office workers.

     During 2002, Argentina had to adjust its operation to face the difficulties
from the Government's debt default and currency devaluation of about 200%. The
service has now strong demand from corporations seeking lower cost data
connections, which replaces fiber optic or dedicated links.

     During 2002, Millicom Argentina obtained a license to offer mobile services
under a Mobile Virtual Network Operator concept, meaning that it could launch
cellular mobile services using existing mobile networks. There is no obligation
for existing operators to open their networks to the Company.

     As at December 31, 2002, Millicom Argentina had 4,462 subscribers, a
decrease of 6% over the reported 4,757 subscribers as at December 31, 2001.

Paraguay

     MIC was granted a nationwide license in August 1999 to provide data and
image transmission through two local frequencies of 2.4 GHz to 3.5 GHz in a 100
MHz bandwidth. The service began operating in May 2000. As at December 31, 2002,
there were 3,882 subscribers, an increase of 35% over the reported 2,879
subscribers as at December 31, 2001.

     2.4 Mhz operators are offering strong competition in the home sector,
particularly with a joint offer of cable TV services. A second 3.5 Mhz operator
is present in the market since 2002, who also operates the second TDMA network
nationwide.

     Telecel services are widely used by mission critical applications, like
bank branches, automated telling machines and supermarkets.

Peru

     In June 2000, the Company announced it had been awarded a nationwide
license to provide wireless data, Internet access and fixed telephony services
in Peru. The license covers the main nine cities and is valid for a 20-year
period with renewal for a similar period. The frequency award is one of three
license awards of this type in Peru. The Company is focused on providing
Internet access and communications for bandwidth intensive applications such as
high-speed data transmission and Internet access to businesses and home office
workers. Services were launched in January 2001 in Lima and now cover Chiclayo
and Trujillo. As at December 31, 2002, the operation reported 2,891 subscribers.


                                      38
<PAGE>


     The Company and the Peruvian government subscribed in May 2002, a
concession agreement to provide long-distance (domestic and international)
carrier services. The concession area comprises the following cities; Ancash,
Arequipa, Ica, La Libertad, Lambbayeque, Lima and the constitutional province of
Callao as well as signals abroad. The concession agreement is for a term of 20
years with renewal for a similar period or partial renewals for five years, not
to exceed 20 years.

     In 2003 voice services will be initiated within Lima, using the IP
architecture of the existing wireless network.

Other licenses

     The Company has been actively pursuing further licenses in countries where
it has existing cellular networks and strong brand recognition. A commercial
wireless license has also been awarded in Venezuela, however, the Company has
never commenced providing services in Venezuela.

Capital Expenditures and Divestitures

     The Company's capital expenditures, acquisitions and divestments and
sources of funding for fiscal 2002, fiscal 2001 and fiscal 2000 are as follows:

     From 2000 to 2002, inclusive, the Company has made the following
investments/divestments in operations:

   Investments

     2002:

     In November 2002, MIC acquired the remaining 30% shareholding in Millicom
(Ghana) Limited at a cost of $500,000.

     During 2002, MIC increased its ownership in Celcaribe, its cellular
operation in Colombia, through partial repayment of their debt, which was
treated as a capital increase, and through a capital increase to 95.4% as of
December 31, 2002. MIC subsequently sold its interest in Celcaribe in February
2003.

     In 2002, the Company invested $500,000 in its new venture in Lao People's
Democratic Republic.

     2001:

      In the first quarter of 2001, MIC increased its shareholding in Celtel
Honduras from 25% to 50%.

     In May 2001, 19,650 shares in Telemovil, MIC's cellular operation in El
Salvador, were put to the Company for a price of approximately $29.2 million.
This increased MIC's interest in Telemovil to 70%.

     In March and September 2001, certain shareholders in Celcaribe, the
operation in Colombia, put a total of 6,320,262 shares to MIC for a
consideration of $20.1 million. In addition, MIC contributed to a capital
increase in Celcaribe. As a result of the above, as at December 31, 2001, MIC's
ownership in Celcaribe had increased to 92.7% from 73.2% at December 31, 2000.

     2000:

     In January 2000, MIC invested $10 million in Modern Holdings (formerly
known as XSource), a subsidiary of Great Universal, in the form of a convertible
promissory note. In February 2000, these notes were converted into 1,293,095
shares of common stock, representing 8.5% of the share capital of XSource. At
December 31, 2002, the value of this investment has been reduced to $2,950,000.

     In March and September 2000, certain shareholders in Celcaribe, the
operation in Colombia, put a total of 6,438,970 shares to MIC for a
consideration of $17,560,000. In addition, MIC contributed to a capital increase


                                      39
<PAGE>


in Celcaribe. As a result of the above, as at December 31, 2000, MIC's ownership
in Celcaribe had increased to 73.2% from 41.6% at December 31, 1999.

     In November 2000, MIC acquired a shareholding of 98.6% in Paktel, in
Pakistan.

   Divestments

   2002:

   Following the sale of the Company's interest in FORA Telecom BV during 2001,
as described below, during 2002 MIC obtained the necessary GSM licenses and
therefore received an additional $30 million proceeds in cash. In addition,
certain loans for which MIC was liable were settled at less than their carrying
value. The credit realized on these less costs incurred in the acquisition of
the licenses, resulted in a net gain of $30,859,000 in 2002.

   In July 2002, MIC's partner in its cellular operation in Vietnam exercised
his options to purchase 10% of the share capital of the company. MIC has
recognized a gain of $16,603,000 on this transaction.

   In September 2002, MIC sold its interest in its cellular operation in the
Democratic Republic of Congo recognizing a loss of $21,000.

   In September 2002, the Group sold its 100% interest in Liberty Broadband Ltd.
(formerly known as Tele2 UK) recognizing a loss of $10,294,000.

     In May 2002, MIC sold a 17% interest in MIC Systems BV to Kinnevik for a
total consideration of $17,000,000 in order to make a repayment on the
Toronto-Dominion financing. In November 2002, MIC then sold its remaining 83%
interest in the subsidiaries of MIC Systems BV for a total consideration of Euro
95 million, approximately $97,000,000. These proceeds were mainly used to meet
our interest obligation on the Old Notes.

     In December 2002, MIC completed the sale of its cellular operation in the
Philippines for a nominal sum, realizing a loss of $35,988,000.

     During the course of 2002, MIC sold 8,743,110 Tele2 AB `B' shares,
recognizing a loss of $168,818,000. The proceeds were used to both make
repayments on the Toronto-Dominion financing and to meet our interest obligation
on the Old Notes.

     2001:

     During 2001, MIC sold 3,513,000 Tele2 AB class B shares realizing net
proceeds of approximately $125.2 million, giving an approximate net loss over
the average book value of $15.9 million.

     In November 2001, the Company sold 100% of its interest in FORA Telecom BV,
its Russian Cellular telephony operations to Tele2 AB. The agreement called for
$80 million of Tele2 AB class B shares, (corresponding to 2,461,449 Tele2 AB
class B shares), to be exchanged for the assets plus a maximum of an additional
$30 million depending on the outcome of GSM license applications for three of
MIC's existing cellular telephony operations in Russia. Upon execution of the
sale agreement, MIC agreed to assign deposits held for loans by Banque Invik and
waived all intercompany balances between the segment and the Company. The total
disposal resulted in a $6.7 million non-cash gain recognized in 2001.

     In September 2001, the Company sold its 24.5% investment in SkyCell
Communications Limited, the Indian cellular company operating in Chenai
(formerly known as Madras), to Bharti Tele-Ventures Limited. The sale resulted
in a $28.4 million gain on the disposal.

     2000:


                                      40
<PAGE>


     In July 2000, the Company announced it had accepted an offer from Tele2 AB
for the share capital of SEC. In the deal, Tele2 AB offered to exchange 11.5 SEC
shares for one Tele2 AB class B share. The Company exchanged its SEC shares on
27 September 2000, realizing a book gain of $609,941,000.

     In February 2000, the Company sold part of its investment in Tele2 AB for
$65,434,000 reducing it's holding from 5.77 % to 4.9 %, realizing a $55,321,000
capital gain.

     Set-out below is a table reflecting the Company's sales of its interests in
cellular systems and certain related information at the time of the sales in
2002, 2001 and 2000.

     Capital Expenditure

     The Company's capital expenditure in the last three years by geographical
region has been as follows:

U.S. $000s                           2002              2001             2000
                                   -------           -------          -------
Asia...........................     40,006            67,000           55,932
Latin America..................     76,616            81,612          122,367
Africa.........................     16,248            18,411           18,701
Europe.........................      2,948             5,260            4,837
Russia.........................          -             7,238            7,109
                                   -------           -------          -------
                                   135,818           179,521          208,946
                                   =======           =======          =======

     The main expenditures were for the introduction of digitalization in Latin
America, Sanbao and Africa and the expansion of existing networks both in terms
of areas covered and capacity.

     During the course of 2003, the Company has continued to invest in its
operations. The main areas of capital expenditure are the expansion of networks
into areas not yet covered and the increase in capacity of existing networks. In
the period to March 31, 2003 the following amounts were approved by the board of
directors in respect of each of these categories:


                                Network      Network
U.S. $000s                     expansion     capacity        Other         Total
----------                     ---------     --------       ------        ------
Latin America...............        875         8,777          129         9,781
Sanbao......................      4,675         5,708          931        11,314
Africa......................      3,993           980          552         5,525
                                  ------       ------        -----        ------
Total.......................      9,543        15,465        1,612        26,620
                                  =====        ======        =====        ======

     In addition to the above amounts, approval has been given for the purchase
of equipment in each region to up-grade and improve billing systems and office
equipment. It is anticipated that the above amounts will be spent over the
coming 12 months. The majority will be financed through suppliers, with some
being backed by a Company guarantee or stand-by letter of credit.


                                      41
<PAGE>


Gain and Loss on Exchange, Disposal and Write-down of Assets

<TABLE>
                                                    Approximate                   Debt
                                                     Population                Assumed by   Number of
Market                                 Ownership      Covered        Price     Purchaser   Subscribers  Date of Sale
---------------------------------    ------------   -----------   ----------- -----------  -----------  -------------
                                     (percentage)    (millions)  ($ millions) ($ millions)
<S>                                   <C>           <C>           <C>        <C>           <C>          <C>
                                                                                                           05/02 and
MIC Systems......................         100%             -        114.0          nil               -         11/02
Democratic Republic of Congo.....        50.9%          55.2          1.5            -               -         09/02
Philippines (i)..................        40.0%          84.0       nominal        29.5 (ii)     29,896         12/02
                                      From 20% to
Russia...........................        100%           47.5         80.0           -          236,516         11/01
India - Madras...................        24.5%           5.7         21.1           -           99,023         09/01
</TABLE>

(i)  The Company had an additional beneficial ownership of 7.9% through
     intermediary holding companies.

(ii) The debt figure above is 100% of the operation's external debt.

Organizational Structure

     Below is a list of MIC's significant subsidiaries and joint ventures as of
March 31, 2003, including the name, country of incorporation or residence and
proportion of ownership interest.

<TABLE>
                                                                                 Proportion of
                                                                                   ownership
Name                                               Country of residence             interest
------------------------------------         --------------------------------    -------------
<S>                                          <C>                                      <C>
Cam GSM Company Limited                      Cambodia                                 58.4%
Royal Telecam International Limited          Cambodia                                 57.0%
Millicom Lao Co. Ltd.                        Lao People's Democratic Republic         78.0%
Emtel Limited                                Mauritius                                50.0%
Pakcom Limited                               Pakistan                                 61.3%
Paktel Limited                               Pakistan                                 98.9%
Celltel Lanka Limited                        Sri Lanka                                99.9%
Comvik International (Vietnam) AB            Vietnam                                  80.0%
Millicom Argentina SA                        Argentina                                65.0%
Telefonica Celular de Bolivia SA             Bolivia                                 100.0%
Telemovil El Salvador SA (i)                 El Salvador                              70.0%
Comunicaciones Celulares SA                  Guatemala                                55.0%
Inversiones Rocafuerte SA                    Honduras                                 50.0%
Telefonica Celular del Paraguay SA           Paraguay                                 96.0%
Millicom Peru SA                             Peru                                    100.0%
Millicom (Ghana) Limited                     Ghana                                   100.0%
Sentel GSM                                   Senegal                                  75.0%
Millicom (SL) Limited                        Sierra Leone                             70.0%
MIC Tanzania Limited                         Tanzania                                 57.0%
</TABLE>

---------------------------------------

(i)  Telemovil El Salvador SA is classified as a non-current investment in
     securities.

Property, Plant and Equipment

     The Company's principal executive offices are located in Bertrange, the
Grand-Duchy of Luxembourg, where it leases approximately 448 square meters. The
lease is automatically renewable from year to year unless terminated by the
Company or the lessor upon six months advance written notice. The current annual
rental is approximately $167,000. The Company believes its principal executive
offices are suitable and adequate for its operations.


                                      42
<PAGE>


ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     This discussion and analysis of the financial condition and results of
operations should be read in conjunction with the financial statements, notes
therein and schedules thereto which comprise part of this document.

     Unless otherwise indicated, all financial data and discussions therein in
this discussion and analysis are based upon financial statements prepared in
accordance with IFRS. See Note 30 of the Notes to the Consolidated Annual
Accounts for certain reconciliations between IFRS and U.S. GAAP.

Overview

     Since its inception, the Company has achieved significant growth, reaching
a total of 4,252,037 cellular subscribers worldwide as of December 31, 2002, as
compared with 3,322,869 at December 31, 2001, excluding divested operations and
El Salvador, and 2,455,228, excluding divested operations and El Salvador, at
December 31, 2000, a growth rate of 28% and 35% in 2002 and 2001, respectively.

     The Company had 3,021,873 proportional cellular subscribers as of December
31, 2002, compared with 2,415,474, excluding divested operations and El
Salvador, as of December 31, 2001 and 1,765,708, excluding divested operations
and El Salvador, as of December 31, 2000, a growth rate of 25% and 37% in 2002
and 2001, respectively. Proportional subscribers are the Company's share of the
total subscribers of its joint venture and subsidiary operations.

     In addition, as at December 31, 2002, the Company owned 6.8% of Tele2 AB
which grew its telephony subscriber base from approximately 15 million as of
December 31, 2001 to approximately 16.8 million as of December 31, 2002.

     MIC's revenues increased 6% over the three years ended December 31, 2002,
increasing from $570,840,000 in 2000 to $605,186,000 in 2002.

     The increase in MIC's revenues, despite a number of divestments, reflects
the continuing expansion of the subscriber base in existing operations as well
as additional revenues from ventures that became operational during each period.
Although total revenues increased, airtime per subscriber has tended to decrease
as the subscriber base has grown. In addition, connection fees and handset
prices were reduced, in some cases to zero, by most ventures as part of programs
to spur subscriber growth. Also, an increasing proportion of subscribers are
choosing the prepaid as opposed to postpaid option. A prepaid subscriber's usage
and airtime tends to be lower than that for a postpaid subscriber. As a result,
the rate of subscriber growth exceeded the rate of growth in revenues. The
improvement in operating profit reflects cost-cutting measures throughout the
Company.

Critical Accounting Policies

     The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards ("IFRS"). In
compiling these statements, management is required to make assumptions and
estimates. We believe that the following critical accounting policies involve
judgment areas that could materially affect the results of the Company. For a
detailed discussion of these and other accounting policies, see Note 2 of the
consolidated financial statements.

     Basis of Consolidation. Entities over which the Group has control are fully
consolidated. Entities over which the Group has joint control are consolidated
using the proportional method that combines the Group's proportional share of
assets, liabilities, income and expenses. The definition of full control is the
power to govern the financial and operating policies of an entity so as to
obtain benefits from it and is based on criteria such as the ability to vote
through items at shareholder and board level. The method of consolidation used
for each entity is based on management's assessments as to whether they have
full or joint control. The Company also owns 100% of Great Universal and Modern
Holdings. However, due to the warrant holders' right to exercise, MIC considers
it does not control either company and that severe long-term restrictions exist
which significantly impair the ability of either company to transfer funds to
MIC and therefore consolidates these


                                      43
<PAGE>


entities as other available-for-sale securities. Although MIC owns 70% of the
share capital of its operation in El Salvador, management has determined that,
due to a dispute with local shareholders, it is no longer able to exercise a
significant influence in the operation and therefore feels it is more
appropriate to show its investment as a long-term asset in the balance sheet
under the caption "Investment in securities".

     Collectability of Assets. Management is required to estimate the
collectability of trade debtors. As of December 31, 2002, these totaled
$140,785,000, of which management had estimated that $27,564,000 was unlikely to
be collected. These estimates are based on knowledge of the local markets and
prior credit history. The basis for the provisions made will vary between
subscribers and amounts due from other telephone companies and are simply
management's best estimates.

     Impairment of Non-current Assets. The Company records significant
intangible and tangible assets relating to wireless and non-wireless operations.
Intangible assets mainly relate to goodwill and license values and tangible
assets mainly relate to network value through property, plant and equipment.
Significant estimates and assumptions are required to decide the useful expected
lives of these assets and whether there is any impairment. These estimates are
made on a regular basis throughout the year as they can be significantly
affected by changes in competition, technology and other similar factors. When
certain operational and financial factors indicate an impairment of value,
management evaluates the carrying value of property, plant and equipment as well
as other assets including licenses and goodwill, in relation to the operating
performance and future cash flows of the underlying assets. When indicated, the
impairment losses are measured based on the difference between the estimated
recoverable amount and the carrying amount of the asset. Management's estimates
of recoverable amounts for the individual asset or, if not possible, the
cash-generating unit, are based on prices of similar assets, to the extent
available in the circumstances, and the result of valuation techniques. These
include net present values of estimated future cash flows and valuations based
on market transactions in similar circumstances. In addition to the evaluation
of possible impairment to the assets carrying value, the foregoing analysis also
evaluates the appropriateness of the expected useful lives of the assets. Any
negative change in relation to the operating performance or the expected future
cash flow of individual assets or of a cash generating unit will change the
expected recoverable amount of the underlying assets and therefore will decrease
the value of the underlying assets.

     In the year ended December 31, 2002, management identified an impairment of
its licenses to operate high-speed wireless data services in Peru and Venezuela
and, as a consequence, made a write-down of $3,034,000 in the value of these
licenses.

     Also, in 2002, MIC recognized an impairment on both goodwill and license
value in its operations in Colombia and Argentina. The total impairment
recognized, by country, being $77,456,000 and $2,496,000, respectively.

     Investments in Securities. The Company holds significant investments in
marketable and non-marketable securities. Marketable securities are carried at
fair value with unrealized changes in market value being recorded within
Shareholders' Equity under the caption "Revaluation Reserve". Where securities
classified as available-for-sale are sold or impaired or when there is a
significant or prolonged decline in the fair value below acquisition cost, the
accumulated fair value adjustments are included in the income statement as
"Gains and losses from investment securities". During 2002, the management of
the Company considered there had been a prolonged decline in the fair value of
its investment in Tele2 AB and consequently charged $119,138,000 to the income
statement. On a regular basis the Company compares the market value of its
investments to their carrying amount in order to identify potential impairment
issues. In considering whether the investment has been impaired, the Company
considers all available evidence such as, among other things, significant
financial difficulties of the issuer, breaches or default in loan agreements,
the recognition of prior impairment losses on that asset or the extent and
duration of a decline in fair value below cost. During 2002, MIC recognized an
impairment on its investment in Great Universal and Modern Holdings of
$5,027,000 and $7,050,000 respectively. The Company no longer has control or
significant influence over Telemovil El Salvador, so the Group's investment is
accounted for as an available-for-sale financial asset in 2002. The shares of
this investment are not quoted on a public market and management has not been
able to obtain reliable financial information since early 2001. Management has
made different estimates to value this investment using different valuation


                                      44
<PAGE>


techniques that have resulted in a wide range of fair values. Management has
therefore concluded that estimating a fair value in these conditions is
inappropriate. Consequently the investment is being carried at the carrying
amount as of December 31, 2001. The valuation exercise, however, produced
sufficient evidence for management to conclude that the investment has not been
impaired as of the balance sheet date.

     Revenue recognition.  The Group revenue comprises the following:

     (i) Revenues from provision of telecom services - these recurring revenues
     consist of monthly subscription fees, airtime usage fees, interconnection
     fees, roaming fees, revenue from the provision of data clearing services
     and other telecommunications services such as data services and short
     message services. Recurring revenues are recognized on an accrual basis,
     i.e. as the related services are rendered. Unbilled revenues for airtime
     usage and subscription fees resulting from services provided from the
     billing cycle date to the end of each month are estimated and recorded.


     (ii) Connection revenues - initial connection fees are recognized when
     charged, i.e. upon initial signing of the contract with customers.

     (iii) Equipment revenues - these revenues consist of the sale of handsets
     and accessories. Revenues from these sales are recognized at the time that
     the item is delivered to the customer.

     Functional Currency. The measurement currency of the Group is the U.S.
dollar. The Company is located in Luxembourg and its subsidiaries, joint
ventures and associated companies operate in different currencies. The
measurement currency of the Company is the U.S. dollar because of the
significant influence of the U.S. dollar on its operations. The measurement
currency of each subsidiary, joint venture and associated company, where these
are foreign entities, is determined in accordance with the requirements of SIC
19 `Reporting Currency - Measurement and Presentation of Financial Statements
under IFRS 21 and IFRS 29'.

     Derivatives. IFRS 39 requires that all financial assets and financial
liabilities, including derivatives, be recognized on the balance sheet.
Derivatives are initially recorded at cost either in other current assets or
other financial liabilities as applicable and then are re-measured to fair value
through the statement of profit and loss under the caption "Fair value result on
financial instruments". Upon adoption of IFRS 39 on January 1, 2001, the Company
recorded a cumulative negative adjustment related to these derivatives,
reflected in shareholders' equity of $45,264,000.

     Certain derivatives embedded in other financial instruments, such as call
and put options related to the Company's subordinated debt, are treated as
separate derivatives when their risks and characteristics are not closely
related to those of the host contract and the host contract is not carried at
fair value with unrealized gains and losses reported in income.

     Goodwill. The excess of cost of an acquisition over the Group's interest in
the fair value of the net identifiable assets of the acquired subsidiary,
associate or joint venture at the date of transaction is recorded as Goodwill
and recognized as an asset in the balance sheet. Goodwill is amortized using the
straight-line method over its estimated useful life but not longer than 20
years. Goodwill on associates is included in their carrying value in the caption
"Investments in associated companies".

     At each balance sheet date the Group assesses whether there is any
indication of impairment. If such indications exist an analysis is performed to
assess whether the carrying amount of goodwill is fully recoverable. A
write-down is made if the carrying amount exceeds the recoverable amount.

     Negative goodwill represents the excess of the fair value of the Group's
share of the net assets acquired over the cost of acquisition. Negative goodwill
is presented in the same balance sheet classifications as goodwill. To the
extent that negative goodwill relates to expectations of future losses and
expenses that are identified in the Group's plan for the acquisition and can be
measured reliably, but which do not represent identifiable liabilities, that
portion of negative goodwill is recognized in the income statement when the
future


                                      45
<PAGE>


losses and expenses are recognized. Any remaining negative goodwill, not
exceeding the fair values of the identifiable non-monetary assets acquired, is
recognized in the income statement over the remaining weighted average useful
life of the identifiable acquired depreciable/amortizable assets; negative
goodwill in excess of the fair values of those assets is recognized in the
income statement immediately.

     Equity Compensation Benefits- Share options are granted to management and
key employees. Options are granted at the market price of the shares on the date
of the grant and are exercisable at that price. Options are exercisable
beginning three years from the date of grant and have a contractual option term
of six years. When the options are exercised, the proceeds received net of any
transaction costs are credited to share capital (nominal value) and share
premium. The Company does not make a charge to staff costs in connection with
share options.

     Recent U.S. GAAP pronouncements -

         In August 2001, the Financial Accounting Standards Board ("FASB")
         issued Statement of Financial Accounting Standard No.143 (SFAS 143),
         Accounting for Asset Retirement Obligations. SFAS 143 applies to all
         entities and addresses financial accounting and reporting for legal
         obligations associated with the retirement of long-lived assets that
         result from the acquisition, construction, development and (or) the
         normal operation of a long-lived asset, except for certain obligations
         of lessees. SFAS 143 is effective from January 2003 and requires
         obligations associated with the retirement of a tangible long-lived
         asset to be recorded as a liability upon acquisition of the asset. The
         Company does not consider that this will have a material impact on its
         consolidated financial statements.

         The FASB issued Statement of Financial Accounting Standard No. 145
         (SFAS 145), Rescission of FASB Statements No. 4, 44, and 64, Amendment
         of FASB Statement No. 13, and Technical Corrections, effective for
         fiscal years beginning May 15, 2002 or later that rescinds FASB
         Statement No. 4, Reporting Gains and Losses from Extinguishment of
         Debt, FASB Statement No. 64, Extinguishments of Debt made to satisfy
         sinking-fund requirement, and FASB Statement No. 44, Accounting for
         Intangible Assets of Motor Carriers. This Statement amends FAS No. 4
         and FAS No. 13, Accounting for Leases, to eliminate an inconsistency
         between the required accounting for sale-leaseback transactions. This
         Statement also amends other existing authoritative pronouncements to
         make various technical corrections, clarify meanings or describe their
         applicability under changed conditions. By adopting SFAS 145 in fiscal
         year 2003, MIC expects to reclassify gains on the extinguish of debt
         recorded in 2002, which are not sinking fund payments, of $28,676,000
         from extraordinary to ordinary gains.

         In July 2002, the FASB issued Statement of Financial Accounting
         Standard 146 (SFAS 146), Accounting for Costs Associated with Exit or
         Disposal Activities. SFAS 146 addresses financial accounting and
         reporting for costs associated with exit or disposal activities and
         nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
         Recognition for Certain Employee Termination Benefits and Other Costs
         to Exit an Activity (including Certain Costs Incurred in a
         Restructuring)". SFAS 146 is effective for disposal activities
         initiated after December 31, 2002. As the Company has not currently
         commenced exit or disposal activities as defined in SFAS 146, adoption
         of the Standard is not expected to have a material impact on its
         consolidated financial statements.

         In December 2002, the FASB issued Statement of Financial Accounting
         Standard 148 (SFAS 148), Accounting for Stock-Based Compensation -
         Transition and Disclosure - an Amendment of SFAS No. 123. SFAS 148
         provides alternative methods of transition for a voluntary change to
         the fair value based method of accounting for stock-based employee
         compensation. In addition, SFAS 148 amends the disclosure requirements
         of SFAS 123, "Accounting for Stock-Based Compensation", to require
         prominent disclosures in both annual and interim financial statements
         about the method of accounting for stock-based employee compensation
         and the effect of the method used on reported results. SFAS 148 does
         not change the fair value measurement principles of SFAS 123. As MIC
         has elected to continue to account for stock compensation in accordance
         with APB 25, the adoption of the Standard is


                                      46
<PAGE>


         not expected to have a material impact on its consolidated financial
         statements. However, the Company has already adopted the disclosure
         requirements of SFAS 148.

         In April 2003, the FASB issued Statement of Financial Accounting
         Standard No. 149 (SFAS 149), Amendment of Statement 133 on Derivative
         Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
         financial accounting and reporting for derivative instruments,
         including certain derivative instruments embedded in other contracts
         (collectively, referred to as derivatives) and for hedging activities
         under SFAS No. 133. This Statement is effective for contracts entered
         into or modified after June 30, 2003, and for hedging relationships
         designated after June 30, 2003. The Company does not consider that SFAS
         149 will have a material impact on its consolidated financial
         statements.

         In May 2003, the FASB issued Statement of Financial Accounting Standard
         No. 150 (SFAS 150), Accounting For Certain Financial Instruments with
         Characteristics of both Liabilities and Equity. SFAS No. 150
         establishes standards for how a company classifies and measures certain
         financial instruments with characteristics of both liabilities and
         equity. It requires that a company classify a financial instrument that
         is within its scope as a liability (or an asset in some circumstances).
         Many of those instruments were previously classified as equity. This
         Statement is effective for financial instruments entered into or
         modified after May 31, 2003, and otherwise is effective for the first
         fiscal period beginning after December 15, 2003. The Company does not
         consider that SFAS 150 will have a material impact on its consolidated
         financial statements.

         In November 2002, the FASB issued Financial Interpretation No. 45 (FIN
         45), Guarantor's Accounting and Disclosure Requirements for Guarantees,
         Including Indirect Guarantees of Indebtedness of Others. Under this
         interpretation, a guarantor must recognize the fair value of the
         obligation it assumes under the guarantee, upon issuance of a
         guarantee. Additionally, FIN 45 requires that the guarantor determine
         and disclose its policy for subsequently re-measuring the guarantor's
         liability. The initial recognition and initial measurement provisions
         of FIN 45 are applicable on a prospective basis to guarantees issued or
         modified after December 31, 2002. The Company is currently assessing
         the impact that FIN 45 will have on its consolidated financial
         statements. The disclosure requirements of FIN 45 are applicable for
         financial statements that end after December 15, 2002. Accordingly,
         such disclosures are included in Note 17 of the consolidated financial
         statements.

         In January 2003, the FASB issued Financial Interpretation No. 46 (FIN
         46), Consolidation of Variable Interest Entities. FIN 46 generally
         applies to all business enterprises and all arrangements used by
         business enterprises, and it requires that a business enterprise
         identify all its Variable Interest Entities ("VIEs"). VIEs are those
         entities possessing certain characteristics, which indicate either a
         lack of equity investment to cover expected losses of the entity or a
         lack of controlling financial interest by an investor. The party that
         absorbs a majority of the entity's expected losses, receives a majority
         of its expected residual returns, or both, as a result of holding
         variable interests is deemed to be the Primary Beneficiary and must
         consolidate the VIE. The measurement principles of this interpretation
         apply to all VIEs created after January 31, 2003 and to all VIEs in
         which an enterprise obtains an interest after that date. Additionally,
         the measurement principles of FIN 46 for all VIEs held by MIC prior to
         January 31, 2003 will be effective for MIC's 2004 financial statements.
         However, MIC has determined that it is reasonably possible that MIC
         will either consolidate or disclose information about its operation in
         Argentina and its other joint ventures (see Note 3) when FIN 46 becomes
         effective.


                                      47
<PAGE>


Results of Operations for the Years Ended December 31, 2002 and 2001

     The following table sets-forth certain profit and loss statement items for
the years indicated
<TABLE>

                                                              2002           2001    Impact on net loss for year
                                                           ---------      --------   ---------------------------
All figures in U.S. $000s, except percentages                                              Amount        Percent
--------------------------------------------------                                   -------------  ------------
<S>                                                         <C>            <C>            <C>                <C>
Revenues..........................................          605,186        644,570        (39,384)           (6%)
Cost of sales.....................................         (269,621)      (283,443)        13,822             5%
Sales and marketing...............................          (80,941)       (95,463)        14,522            15%
General and administrative expenses...............         (164,703)      (172,912)         8,209             5%
Gain from sale of subsidiaries and joint
   ventures, net..................................            88,814         35,047        53,767           153%
Other operating expenses..........................          (56,422)       (35,013)      (21,409)           (61%)
Operating profit..................................           122,313         92,786        29,527            32%
Loss from investment securities......................       (299,963)       (15,931)     (284,032)            -
Interest expense..................................         (185,959)      (209,912)        23,953            11%
Exchange losses...................................          (23,483)       (17,313)       (6,170)           (36%)
Charge for taxes..................................          (22,734)        (8,217)      (14,517)          (177%)
Net loss for the year.............................         (385,143)      (138,053)     (247,090)          (179%)
</TABLE>

     Subscribers - The Company's worldwide cellular subscribers increased over
the year ended December 31, 2002 by 28% to 4,252,037 from 3,322,869 as of
December 31, 2001 (3,366,551 including divested operations and El Salvador),
with proportional subscribers increasing by 25% to 3,021,873 as of December 31,
2002 from 2,415,474 as of December 31, 2001 (2,436,409 including divested
operations and El Salvador). Net additions, excluding divested operations and El
Salvador, of subscribers for the year were 929,168, a 7% increase over the
867,641 additions in 2001 (excluding divested operations and El Salvador). Of
the total subscribers as of December 31, 2002, 3,672,702 were prepaid, an
increase of 37% over the 2,676,403 prepaid subscribers as of December 31, 2001,
excluding divested operations and El Salvador. Prepaid services have now been
launched in all markets. The three largest contributors to subscriber growth in
2002 were the operations in Cambodia, Guatemala and Vietnam with a total of
421,956 new subscribers.

     Revenues - Total revenues for the Company in the year were $605,186,000, a
decrease of 6% over the previous year. The decrease is largely due to the
Company's operations in Russia and Madras which were divested during 2001 and
the change in consolidation method for the Company's operation in El Salvador.
In 2001, these divested operations had consolidated revenues of $59,089,000.
Excluding these, revenues increased by over 3% in the year from $585,481,000.
The three largest contributors to revenues were the Company's operations in
Vietnam, Paraguay and Guatemala. Using reported revenues and gross subscribers,
average revenue per average number of subscribers has declined in the year from
$192 in 2001 to $151 in 2002, reflecting the increasing proportion of prepaid
subscribers whose usage and airtime tend to be lower than that of postpaid
customers. In addition, revenues have been hit by currency devaluations, in
particular, a 54% decline in the value of the currency in Paraguay.

     Cost of sales - Cost of sales decreased by 5% in the year to $269,621,000.
The lower cost of sales is explained by divestment of Madras and the Russian
operations during 2001 and the change in consolidation method for El Salvador.
The total cost of sales for these operations in 2001 was $18,194,000. Omitting
these, total cost of sales in 2001 were $265,249,000. In addition, during 2002,
the Company charged $6,833,000 as an impairment against network equipment in
Liberty Broadband. As a percentage of total revenues, cost of sales for cellular
operations increased from 44.0% in 2001 to 44.6% in 2002.

     Sales and marketing - Sales and marketing expenses have decreased by 15% in
the year to $80,941,000. This decrease reflects the large sales and marketing
expenses in the prior year following the digitalization of networks. Sales and
marketing, as a percentage of revenues, decreased from 14.8% in 2001 to 13.4% in
2002.


                                      48
<PAGE>


     General and administrative expenses - General and administrative expenses
decreased by 5% in the year to $164,703,000. The decrease is largely due to a
lower depreciation charge in the year of $33,372,000 (2001: $46,894,000). As a
percentage of revenues, general and administrative expenses increased marginally
from 26.8% to 27.2% reflecting lower revenues as a result of divestments in both
2001 and 2002.

     Gain from sale of subsidiaries and joint ventures, net - During 2002 MIC
made a gain of $88,814,000 from the sale of subsidiaries and joint ventures, up
$53,767,000 compared with 2001. The main items in this were a gain of
$87,655,000 on the sale of Mach, a gain of $16,603,000 realized when the local
partner in Vietnam exercised his option to purchase 10% of the Group's interest
in Vietnam and a loss of $35,988,000 on the sale of its cellular operation in
the Philippines. In addition, during 2002, MIC obtained the necessary GSM
licenses for the Russian operations disposed of in 2001, realizing a further
gain of $30,859,000.

     Other operating expenses - Other operating expenses have increased by 61%
in the year to $56,422,000 from $35,013,000 in 2001. The increase is mainly due
to an increased goodwill impairment charge, up from $1,652,000 in 2001 to
$36,308,000 in 2002, in respect of Colombia and Argentina as MIC recognized a
defference between the recoverable amount and the carrying amount of its
intangibles. Goodwill amortization has remained relatively constant during the
year at $7,865,000 compared to $8,090,000 in 2001. Corporate costs have
decreased in the year from $25,271,000 to $21,591,000, reflecting the
reorganization of the regional offices and a cost review during the year.

     Operating profit - Total operating profit for the Company for the year
ended December 31, 2002 was $122,313,000, compared with $92,786,000 in 2001, an
increase of 32%. The increase in the year is largely due to higher gains on the
sale of subsidiaries and joint ventures, which were $88,814,000 in 2002 (2001:
$35,047,000) offsetting lower revenues resulting from divestments in 2001 and
2002.

     Loss from investment securities - The loss from investment securities
increased from $15,931,000 in 2001 to $299,963,000 in 2002. During 2002, the
Company recorded a loss of $168,818,000 (2001: $15,931,000) on the sale of
shares in Tele2 AB. In addition, the Company recognized a significant and
prolonged decline in the value of its investment in Tele2 AB and, as a result,
charged $119,138,000 to the profit and loss account. In addition, during 2002
MIC recognized an impairment on its investments in Modern Holdings (formerly
known as XSource) and Great Universal, totaling $12,077,000 due to uncertainty
concerning its recoverability, see Note 20 to the Consolidated Annual Accounts
for more information.

     Interest expenses - Interest expense for the year ended December 31, 2002
decreased 11% to $185,959,000 from $209,912,000 in 2001. This decrease arose
from the repayment of debt during the year, in particular the repurchase of
$44,000,000 nominal value of Old Notes.

     Exchange losses - The Company's net exchange losses for the year ended
December 31, 2002 were $23,483,000 compared to $17,313,000 for 2001, an increase
of 36% largely due to the sharp devaluation of the Pesos in Argentina and losses
on the Toronto Dominion loan that is financed in Swedish Krone.

     Charge for taxes - The net tax charge for 2002 increased to $22,734,000
from $8,217,000 in 2001. The increase is due to two causes. Firstly, increased
profitability throughout the Group resulting in higher tax charges in 2002.
Secondly, a tax provision that was established at the date of the formation of
the Group was reversed, significantly reducing the tax charge in 2001. At the
time of the Merger, the Group recorded a provision of $13,544,000 as a deferred
tax liability for the Tax Liabilities. In October 2001, the Company determined
that the Tax Liability, as defined by the Merger Agreement, amounted to
$7,023,000, resulting in a difference of $6,521,000.This difference was settled
by the final issuance of 374,521 of the Company's shares and a realized gain of
$3,521,000, corresponding to the difference between the issuance price and the
share price as of the date of the transaction.

     Net loss for the year - The net loss for the year ended December 31, 2002
was $385,143,000 compared to $138,053,000 in 2001.


                                      49
<PAGE>


Results of Operations for the Years Ended December 31, 2001 and 2000

     The following table sets-forth certain profit and loss statement items for
the years indicated

<TABLE>
                                                                                    Impact on net (loss) profit
                                                             2001           2000             for year
                                                           --------       --------  ----------------------------
All figures in U.S. $000s, except percentages                                              Amount        Percent
-------------------------------------------------                                   -------------    -----------
<S>                                                         <C>            <C>             <C>               <C>
Revenues..........................................          644,570        570,840         73,730            13%
Cost of sales.....................................         (283,443)      (318,316)        34,873            11%
Sales and marketing...............................          (95,463)       (88,097)       (7,366)           (8)%
General and administrative expenses...............         (172,912)      (174,177)         1,265             1%
Gain (loss) from sale of subsidiaries and joint
   ventures, net..................................            35,047        (2,755)        37,802              -
Other operating expenses..........................          (35,013)       (40,873)         5,860            14%
Operating profit (loss)...........................            92,786       (53,378)       146,164              -
Loss from associated companies....................           (3,112)       (43,178)        40,066            93%
(Loss) gain from investment securities............          (15,931)        665,262     (681,193)              -
Interest expense..................................         (209,912)      (196,002)      (13,910)           (7)%
Exchange losses...................................          (17,313)       (23,015)         5,702            25%
Charge for taxes..................................           (8,217)       (26,264)        18,047            69%
Net (loss) profit for the year....................         (138,053)        355,388     (493,441)              -
</TABLE>

     In the discussion below, reference to divested operations means operations
that had been divested as of December 31, 2001.

     Subscribers - The Company's worldwide cellular subscribers increased over
the year ended December 31, 2001 by 29% to 3,741,136 from 2,909,961 as of
December 31, 2000 (3,147,187 including divested operations), with proportional
subscribers increasing by 35% to 2,698,619 as of December 31, 2001 from
2,005,785 as of December 31, 2000 (2,110,857 including divested operations). Net
additions, excluding divested operations, of subscribers for the year were
831,175, a 25% decrease over the 1,036,645 additions in 2000 (excluding divested
operations). Of the total subscribers as of December 31, 2001, 2,995,619 were
prepaid, an increase of 41% over the 2,131,328 prepaid subscribers as of
December 31, 2000, excluding divested operations. Prepaid services have now been
launched in all markets. The three largest contributors to subscriber growth in
2001 were the operations in Cambodia, Pakistan and Vietnam with a total of
440,805 new subscribers.

     The above figures for subscribers include those of MIC's operation in El
Salvador, even though as of May 2001, MIC began accounting for the venture under
the equity method. The profit and loss figures detailed below include MIC's
proportional share of the results of its operation in El Salvador for 2000, but
for 2001 only includes its proportional share up to the end of April 2001. At
that time, MIC started to account for this operation under the equity method.

     Revenues - Total revenues for the Company in 2001, were $644,570,000, an
increase of 13% over the previous year. The three largest contributors to
revenues were the Company's operations in Paraguay, Vietnam and Guatemala.
Average revenue per average number of subscribers has declined in the year from
$325 in 2000 to $255 in 2001, reflecting the increasing proportion of prepaid
subscribers whose usage and airtime tend to be lower than that of postpaid
customers.

     Cost of sales - Cost of sales have decreased by 11% in 2001 to
$283,443,000. Depreciation charges in 2001were higher at $98,190,000 (2000:
$86,104,000) reflecting network increases whilst the total for 2000 includes
$74,180,000 for impairments on analogue equipment. As a percentage of total
revenues, cost of sales for cellular operations decreased from 55.8% in 2000 to
44.0% in 2001.

     Sales and marketing - Sales and marketing expenses have increased by 8% in
2001 to $95,463,000. This increase reflects the large increase in subscribers
during 2001 following the introduction of increased digitalization of networks
and the new operations established during 2001. The main increase was in Sanbao


                                      50
<PAGE>


Telecom where sales and marketing expenses increased by 55% in 2001. Sales and
marketing as a percentage of revenues has decreased from 15.4% in 2000 to 14.8%
in 2001.

     General and administrative expenses - General and administrative expenses
decreased by 1% in 2001 to $172,912,000. During the course of 2000, MIC took
impairment charges of $29,249,000 on certain license values and fixed fee
licenses. As a percentage of revenues, general and administrative expenses
decreased from 30.5% to 26.8% reflecting the tight control of overheads by
existing operations.

     Gain (loss) from sale of subsidiaries and joint ventures, net - During
2001, MIC made a gain of $35,047,000 from the sale of its operations in India
and Russia. During 2000, MIC made a loss of $2,755,000 from the impairment of
certain start-up ventures.

     Other operating expenses - During 2001, other operating expenses decreased
by 14% to $35,013,000 as a result of strict controls over corporate costs.

     Operating profit (loss) - Total operating profit for the Company for the
year ended December 31, 2001 was $92,786,000, compared with a loss of
$53,378,000 in 2000. The increase in the year is due to gains on the sale of
subsidiaries and joint ventures in 2001 and the impairment of analogue equipment
and related intangibles in 2000 together with increased profitability in the
operations.

     Loss from associated companies -The Company's operation in El Salvador was
consolidated on a proportional basis up to the end of April 2001. However,
following a dispute with local shareholders, group management determined that
circumstances regarding its investment were changed to the extent that
proportional consolidation was no longer appropriate. Therefore, as of May 2001,
the entity was accounted for under the equity method. The charge for 2000
reflects the Company's share of the losses of SEC for the nine months to
September 30, 2000, at which date the Company exchanged its shareholding in SEC
for shares in Tele2 AB, from when the investment was accounted for as a trade
investment.

     (Loss) gain from investment securities - In 2001, MIC recorded a loss of
$15,931,000 on the sale of Tele2 AB shares. In 2000, following the exchange
offer of Tele2 AB, the Company exchanged its 29.6% interest ownership in SEC
realizing a gain of $609,941,000, corresponding to the market value of the Tele2
AB shares obtained less the value of SEC as recorded in the books of the
Company. In addition, during 2000, the Company sold shares in Tele2 AB
recognizing a gain of $55,321,000.

     Interest expenses - Interest expenses for the year ended December 31, 2001
increased 7% to $209,912,000 from $196,002,000 in 2000. This increase arose from
higher accrued interest on the Old Notes.

     Exchange losses - The Company's net exchange losses for the year ended
December 31, 2001 were $17,313,000 compared to $23,015,000 for 2000, a decrease
of 25% largely due to the more stable currency in Ghana compared with 2000.
Exchange losses in 2001 arose primarily from the depreciation of the guarani in
Paraguay and the peso in Colombia.

     Charge for taxes - The net tax charge for 2001 decreased to $8,217,000 from
$26,264,000 in 2000. This comprises an income tax charge of $25,577,000, against
a charge of $17,771,000 in 2000, and a deferred tax credit of $17,360,000,
against a charge of $8,493,000 in 2000. The increased income tax charge in the
year is the result of increased taxable profits throughout the Group. The
deferred tax credit is largely due to timing differences and the reversal of a
tax provision established at the date of the formation of the Group. In October
2001, the Company determined that the Tax Liability, as defined by the Merger
Agreement, amounted to $7,023,000. At the time of the Merger, the Group recorded
a provision of $13,544,000 as a deferred tax liability for the Tax Liabilities,
resulting in a difference of $6,521,000. Under the terms of the Merger Agreement
the Company was required to issue additional shares equal to the amount of the
provision that did not crystallize divided by the market price of the shares at
the date of the merger. This resulted in the issuance of 374,521 shares with a
fair value at the date of the transaction of $3,000,000. The difference of
$3,521,000 has been recorded as other income.


                                      51
<PAGE>


     Net (loss) profit for the year - The loss after taxes for the year ended
December 31, 2001 was $138,053,000, or $8.46 per share, compared to a profit of
$355,388,000, or $21.54 per share on a fully diluted basis in 2000.

Liquidity and Capital Resources

     Overview

     In the Company's opinion, the working capital is sufficient for the
Company's present requirements.

     As at December 31, 2002 MIC reported total consolidated outstanding debt
and other financing of $1,228,575,000. Of this, $912,539,000 was in respect of
the Old Notes, net of deferred financing costs, interest on which became
payable on a semiannual basis commencing December 1, 2001. MIC expects to meet
its payment obligations on the Old Notes and the New Notes through operating
income and the sale of assets. In addition, the Group had a remaining amount
outstanding of $54,638,000 on its Toronto-Dominion Securities facility, net of
deferred financing costs. The majority of the remaining debt of $261,398,000,
on a consolidated basis, is recorded in the books of the Company's individual
operations.

     At the venture level, the Company seeks, in the long term, to finance the
costs of developing and expanding cellular operations on a project-by-project
basis. Ventures are typically financed initially by MIC contributions in the
form of equity and, in some cases, debt. In many cases the Company seeks to
replace MIC debt financing with third party financing after the initial stages
of a venture's development. Sources of financing at the venture level have
included vendor financing provided by equipment suppliers, project financing
from commercial banks and international agencies such as IFC and OPIC, bank
lines of credit and sales of equity and debt issued by its venture companies.

     In 2002, the Company had a positive operating cash flow of $72,581,000,
compared with $103,969,000 in 2001. The decrease is mainly due to an additional
payment of interest on the Old Notes. A number of the Company's ventures have
generated positive operating cash flows. This cash has been employed to expand
operations and finance capital expenditure at the venture level. In addition,
during 2002, MIC's operations up-streamed approximately $96,700,000 to MIC which
was used to meet interest obligations under the Old Notes. External sources of
funding are expected to continue to play an important role in financing both at
the parent company level and at the venture level, although additional debt may
be subject to restrictions imposed by existing debt.

     Cash generated by investing activities was $141,665,000, compared with a
$167,074,000 usage of cash in 2001. During the year, the Company sold part of
its interest in Tele2 AB, realizing proceeds of $167,238,000. In addition, the
Company realized net proceeds of $106,452,000 on the sale of MIC Systems and an
additional $27,547,000 for the acquisition of the remaining GSM licenses in
Russia. The main outlay in the year was the purchase of tangible fixed assets
for $135,818,000. This was to expand coverage and update to new technologies and
showed a decrease from the $192,178,000 recorded in 2001.

     Financing activities used total cash of $199,780,000 in the year, compared
with cash provided of $22,576,000 in 2001. In the course of 2002, MIC used
$363,584,000 to repay debt while raising an additional $182,828,000 through the
issuance of debt and other financing.

     The net cash generated in the year was $14,175,000 compared with an outflow
of $38,645,000 in 2001. The Company had closing cash and cash equivalents
balance of $70,451,000 as of December 31, 2002.

     Historically, the Company has sold certain operations and shares in Tele2
AB in order to provide funding and to reduce indebtedness. The Company may make
further asset sales from time to time, by means of selling all or a part of any
existing operation for strategic reasons. MIC's ability to continue to make
these asset sales may be restricted by covenants contained in financing
agreements. These restrictions would require consent of lenders to amend.
Furthermore, following the refinancing of the Company's debt and other factors,
the Company has pledged a portion of its Tele2 AB shares to its creditors.


                                      52
<PAGE>


     As of December 31, 2002, on a consolidated basis, the Company had total
outstanding debt and other financing of approximately $1,228,575,000, calculated
as the Company's consolidated interest of total debt, compared with
$1,455,974,000 as of December 31, 2001. The decrease in the year of $227,399,000
is largely due to a repayment of $115,829,000 on the Toronto-Dominion Securities
facility, a repurchase of Old Notes with a face value of $44,000,000 and a
reduction of $40,018,000 in the debt of Celcaribe. As of December 31, 2002, the
total debt and other financing of the Company and each of the ventures,
combining 100% of each venture's debt, was $1,289,893,000. Of the total
indebtedness of the combined ventures, $189,395,000 represented indebtedness
that is secured by pledged assets, letters of credit or MIC guarantees.

     Operational financing

     At the venture level there are a number of significant debt financings.

     In order to finance a license acquisition in the Northern region of
Colombia, in May 1994, Celcaribe sold $108,769,005 of trust certificates to
institutional investors which consisted of $82,504,129 of Celcaribe 14.5% Senior
Secured Note Trust Certificates due 2004 (the "Note Trust Certificates") and
$26,264,876 in Celcaribe Ordinary Share Trust Certificates (the "Share Trust
Certificates"). The holders of the Share Trust Certificates have the right to
require the Company to purchase such certificates. The amount outstanding under
this finance as of December 31, 2002, was $67,700,000. The fair value of the
outstanding Note Trust Certificates at December 31, 2002, based upon secondary
market trading information, was $48,067,000 (2001: $61,044,000). Celcaribe also
obtained approximately $11,400,000 of bank financing. Following the Company's
divestment of Celcaribe in March 2003, the above liability is no longer part of
the Company's liabilities.

     In September 2000, ABN-Amro arranged a seven-and-a-half-year syndicated
loan of Lkr 1,534,000,000 (approximately $20,000,000) for Celltel Lanka Limited,
MIC's 99.9% owned operation in Sri Lanka. This financing bears interest at 3%
over the weighted average Treasury Bill Rate and is repayable over 13
installments commencing one year from signing. At December 31, 2002, $13,418,000
was outstanding.

     In June 2001, Telefonica Celular de Bolivia SA signed an agreement for
additional financing in the amount of $25,000,000 with the IFC and $10,000,000
from the Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden, N.V.
(FMO), also known as the Netherlands Development Finance Company. This financing
bears interest at LIBOR+3.00% and is repayable in installments starting in
December 2002 until December 2006. Among other things, the financing requires
the company to maintain certain financial covenants such as a debt ratio,
long-term debt service coverage, and debt to equity ratio. As of December 31,
2002 the company was in breach of certain covenants on the IFC loan and the
outstanding balance had been re-classified as short-term financing. As of
December 31, 2002, $31,030,000 was drawn down related to these financings. These
investments will help to fund the expansion and further digitalization of the
Group's mobile cellular telecommunications network in Bolivia.

     In November 2002, Pakcom signed a syndicated finance agreement for Rupees
800 million (approximately $13,700,000). For this agreement Faysal Bank Limited
acts as security agent and Standard Chartered Bank acts as facility agent. The
facility is repayable in monthly installments until December 31, 2004 and
attracts interest at State Bank of Pakistan discount rate plus 1.75%, with a
floor rate of 11.75%. As of December 31, 2002, $13,185,000 of this facility was
outstanding.

     Corporate financing

     In June 1996, the Company issued $962,000,000 principal amount at maturity
of 131/2% Senior Subordinated Discount Notes due 2006 (the "Old Notes"). The Old
Notes will mature on June 1, 2006. The Old Notes were issued at 52.075% of their
principal amount and the purchase discount on the Old Notes accretes at a rate
of 131/2% compounded semiannually from issuance until June 1, 2001. The net cash
proceeds to the Company from the issuance of the Old Notes after deducting
discount and estimated expenses were approximately $483,433,000. The Old Notes
began accruing cash interest on June 1, 2001 and cash interest will continue to
accrue until maturity on the Old Notes at a rate of 131/2% per annum, payable
semiannually in arrears on June 1 and December 1, commencing December 1, 2001.


                                      53
<PAGE>


     The Old Notes are redeemable at the option of the Company, in whole or in
part, at any time at redemption prices starting at 106.75% of the principal
amount in year 2001 and decreasing to 100.00% in year 2004 plus accrued and
unpaid interest, if any, to the date of redemption.

     During 2002, the Company purchased Old Notes with a face value of
$44,000,000 at market prices at the time. As of December 31, 2002, MIC has
offset $5,461,000 (2001: $7,399,000) of deferred financing fees against the
value of the Old Notes.

     As of December 31, 2002, MIC had total consolidated debt of approximately
$1,228,575,000 which required substantial free cash flows (i.e. cash flows
generated from the operations and available for repayment of debt and interests)
to finance the interest. During 2002, operating cash flows available to MIC were
insufficient to pay interest on the Old Notes as it became due and there was a
risk that our planned dispositions would be insufficient to pay the interest on
the Old Notes as it became due. Reflecting the risks involved with our leverage,
the market price of the Old Notes had traded significantly below par value. In
order to reduce the extent of our payments, on January 21, 2003, MIC made an
exchange offer and consent solicitation to bondholders of the Old Notes. On May
8, 2003, MIC announced the closing of this offer with the tendering of
approximately 85% of the Old Notes. Under the terms of this exchange, holders of
the Old Notes received $720 of our newly issued 11% Senior Notes due 2006 and
$81.70 of our newly issued 2% Senior Convertible PIK Notes due 2006 per $1,000
of Old Notes. In addition, in consideration for consenting to certain amendments
to the indenture under which the Old Notes were issued, eligible holders who
consented to amendments of the indentures of the Old Notes received $50.00 in
cash for each $1,000 in principal amount of Old Notes they tendered. Following
the successful completion of the exchange offer, MIC has significantly reduced
its overall level of indebtedness and interest burden, improved its near-term
liquidity position and created greater ongoing financial and operating
flexibility. For example, our interest obligations under the Old Notes were
$129,870,000 each year, while our interest obligation under the New Notes is
$81,624,000 each year. For a more detailed description of the exchange offer and
its terms, see "Item 10. Additional Information - Material Contracts." There is
a risk that future cash flows generated will be insufficient to repay interest
and/or principal on all our existing debt obligations as they become due.

     In December 2001, the Group entered into a loan agreement with
Toronto-Dominion Securities for a maximum facility amount of SEK 1,855 million
(approximately $175 million as of December 31, 2001) to replace an existing
facility. In exchange for the agreement, the Group has pledged a portion of its
Tele2 AB class B shares. The number of shares pledged is adjusted on a monthly
basis based on the Tele2 AB class B shares market value. The facility bears an
annual interest rate calculated using the current STIBOR rate plus 2% payable on
a monthly basis, and must be fully repaid by November 2004. As of December 31,
2002, $54,638,000 (2001: $173,365,000) was outstanding under this facility
collateralized by 6,184,293 (2001: 9,115,479) Tele2 AB class B shares. This
transaction has been accounted for as a borrowing and the related Tele2 AB class
B shares are recorded as pledged securities under the caption "Investment in
securities".

     Other Short-Term Liabilities

     As of December 31, 2002, the Company had a total of $375,862,000 (2001:
$469,191,000) of short-term liabilities, including $156,666,000 (2001:
$153,898,000) of short-term debt and other financing. Management expects a
substantial portion of such short-term debt to be extended prior to maturity.

     As of December 31, 2002 the Company and its operations had commitments to
purchase within one-year network equipment, land and buildings and other fixed
assets with a value of $11,867,000 (2001: $56,436,000) from a number of
suppliers.

Geographical Segment Information

     The table below sets forth the Company's revenue by geographical segment
for the periods indicated.

                                      54
<PAGE>

                                                    Year Ended December 31,
                                               ---------------------------------
                    In U.S. $000s               2002         2001         2000
                                               -------      -------      -------
Latin America...............................   277,554      315,321      313,842
   Of which El Salvador.....................         -       17,311       45,555
Asia........................................   233,671      209,635      154,256
   Of which divested........................     1,113        5,878        9,533
Africa......................................    52,080       45,323       33,897
Other.......................................    15,671       11,945        3,798
   Of which divested........................     2,620        2,156        1,422
MIC Systems (divested in 2002)..............    28,186       26,300       28,027
FORA Telecom (divested in 2001).............         -       37,716       36,999
Unallocated items...........................        41           15           21
Inter-segment eliminations..................    (2,017)      (1,685)           -
   Of which divested........................      (463)        (378)           -
                                               -------      -------      -------
                                               605,186      644,570      570,480
                                               =======      =======      =======

Contractual Obligations

     The Company has various contractual obligations to make future payments,
including debt agreements and lease obligations. The following table summarizes
MIC's obligations under these contracts due by period as of December 31, 2002:

<TABLE>
                                                                 2004 and     2006 and
In U.S. $000s                                           2003        2005         2007     Post 2007     Total
-------------                                         -------     -------      -------    ---------  --------
<S>                                                   <C>         <C>          <C>           <C>     <C>
Debt............................................      156,666     143,119      935,342       1,807   1,236,934
Operating leases................................          246         427          295         196       1,164
Financial leases................................          290         164            2           -         456
                                                      -------     -------      -------       -----   ---------
Total...........................................      157,202     143,710      935,639       2,003   1,238,554
                                                      =======     =======      =======       =====   =========
<CAPTION>

     The above table includes obligations of the Company's subsidiaries and
joint venture, summarized in the following table:

                                                                 2004 and     2006 and
In U.S. $000s                                           2003       2005         2007      Post 2007     Total
-------------                                         -------    --------     --------    ---------  --------
<S>                                                   <C>         <C>          <C>           <C>     <C>
Debt............................................      156,666      85,203       17,342       1,807     261,018
Operating leases................................          246         427          295         196       1,164
Financial leases................................          290         164            2           -         456
Total...........................................      157,202      85,794       17,639       2,003     262,638
</TABLE>

     At December 31, 2002, MIC was in breach of loan covenants for a total debt
of $22,459,000 (2001: $174,000), which is classified as short-term debt on the
balance sheet. None of the above facilities have been called by the banks
concerned. In the opinion of management, the outcome of discussions to resolve
these breaches will not materially impact the ability of these companies to
maintain adequate funding arrangements to support and develop future operations.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.

Directors and Executive Officers


                                      55
<PAGE>


     The directors of the Company are as follows:

                                                                 Date of
                                                    Year        Expiration
    Name                      Position           Appointed       of Term
  ----------------------      --------           ---------      ----------
  E. Hakan Ledin              Chairman              1990         May 2004
  Vigo Carlund                Member                2002         May 2004
  Ernest Cravatte             Member                2003         May 2004
  Lars-Johan Jarnheimer       Member                2001         May 2004
  Daniel Johannesson          Member                2003         May 2004
  Raymond Kirsch              Member                1994         May 2004
  Michel Massart              Member                2003         May 2004
  Cristina Stenbeck           Member                2003         May 2004

     E. Hakan Ledin, age 65, Chairman, was President of Millicom International
Holdings Limited, a subsidiary of Mil-Inc, from 1987 until December 1990, when
Millicom International Holdings Limited became part of the Company and Mr. Ledin
became an Executive Vice-President of the Company. He became Vice Chairman on
May 9, 1995 and was appointed Chairman in August 2002. Previously, he was Group
Executive Vice President and a director of Telefonaktiebolaget L M Ericsson as
well as Chairman and President of Ericsson Inc. He became a director of the
Company in May 1991. Mr. Ledin is also Vice Chairman of Tele2 AB.

     Vigo Carlund, age 47, non-executive member, has worked for the Kinnevik
Group since 1968. In 1997 he became Vice President of Industriforvaltnings AB
Kinnevik and took over as President in May 1999. He is also Chairman of Transcom
WorldWide S.A. and Korsnas AB. He was appointed to the Board of MIC in 2002 and
is also a director of Tele2 AB and Viking Telecom AB.

     Ernest Cravatte, age 53, is a practicing lawyer in Luxembourg and a former
member of the Executive Management of Banque Generale du Luxembourg. He has also
held positions on various banking supervisory committees.

     Lars-Johan Jarnheimer, age 43, non-executive member, was appointed to the
board in May 2001. He has been President and CEO of Tele2 AB since March 1999,
and previously was Vice-President of Industriforvaltnings AB Kinnevik and
President of Investment AB Kinnevik.

     Daniel Johannesson, age 60, has held a number of executive positions at
major Swedish companies including Senior Executive of the construction company
Skanska, where he was responsible for their telecommunications and facilities
management interests, and Chief Executive Officer of Industriforvaltnings AB
Kinnevik and national railway operator, SJ.

     Raymond Kirsch, age 60, non-executive member, is the President and Chief
Executive Officer of Banque et Caisse d'Epargne de L'Etat Luxembourg. He became
a director of the Company in May 1994.

     Michel Massart, age 52, non-executive member, was appointed to the Board in
May 2003. Up to June 2002, he was a Partner of PricewaterhouseCoopers in
Belgium, where he set up the corporate finance department in 1997, and was a
former member of the Board of the Institute of Statutory Auditors and is
currently a professor at Solvay Business School in Brussels, Belgium.

     Cristina Stenbeck, age 25, is Vice Chairman of the Board of Directors of
Industriforvaltnings AB Kinnevik, Invik & Co. and Metro International, and a
member of the Board of Directors of Modern Times Group, Tele2 AB and Transcom
WorldWide.


                                      56
<PAGE>


Senior Management

  Name                         Position
--------------------           ----------------------------------------
Marc Beuls                     President and Chief Executive Officer
Mikael Grahne                  Chief Operating Officer of MIC
John Ratcliffe                 Chief Financial Controller
Won-Suck Song                  Executive Vice President - Operations
Judy Tan                       Chief of Finance - Global Operations

     Marc Beuls, age 46, President and Chief Executive Officer, was promoted to
his current position in January 1998 from his position as Senior Vice-President
Finance. Mr. Beuls joined the Company in March 1992. Prior to joining the
Company he held several positions with Generale Banque Belgium, both as branch
manager and senior trade finance manager for emerging markets. Mr. Beuls is also
a non-executive director of Tele2 AB.

     Mikael Grahne, age 50, joined MIC in February 2002 having previously been
President of Seagram Latin America. Prior to this he held various senior
management positions at PepsiCo and at Procter & Gamble. Mr. Grahne has an MBA
from the Swedish School of Economics in Helsinki.

     John Ratcliffe, age 40, joined MIC as Group Financial Controller in January
1998 having previously worked at United News & Media Plc. He was appointed to
his present position in November 2002. He qualified as a Chartered Accountant
with Hayes Allan in London having obtained a mathematics and business management
degree from London University.

     Won-Suck Song, age 36, was appointed to his current position in October
2002. He started his career with the Kinnevik Group in 1997 where he held the
position of Chief Operating Officer of Metro International before being
transferred in June 2001 to Tele2 AB as Executive Vice President.

     Judy Tan, age 32, joined MIC in 1998 with responsibility for the Asian
operations. She was appointed to her current position in November 2002 with
responsibility for all operating ventures. She qualified as a Certified Public
accountant with PriceWaterhouse, Singapore and has an MBA from Imperial College,
London.

     All the members of the board of directors and other corporate officers can
be contacted through our principal executive office, the address for which can
be found on the cover page of this form.

     The aggregate amount of compensation paid by the Company and its
subsidiaries during the Company's last fiscal year ended December 31, 2002 to
the directors of MIC was $1,711,000, and to the executive officers and senior
management was $961,000. In addition, options to purchase 66,666 MIC common
stock, with a par value of $6 each, were issued to directors. These options are
exercisable in tranches for an indefinite period after one year from the date of
issuance at a price of $15 each. Also, options to purchase 47,333 MIC common
stock, with a par value of $6 each, were issued to senior management of MIC.
These options are exercisable in tranches, with a maximum exercise period of six
years, after three years from the date of issuance at a price of $15 each.

     During the Company's last fiscal year, no amounts were set aside as accrued
by the Company to provide pension, retirement or other similar benefits to its
directors and officers.

     The following options to purchase MIC common stock with a par value of $6
each, issued to directors, officers and employees of the Company, are
outstanding as of December 31, 2002.

<TABLE>
                                                                Exercise
                                                Number of        price
            Date issued                          options           $               Terms of option
   -------------------------------------        ---------       --------   ----------------------------------
<S>                                             <C>             <C>        <C>
   May 1994, 1995, 1996, 1997, 1998,                                       Exercisable in tranches, for an
      January 1998, August 1999, May                            15.00 -    indefinite period, after one year
      2000, December 2001 and 2002......         560,266        146.625    from the date of issuance
   May 1994, 1995, 1996, 1997, 1998,
      2000, August 1996, November 1996,                                    Exercisable in tranches, with a
      March 1997, August 1999, May                                         maximum exercise period of six
      2000, June 2000, December 2001                            15.00 -    years, after three years from the
      and 2002..........................         494,984         127.50    date of issuance
                                             -----------
   Balance as of December 31, 2002......       1,055,250
                                             ===========
</TABLE>

     Of the above options, 489,051 (2001: 514,092; 2000: 390,072) were
exercisable at December 31, 2002. No options were exercised during 2002 (2001:
111; 2000: 54,685), and 426,534 (2001: 103,977; 2000: 115,056) options, with an
exercise price of between $36.00 and $143.625 were forfeited.


                                      57
<PAGE>


     Included above are 200,000 options to purchase MIC Common Stock, with a par
value of $6 each, which are held by directors of the Company as a group.

      In February 2003, an Extraordinary General Meeting of the Company passed a
resolution approving a reverse share split whereby three existing shares of a
par value of $2 each would be exchanged for one new share with a par value of $6
each. The number and exercise price of options referred to above have been
restated to reflect the reverse share split.

Board Practices

   Directors' Service Agreements

     None of the Company's directors has entered into service agreements with
the Company or its subsidiaries providing for benefits upon termination of
employment.

   Audit Committee

     The Company's directors have established an Audit Committee that convenes
at least twice a year, comprising Mr. Lars-Johan Jarnheimer and Mr. Raymond
Kirsch, both of whom are directors of the Company. This committee has
responsibility for planning and reviewing the Company's annual and quarterly
reports and accounts and the involvement of MIC's auditors in that process,
focusing particularly on compliance with legal requirements and accounting
standards, and ensuring that an effective system of internal financial controls
is maintained. The ultimate responsibility for reviewing and approving the
Company's annual and quarterly reports and accounts remains with the Company's
directors.

   Remuneration Committee

     The Company's directors have established a Remuneration Committee
comprising Mr. Marc Beuls, the Chief Executive Officer and Mr. Ledin, the
Chairman. This committee reviews and makes recommendations to the Company's
directors regarding its compensation policies and all forms of compensation to
be provided to our executive officers and other employees.

Employees

     The Company employed an average of 2,080 (2001: 3,032; 2000: 3,515)
employees for the year ended December 31, 2002. Of these, in 2002, 680 were
employed in Asia, 981 in Latin America, 325 in Africa, 89 in Europe and 5 in the
United States.

Share Ownership of Directors and Officers

     The following table sets forth, as at March 31, 2003, the total amount of
MIC Common Stock, with a par value of $6 each, beneficially owned by the
directors and other executive officers and senior management of the Company, and
the percentage of the MIC Common Stock represented by such MIC Common Stock.

  Title of Class      Identity of Person or Group    Amount Owned     % of Class
-------------------   --------------------------     -----------      ----------
Common Stock                Directors(1)                1,531,431        9.4%
Common Stock                Senior management              16,286        0.1%

---------------------------------------
(1) This includes 1,283,235 shares owned by the 1980 Stenbeck Trust and 105,114
    shares owned by The 1985 Stenbeck Trust.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

     The following table sets forth certain information known to the Company as
of March 31, 2003, unless indicated, with respect to beneficial ownership of the
MIC Common Stock, with a par value of $6 each, by: (i) each person who
beneficially owns more than 5% of the MIC Common Stock; and (ii) all officers
and directors as a group. Except as otherwise indicated, the holders listed
below have sole voting and investment power with


                                      58
<PAGE>


respect to all shares beneficially owned by them. The holders listed below have
the same voting rights as the holders of MIC Common Stock. For purposes of this
table, a person or group of persons is deemed to have "beneficial ownership" of
any shares as of a given date which such person or group of persons has the
right to acquire within 60 days after such date. For purposes of computing the
percentage of outstanding shares held by each person, or group of persons,
named below on a given date, any security which such person or persons has the
right to acquire within 60 days after such date (including shares which may be
acquired upon exercise of vested portions of stock options) is deemed to be
outstanding, but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person. The Company is deemed to be
controlled by Kinnevik B.V. by virtue of their ownership of 35.6% of the
Company's outstanding common stock.

<TABLE>

Title of Class       Identity of Person or Group              Amount owned        Percent of Class
----------------     -------------------------------------   --------------      ----------------
<S>                   <C>                                     <C>                     <C>
MIC Common Stock     Kinnevik B.V. (1)                        5,799,433 (1)           35.6%
                     Westblaak 79
                     3012 KE Rotterdam
                     The Netherlands
MIC Common Stock     Genesis Asset Managers International     1,125,011 (2)            6.9%
                        Limited
MIC Common Stock     Barry R. Feirstein                         833,333 (3)            5.1%
MIC Common Stock     T. Rowe Price Associates Inc.              927,600 (4)            5.7%
MIC Common Stock     All directors and officers as a group    1,927,661 (5)           11.6%
</TABLE>

---------------------------------------
(1)  Kinnevik B.V. is a wholly owned subsidiary of Kinnevik. Includes 503,524
     shares of MIC Common Stock held by Kinnevik International AB, a subsidiary
     of Kinnevik. Of the 5,799,433 shares, Kinnevik has pledged 1,416,666
     against various borrowings.

(2)  As of February 13, 2003, information filed with the Securities and Exchange
     Commission, pursuant to Schedule 13G, jointly with Genesis Asset Managers
     International Limited.

(3)  As of December 6, 2002, information filed with the Securities and Exchange
     Commission, pursuant to Schedule 13G.

(4)  T. Rowe Price Associates Inc. has sole voting power over 123,900 shares.
     The number of shares held is information filed with the Securities and
     Exchange Commission, pursuant to Schedule 13G, as at February 14, 2003.

(5)  Includes 379,944 shares of MIC Common Stock that may be acquired upon the
     exercise of stock options of the Company that are currently exercisable.
     Also includes 1,283,235 shares of MIC Common Stock owned by The 1980
     Stenbeck Trust and 105,114 shares of MIC Common Stock owned by The 1985
     Stenbeck Trust.

     In the past the Company allowed its senior management to participate in its
joint venture companies. In the future, management participation in the business
of the Company will only be through options granted to acquire MIC Common Stock.

Related Party Transactions

     On December 31, 1995, MIC acquired 17.7% of Mach from Kinnevik. The
consideration, which was to have a minimum present value of $5,000,000 at
December 31, 1995, consisted of (i) an initial payment of $1,000,000 plus
interest, at the ruling market rate, for the month of January 1996, (ii) seven
additional payments for each of the financial years 1996 to 2002, calculated as
17.7% of Mach's pre-tax profit for the relevant year and payable in April of the
following year, and (iii) a final payment payable in April 2003, calculated as
the higher of (a) the sum of the seven additional payments multiplied by a
factor of 1.3 minus the initial payment or (b) the amount required to make the
present value of all payments at December 31, 1995 equal to $5,000,000. The
final payment is to be made in common stock of MIC using a pre-stock split share
price of $30.50 per share. An amount of $3,958,000 (2001: $7,042,000), equal to
the estimated remaining purchase payment for this transaction based on the
results of Mach to date, is included in the balance sheet under the heading
"Amounts


                                      59
<PAGE>


due to shareholders". In 1996 the remaining 2.7% of Mach was purchased from the
remaining unrelated shareholder giving MIC a 100% interest.

     In May 2002, MIC sold a 17% interest in MIC Systems BV, the parent company
of Mach, to Kinnevik B.V. for $17,000,000.

     As of December 31, 2002, MIC owed $63,000 (2001: $116,000) to Kinnevik for
additional charges relating to services provided.

     During 2002, Kinnevik purchased Old Notes on the open market with a face
value of $44,000,000. MIC then exchanged these for $1,500,000 cash and 672,016
Tele2 AB shares at market prices.

     During the course of 2002, MIC sold an additional 6,177,369 Tele2 AB `B'
shares at market prices to Kinnevik for a value of $104,295,000.

     On September 27, 2000, following an exchange offer made by Tele2 AB, the
Company exchanged its SEC shares into Tele2 AB shares.

     In November 2001, the Company sold 100% of its interests in FORA Telecom
BV, its Russian Cellular telephony operations to Tele2 AB. The agreement called
for $80 million in Tele2 AB class `B' shares to be exchanged for the assets plus
a maximum equivalent of $30 million in cash or additional Tele2 AB "B" shares,
depending on the outcome of GSM license applications for three of MIC's existing
cellular telephony operations in Russia. The sale resulted in a $6,693,000 gain
on the disposal in 2001. During 2002, MIC obtained the necessary GSM licenses
referred to above and therefore received the additional $30 million proceeds in
cash. In addition, certain loans for which MIC was liable were settled at less
than their carrying value. The credit realized on the receipt of the $30 million
in cash and the settlement of loans of $ 3,755,000, less costs of $ 2,896,000
incurred in the acquisition of the licenses, resulted in a net gain of
$30,859,000 in 2002.

     The Group maintains corporate bank accounts at Banque Invik through which
it makes payments and receives monies in the normal course of business. As of
December 31, 2002, the Group had current accounts, time deposits and blocked
deposits at Banque Invik.

   MIC charged $nil (2001: $280,000; 2000: $800,000) to related parties for
services rendered.

   Great Universal

     As of December 31, 1998, the Group, through its subsidiary MIC-USA inc.
("MIC-USA"), had a 100% temporary and restricted shareholding in Great
Universal. On December 31, 1999, MIC-USA transferred its 100% ownership and
related rights in Great Universal to Great Universal LLC 1999 Trust for a
consideration of $5,027,000, corresponding to the net book value of MIC's
investment in Great Universal. This amount is recorded in Investment in
securities. During 2002, management made an impairment for 100% of this asset
due to uncertainty concerning its recoverability. Following the reorganization
described below, the rights and obligations of MIC-USA toward Great Universal
were assigned to Great Universal LLC. Great Universal continues to indemnify MIC
against certain contingent liabilities of Millicom. Great Universal is currently
engaged in the communications, information technology, teleservices and media
industries primarily in the United States.

     In June 1999, Great Universal effected a reorganization of Great Universal
and its subsidiaries, in which Great Universal was merged with and into Great
Universal LLC and operations were spun off into two separate businesses, being
Great Universal and Modern Holdings. Great Universal Inc. holds the subsidiaries
in teleservices, television and media and specialized electronics industries,
and Modern Holdings holds the subsidiaries in the integrated network services
industries. Great Universal LLC holds 100% of common shares in Great Universal
Inc. and 53% of common shares in Modern Holdings. MIC does not consolidate its
investment in Great Universal as, due to the warrant holders' right to exercise,
it considers it does not control Great Universal and also that there exist
severe long-term restrictions that significantly impair the ability of Great
Universal to transfer funds to MIC.


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<PAGE>


     In January 2000, Modern Holdings sold its 100% interest in MACH USA to MACH
SA for a total consideration of $1,800,000. Due to the loss situation of MACH
USA and the low expected development of MACH USA, the Company's management
decided to close the activities of MACH USA and to write down the investment.

     In January 2000, MIC invested $10,000,000 in Modern Holdings in the form of
promissory notes. In February 2000, those notes were converted into 1,293,095
shares of common stock, representing 8.5% of the share capital of Modern
Holdings. This investment is recorded as a non-current available-for-sale
security. As of December 31, 2002, following a restructuring of Modern Holdings
and an independent valuation, MIC recognized an impairment of $7,050,000 on its
investment.

     The largest single shareholder in the Company is Kinnevik, with a direct
interest of approximately 36%. The following purchases and outstanding balances
occurred with companies affiliated to Kinnevik and MIC. All transactions were
conducted on commercial terms and conditions at market prices. The services
supplied covered fraud detection, network and IT support, acquisition of assets
and customer care systems.

     As of December 31, 2002 and 2001, MIC had the following payables and
purchases to related parties:

<TABLE>
                                     Purchases in year             Amount payable at
                                                                   December 31,
                                          2002         2001             2002         2001
                                     ------------------------------------------------------
                                        US $000s     US $000s         US $000s     US $000s
                                     ------------------------------------------------------
<S>                                          <C>        <C>                 <C>         <C>
Bassett..........................            669        1,222               23          101
Great Universal..................              -            -               25           39
Netcom Consultants...............            157          554                9           56
Procure-it-right.................            839          962              100            1
Applied Sales Management.........            110          100                -            -
Applied Value....................          2,009          484              252            -
Praesidium.......................            204           70                -            3
Lothar Systems...................             10        1,601              288          508
Ephibian.........................             38            -                -            -
Shared Value.....................            656          477               23            -
YXK Systems......................             28            -                -            -
Search Value.....................            489          189                -            -
Banque Invik.....................            638          438               44            -
Tele2............................             50           25            5,723       10,596
                                     ------------------------      -----------       ------
                                           5,897        6,122            6,487       11,304
                                     ========================      ===========       ======
</TABLE>

     As of December 31, 2002 and 2001, MIC had the following receivables from
Kinnevik and other related parties:

                                         2002         2001
                                     ------------- -----------
                                       US $000s     US $000s
                                     ------------- -----------
Kinnevik.........................           1,976       2,581
Modern Times Group...............             752         281
Metro............................             734         256
Lothar...........................             922          29
Tele2............................             359       4,216
Modern Holdings..................           1,825       1,633
Netcom...........................              64         100
Shared Value.....................              18           6
Stonebrook Enterprises...........             156         156
                                     ------------  ----------
                                            6,806       9,258
                                     ============  ==========


                                      61
<PAGE>


     In the opinion of management of the Company, the terms of the transactions
described above in this section are at least as favorable to the Company as
could have been obtained from independent parties.

ITEM 8.  FINANCIAL INFORMATION

Financial Statements and Other Information

     See Item 18 for the Company's Financial Statements.

Legal Proceedings

     The Company is currently in litigation in certain operations, but in
management's opinion these will not have a material negative impact on the
Company's financial position or operations.

Dividend Policy

     Holders of the MIC Common Stock are entitled to receive dividends ratably
when, as and if declared by the Company's Board of Directors, subject to
Luxembourg legal reserve requirements. The Company has not paid any cash
dividends on its common stock since inception. The Company anticipates that it
will retain any earnings for use in the operation and expansion of its business
and does not anticipate paying any cash dividends on the MIC Common Stock in the
foreseeable future. In addition, the ability of the Company to make dividend
payments or other payments on its common stock is limited by the Indenture for
the Company's New Notes. Management will consider any tax consequences to the
Company before declaring a dividend.

ITEM 9.  THE OFFER AND LISTING

     The principal trading market for the MIC Common Stock is the NASDAQ
National Market.

     In February 2003, an Extraordinary General Meeting of the Company passed a
resolution approving a reverse share split whereby three existing shares of a
par value of $2 each were exchanged for one new share with a par value of $6.
The prices quoted above for the periods from 1996 to 2002 are pre-reverse share
split and are therefore based on shares with a par value of $2 each. The figures
quoted for 2003 show the high and low closing market prices for the shares with
a par value of $2 each and post-reverse split.

                                                    High                Low
                                                   --------           --------
Year ended December 31, 1998
First Quarter................................      $45.00             $34.125
Second Quarter...............................      $45.50             $36.875
Third Quarter................................      $53.3125           $24.125
Fourth Quarter...............................      $38.375            $13.75

Year ended December 31, 1999
First Quarter................................      $39.50             $22.875
Second Quarter...............................      $40.00             $26.00
Third Quarter................................      $31.625            $25.125
Fourth Quarter...............................      $64.50             $24.75

Year ended December 31, 2000
First Quarter................................      $81.50             $49.375
Second Quarter...............................      $68.625            $35.00
Third Quarter................................      $51.75             $34.125
Fourth Quarter...............................      $36.75             $21.4375

Year ended December 31, 2001
First Quarter................................      $34.25             $18.625
Second Quarter...............................      $31.45             $17.9375
Third Quarter................................      $24.98             $10.25


                                      62
<PAGE>


Fourth Quarter...............................      $12.35             $9.16
Year ending December 31, 2002
First Quarter................................      $13.92             $4.67
Second Quarter...............................      $7.85              $1.60
Third Quarter................................      $1.74              $0.66
Fourth Quarter...............................      $2.29              $0.39

Year ending December 31, 2003
Pre-reverse share split .....................
November 2002................................      $1.90              $1.08
December 2002................................      $2.29              $1.49
January 2003.................................      $3.00              $1.77
February 2003................................      $1.96              $1.45
Post-reverse share split to April 30, 2003 ..
February 2003................................      $5.70              $4.51
March 2003...................................      $6.75              $4.51
April 2003...................................      $9.86              $7.09

     On May 12, 2003 the closing market price for the MIC Common Stock was
$13.80.

     As of March 31, 2003, 519 holders of record having registered addresses in
the United States held approximately 56% of the outstanding shares of MIC Common
Stock. Daily trading volume on the NASDAQ National Market ranged from 400 shares
to 781,033 shares, adjusted to reflect the reverse share split, during the
period from December 31, 2001 through April 30, 2003.

     There are currently no Luxembourg decrees or regulations restricting the
import or export of capital affecting the remittance of dividends or other
payments to holders of MIC Common Stock who are non-residents of the Grand-Duchy
of Luxembourg.

     There are no limitations relating only to non-residents of the Grand-Duchy
of Luxembourg under Luxembourg law or the Articles of Incorporation of the
Company on the right to be a holder of, and to vote in respect of MIC Common
Stock.

ITEM 10. ADDITIONAL INFORMATION

Memorandum and Articles of Association

   Registration and Object

     Millicom International Cellular is a public liability company ("societe
anonyme") governed by the Luxembourg law of August 10, 1915 on Commercial
Companies, incorporated on June 16, 1992 and registered with the Luxembourg
Trade Register ("Registre de Commerce et des Societes") under the number
B-40.630.

     Article 3 of the articles of incorporation of the Company defines the
purpose of the Company as follows: "the purposes for which the Company is formed
are to engage in all transactions pertaining directly or indirectly to the
acquisition of participating interests in any business enterprise, including but
not limited to, the administration, management, control and development of any
such enterprise, and to engage in all other transactions in which a company
created under the laws of Luxembourg may engage".

   Directors

     Restrictions on voting - In case a director has a personal material
interest in a proposal, arrangement or contract to be decided by the Company,
article 13 of the articles of incorporation of the Company provide that the
validity of the decision of the Company will not be affected by a conflict of
interest existing for a director. However, any such personal interest must be
disclosed to the board of directors and the concerned director can


                                      63
<PAGE>


not vote on the relevant issue. Such conflict of interest must be reported to
the next general meeting of shareholders.

     Compensation - The decision on the annual remuneration of the directors
("tantiemes") is reserved by article 12 of the articles of incorporation to the
general meeting of shareholders. Directors can therefore not vote compensation
to themselves. Yet, the Directors could vote on the employment contract terms of
their own contract with the Company (including special bonuses there under) and,
if the Articles so permit (which they do for MIC) on the allotment of shares
under a share option scheme.

     Borrowing powers - The Directors generally have unrestricted borrowing
powers on behalf of and for the benefit of the Company.

     Age limit - There is no age limit for being a director of the Company.
Directors are appointed for a maximum of six years and are re-eligible.

     Share ownership requirements - Directors need not be shareholders.

   Shares

     Rights attached to the shares - The Company has only one class of shares,
each share entitling (i) to one vote at the general meeting of shareholders,
(ii) to receiving dividends out of distributable profits when such distributions
are decided and (iii) to share in any surplus left after the payment of all the
creditors in the event of liquidation. There is a preferential subscription
right under any Share or Rights issue for cash, unless the Directors restrict
the exercise thereof.

     Redemption of shares - The articles of incorporation provide for the
possibility and the terms of the repurchase by the Company of its own shares,
solely at the Company's initiative.

     Sinking funds - The Company's shares are not subject to any sinking fund.

     Liability to further Capital Calls - All of the issued shares in the
Company's capital are fully paid. Accordingly none of the Company's shareholders
are liable for further capital calls.

     Principal Shareholder Restrictions - There are no provisions in the
articles of incorporation that would discriminate against any existing or
prospective holder of the Company's shares as a result of such shareholder
owning a substantial number of shares.

   Changes to the Shareholders' Rights

     In order to change the rights attached to the shares of the Company, a
general meeting of shareholders must be duly convened and held before notary, as
it implies the amendment of the articles of incorporation of the Company. A
quorum of presence of at least 50% is required (in a meeting held on a first
call) and the decision must be taken by a majority of two thirds of the shares
present or represented. Any change to the obligations attached to shares may
only be passed with the unanimous consent of all the shareholders.

   Shareholders meetings

     General meetings of shareholders are convened by convening notice published
in the Luxembourg official Gazette and in a Luxembourg newspaper, twice at an
interval of eight days, at least eight days prior to the meeting. If all the
shares are registered shares, a convening notice may, as an alternative to the
publication, be sent to each shareholder by registered mail at least eight days
before the annual general meeting. According to article 17 of the articles of
incorporation of the Company, the board of directors determines in the convening
notice the formalities to be observed by each shareholder for admission to the
general meeting of shareholders. An annual general meeting of shareholders must
be convened every year on the date provided for in the articles of incorporation
(article 18: the last Tuesday of May of each year). Other meetings can be
convened as necessary.


                                      64
<PAGE>


   Limitation on Securities Ownership

     There are no limitations under Luxembourg law or the articles of
incorporation on the rights for non-resident or foreign entities to own shares
in the Company.

   Change of control

     There are no provisions in the articles of incorporation of the Company
that would have an effect of delaying, deferring or preventing a change in
control of the Company and that would operate only with respect to a merger,
acquisition or corporate restructuring involving the Company, or any of its
subsidiaries. Luxembourg laws impose the mandatory disclosure of an important
participation in the Company and any change in such participation.

   Disclosure of Shareholder Ownership

     There are no provisions of the articles of incorporation by which a certain
ownership threshold must be disclosed. However, Luxembourg laws provide that any
entity or person holding more than certain thresholds (10%, 20%, 33 1/3%, 50%
and 66 2/3%) of a company listed on the Luxembourg Stock Exchange must declare
such shareholding to the Luxembourg Stock Exchange and to the Company itself.
Such disclosure is mandatory also in case of a decrease beyond such respective
thresholds.

Material Contracts

     In May 2003, the Company issued approximately $562 million of 11% Senior
Notes due 2006 (the "11% Notes") and approximately $64 million of 2% Senior
Convertible PIK (payment in kind) Notes due 2006 (the "2% Notes" together with
the 11% Notes, the "New Notes") in exchange for $781 million of the Company's 13
1/2 Senior Subordinated Discount Notes due 2006 (the "Old Notes"). The 11% Notes
were issued pursuant to an indenture dated May 8, 2003 between the Company and
The Bank of New York (the "11% Indenture") and the 2% Notes were issued pursuant
to an indenture dated May 8, 2003 between the Company and The Bank of New York
(the "2% Indenture together with the 11% Indenture, the "New Indentures"). As of
May 20, 2003, $137,080,000 of Old Notes remained outstanding.

     The New Notes are senior, unsecured obligations of the Company. The 11%
Notes will bear interest at 11% and the 2% Notes will bear interest at 2%
payable semi-annually in arrears on June 1 and December 1 of each year, with a
final maturity on June 1, 2006. The interest on the 11% Notes is payable in
cash. The interest on the 2% Notes is payable, at the Company's option, in cash
or through the issuance of 2% Notes (valued at 100% of the principal amount of
such additional notes).

     For the 11% Notes only, on each of June 1, 2004, December 1, 2004, June 1,
2005 and December 1, 2005 the Company will deposit with The Bank of New York or
the Paying Agent under the 11% Indenture an amount in cash equal to $17,500,000.
Each such amortization payment will be applied to the redemption on such date of
$17,500,000 in principal amount of 11% Notes.

     The Holders of the 2% Notes may convert their 2% Notes into shares of the
Company's common stock at an initial conversion price of $10.75 per share,
subject to adjustment as set forth in the 2% Indenture, at any time on or before
the close of business on the last trading day prior to June 1, 2006, unless the
Company has previously redeemed or repurchased the 2% Notes.

     At maturity of the 2% Notes, the Company may, at its option, pay all or a
portion of the then outstanding principal amount of the 2% Notes in cash or in
shares of the Company's common stock. If the Company decides to pay the holder
of the 2% Notes all or a portion of the outstanding principal amount in shares
of its common stock, the Company will calculate the number of shares of common
stock such holder is entitled to receive by dividing the principal amount of 2%
Notes being repaid by the lesser of (a) the conversion price and (b) the average
closing price of the common stock over the 60 day period immediately preceding
the maturity date.


                                      65
<PAGE>


     The New Notes are redeemable at the option of the Company, at any time
prior to June 1, 2004 in whole or in part, at a price of 102.25% of the
outstanding principal amount plus accrued and unpaid interest to the date of
redemption and at June 1, 2004 and thereafter at a price of 100% of the
outstanding principal amount plus accrued and unpaid interest to the date of
redemption.

     The New Indentures pursuant to which the New Notes were issued contain
certain covenants that, among others, restrict the ability of the Company, its
Restricted Subsidiaries, Restricted Affiliates and Restricted Subsidiaries of
its Restricted Affiliates (each as defined in the New Indentures) to (i) incur
additional indebtedness; (ii) pledge or dispose of assets; (iii) make
distributions on and repurchases of its common stock or make certain
investments; (iv) have restrictions on the ability of Restricted Subsidiaries or
Restricted Affiliates to make dividend or other payments to the Company; and (v)
engage in transactions with affiliates. The Indenture also restricts the ability
of the Company to merge or consolidate with or transfer all or substantially all
of its assets to another entity.

     The issuance of the New Notes was conditioned upon delivery of consent to
amendments to the indenture under which the Old Notes were issued (the "Old
Indenture") and waivers to certain provisions contained in the Old Indenture.
The Old Indenture was modified by a supplemental indenture. The supplemental
indenture eliminated the covenants contained in the Old Indenture "Limitation on
Restricted Payments", "Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries" and "Limitation on Asset Dispositions".

     The Company has paid each holder of the Old Notes that consented to the
amendments to the Old Indenture $50 for each $1,000 in principal amount of
outstanding Old Notes validly tendered by such consenting holder and accepted
for exchange, as a consent fee.

Exchange Controls

     There are currently no governmental laws, decrees, regulations or other
legislation of Luxembourg that may affect (i) the import or export of capital
including the availability of cash and cash equivalents for use by the Company's
group and (ii) the remittance of dividends, interests or other payments to
non-resident holders of the Company's securities other than those deriving from
the U.S.-Luxembourg double taxation treaty.

Taxation

     The following paragraphs describe very generally the tax laws of Luxembourg
as they apply to investors in the Company, which is a Luxembourg corporation,
and also the taxation of investors who are citizens, residents or domiciliaries
of the United States. The following is intended merely as a general summary of
the principal tax consequences of the receipt, holding and disposition of shares
of MIC Common Stock, and is not intended as a substitute for professional tax
advice that takes into account the particular circumstances relevant to a
specific investor. Accordingly, investors should consult their own professional
advisors on the possible tax consequences of holding or disposing of shares of
MIC Common Stock, under the laws of their countries of citizenship, residence or
domicile.

   Luxembourg Taxation

     Because the Company is a Luxembourg corporation, domestic Luxembourg law
generally imposes a 20% withholding tax on dividends paid by the Company under
certain circumstances. Certain reduced rates of withholding tax, or exemptions
from withholding tax, are available under provisions of domestic Luxembourg law
and bilateral tax treaties entered into between Luxembourg and various other
countries. Investors should consult their tax advisors with respect to the
possible availability of such reduced rates or exemptions.

   United States Investors

     (a) Luxembourg Taxation. The United States and Luxembourg have signed a
Convention between the United States of America and the Grand-Duchy of
Luxembourg with Respect to Taxes on Income and Property (the "Treaty") for the
purpose of avoiding double taxation. The provisions of this new treaty governing
taxes withheld at source apply to amounts paid or credited on or after January
1, 2001; for taxes on other income and on


                                      66
<PAGE>


capital, the provisions of this new treaty apply for fiscal periods beginning
on or after January 1, 2001. There is the possibility to opt for the provisions
of the old Treaty for an additional taxable year if the old Treaty provides for
a greater relief from tax. The old Treaty provides that dividends received from
the Company by a U.S. Holder (as defined below) that qualifies for Treaty
benefits and that does not conduct a business through a "permanent
establishment" in Luxembourg, will be subject to Luxembourg tax at the rate of
7.5% on the gross amount of such dividend. The Luxembourg withholding agent is
required to withhold Luxembourg tax at the full statutory rate subject to
refund of amounts withheld in excess of the treaty rates upon the filing of
appropriate documentation with the Luxembourg tax authorities. A U.S. Holder
(as defined below) whose only contact with Luxembourg is the receipt, holding
and ultimate disposition of shares of MIC Common Stock should not be required
to file any tax returns in Luxembourg.

     The new treaty changes the rate of Luxembourg tax on dividends received
from the Company by a U.S. Holder from 7.5% to 15% of the gross amount of such
dividend; if the U.S. Holder is a company that owns directly at least 10% of the
Company's voting stock, then the new treaty will reduce the rate of Luxembourg
taxation on dividends to 5%; in certain cases the new treaty will exempt from
Luxembourg taxation dividends paid to U.S. Holders that are treated as
corporations for U.S. federal income tax purposes, that are residents of the
United States under the new treaty, and that directly hold at least 25% of the
Company's voting stock. As in the current Treaty, these reduced rates will be
available only for dividends that are not attributable to a permanent
establishment through which the U.S. Holder conducts a business in Luxembourg.
In addition, the benefits of the new treaty will be available to U.S. Holders
that are "qualified residents" of the United States, as defined in the treaty.

     (b) Special Considerations. Unfavorable U.S. tax rules apply to U.S.
shareholders of a "passive foreign investment company" ("PFIC") or a "foreign
personal holding company" ("FPHC"). There can be no assurance that we presently
are not, or will not become, a PFIC. Our substantial investment in associated
companies' securities and other "passive assets", and the recent decline in the
value of our stock, result in a risk that we are a PFIC or could become a PFIC
in the future. See "--PFIC Considerations" and "--FPHC Considerations."

     (c) Taxation of Distributions on MIC Common Stock. Distributions made by
the Company with respect to MIC Common Stock (including the amount of any
Luxembourg taxes withheld there from) will generally be includable in the gross
income of a United States person who is an individual citizen or resident of the
United States for U.S. federal income tax purposes, a corporation or a
partnership created or organized in the United States or under the laws of the
United States or of any state, or an estate or trust (other than a foreign
estate or trust) that holds MIC Common Stock (a "U.S. Holder") as dividend
income to the extent that such distributions are paid out of the Company's
current or accumulated earnings and profits as determined under U.S. federal
income tax principles. A corporation organized in the United States or under the
laws of the United States that owns 10% of the Company's voting stock, however,
may be entitled to a deduction for United States income tax purposes for a
portion of a distribution treated as dividend income. To the extent, if any,
that the amount of any such distribution exceeds the Company's current or
accumulated earnings and profits as so computed, it will first reduce the U.S.
Holder's tax basis in its MIC Common Stock to the extent thereof, and, to the
extent in excess of such tax basis, will be treated as a gain from the sale or
exchange of property.

     On May 28, 2003, President Bush signed the Jobs and Growth Tax Relief
Reconciliation Act of 2003. Among other changes, this legislation lowers from
39.5% to 15% the maximum tax rate applicable to "qualified dividends" received
by individuals. Dividend income paid by the Company to a U.S. Holder will not be
eligible for this rate reduction if the Company is a PFIC or a FPHC for its tax
year in which the dividend is paid, or for its previous tax year. See "-PFIC
Considerations" and "-FPHC Considerations".

     Future distributions of rights to subscribe to MIC Common Stock, or of MIC
Common Stock that are made as part of a pro rata distribution to all
shareholders generally will not be subject to U.S. federal income tax.

     Subject to certain conditions and limitations, the amount of any Luxembourg
taxes (other than taxes with respect to which a U.S. Holder is entitled to a
refund under the Treaty, even if such refund is not claimed or received)
withheld on a distribution by the Company will be creditable against such
holder's U.S. federal income tax liability. Distributions with respect to MIC
Common Stock that are taxable as dividends will


                                      67
<PAGE>


generally constitute foreign source income for purposes of the foreign tax
credit limitation. The limitation on foreign taxes eligible for credit is
calculated separately with respect to specific classes of income. For this
purpose, dividends distributed by the Company with respect to the MIC Common
Stock will generally constitute "passive income" or, in the case of certain
U.S. Holders, "financial services income."

     A U.S. Holder must hold the MIC Common Stock for a minimum holding period
in order to claim a foreign tax credit with respect to Luxembourg tax withheld
from a dividend distribution on the common stock. The minimum holding period for
common stock is 16 days, and such holding period must be satisfied within the
30-day period beginning on the date that is 15 days prior to the ex-dividend
date. Any period for which the U.S. Holder protects itself from risk of loss is
not includable in the minimum 16-day holding period. Amounts not currently
creditable against U.S. tax may instead be currently deducted at the election of
the U.S. Holder.

     (d) Taxation on Disposition of MIC Common Stock. U.S. Holders will
recognize gain or loss for U.S. federal income tax purposes on the sale or
other disposition of MIC Common Stock in the same manner as on the sale or
other disposition of any other shares. Such gain or loss will be a capital gain
or loss if the MIC Common Stock is held as a capital asset. Gain, if any,
generally will be U.S. source gain.

     Net capital gains (i.e. generally capital gains in excess of capital
losses) recognized by an individual U.S. Holder upon the sale of a capital asset
that has been held for more than 12 months will generally be subject to tax at a
rate not to exceed 20%. Net capital gains recognized by an individual from the
sale of a capital asset that had been held for 12 months or less will be subject
to tax at ordinary income tax rates. In addition, capital gains recognized by a
corporate U.S. Holder will continue to be subject to tax at the ordinary income
tax rates applicable to corporations.

     (e) PFIC Considerations. A foreign corporation is a PFIC for any taxable
year if either (i) at least 75% of its gross income is "passive income" or (ii)
at least 50% of its assets produce, or are held for the production of, "passive
income." For purposes of determining whether it is a PFIC, a foreign corporation
is treated as holding its share of the assets, and receiving its share of the
income, of any other corporation in which it owns (directly or indirectly) 25%
or more of the stock (by value). Our substantial investment in associated
companies' securities and other "passive assets", and the recent decline in the
value of our stock, as well as the possibility that the Company may generate
significant amounts of passive income from time to time, could cause us to be a
PFIC currently, or to become a PFIC in the future.

      If the Company is a PFIC in any taxable year, a U.S. Holder who
beneficially owns MIC Common Stock, during such year must make an annual return
on IRS Form 8621 that describes the distributions received with respect to the
MIC Common Stock and any gain realized on the disposition of such MIC Common
Stock. Furthermore, if the Company is a PFIC for any taxable year during which a
U.S. Holder holds MIC Common Stock, such U.S. Holder generally will be subject
to special rules (regardless of whether the Company continued to be a PFIC) with
respect to (i) any "excess distribution" made with respect to the MIC Common
Stock (generally, any distributions received by the U.S. Holder on MIC Common
Stock in a taxable year that is greater than 125% of the average annual
distributions received by the U.S. Holder in the three preceding taxable years,
or, if shorter, the U.S. Holder's holding period for the MIC Common Stock) and
(ii) any gain realized on the sale or other disposition of MIC Common Stock.
Under these rules, (a) the excess distribution or gain would be allocated
ratably over the U.S. Holder's holding period for the MIC Common Stock, (b) the
amount allocated to the current taxable year would be taxed as ordinary income
and (c) the amount allocated to each of the other taxable years would be subject
to tax at the highest rate of tax in effect for the applicable class of taxpayer
for that year and an interest charge for the deemed deferral benefit would be
imposed with respect to the resulting tax attributable to each such other year.

     A U.S. Holder could avoid the imposition of the interest charge with
respect to such shares by making certain elections (either a mark-to-market
election or a qualified electing fund ("QEF") election). To make the
mark-to-market election, the MIC Common Stock must be considered marketable
under U.S. income tax rules. For a U.S. Holder to make the QEF election, the
Company would have to satisfy certain reporting requirements.


                                      68
<PAGE>


     Neither we nor our advisors have the duty to or will undertake to inform
U.S. Holders whether or not we are a PFIC. We do not currently intend to make
available the information necessary for a U.S. Holder to make a QEF election in
the event we are determined to be a PFIC.

     Because of the complexity of these rules regarding ownership of stock in a
PFIC by a U.S. Holder, U.S. Holders of MIC Common Stock should consult with
their own tax advisors regarding any potential reporting or tax obligations, as
well as their potential election options.

     (f) FPHC Considerations. A foreign corporation will generally be a FPHC for
any taxable year if (i) at least 60% (50% in certain cases) of its gross income
consists of "foreign personal holding company income" and (ii) at any time
during such year more than 50% of the voting power or value of its stock is
owned, directly or pursuant to rules of attribution, by, or for, five or fewer
individuals who are citizens or residents of the United States (a "U.S. Group").
For this purpose, foreign personal holding company income generally includes
dividends and interest. Because the Company's principal source of income is
expected to be dividends and interest from its subsidiaries, the Company is
likely to satisfy the FPHC income test. With respect to the FPHC ownership test,
although the Company believes that a significant percentage of its stock may be
treated as owned, under the FPHC attribution rules, by five or fewer U.S.
individuals, the Company is not aware of any facts which would indicate that a
U.S. Group with respect to the Company exists as of March 15, 2003. Future
changes in the ownership of the Company's stock, which the Company has no reason
to anticipate, could affect its status for purposes of the FPHC rules.

     If the Company is a FPHC for any taxable year, each U.S. Holder who owns
Shares on the last day of such year, or if earlier, the last day in such year on
which a U.S. Group existed with respect to the Company will be required to
include in gross income as a dividend such U.S. Holder's pro rata share of the
Company's undistributed taxable income, subject to adjustments, determined using
U.S. tax accounting principles.

Documents on Display

     It is possible to read and copy documents referred to in this annual report
on Form 20-F that have been filed with the Securities and Exchange Commission at
the Securities and Exchange Commission's public reference room located at 450
Fifth Street, NW, Washington D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms and their copy charges.

ITEM 11..QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The principal market risks to which the Company is exposed are interest
rate risk and foreign currency exchange risk.

   Interest Rate Risk

     The interest rate risk to which the Company is exposed is principally a
function of the Company's long-term debt. To alleviate this risk, the Company
obtains both fixed-rate and floating-rate debt.

     The table below summarizes as at December 31, 2002, the Company's debt
between fixed- and floating-rates.

<TABLE>
                                                                   Amounts due within
                                         ---------------------------------------------------------------------------
                                                   1 - 2         2 - 3     3 - 4        4 - 5     After 5
                                         1 year    years         years     years        years      years     Total
                                         ------    ------       ------    -------       -----     -------  ---------
                                                             (US $000s, except percentages)
<S>                                      <C>       <C>           <C>      <C>             <C>      <C>       <C>
Fixed rate
U.S. dollar.....................         43,692    36,187        1,457    913,750         886          -     995,972
Average interest rate...........           12.7%     13.6%         6.2%      13.5%        6.9%         -

Colombia (1)....................            389         -            -          -           -          -         389
Mauritius.......................            105         -            -          -           -          -         105


                                      69
<PAGE>

<CAPTION>

<S>                                      <C>       <C>           <C>      <C>             <C>      <C>       <C>
Pakistan........................         18,764         -            -          -           -          -      18,764
Paraguay........................          1,169         -            -          -           -          -       1,169
Senegal.........................            326       278          166        142         140          -       1,052
                                         ------    ------       ------    -------       -----      -----   ---------
Local currency..................         20,753       278          166        142         140          -      21,479
                                         ------    ------       ------    -------       -----      -----   ---------
Average interest rate...........           11.8%      8.4%         8.4%       8.4%        8.4%
                                         ------    ------       ------    -------       -----      -----   ---------

Total fixed rate................         64,445    36,465        1,623    913,892       1,026          -   1,017,451
                                         ======    ======       ======    =======       =====      =====   =========

Floating rate
U.S. dollar.....................         52,888     9,288        6,981      3,969       3,570          -      76,696
Average interest rate...........            5.7%      5.3%         6.1%       6.2%        8.2%

Colombia (1)....................          7,190         -            -          -           -          -       7,190
Ghana...........................            451         -            -          -           -          -         451
Guatemala.......................          4,548     2,844        2,419      3,221       1,322      1,807      16,161
Mauritius.......................          2,433     1,426          569          -           -          -       4,428
Pakistan........................         15,176     6,592            -          -           -          -      21,768
Senegal.........................          1,720     1,516        1,516      1,516         758          -       7,026
Sri Lanka.......................          7,815     7,304        7,040        607           -          -      22,766
Sweden..........................              -    54,638            -          -           -          -      54,638
                                         ------    ------       ------    -------       -----      -----   ---------
Local currency..................         39,333    74,320       11,544      5,344       2,080      1,807     134,428
                                         ------    ------       ------    -------       -----      -----   ---------
Average interest rate...........           12.2%      7.3%        10.6%       8.7%        8.3%       8.2%
                                         ------    ------       ------    -------       -----      -----   ---------
                                         ------    ------       ------    -------       -----      -----   ---------
Total floating rate.............         92,221    83,608       18,525      9,313       5,650      1,807     211,124
                                         ======    ======       ======    =======       =====      =====   =========

Total...........................        156,666   120,073       20,148    923,205       6,676      1,807   1,228,575
                                         ======    ======       ======    =======       =====      =====   =========
</TABLE>


(1) Operation sold in February 2003.


                                      70
<PAGE>


     The table below summarizes as at December 31, 2001, the Company's debt
between fixed- and floating-rates.

<TABLE>
                                                                   Amounts due within
                                                    1 - 2      2 - 3       3 - 4        4 - 5     After 5
                                          1 year    years      years       years        years      years      Total
                                         ------    ------       ------    -------       -----     -------  ---------
                                                             (US $000s, except percentages)
Fixed rate
<S>                                      <C>       <C>          <C>       <C>         <C>         <C>      <C>
U.S. dollar.....................         46,127    35,176       33,935          -     963,230          -   1,078,468
                                         ------    ------       ------    -------     -------      -----   ---------
Average interest rate...........           12.2%     13.6%        13.9%          -       13.5%         -

Argentina.......................            580       410            -          -           -          -         990
Colombia........................            421         -            -          -           -          -         421
India...........................              -         5            -          -           -          -           5
Mauritius.......................          2,043     1,436        1,346        346           -          -       5,171
Pakistan........................          7,477     3,914            -          -           -          -      11,391
Paraguay........................          1,889         -            -          -           -          -       1,889
Philippines.....................            623         -            -          -       1,449          -       2,072
Senegal.........................            197       170          121         20           -          -         508
                                         ------    ------       ------    -------     -------      -----   ---------
Local currency..................         13,230     5,935        1,467        366       1,449          -      22,447
Average interest rate...........           10.0%     12.5%        12.1%      12.2%       13.9%         -
                                         ------    ------       ------    -------     -------      -----   ---------

Total fixed rate................         59,357    41,111       35,402        366     964,679          -   1,100,915
                                         ======    ======       ======    =======       =====      =====   =========

Floating rate
U.S. dollar.....................         69,017    21,276       14,110     10,042       9,443          -     123,888
                                         ------    ------       ------    -------     -------      -----   ---------
Average interest rate...........            7.3%      7.9%         7.9%       6.8%        6.5%         -

Colombia........................          8,596         -            -          -           -          -       8,596
Ghana...........................          1,076       361            -          -           -          -       1,437
Guatemala.......................          3,632     1,863        4,890      3,352         382          -      14,119
Luxembourg......................              -     1,744            -          -           -          -       1,744
Pakistan........................              -     3,847            -          -           -          -       3,847
Philippines.....................          7,721         6            -          -           -          -       7,727
Senegal.........................          1,419     1,288        1,288      1,288       1,288        697       7,268
Singapore.......................             21         -            -          -           -          -          21
Sri Lanka.......................          3,059     6,937        6,937      6,025         468          -      23,426
Sweden..........................              -         -      173,365          -           -          -     173,365
                                         ------    ------       ------    -------     -------      -----   ---------
Local currency..................         25,524    16,046      186,480     10,665       2,138        697     241,550
                                         ------    ------       ------    -------     -------      -----   ---------
Average interest rate...........           12.9%     12.1%         6.3%      12.4%        9.4%       7.2%
                                         ------    ------       ------    -------     -------      -----   ---------
Total floating rate.............         94,541    37,322      200,590     20,707      11,581        697     365,438
                                         ======    ======       ======    =======      ======      =====   =========

Total...........................        153,898    78,433      235,992     21,073     976,260        697   1,466,353
                                         ======    ======       ======    =======     =======      =====   =========
</TABLE>


                                      71
<PAGE>


     The Company does not use interest rate swaps, forward rate agreements or
any future contracts but manages its interest exposure by diversifying its debt
between fixed- and floating-rate loans.

     Included in the total for U.S. Dollar fixed rate balances above is
$985,700,000 (2001: $1,061,740,000) in respect of the book value of Old Notes
and notes in Colombia for which the fair value is $488,133,000 (2001:
$691,154,000). For all other amounts, the fair value is taken to be the book
value as stated above.

   Exchange Rate Risk

     The Company is exposed to fluctuations of the U.S. dollar against certain
other currencies. The Company publishes its financial statements in U.S. dollars
while a significant proportion of its assets, liabilities, sales and costs are
denominated in other currencies. The Company currently conducts business in 17
currencies.

     The Company seeks to protect its reported earnings from falling in U.S.
dollar terms, from currency depreciation, by periodically adjusting its prices
in local currency terms to reflect any such depreciation. In certain countries
that experience very high inflation the Company sets its prices in direct
relation to the U.S. dollar. However, there can be no assurance that a
significant devaluation of a currency against the U.S. dollar can be offset, in
whole or in part, by a corresponding price increase, even over the long term. To
some extent, the broad mix of currencies in which the Company conducts its
businesses and the geographic spread of its operations provides the Company with
some measure of protection against specific exchange rate movements and reduces
the overall sensitivity of the Company's results to specific exchange rate
fluctuations. The Company does not hedge its foreign currency exposure as it is
considered that the cost of purchasing financial instruments outweighs the
benefits derived.

     At the venture level, the Company seeks to reduce its foreign exchange
exposure arising from transactions through a policy of matching, as far as
possible, assets and liabilities. In some cases, the Company may borrow in U.S.
dollars because it is either advantageous for ventures to incur debt obligations
in U.S. dollars or because dollar-denominated borrowing is the only funding
source available to a venture. In these circumstances, the Company has currently
decided to accept the inherent currency risk, principally because of the
relatively high cost of buying, or inability to buy, forward cover in currencies
of the countries in which the Company operates. See also Note 2 of the Notes to
the Consolidated Annual Accounts for a description of the currencies in which
the Company operates.

     The following table summarizes the Company's debt detailing the balances at
December 31, 2002, that were denominated in U.S. dollars and that in other local
currencies:

<TABLE>
                                                                   Amounts due within
                                         ---------------------------------------------------------------------------
                                                    1 - 2        2 - 3     3 - 4       4 - 5      After 5
                                         1 year     years        years     years       years       years     Total
                                         ------    ------       ------    -------     -------     -------  ---------
                                                                       (US $000s)
<S>                                      <C>        <C>          <C>      <C>        <C>          <C>      <C>
U.S. dollar.....................         96,581     45,475       8,438    917,719    4,456             -   1,072,669

Colombia........................          7,579          -           -          -           -          -       7,579
Ghana...........................            451          -           -          -           -          -         451
Guatemala.......................          4,547      2,844       2,419      3,221       1,322      1,807      16,160
Mauritius.......................          2,538      1,426         569          -           -          -       4,533
Pakistan........................         33,940      6,592           -          -           -          -      40,532
Paraguay........................          1,169          -           -          -           -          -       1,169
Senegal.........................          2,046      1,794       1,682      1,658         898          -       8,078
Sri Lanka.......................          7,815      7,304       7,040        607           -          -      22,766
Sweden..........................              -     54,638           -          -           -          -      54,638
                                         ------    ------       ------    -------     -------      -----   ---------
Total local currency............         60,085     74,598      11,710      5,486       2,220      1,807     155,906
                                         ------    ------       ------    -------     -------      -----   ---------

Total...........................        156,666    120,073      20,148    923,205       6,676      1,807   1,228,575
                                         ======    ======       ======    =======      ======      =====   =========
</TABLE>


                                      72
<PAGE>


     The following table summarizes the Company's debt detailing the balances at
December 31, 2001, that were denominated in U.S. dollars and that in other local
currencies:

<TABLE>
                                                                   Amounts due within
                                                   1 - 2        2 - 3      3 - 4      4 - 5      After 5
                                         1 year    years        years      years      years        years      Total
                                         ------    ------       ------    -------     -------    -------   ---------
                                                                         ($'000)
<S>                                     <C>         <C>         <C>        <C>        <C>        <C>       <C>
U.S. dollar.....................        115,143     56,453      48,045     10,042     972,673          -   1,202,356
                                         ------    ------       ------    -------     -------      -----   ---------

Argentina.......................            580        410           -          -           -          -         990
Colombia........................          9,017          -           -          -           -          -       9,017
Ghana...........................          1,076        361           -          -           -          -       1,437
Guatemala.......................          3,632      1,863       4,890      3,352         382          -      14,119
India...........................              -          5           -          -           -          -           5
Luxembourg......................              -      1,744           -          -           -          -       1,744
Mauritius.......................          2,043      1,436       1,346        346           -          -       5,171
Pakistan........................          7,477      7,761           -          -           -          -      15,238
Paraguay........................          1,889          -           -          -           -          -       1,889
Philippines.....................          8,344          6           -          -       1,449          -       9,799
Senegal.........................          1,616      1,458       1,409      1,308       1,288        697       7,774
Singapore.......................             21          -           -          -           -          -          21
Sri Lanka.......................          3,059      6,937       6,937      6,025         468          -      23,428
Sweden..........................              -          -     173,365          -           -          -     173,365
                                         ------    ------       ------    -------     -------      -----   ---------
Total local currency............         38,754     21,981     187,947     11,031       3,587        697     263,997
                                         ------    ------       ------    -------     -------      -----   ---------

Total...........................        153,898     78,433     235,992     21,073     976,260        697   1,466,353
                                         ======    ======       ======    =======      ======      =====   =========
</TABLE>

     In the years ended December 31, 2002, 2001 and 2000 the Company incurred
exchange losses of $23,483,000, $17,313,000 and $23,015,000, respectively.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.


                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

     Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

     Within 90 days prior to the date of this report, the Company, under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer, the Chief Financial Controller and the Chief of
Finance - Global Operations, performed an evaluation of the effectiveness of the
Company's disclosure controls and procedures. Based on this evaluation, the
Company's Chief Executive Officer, Chief Financial Controller and Chief of
Finance - Global Operations concluded that the Company's disclosure controls and
procedures are effective for gathering, analyzing and disclosing the information
the Company is required to disclose in the reports it files under the Securities
Exchange Act of 1934, within the time periods specified in the SEC's rules and
forms. The Company's management necessarily applied its judgement in assessing
the costs and benefits of such controls and procedures, which by their nature
can provide only reasonable assurance regarding management's control objectives.


                                      73
<PAGE>


     There have been no significant changes in the Company's internal controls
or other factors that could significantly affect internal controls subsequent to
the date of their evaluation.


ITEM 16. [RESERVED]


                                    PART III

ITEM 17. FINANCIAL STATEMENTS

     Not applicable.

ITEM 18. FINANCIAL STATEMENTS

     See pages F-1 through F-82.

ITEM 19. EXHIBITS

1.1      Memorandum and Articles of Association and bylaws of Millicom
         International Cellular S.A.

4.1      Indenture dated May 8, 2003, between the Company and The Bank of New
         York, as trustee, relating to $562,219,000 11% Senior Subordinated
         Notes due 2006.

4.2      Indenture dated May 8, 2003, between the Company and The Bank of New
         York, as trustee, relating to $63,714,000 2% Senior Convertible PIK
         Notes due 2006.

4.3      Supplemental indenture dated May 23, 2003, between the Company and The
         Bank of New York, as trustee, relating to the 13 1/2% Senior
         Subordinated Notes due 2006.

7.1      Explanation of the calculation of earnings per share.

99.1     Section 906 Certifications.










                                      74
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.

     Dated June 30, 2003




                                            MILLICOM INTERNATIONAL CELLULAR S.A.


                                            By: /s/  E. Hakan Ledin
                                                --------------------------------
                                            Name:  E. Hakan Ledin
                                            Title: Chairman and Director



                                            By: /s/  M. Beuls
                                                --------------------------------
                                                Name:  M. Beuls
                                                Title: President and
                                                       Chief Executive Officer






















                                      75
<PAGE>


I, Marc Beuls, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 20-F of Millicom International
Cellular S.A.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have;

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    June 30, 2003
                                            /s/  Marc Beuls
                                            ------------------------------------
                                            Marc Beuls
                                            Chief Executive Officer



                                      76
<PAGE>



I, John Ratcliffe, Chief Financial Controller, certify that:

1. I have reviewed this annual report on Form 20-F of Millicom International
Cellular S.A;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have;

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    June 30, 2003
                                            /s/  John Ratcliffe
                                            ------------------------------------
                                            John Ratcliffe
                                            Chief Financial Controller


                                      77
<PAGE>


I, Judy Tan, Chief of Finance - Global Operations, certify that:

1. I have reviewed this annual report on Form 20-F of Millicom International
Cellular S.A;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have;

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:    June 30, 2003
                                            /s/  Judy Tan
                                            ------------------------------------
                                            Judy Tan
                                            Chief of Finance -- Global
                                              Operations



                                      78
<PAGE>




                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                       OF
                      MILLICOM INTERNATIONAL CELLULAR S.A.
                                AND SUBSIDIARIES


Independent Auditor's Report.............................................    F-1
Consolidated Balance Sheets as of December 31, 2002 and 2001.............    F-2
Consolidated Statements of Profit and Loss for the years ended
        December 31, 2002, 2001 and 2000.................................    F-4
Consolidated Statements of Cash Flows for the years ended
        December 31, 2002, 2001 and 2000.................................    F-5
Consolidated Statements of Changes in Shareholders' Equity for
        the Years ended December 31, 2002, 2001 and 2000.................    F-6
Notes to the Consolidated Annual Accounts as of December 31, 2002
        and 2001, including reconciliation to U.S. GAAP (Note 30)........    F-7
1.      Organization.....................................................    F-7
2.      Summary of Consolidation and Accounting Policies.................    F-7
        (a)     Group Accounting.........................................    F-8
        (b)     Goodwill.................................................    F-9
        (c)     Licenses.................................................   F-10
        (d)     Deferred costs...........................................   F-10
        (e)     Tangible assets..........................................   F-10
        (f)     Inventories..............................................   F-11
        (g)     Time and pledged deposits................................   F-11
        (h)     Cash and cash equivalents................................   F-11
        (i)     Foreign currency translation.............................   F-11
        (j)     Revenue recognition......................................   F-12
        (k)     Prepaid cards............................................   F-13
        (l)     Cost of sales............................................   F-13
        (m)     Customer acquisition costs...............................   F-13
        (n)     Leases...................................................   F-13
        (o)     Taxation.................................................   F-14
        (p)     (Loss) earnings per common share.........................   F-14
        (q)     Amounts due from joint ventures..........................   F-14
        (r)     Financial instruments....................................   F-14
        (s)     Risk management..........................................   F-16
        (t)     Impairment of non-financial assets.......................   F-17
        (u)     Segment reporting........................................   F-17
        (v)     Comparatives.............................................   F-17
        (w)     Equity compensation benefits.............................   F-17
3.      Joint Ventures and Subsidiaries..................................   F-18
        (a)     Joint ventures...........................................   F-20
        (b)     Subsidiary companies.....................................   F-21
        (c)     Associated companies.....................................   F-21
4.      Goodwill.........................................................   F-22
5.      Licenses.........................................................   F-24
6.      Deferred costs and other non-current assets, net.................   F-25
7.      Tangible assets..................................................   F-26
8.      Investment in Securities.........................................   F-27
9.      Derivatives arising from business combinations...................   F-29
10.     Pledged deposits.................................................   F-31
11.     Inventories......................................................   F-32


                                      79
<PAGE>


12.     Trade receivables, net...........................................   F-32
13.     Other current assets.............................................   F-33
14.     Time deposits....................................................   F-33
15.     Cash and cash equivalents........................................   F-34
16.     Shareholder's equity.............................................   F-34
        (a)     Share capital and premium................................   F-34
        (b)     Treasury stock...........................................   F-34
        (c)     Legal and consolidation reserves.........................   F-34
        (d)     Options outstanding......................................   F-35
17.     Borrowings.......................................................   F-37
        (a)     Company borrowings.......................................   F-37
        (b)     Corporate subordinated debt..............................   F-39
        (c)     Other debt...............................................   F-41
        (d)     Analysis of borrowings by maturity.......................   F-43
18.     Analysis of group revenues and cost of revenues,
          segmental reporting............................................   F-44
19.     Personnel charges................................................   F-48
20.     Gain and loss on exchange, disposal and write-down of assets, net   F-49
        (a)     Write-down of assets, net................................   F-49
        (b)     Gain (loss) from sale of subsidiaries and joint
                  ventures, net..........................................   F-51
        (c)     (Loss) gain from investment securities...................   F-52
        (d)     Disclosure on discounting operations.....................   F-53
21.     Taxes   .........................................................   F-54
22.     Cash flow from operating activities..............................   F-56
23.     Acquisition of subsidiaries......................................   F-56
24.     Disposal of subsidiaries.........................................   F-57
25.     Non-cash investing and financing activities......................   F-57
26.     Commitments and contingencies....................................   F-58
27.     Related party transactions.......................................   F-60
28.     Other current liabilities........................................   F-63
29.     (Loss) earnings per common share.................................   F-63
30.     Reconciliation to U.S. GAAP......................................   F-64
31.     Subsequent Events................................................   F-81



                                      80
<PAGE>


PricewaterhouseCooper

--------------------------------------------------------------------------------
                                                PricewaterhouseCooper
                                                Societe a responsabilite limitee
Report of the independent auditors              Reviseur d'entreprises
                                                400, route d'Esch
                                                B.P. 1443
To the shareholders of                          L-1014 Luxembourg
Millicom International Cellular S.A.            Telephone +352 494848-1
                                                Facsimile + 352 494848-2099
--------------------------------------------------------------------------------

     We have audited the accompanying consolidated balance sheets of Millicom
International Cellular S.A. and its subsidiaries ("MIC") as of December 31, 2002
and 2001, and the related consolidated statements of profit and loss, changes in
shareholders' equity and cash flows for the three years ended December 31, 2002,
2001 and 2000. These consolidated financial statements are the responsibility of
the Board of Directors. Our responsibility is to express an opinion on these
financial statements based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the 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 examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statements presentation. We believe that our audit provides a reasonable basis
for our opinion.

     In our opinion, based on our audit, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Millicom International Cellular S.A. and its subsidiaries as of
December 31, 2002 and 2001, and the results of their operations, changes in
shareholders' equity and cash flows for the three years ended December 31, 2002,
2001 and 2000, in conformity with International Financial Reporting Standards as
published by the International Accounting Standards Board.

     International Financial Reporting Standards vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
would have affected the profit (loss) after taxes for each year, as well as the
shareholders' equity for the three years ended December 31, 2002, 2001 and 2000,
to the extent summarized in Note 30 to the consolidated financial statements.

     As discussed in Note 30, MIC has restated its shareholders' equity and its
profit (loss) after taxes as of and for each of the two years ended December 31,
2001 and 2000 as reported in accordance with accounting principles generally
accepted in the United States, previously audited by other independent auditors
who have ceased operations.


PricewaterhouseCoopers S.a r.l.                      Luxembourg, June 30, 2003
Reviseur d'entreprises




                                      F-1
<PAGE>


Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


                                                            2002          2001
                                             -----------------------------------

ASSETS                                       Notes      US$ `000       US$ `000
--------------------------------------------------------------------------------

NON-CURRENT ASSETS

Intangible assets

    Goodwill, net                                4        10,172         52,575
    Licenses, net                                5        84,471        164,541
    Deferred costs and other
       non-current assets, net                   6         4,919         15,685

Tangible assets, net                             7       458,933        512,236

Financial assets

    Investment in securities                     8       220,386        676,829
    Investments in associated companies          3        1,013         52,858
    Pledged deposits                            10        32,921         47,404

Deferred taxation                               21         8,470          3,785

                                                      ----------      ---------
TOTAL NON-CURRENT ASSETS                                 821,285      1,525,913
                                                      ----------      ---------

CURRENT ASSETS

Investment in securities                         8       101,540              -
Inventories                                     11         6,962         12,932
Trade receivables, net                          12       113,221        136,078
Amounts due from joint ventures                  3        14,053         46,001
Amounts due from other related parties          27         6,806          9,258
Prepaid and accrued income                                14,148         27,228
Other current assets                            13        38,453         35,800
Time deposits                                   14        16,200         21,444
Cash and cash equivalents                       15        70,451         56,276


                                                      ----------      ---------
TOTAL CURRENT ASSETS                                     381,834        345,017
                                                      ----------      ---------

TOTAL ASSETS                                           1,203,119      1,870,930
                                                      ==========      =========


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




                                      F-2
<PAGE>


Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------




                                                            2002           2001
                                                        ------------------------

SHAREHOLDERS' EQUITY
  AND LIABILITIES                            Notes      US$ `000       US$ `000
--------------------------------------------------------------------------------

 SHAREHOLDERS' EQUITY                           16

    Share capital and premium                            281,989        281,989
    Treasury stock                                       (54,521)       (52,033)
    Legal reserve                                          4,256          4,256
    Retained (loss) profit brought forward               (57,719)        80,334
    Loss for the year                                   (385,143)      (138,053)
    Revaluation reserve                                        -       (61,325)
    Currency translation reserve                         (84,121)      (46,274)

                                                        ---------     ----------
 TOTAL SHAREHOLDERS' EQUITY                             (295,259)         68,894
                                                        ---------     ----------

 Minority interest                                        23,733          10,262

 LIABILITIES

 NON-CURRENT LIABILITIES

    Deferred taxation                           21        26,874         20,507
    Borrowings
       Corporate subordinated debt              17       912,539        954,601
       Other debt and financing                 17       159,370        347,475
                                                       ---------      ---------
                                                       1,098,783      1,322,583
                                                       ---------      --------
 CURRENT LIABILITIES

    Other debt and financing                    17       156,666        153,898
    Trade payables                                        90,945        109,739
    Amounts due to shareholders                 27         4,021          7,158
    Amounts due to other related parties        27         6,487         11,304
    Other financial liabilities                  9             -         36,365
    Accrued interest and other expenses                   42,745         57,981
    Other current liabilities                   28        74,998         92,746
                                                       ---------      ----------
                                                         375,862        469,191
                                                       ---------      ----------
 TOTAL LIABILITIES                                     1,474,645      1,791,774
                                                       ---------      ----------

 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
                                                       1,203,119      1,870,930
                                                       =========      =========

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


                                      F-3
<PAGE>


<TABLE>
Consolidated statements of profit and loss                                                        Millicom International
for the years ended December 31, 2002, 2001 and 2000                                                        Cellular S.A
------------------------------------------------------------------------------------------------------------------------

                                                                                   2002             2001            2000
                                                               ---------------------------------------------------------
                                                               Notes           US$ '000         US$ '000        US$ '000

<S>                                                               <C>           <C>              <C>              <C>
Revenues                                                          18            605,186          644,570          570,840

Cost of sales                                                     18           (269,621)        (283,443)        (318,316)
                                                                             ----------       ----------       ----------
GROSS PROFIT                                                                    335,565          361,127          252,524

Sales and marketing                                                             (80,941)         (95,463)         (88,097)
General and administrative expenses                                            (164,703)        (172,912)        (174,177)
Gain (loss) from sale of subsidiaries and joint ventures, net     20             88,814           35,047          (2,755)
Other operating expenses                                         4, 20          (56,422)         (35,013)         (40,873)

                                                                             ----------       ----------       ----------
OPERATING PROFIT (LOSS)                                                         122,313           92,786          (53,378)

Profit (loss) from associated companies                           18                 62           (3,112)         (43,178)

                                                                             ----------       ----------       ----------
PROFIT (LOSS) BEFORE  FINANCIAL INCOME  (EXPENSE),  TAXES AND                   122,375           89,674         (96,556)
MINORITY INTEREST

(Loss) gain from investment securities                            20          (299,963)         (15,931)          665,262
Interest expense                                                  17          (185,959)        (209,912)        (196,002)
Interest income                                                                  12,726           22,768           28,395
Other income                                                     16,17           42,247           11,596                -
Fair value result on financial instruments                         9            (7,858)          (9,914)                -
Exchange loss, net                                                             (23,483)         (17,313)         (23,015)

                                                                             ----------       ----------       ----------
(LOSS) PROFIT BEFORE TAXES AND MINORITY INTEREST                              (339,915)        (129,032)          378,084
Charge for taxes                                                  21           (22,734)          (8,217)         (26,264)

                                                                             ----------       ----------       ----------
(LOSS) PROFIT BEFORE MINORITY INTEREST                                        (362,649)        (137,249)          351,820
Minority interest                                                              (22,494)            (804)            3,568

                                                                             ----------       ----------       ----------
NET (LOSS) PROFIT FOR THE YEAR                                                (385,143)        (138,053)          355,388
                                                                             ==========       ==========       ==========

Basic (loss) earnings per common share (US$)                      29             (23.60)           (8.46)           21.84
                                                                             ==========       ==========       ==========
Weighted average number of shares
  outstanding in the year (in 000's)                              29             16,318           16,314           16,273
                                                                             ==========       ==========       ==========
Diluted (loss) earnings per common  share, (US$)                  29             (23.60)           (8.46)           21.54
                                                                             ==========       ==========       ==========
Weighted average number of shares and
  diluted potential common shares (in 000's)                      29             16,318           16,314           16,500
                                                                             ==========       ==========       ==========
</TABLE>


                                      F-4
<PAGE>

<TABLE>
Consolidated statements of Cash Flows                                                      Millicom International
for the years ended December 31, 2002, 2001 and 2000                                                 Cellular S.A
-----------------------------------------------------------------------------------------------------------------

                                                                       2002              2001                2000
                                                           ------------------------------------------------------
                                                           Notes     US $'000            US $'000        US $'000
                                                           ------------------------------------------------------


<S>                                                        <C>         <C>               <C>             <C>
Net cash provided by operating activities                  22          72,581            103,969         127,469
                                                                    ---------          ---------         -------

Cash flow from investing activities
Acquisition of subsidiaries and joint ventures,
  net of cash acquired                                     23          (2,000)            (22,978)        (27,399)
Increase in investment in associate company                                 -            (29,213)              -
Cash impact of change in consolidation method                               -                 470            366
Proceeds from the disposal of subsidiaries and
joint ventures, net of cash                                24         135,071             19,251              17
Purchase of licenses and other non-current assets
                                                                       (2,064)            (11,631)        (29,833)
Increase in deferred costs                                             (3,141)             (6,692)         (6,400)
Purchase of investments in securities                                    (186)             (1,728)        (11,646)
Proceeds from the disposal of investments in securities
                                                                      167,082             125,196          65,434
Purchase of tangible fixed assets                                    (135,818)           (192,178)       (182,771)
Disposal of tangible fixed assets                                         307              16,873           2,427
Increase in amounts due from joint venture partners
                                                                       (7,131)            (35,372)         (2,294)
Increase in pledged deposits                                          (16,506)            (39,083)         (2,414)
Decrease in time deposits                                               6,051              10,011          12,149
                                                                   ----------          ----------        --------
Net cash provided (used) by investing activities                      141,665            (167,074)       (182,364)
                                                                   ----------          ----------        --------

Cash flow from financing activities
Proceeds from the issuance of share capital                                 -                   -             774
Proceeds from the issuance of debt  and other financing
                                                                      182,828             379,957         276,778
Repayment of debt and other financing                                (363,584)           (358,294)       (173,563)
Proceeds from minority share of
  recapitalization of subsidiary                                            -                   -           4,206
Payment of dividends to minority interests                            (16,536)                  -               -
Proceeds from shareholders                                                  -                 905             516
Net (purchase) sale of treasury stocks                                 (2,488)                  8           3,797
                                                                   ----------          ----------        --------
Net cash (used) provided by financing activities
                                                                     (199,780)             22,576         112,508
                                                                   ----------          ----------        --------
Cash effect of exchange rate changes                                     (291)              1,884            (775)
                                                                   ----------          ----------        --------

Net increase (decrease) in cash and
  cash equivalents                                                     14,175           (38,645)           56,838
Cash and cash equivalents, beginning                                   56,276             94,921           38,083
                                                                   ----------          ----------        --------
Cash and cash equivalents, ending                                      70,451              56,276          94,921
                                                                   ==========          ==========        ========


     The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                                                          F-5
<PAGE>

<TABLE>

Consolidated Statements of Changes                                                                     Millicom International
in Shareholders' Equity                                                                                         Cellular S.A.
for the years ended December 31, 2002, 2001 and 2000
------------------------------------------------------------------------------------------------------------------------------
                                   -------------------------------------------------------------------------------------------
                                   Number of  Number of                                                   Profit
                                   shares     shares                                                      and loss    Other
                                   out-       held in      Share      Share       Treasury   Revaluation  account     Reserves
                                   Standing   the Group    Capital    premium     stock      reserve      (Restated)  (i)
                                   ---------  ---------    --------   --------    --------   -----------  ----------  --------
                                      `000       `000      US$ `000   US$ `000    US$ `000   US$ `000     US$ `000    US$ `000
                                   ---------  ---------    --------   --------    --------   ----------   ----------  --------
<S>                                  <C>        <C>         <C>        <C>        <C>         <C>        <C>          <C>
Balance as of December 31, 1999      70,737     (22,036)    141,474    136,742    (55,838)    333,778    (225,828)    (35,499)

Transfer to legal reserve              --          --          --         --         --          --          (613)        613

Shares issued via the  exercise          13         150          26        748      3,797        --          --          --
of options during the year

Profit for the year                    --          --          --         --         --          --       355,388        --

Movement in revaluation reserve        --          --          --         --         --      (316,042)       --          --

Movement in currency translation       --          --          --         --         --          --          --         2,445
reserve

                                   --------    --------    --------   --------   --------    --------    --------    --------
Balance as of December 31, 2000      70,750     (21,886)    141,500    137,490    (52,041)     17,736     128,947     (32,441)

Cumulative effect of adopting          --          --          --         --         --          --       (45,264)       --
IAS 39 (ii)

                                   --------    --------    --------   --------   --------    --------    --------    --------
Restated balance as of January       70,750     (21,886)    141,500    137,490    (52,041)     17,736      83,683     (32,441)
1, 2001

Transfer to legal reserve              --          --          --         --         --          --        (3,349)      3,349

Shares issued/sold via the             --             1        --         --            8        --          --          --
 exercise of options  during the
 year

Loss for the year                      --          --          --         --         --          --      (138,053)       --

Issuance of Shares                      374        --           749      2,250       --          --          --          --

Movement in revaluation reserve        --          --          --         --         --       (79,061)       --          --

 Movement in currency                  --          --          --         --         --          --          --       (12,926)
 translation reserve

                                   --------    --------    --------   --------   --------    --------    --------    --------
Balance as of December 31, 2001      71,124     (21,885)    142,249    139,740    (52,033)    (61,325)    (57,719)    (42,018)

Shares issued/sold via the             --          --          --         --         --          --          --          --
 exercise of options during the
 year

Loss for the year                      --          --          --         --         --          --      (385,143)       --

Shares purchased during the year       --          (386)       --         --       (2,488)       --          --          --
Effect of reverse stock split       (47,416)     14,847        --         --         --          --          --          --

 Prolonged decrease in  market         --          --          --         --         --        61,325        --          --
value

 Movement in currency                  --          --          --         --         --          --          --       (37,847)
translation reserve

                                   --------    --------    --------   --------   --------    --------    --------    --------
Balance as of December 31, 2002      23,708      (7,424)    142,249    139,740    (54,521)       --      (442,862)    (79,865)
                                   ========    ========    ========   ========   ========    ========    ========    ========

(i) Other  reserves  at  December  31,  2002  consist  of  a  $(84,121,000)  currency  translation  reserve  (2001:  $(46,274,000),
    2000: $(33,348,000)) and a $4,256,000 legal reserve (2001: $4,256,000, 2000: $907,000 ).

(ii)  See Note 2r.

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F-6
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


1.   ORGANIZATION

Millicom International Cellular S.A. (the "Company"), a Luxembourg Societe
Anonyme, and its subsidiaries, joint ventures and associated companies (the
"Group" or "MIC") is a global telecommunications investor with cellular
operations in Latin America, Asia and Africa. As of December 31, 2002, the
Company had interests in 16 cellular operations in 15 countries. In addition,
MIC provides high-speed wireless data services in five countries. MIC also has a
6.8% interest in Tele2 AB. Tele2 AB is an alternative pan-European
telecommunications company offering fixed and mobile telephony, data network and
internet services in 22 countries. The Company's shares are traded on the NASDAQ
National Market under the symbol MICC and on the Luxembourg stock exchange. The
Company has its registered office at 75, Route de Longwy, L-8080, Bertrange,
Grand-Duchy of Luxembourg.

MIC's cellular interests ("MIC Cellular") operate through strategic operating
entities principally focused on major geographic regions of the world:

Sanbao Telecom (Asia)
MIC Latin America
MIC Africa

In 2001, MIC disposed of FORA Telecom, its Russian segment (Note 20). In
November 2002, MIC disposed of MIC Systems, its GSM clearing-house.

The Group was formed in December 1990 when Industriforvaltnings AB Kinnevik
("Kinnevik"), a company established in Sweden, and Millicom Incorporated
("Millicom"), a corporation established in the United States of America,
contributed their respective interests in international cellular joint ventures
to form the Group. During 1992, the Group was restructured under a new ultimate
parent company, maintaining the same name. On December 31, 1993, Millicom was
merged ("the Merger") into a wholly owned subsidiary of MIC, MIC-USA Inc
("MIC-USA") a Delaware corporation, and the outstanding shares of Millicom's
common stock were exchanged for approximately 46.5% of MIC's common stock
outstanding at that time.

As of December 31, 2002, Kinnevik owns approximately 36% of MIC.

2.   SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES

Basis of preparation

The consolidated financial statements of the Group are presented in US dollars
and have been prepared in accordance with International Financial Reporting
Standards ("IFRS") as published by the International Accounting Standards Board.
The consolidated financial statements have been prepared under the historical
cost convention as modified by the revaluation of certain financial assets and
liabilities. These consolidated financial statements are not prepared for the
purposes of statutory filing.

The Group has experienced significant losses during the last two years and has
negative equity of $295,259,000 at December 31, 2002. The Group has substantial
outstanding debt, significant debt service obligations and capital requirements.
Management of the Group has taken certain measures to restructure the operations
of the Group and reduce the extent of its obligations. This has included the
disposal of certain businesses and investments during 2002 (see Note 20) and
subsequent to the end of the year (see Note 31). Further, the Group has made an
exchange offer


                                      F-7
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


to holders of the Senior Subordinated Discount Notes (see Note 17 for a
description of the Senior Subordinated Discount Notes, and Note 31 for a
description of the exchange offer). Management expects that the Group will
generate sufficient cash from operations to meet its obligations as they come
due and the financial statements have been prepared on the basis that the Group
is a going concern.

The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these
estimates are based on management's best knowledge of current event and actions,
actual results ultimately may differ from those estimates.

Beginning on January 1, 2001, IAS 39, "Financial Instruments: Recognition and
Measurement" became effective. The statement required that all financial assets
and financial liabilities, including derivatives, be recognized on the balance
sheet. Upon adoption of IAS 39, the Group recorded a cumulative adjustment,
reflected in shareholders' equity, related to the options and other contracts as
discussed in note 9, of $45,264,000.

The consolidated financial statements are prepared in accordance with the
following significant consolidation and accounting policies:

     a) Group accounting

Subsidiaries
Subsidiaries, which are those entities (including Special Purpose Entities) in
which the Group has an interest of more than one half of the voting rights or
otherwise has power to govern the financial and operating policies, are
consolidated.

The existence and effect of potential voting rights that are presently
exercisable or presently convertible are considered when assessing whether the
Group controls another entity.

Subsidiaries are consolidated from the date on which control is transferred to
the Group and are no longer consolidated from the date that control ceases. The
purchase method of accounting is used to account for the acquisition of
subsidiaries. The cost of an acquisition is measured as the fair value of the
assets given up, shares issued or liabilities undertaken at the date of
acquisition plus costs directly attributable to the acquisition. The excess of
the cost of acquisition over the fair value of the net assets of the subsidiary
acquired is recorded as goodwill. See note 2(b) for the accounting policy on
goodwill. Intercompany transactions, balances and unrealized gains on
transactions between Group companies are eliminated; unrealized losses are also
eliminated unless cost cannot be recovered. Where necessary, accounting policies
of subsidiaries have been changed to ensure consistency with the policies
adopted by the Group.

Associates
Investments in associates are accounted for by the equity method of accounting.
Under this method the Company's share of the post-acquisition profits or losses
of associates is recognized in the income statement and its share of
post-acquisition movements in reserves is recognized in reserves. The cumulative
post-acquisition movements are adjusted against the cost of the investment.
Associates are entities over which the Group generally has between 20% and 50%
of the voting rights, or over which the Group has significant influence, but
which it does not control.


                                      F-8
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


Unrealized gains on transactions between the Group and its associates are
eliminated to the extent of the Group's interest in the associates; unrealized
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. The Group's investment in associates
includes goodwill (net of accumulated amortization) on acquisition. When the
Group's share of losses in an associate equals or exceeds its interest in the
associate, the Group does not to recognize further losses, unless the Group has
incurred obligations or made payments on behalf of the associates.

Joint ventures

Entities that are jointly controlled are consolidated using the proportional
method which combines the Group's assets, liabilities, income and expenses with
the Group's share of the assets, liabilities, income and expenses of the joint
ventures in which the Group has an interest.

The Group recognizes the portion of gains or losses on the sale of assets by the
Group to the joint venture that is attributable to the other venturers. The
Group does not recognize its share of profits or losses from the joint venture
that result from the purchase of assets by the Group from the joint venture
until it resells the assets to an independent party. However, if a loss on the
transaction provides evidence of a reduction in the net realizable value of
current assets or an impairment loss, the loss is recognized immediately.

     b) Goodwill

     The excess of cost of an acquisition over the Group's interest in the fair
value of the net identifiable assets of the acquired subsidiary, associate or
joint venture at the date of transaction is recorded as Goodwill and recognized
as an asset in the balance sheet. Goodwill is amortized using the straight-line
method over its estimated useful life but not longer than 20 years. Goodwill on
associates is included in their carrying value in the caption "Investments in
associated companies".

At each balance sheet date the Group assesses whether there is any indication of
impairment. If such indications exist an analysis is performed to assess whether
the carrying amount of goodwill is fully recoverable. A write-down is made if
the carrying amount exceeds the recoverable amount.

Negative goodwill represents the excess of the fair value of the Group's share
of the net assets acquired over the cost of acquisition. Negative goodwill is
presented in the same balance sheet classifications as goodwill. To the extent
that negative goodwill relates to expectations of future losses and expenses
that are identified in the Group's plan for the acquisition and can be measured
reliably, but which do not represent identifiable liabilities, that portion of
negative goodwill is recognized in the income statement when the future losses
and expenses are recognized. Any remaining negative goodwill, not exceeding the
fair values of the identifiable non-monetary assets acquired, is recognized in
the income statement over the remaining weighted average useful life of the
identifiable acquired depreciable/amortizable assets; negative goodwill in
excess of the fair values of those assets is recognized in the income statement
immediately.


                                      F-9
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


     c) Licenses

The carrying value of licenses for the right to provide mobile cellular,
wireless and other telephone services as well as related ancillary services held
by joint ventures and subsidiaries is disclosed in note 5.

The Group operates in an industry that is subject to changes in competition,
regulation, technology and subscriber base evolution. In addition, the terms of
the licenses, which have been awarded for various periods, are subject to
periodic review for, amongst other things, rate making, frequency allocation and
technical standards. Licenses are amortized using the straight-line basis over
periods of five to 20 years depending on the term of the license. Licenses held,
subject to certain conditions, are renewable and are generally non-exclusive.
MIC does not currently expect any of the Group's telephone operations to be
required to cease due to license reviews and renewals. Under the terms of the
respective licenses, the joint ventures and subsidiaries are entitled to enter
into interconnection agreements with operators of both landline and other
cellular systems.

     d)  Deferred costs

The Group capitalizes internal software development costs. The capitalization of
these costs begins when a software package's technological feasibility has been
established and the costs can be measured reliably and ends when the software
package is completed and ready for use. On completion of each software package,
such costs are amortized on a straight-line basis over three to five years with
a periodic evaluation as to their ultimate realization. The majority of these
costs related to Multinational Automated Clearing House SA ("MACH"), a
subsidiary developing clearing services for Global System for Mobile
Communications ("GSM") operators.

     e)  Tangible assets

Tangible assets are stated at cost and are depreciated over their estimated
useful lives using the straight-line method. All repairs and maintenance
expenditures are expensed as they occur.

Maximum estimated useful lives are:

                  Buildings                40 years or life of lease if lower
                  Networks                 five to ten years
                  Other                    two to seven years

Construction in progress consists of the cost of labor and other direct costs
associated with tangible assets being constructed by the Group.

Costs directly associated with the establishment of new networks are recorded as
construction in progress in tangible fixed assets in the consolidated balance
sheets. Such costs are primarily related to engineering and design work for the
installation of the network and systems integral to its operation. The
amortization of these costs commences on the date that the network becomes
operational.

The cost of major renovations is included in the carrying amount of the asset
when it is probable that future economic benefits in excess of the originally
assessed standard of performance of the existing asset will flow to the Group.
Major renovations are depreciated over the remaining useful life of the related
asset.


                                     F-10
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


     f) Inventories


Inventories consist of cellular telephone equipment and related accessories,
which are classified as trading inventory, and network equipment spares, which
are classified as non-trading inventory. Inventory is stated at the lower of
cost or market value, with cost determined on a first-in, first-out basis and
market value based on the estimated net realizable value.

     g)  Time and pledged deposits


Time deposits represent cash deposits with banks that earn interest at market
rates and have maturity periods of between six and nine months.

Pledged deposits represent contracted cash deposits with banks that are held as
security for debts either at the corporate or operational entity level. MIC is
unable to access these funds until either the relevant debt is repaid or
alternative security is arranged with the lender.

     h)  Cash and cash equivalents

Highly liquid investments with an original maturity of three months or less are
considered to be cash equivalents.

Cash and cash equivalents are carried in the balance sheet at cost. For the
purposes of the cash flow statement, cash and cash equivalents comprise cash on
hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank overdrafts
are included within other debt and financing in current liabilities on the
balance sheet.

     i)  Foreign currency translation


    i) Reporting and measurement currency

The measurement currency of the Group is the US dollar. The Company is located
in Luxembourg and its subsidiaries, joint ventures and associated companies
operate in different currencies. The measurement currency of the Company is the
US dollar because of the significant influence of the US dollar on its
operations. The measurement currency of each subsidiary, joint venture and
associated company, where these are foreign entities, is determined in
accordance with the requirements of SIC 19 `Reporting Currency - Measurement and
Presentation of Financial Statements under IAS 21 and IAS 29'.

     ii) Transactions and balances

In the financial statements of Group entities, transactions denominated in
foreign currencies are recorded in the local currency at the actual exchange
rate existing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the year-end are reported at the exchange
rates prevailing at the year-end. Any gain or loss arising from a change in
exchange rates subsequent to the date of the transaction is included as an
exchange gain or loss in the consolidated statements of profit and loss.

                                     F-11
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


For the purposes of consolidating joint ventures and subsidiaries that report in
currencies other than US dollars, the balance sheets are translated using the
closing rate method. Profit and loss accounts are translated at the average
exchange rate during the year. Foreign exchange gains and losses arising from
the translation of financial statements are recorded as a separate component of
shareholders' equity.

The following is a table of the principal currency translation rates to the US
dollar as of December 31, 2002 and 2001 and the average rates for the year ended
December 31, 2002.

                                       2002             2002           2001
Country               Currency     Average rate    Year-end rate   Year-end rate
--------------------------------------------------------------------------------

Argentina             Pesos             3.15             3.36           1.00
El Salvador           Colon             8.75             8.75           8.75
Ghana                 Cedi          7,957.19         8,400.00       7,400.00
Guatemala             Quetzal           7.81             7.64           7.91
Honduras              Lempira          16.39            16.92          15.88
India                 Rupee            48.56            47.97          48.22
Luxembourg            Euro              1.06             0.95           1.12
Mauritius             Rupee            29.96            29.30          30.25
Pakistan              Rupee            59.50            58.25          59.90
Paraguay              Guarani       5,697.27         7,150.00       4,635.00
Philippines           Peso             51.74            53.60          51.60
Senegal               CFA franc       696.21           625.76         736.70
Sierra Leone          Leone         2,058.09         1,970.00       2,091.00
Sri Lanka             Rupee            95.56            96.73          93.16
Tanzania              Shilling        960.69           963.00         917.00
United Kingdom        Pound             0.67             0.62           0.69

Unrealized gains and losses arising from changes in foreign currency exchange
rates are not cash flows. However, the effect of exchange rate changes on cash
and cash equivalents held or due in a foreign currency is reported in the cash
flow statement in order to reconcile cash and cash equivalents at the beginning
and end of the period.

Foreign exchange risk
MIC seeks to reduce its foreign currency exposure through a policy of matching,
as far as possible, assets and liabilities denominated in foreign currencies. In
some cases, MIC may borrow in US dollars because it is either advantageous for
joint ventures and subsidiaries to incur debt obligations in US dollars or
because US dollar-denominated borrowing is the only funding source available to
a joint venture or subsidiary. In these circumstances, MIC has currently decided
to accept the remaining currency risk associated with the financing of its joint
ventures and subsidiaries, principally because of the relatively high cost of
forward cover in the currencies of the countries in which the Group operates.

     j) Revenue recognition

The Group revenue sources in the consolidated income statement comprise the
following:

Revenues from provision of telecom services
These recurring revenues consist of monthly subscription fees, airtime usage
fees, interconnection fees, roaming fees, revenue from the provision of data
clearing services and other telecommunications services such as data services
and short message services. Recurring revenues are recognized on an accrual
basis, i.e. as the related services are rendered. Unbilled


                                     F-12
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


revenues for airtime usage and subscription fees resulting from services
provided from the billing cycle date to the end of each month are estimated and
recorded.

Connection revenues
Initial connection fees are recognized when charged, i.e. upon initial signing
of the contract with customers.

Equipment revenues
These revenues consist of the sale of handsets and accessories. Revenues from
these sales are recognized at the time that the item is delivered to the
customer.

     k) Prepaid cards

Prepaid cards allow the forward purchase of a specified amount of airtime by
customers. Revenues are recognized as credit is used. Unutilized airtime is
carried in the balance sheet and is included under deferred income within other
current liabilities.

     l) Cost of sales

The primary cost of sales incurred by the Group in relation to the provision of
telecommunication services relates to interconnection costs, roaming costs,
rental of channel, costs of handsets and other accessories sold and commissions
payable to agents for obtaining customers on behalf of the Group. Costs of sales
are recorded on an accrual basis.

Cost of sales also includes the depreciation, amortization and impairment of
network equipment (Note 2 e) and licenses (Note 2 c).

     m) Customer acquisition costs

Specific customer acquisition costs, including handset subsidies and free phone
promotions, are charged to sales and marketing when the subscriber is activated.
Advertising costs are charged to sales and marketing when incurred and amounted
to $24,914,000 for the year ended December 31, 2002 (2001: $31,376,000; 2000 :
$30,065,000).

     n) Leases

Operating lease rentals are charged to the profit and loss account on a
straight-line basis over the life of the lease.

Leases of property, plant and equipment where the Group has substantially all
the risks and rewards of ownership are classified as finance leases. Finance
leases are capitalized at the inception of the lease at the lower of the fair
value of the leased property or the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges so as
to achieve a constant rate on the finance balance outstanding. The corresponding
rental obligations, net of finance charges, are included in borrowings. The
interest element of the finance cost is charged to the income statement over the
lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The property, plant and
equipment acquired under finance leases are depreciated over the shorter of the
useful life of the asset or the lease term.


                                     F-13
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


     o)  Taxation

The companies of the Group are subject to taxation in the countries in which
they operate. Corporate tax, including deferred taxation where appropriate, is
applied at the applicable current rates on their taxable profits. Deferred
income taxes are determined using the liability method whereby the future
expected consequences of temporary differences between the tax bases of assets
and liabilities and their reported amounts in the financial statements are
recognized as deferred tax assets and liabilities.

     Deferred tax assets are recognized to the extent that it is probable that
future taxable profit will be available against which the temporary differences
can be utilized.

     Deferred income tax is provided on temporary differences arising on
investments in subsidiaries, associates and joint ventures, except where the
timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable
future.

     p)  (Loss) earnings per common share

Basic (loss) earnings per common share are based on the (loss) profit for the
year divided by the weighted average number of common shares outstanding during
the year. Diluted (loss) earnings per share is calculated by dividing the net
income attributable to ordinary shareholders by the sum of the weighted average
number of common shares outstanding and the dilutive effect of the weighted
average number of dilutive potential ordinary shares.

     q)  Amounts due from joint ventures

In the ordinary course of business, the Company advances cash to fund operations
of the joint ventures. During consolidation of the Group's financial statements,
certain amounts are eliminated based on the Company's ownership percentage in
each joint venture. The remaining amount represents the partner's share of the
joint venture's payable to the Company.

     r)  Financial instruments

A financial instrument is any contract that gives rise to both a financial asset
of one enterprise and a financial liability or equity instrument of another
enterprise. After the initial recognition, the Group revalues financial assets
held as available-for-sale and derivatives at fair value.

Fair value is defined as the amount at which the instrument could be exchanged
in a current transaction between knowledgeable willing parties in an arm's
length transaction, other than in a forced or liquidation sale. Fair values are
obtained from quoted market prices, discounted cash flow models and
option-pricing models using management's estimates as appropriate.

Investment in securities

The Company has classified all of its financial assets and financial liabilities
in accordance with the categories identified in IAS 39. Management considers all
of the Group's investments in marketable and non-marketable equity securities,
other than subsidiaries, joint ventures and associated companies, to be
available for sale.


                                     F-14
<PAGE>


Available-for-sale securities are reported at fair value with net unrealized
gains or losses reported within shareholders' equity under the caption
"Revaluation reserve". Realized gains and losses are computed on an average cost
basis and are recorded in the profit and loss statement.

When securities classified as available-for-sale are sold or impaired or when
there is a significant and prolonged decline in the fair value below acquisition
cost, the accumulated fair value adjustments are included in the income
statement as gains and losses from investment securities.

The Group determines the fair value of its investment in securities, which is
comprised of available-for-sale securities, based on quoted market prices. The
fair value of non-marketable securities is based on management's best estimate
of the amount at which the securities could be sold in a current transaction.

Unquoted available-for-sale equity investments are reviewed for impairment
losses every balance sheet date and whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. When a review for
impairment is conducted, the recoverable amount is assessed by reference to the
net present value of expected future cash inflows. The discount rate applied is
based upon the entities' weighted average cost of capital with appropriate
adjustment for the risks associated with the investment under assessment. When
the level of information available to calculate the net present value of
expected future cash inflows makes this exercise unworkable, management uses
different valuation techniques to estimate whether there is objective evidence
of impairment and to determine the likely amount of impairment, if any.

Other current financial assets and liabilities

The fair value of the other current financial assets and liabilities due within
one year approximate the carrying value disclosed in the financial statements
due to the short-term nature on which these transactions settle. Current assets,
on which provisions are necessary, are netted against that provision to reflect
the estimated amount that will be settled.

Borrowings

Borrowings are recognized initially at the proceeds received, net of transaction
costs incurred. Borrowings are subsequently stated at amortized cost using the
effective yield method; any difference between proceeds (net of transaction
costs) and the redemption value is recognized in the income statement over the
period of the borrowings.

Corporate subordinated debt consists of 13,5 % Senior Subordinated Discount
Notes due in 2006 (Note 17). These were issued at a discount and were initially
recorded based on the face value less the un-amortized discount. The discount
between the issue and redemption values is amortized through the interest
expense account in the income statement at a constant percentage of the balance
sheet carrying value. The corresponding amount is added to the balance sheet
carrying value of the notes for each period up to the commencement of the
payment of cash interest.

Borrowings due after more than one year, excluding corporate subordinated debt
and subordinated debt notes in Colombia, primarily comprises bank loans bearing
market rates of interest that vary on a regular basis.


                                     F-15
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


Derivative financial instruments

IAS 39 requires that all financial assets and financial liabilities, including
derivatives, be recognized on the balance sheet. Derivatives are initially
recorded at cost either in other current assets or other financial liabilities
as applicable and then are re-measured to fair value through the statement of
profit and loss under the caption "Fair value result on financial instruments".
Upon adoption of IAS 39, the Company recorded a cumulative adjustment related to
these derivatives, reflected in shareholders' equity of $45,264,000. See note 9
for further description and fair value of the derivatives.

Certain derivatives embedded in other financial instruments, such as call and
put options related to the Company subordinated debt (Note 17), are treated as
separate derivatives when their risks and characteristics are not closely
related to those of the host contract and the host contract is not carried at
fair value with unrealized gains and losses reported in income.

Trade receivables
Trade receivables are carried at original invoice amount less provision made for
impairment of these receivables. A provision for impairment of trade receivables
is established when there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of receivables. The
amount of the provision is the difference between the carrying amount and the
recoverable amount, being the present value of expected cash flows, discounted
at the market rate of interest for similar borrowers.

     s)  Risk management


Liquidity Risk
The Group has incurred significant indebtedness but evaluates its ability to
meet its obligations on an ongoing basis. Based on these evaluations, the Group
devises strategies to manage its liquidity risk, including the designation of
certain assets as available for sale.

Credit Risk
Financial instruments that potentially subject the Group to concentrations of
credit risk are primarily cash and cash equivalents, time and pledge deposits,
letters of credit, available-for-sale securities and accounts receivable. The
counter-parties to the agreements relating to the Group's cash and cash
equivalents, time deposits, pledge deposits and available-for-sale securities
are significant financial institutions. Management does not believe there is a
significant risk of non-performance by these counter-parties. Accounts
receivable are derived from the provision of telecom services to a large number
of customers, including businesses and individuals as well as local
telecommunications companies and the related concentration of credit risk is
therefore limited. The Group maintains a provision for impairment of trade
receivables based upon the expected collectability of all trade accounts
receivable.


                                     F-16
<PAGE>


     t)  Impairment of non-financial assets

The recoverability of the Group's assets, including its intangible assets, is
subject to the future profitability of the Group's operations and the evolution
of the business in accordance with its plans. In evaluating the recoverability
of its assets, the value and future benefits of the Group's operations are
periodically reviewed by management based on technological, regulatory and
market conditions. When certain operational and financial factors indicate an
impairment of value, the Group evaluates the carrying value of property, plant
and equipment as well as other assets including licenses and goodwill, in
relation to the operating performance, and future cash flows of the underlying
assets. When indicated, the impairment losses are measured based on the
difference between the estimated recoverable amount and the carrying amount of
the asset. Management's estimates of recoverable amounts for the individual
asset or, if not possible, the cash-generating unit, are based on prices of
similar assets, to the extent available in the circumstances, and the result of
valuation techniques. These include net present values of estimated future cash
flows and valuations based on market transactions in similar circumstances. For
new product launches where no comparable market information is available,
management bases its view on recoverability primarily on cash flow forecasts. In
addition to the evaluation of possible impairment to the assets' carrying value,
the foregoing analysis also evaluates the appropriateness of the expected useful
lives of the assets. In 2002, 2001 and 2000, management recorded a non-cash
charge related to the impairment of certain assets (Note 20).

     u)  Segment reporting

Business segments provide products or services that are subject to risks and
returns that are different from those of other business segments. Geographical
segments provide products or services within a particular economic environment
that is subject to risks and returns that are different from those of components
operating in other economic environments.

     v)  Comparatives

When necessary, and in particular in the consolidated income statement,
comparative figures have been adjusted to conform with changes in presentation
in the current year.

     w)   Equity compensation benefits

Share options are granted to management and key employees. Options are granted
at the market price of the shares on the date of the grant and are exercisable
at that price. Options are exercisable beginning three years from the date of
grant and have a contractual option term of six years. When the options are
exercised, the proceeds received net of any transaction costs are credited to
share capital (nominal value) and share premium. The Group does not make a
charge to staff costs in connection with share options.


                                     F-17
<PAGE>


Notes to the Consolidated Annual Accounts                 Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


3.     JOINT VENTURES AND SUBSIDIARIES

     a)  Joint ventures

The following companies have been proportionally consolidated as joint ventures:

<TABLE>
                                                                      Holding         Holding
                                                                    December 31,   December 31,
Name of the company                         Country                     2002           2001
-------------------------------------------------------------------------------------------------
                                                                  %   of   share %   of    share
                                                                  capital owned  capital owned
                                                                  -------------------------------
<S>                                         <C>                             <C>             <C>

Sanbao Telecom (Asia)
    Cam GSM Company Limited                 Cambodia                        58.4            58.4
    Royal Telecam International Limited     Cambodia                        57.0            57.0
                                            Lao People's
    Millicom Lao Co. Ltd. (i)               Democratic Republic             78.0               -
    Emtel Limited                           Mauritius                       50.0            50.0
    Express Telecommunications Co Inc (ii)  Philippines                        -            40.0

MIC Latin America
    Comunicaciones Celulares SA             Guatemala                       55.0            55.0
    Inversiones Rocafuerte SA               Honduras                        50.0            50.0

MIC Africa
                                            Democratic Republic
    Cellco sarl (iii)                       of Congo                           -            50.9
    MIC Tanzania Limited                    Tanzania                        57.0            57.0

Other
    Millicom Argentina SA                   Argentina                       65.0            65.0

</TABLE>

(i)  In January 2002, the Company was awarded a license to provide a GSM
     service. It is expected that services will commence in the first half of
     2003.

(ii) The Company had an additional beneficial ownership of 7.9% in Express
     Telecommunications Co. Inc. through intermediary holding companies, which
     is included in the consolidated results. In December 2002, MIC sold its
     interest in Express Telecommunications Co. Inc.

(iii) In September 2002, MIC disposed of its interest in Cellco sarl.


The Directors have determined the existence of joint control by reference to the
joint venture agreements, articles of association, structures and voting
protocols of the Boards of Directors, of the above ventures.

The following amounts have been consolidated into the Group accounts
representing the Group's share of assets, liabilities, income and expenses in
the above ventures, excluding divested operations.


                                     F-18
<PAGE>
Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------

<TABLE>
                                                          2002            2001            2000
                                                      -------------- --------------- ---------------
                                                        US$ `000        US$ `000        US$ `000
                                                      -------------- --------------- ---------------

<S>                                                      <C>             <C>             <C>
Revenues                                                 186,935         180,704         123,626
Total operating expenses                                (141,422)       (135,763)        (95,745)
Operating profit                                          45,513          44,941          27,881

Tangible assets                                          134,439         125,893         108,579
Fixed fee licenses, net                                      401             451           1,241
Deferred costs and other non-current assets, net           2,352           2,361           1,747
Total non-current assets                                 138,079         131,140         111,588
Current assets                                            71,237          58,841          48,273
Amounts due from joint ventures to MIC                   (14,053)        (14,827)         (7,763)
Non-current liabilities                                  (40,358)        (35,334)        (24,724)
Current liabilities                                      (65,875)        (82,804)        (70,957)

Cash flow:
  Cash generated from operating activities                46,791          34,251          43,650
  Cash flow from investing activities                    (30,879)        (32,103)         46,788
  Cash flow from financing activities                    (21,146)        (13,350)        (75,669)
</TABLE>













                                     F-19
<PAGE>
Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


     b)  Subsidiary companies


The Group has the following significant subsidiary companies:

<TABLE>
                                                                        Holding          Holding
                                                                      December 31,    December 31,
Name of the company                                Country                2002            2001
--------------------------------------------------------------------------------------------------
                                                                      % of share      % of share
                                                                    capital owned    capital owned
                                                                    ------------------------------
<S>                                                <C>                     <C>             <C>
  SANBAO Telecom (Asia)
    Celltel Lanka Limited                          Sri Lanka               99.9            99.9
    Comvik International (Vietnam) AB (i)          Vietnam                 80.0            90.0
    Pakcom Limited                                 Pakistan                61.3            61.3
   Paktel Limited                                  Pakistan                98.9            98.9
  MIC Latin America
    Telefonica Celular de Bolivia SA               Bolivia                100.0           100.0
    Celcaribe SA (ii)                              Colombia                95.4            92.7
    Telefonica Celular del Paraguay SA             Paraguay                96.0            96.0
  MIC Africa
    Millicom (Ghana) Limited (iii)                 Ghana                  100.0            70.0
    Sentel GSM                                     Senegal                 75.0            75.0
    Millicom Sierra Leone LTD                      Sierra Leone            70.0            70.0
  Other
     Cybertwiga Limited                            Tanzania               100.0           100.0
    GisMo SA (vi)                                  Luxembourg               -             100.0
    GisMo Finance SA (vi)                          Luxembourg               -             100.0
    Millicom Peru SA                               Peru                   100.0           100.0
     Liberty Broadband Limited (vii)               United Kingdom           -             100.0

  MIC Systems (v)
     Multinational Automated Clearing House SA     Luxembourg               -             100.0
     Magellan SA                                   Luxembourg               -             100.0
      Globalport SA                                Luxembourg               -             100.0
        Interfact SA                               Luxembourg               -             100.0
  Unallocated
     Millicom International Operations SA          Luxembourg             100.0           100.0
     MIC-USA Inc                                   United States          100.0           100.0
     Millicom Holding BV                           Netherlands            100.0           100.0
     Millicom International Operations BV          Netherlands            100.0           100.0
     Millicom  Telecommunications BV               Netherlands            100.0           100.0
     Millicom Telecommunications SA                Luxembourg             100.0           100.0
     MIC Systems BV (iv)                           Netherlands             83.0           100.0
     MIC Latin America BV                          Netherlands            100.0           100.0
Millicom International BV                          Netherlands            100.0           100.0
</TABLE>





                                     F-20
<PAGE>


 (i)  Comvik International (Vietnam) AB ("CIV"), a 80% owned subsidiary of the
      Company, and Vietnam Mobile Services Co. ("VMS") have entered into a
      revenue sharing agreement to operate a national cellular GSM system in
      Vietnam ("Mobifone"). This revenue sharing agreement, which had a ten year
      term starting July 1, 1995, provided that CIV would be entitled to receive
      50% of Mobifone's net revenues for the first five years of operation and
      40% thereafter. In October 2000, the revenue sharing agreement was amended
      and stated that MIC would continue to receive 50% of net revenue in years
      six through ten of the contract agreement. CIV initially contracted to
      invest $128 million in the venture. Such commitment has been met as of
      December 31, 2002. As part of the amendment in 2000, and a further
      amendment in 2001, CIV committed to invest an additional minimum of $65
      million, of which approximately $18 million has been disbursed as of
      December 31, 2002. At the time the revenue sharing agreement expires in
      2005, legal title to all equipment shall be transferred to VMS at a price
      of $1. Negotiations are ongoing to extend the life of the revenue sharing
      agreement for a significant period of time. In July 2002, MIC's partner
      exercised his right to acquire an additional 10% in the operation (Note
      20b).

 (ii) In 2002, the Company increased its ownership throughout the year to arrive
      at an ownership percentage of 95.4% as of December 31, 2002 (note 9 and
      note 17).

(iii) In November 2002, MIC purchased the remaining 30% interest in Millicom
      (Ghana) Limited.

 (iv) In May 2002, MIC sold a 17% interest in MIC Systems BV to Kinnevik BV.

 (v)  MIC sold its remaining 83% interest in the MIC Systems' companies in
      November 2002.

 (vi) These companies were liquidated in December 2002.

(vii) In September 2002, MIC sold its interest in Liberty Broadband Limited,
      formerly Tele2 (UK) Limited.

     c)  Associated companies

                                                  2002             2001
                                                -------------------------
                                                US$ `000         US$ `000
                                                -------------------------
At the beginning of year                          52,858                -
Share of results before tax                           62                -
Share of tax                                           -                -
                                                -------------------------
Share of results after tax                            62                -
                                                -------------------------
Exchange differences                                  34                -
Transfers (i)                                   (51,941)           52,858
                                                -------------------------

At end of year                                     1,013           52,858
                                                =========================


As at December 31, 2002, the principal associated company, which is unlisted,
is Navega S.A. (ii).

(i) As of May 2001, Group management determined that, due to a dispute with the
local shareholders, circumstances regarding its investment in 70% owned
operation in El Salvador had changed so that proportional consolidation was no
longer appropriate. Therefore, as of December 2001, the entity was accounted for
under the equity method and recorded in the balance sheet under the caption
"Investments in associated companies". As of December 31, 2002, this dispute has
still to be settled and management no longer feels it is able to exercise a
significant influence in the operation and therefore feels it is more
appropriate to show its investment as a long-term asset in the balance sheet
under the caption "Investment in securities".

(ii) As of December 31, 2001, MIC's interest in Navega SA was recorded as a
long-term investment in securities. During the course of 2002, the Group was
able to exercise significant influence in the operation and therefore
transferred the investment cost of $917,000 to investments in associated
companies.


                                     F-21
<PAGE>


Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


4.     GOODWILL


The movements in goodwill, including negative goodwill, were as follows:

                                                 2002               2001
                                               -----------------------------
                                               US$ `000            US$ `000
                                               -----------------------------
Cost
Opening balance                                  70,431              64,982
Additions                                         2,268               8,091
Write-down in year (Note 20) (i)                (36,308)             (1,652)
Acquisition of negative goodwill                      -                (755)
Effect of change in ownership                      (829)               (235)
                                               --------            ---------
Closing balance                                  35,562              70,431
                                               ========            =========

Amortization
Opening balance                                 (17,856)            (10,001)
Charge for the year                              (7,865)             (8,090)
Effect of change in ownership                       331                 235
                                               --------            ---------
Closing balance                                 (25,390)            (17,856)
                                               ========            =========

Net book value
Closing balance                                  10,172              52,575
                                               ========            =========

Opening balance                                  52,575              54,981
                                               ========            =========

(i)   Accumulated write-downs at December 31, 2002 were $36,308,000 (2001:
      $1,030,000). These write-downs are mainly in respect of MIC's interest in
      Colombia. During 2002, the Group reversed $1,030,000 accumulated
      write-down as part of the divestment of its operation in the Philippines
      (Note 20).

Included in the gain from sale of subsidiaries and joint ventures in the year
ended December 31, 2002 was $498,000 of goodwill. This amount relates to the
disposal of MIC's operation in the Democratic Republic of Congo and is included
in the segment "MIC Africa". The amount of goodwill acquired in 2002 of
$2,268,000 is allocated to the following segment: $752,000 for MIC Latin
America, $1,110,000 for Sanbao Telecom and $406,000 for MIC Africa.


                                     F-22
<PAGE>


Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


The movements in negative goodwill were as follows:

                                                 2002                  2001
                                           -----------------------------------
                                               US$ `000               US$ `000
                                           -----------------------------------
Cost
Opening balance                                 (11,483)               (10,728)
Additions                                             -                   (755)
Effect of change in ownership                        99                      -
                                           ------------            -----------
Closing balance                                 (11,384)               (11,483)
                                           ============            ===========

Amortization
Opening balance                                   2,147                    754
Charge for the year                               1,393                  1,393
Effect of change in ownership                       (99)                     -
                                           ------------            -----------
Closing balance                                   3,441                  2,147
                                           ============            ===========

Net book value
Closing balance                                  (7,943)                (9,336)
                                           ============            ===========
Opening balance                                  (9,336)                (9,974)
                                           ============            ===========


                                     F-23
<PAGE>


Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------


5.   LICENSES


Licenses comprise the amortized cost of purchased fixed fee licenses and other
licenses held by joint ventures and subsidiaries (Note 2c). The movements were
as follows:

                                               Total                   Total
                                                2002                    2001
                                           -------------------------------------
                                               US$ '000                US$ `000
                                           -------------------------------------
  Cost

  Opening balance                               284,519                 315,800
  Additions                                       3,962                   6,486
  Write-downs for the year (Note 20) (i)       (46,678)                (20,570)
  Effect of change in ownership
  percentage                                   (54,940)                (17,741)
  Transfers                                         404                       -
  Exchange rate movements                       (2,435)                     544
                                           ------------            ------------
  Closing balance                               184,832                 284,519
                                           ============            ============

  Amortization

  Opening balance                             (119,978)               (114,676)
  Charge for the year                          (16,726)                (18,703)
  Effect of change in ownership
  percentage                                     36,125                  13,397
  Transfers                                         120                       -
  Exchange rate movements                            98                       4
                                           ------------            ------------
  Closing balance                             (100,361)               (119,978)
                                           ============            ============

  Net book value
  Closing balance                                84,471                 164,541
                                           ============            ============

  Opening balance                               164,541                 201,124
                                           ============            ============

(i)  Accumulated write-downs as of December 31, 2002 were $ 46,678,000 (2001:
     $39,627,000; 2000: $33,020,000), including the disposal of $39,627,000
     accumulated write-downs as part of the divestment of the Group's interest
     in the Philippines and Liberty Broadband Ltd. (Note 20).

During the year, certain items have been reclassified in the balance sheet,
these are shown above as transfers.


The weighted-average amortization period of licenses acquired during 2002 is 10
years.



                                     F-24
<PAGE>



Consolidated balance sheets                               Millicom International
As of December 31, 2002 and 2001                                   Cellular S.A.
--------------------------------------------------------------------------------

The estimated aggregate amortization expense for amortizable intangible assets
for each of the five succeeding fiscal years is shown the table below:

        --------------------------------------------------------------
        Estimated amortization expense                       U.S.$'000
        --------------------------------------------------------------
        For the year ended December 31, 2003                     5,833
        --------------------------------------------------------------
        For the year ended December 31, 2004                     4,428
        --------------------------------------------------------------
        For the year ended December 31, 2005                     3,578
        --------------------------------------------------------------
        For the year ended December 31, 2006                     2,881
        --------------------------------------------------------------
        For the year ended December 31, 2007                     2,852
        --------------------------------------------------------------


6.   DEFERRED COSTS AND OTHER NON-CURRENT ASSETS, NET

The movements in the year were as follows:

<TABLE>
                                      Software       Other
                                    development    non-current      Total       Total
                                       costs         assets         2002        2001
                                   -----------------------------------------------------
                                     US$ `000        US$ `000     US$ `000    US$ `000
                                   -----------------------------------------------------
<S>                                      <C>            <C>         <C>          <C>
 Opening balance, net                    8,820          6,865       15,685       19,492
 Additions                               3,331          1,300        4,631        7,177
 Disposals                                (266)        (4,213)      (4,479)      (1,702)
 Amortization for the year (i)          (5,087)        (1,125)      (6,212)      (6,424)
  Effect  of  change  in  ownership
 percentage                             (3,253)           (80)      (3,333)      (7,105)
 Transfers                                (856)             -         (856)       4,999
 Exchange rate movements                    19           (536)        (517)        (752)
                                   ----------------------------------------   ----------
 Closing balance, net                    2,708          2,211        4,919       15,685
                                   ========================================   ==========
</TABLE>

(i)  Accumulated amortization for software development costs and other
     non-current assets as of December 31, 2002 was $13,946,000 (2001:
     $23,099,000; 2000: $22,097,000).

During the year, certain items have been reclassified in the balance sheet,
these are shown above as transfers.

The Company does not hold major intangible assets not subject to amortization.




                                     F-25
<PAGE>




Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

7.   TANGIBLE ASSETS

The movements in the year were as follows:

<TABLE>
                             Land and                     Construction                    Total          Total
                            buildings      Networks       in progress      Other          2002           2001
                           ----------------------------------------------------------------------------------------
                             US$ '000      US$ '000        US$ '000       US$ '000      US$ '000        US$ '000
                           ----------------------------------------------------------------------------------------
<S>                            <C>          <C>              <C>           <C>           <C>             <C>
Cost
Opening balance                20,778       676,243          56,763        118,691       872,475         925,134

Additions                       1,556        65,476          27,005          3,737        97,774         179,521
Disposals                      (1,194)         (355)         (9,781)       (15,267)      (26,597)        (29,852)
Transfers                         672        33,951         (44,838)         9,111        (1,104)            (16)
Write-down of assets                -        (6,833)              -              -        (6,833)             -
Exchange rate movements
                               (2,054)      (32,594)         (3,211)        (3,940)      (41,799)        (50,819)
Effect of change in
ownership percentage             (618)      (11,719)         (1,788)        (7,864)      (21,989)       (151,493)
                           -------------------------------------------------------------------------  -------------
Closing balance                19,140       724,169          24,150        104,468       871,927         872,475
                           =========================================================================  =============

Depreciation
Opening balance                (5,630)     (288,065)              -        (66,544)     (360,239)       (347,633)

Charge for the year            (1,215)      (87,988)              -        (19,779)     (108,982)       (120,974)
Disposals                       1,283         8,858               -         16,448        26,589          15,845
Transfers                           -           459               -         (1,035)         (576)            126
Exchange rate movements
                                  358        16,994               -          2,280        19,632          20,232
Effect of change in
ownership percentage              301         5,407               -          4,874        10,582          72,165
                           -------------------------------------------------------------------------  -------------
Closing balance                (4,903)     (344,335)              -        (63,756)     (412,994)       (360,239)
                           =========================================================================  =============
Net book value
     Closing balance           14,237       379,834          24,150         40,712       458,933         512,236
                           =========================================================================  =============

     Opening balance           15,148       388,178          56,763         52,147       512,236         577,501
                           =========================================================================  =============

Leased assets included
in the above                    1,139             -               -            125         1,264           1,644
                           =========================================================================  =============
</TABLE>

During the year, certain items have been reclassified in the balance sheet,
these are shown above as transfers.



                                     F-26
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

8.   INVESTMENT IN SECURITIES

As of December 31, 2002 and 2001, MIC had the following available-for-sale
securities:

                                                      2002            2001
                                                 --------------  ---------------
                                                    US$ '000        US$ '000
                                                 --------------  ---------------

Non-current available-for-sale securities:
  Tele2 AB                                            164,031         659,440
   El Salvador                                         52,858               -
   Other investments                                    3,497          17,389
                                                 ==============  ===============
                                                      220,386         676,829
                                                 ==============  ===============

Current available-for-sale securities:
  Tele2 AB                                            101,540             -
                                                 ==============  ===============
                                                 ==============  ===============


Tele2 AB

Tele2 AB ("Tele2") is an alternative pan-European telecommunications company
offering fixed and mobile telephony, data network and Internet services in 22
countries. Tele2 is listed on the Stockholm Stock Exchange and the NASDAQ
National Market. In 2001, the Group classified its investment in Tele2 as
non-current as management considered it to be a strategic investment. However,
the Group sold certain of these shares during the course of 2002 in order to
meet liquidity needs and has re-classified that portion of its holding that is
not pledged against financing as a current asset in the consolidated balance
sheet as of December 31, 2002.



                                     F-27
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

Tele2 share transactions have been summarized in the table below:

<TABLE>
                                                                               Cash received/
                                                                                  (assets          Gain/
                                                                   Ownership     disposed of)      (loss)      Total
                                          Number of Shares held        %           US$'000         US$'000    US$'000
                                      ----------------------------------------------------------------------------------
                                         Tele2 A       Tele2 B

<S>                                     <C>          <C>             <C>           <C>            <C>          <C>
Balance as of December 31, 1999         1,384,316     4,607,228       5.77%                                    400,895

Sale of shares                                  -      (900,000)     (0.85)%        65,434         55,321      (10,113)

Exchange SEC shares for Tele2 AB        4,000,000    10,715,660       8.78%       (115,390)       609,941      725,331
shares

Unrealized change in market value               -             -          -               -       (316,043)    (316,043)
                                      ----------------------------------------------------------------------------------
Balance as of December 31, 2000         5,384,316    14,422,888      13.70%                                    800,070

Sale of shares                                  -    (3,513,000)     (3.60)%       125,195        (15,931)    (141,126)

Exchange of Shares for FORA assets              -     2,461,449       2.63%        (72,864)         6,693       79,557
(Note 20)

Unrealized change in market value               -             -       -                  -        (79,061)     (79,061)
                                      ----------------------------------------------------------------------------------
Balance as of December 31, 2001         5,384,316    13,371,337      12.73%                                    659,440

Sale of Tele2 AB shares                         -    (8,743,110)     (5.94)%       167,238       (168,818)    (336,056)

Exchange of A shares for B shares      (5,384,316)    5,384,316       -                  -              -            -

Unrealized change in market value               -             -       -                  -        (57,813)     (57,813)

Prolonged decline in value
transferred to profit and loss                  -             -       -                  -        (61,325)           -
                                      ----------------------------------------------------------------------------------
Balance as of December 31, 2002                 -    10,012,543       6.79%                                 265,571
                                      ==================================================================================
</TABLE>

The cost of the Tele 2 shares sold is determined on a average cost basis.

In December 2001, MIC entered into a credit facility up to an amount totaling
SEK 1,855 million (approximately $175 million as of December 31, 2001) from
Toronto-Dominion Bank. As of December 31, 2002 6,184,293 shares of Tele2 B
shares (2001: 9,115,479), with a fair value of $164,031,000 (2001:
$328,479,000), were pledged under this agreement (Note 17).

El Salvador
Note 3 (c)(i) explains that the Group no longer has control or significant
influence over Telemovil El Salvador, so the Group's investment is accounted for
as an available-for-sale financial asset in 2002. The shares of this investment
are not quoted on a public market and management has not


                                     F-28
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

been able to obtain reliable financial information since early 2001. Management
has made different estimates to value this investment using different valuation
techniques that have resulted in a wide range of fair values. Management has
therefore concluded that estimating a fair value in these conditions is
inappropriate. Consequently the investment is being carried at the carrying
amount as of December 31, 2001. The valuation exercise, however, produced
sufficient evidence for management to conclude that the investment has not been
impaired as of the balance sheet date.

Other available-for-sale securities
In January 2000, MIC invested $10,000,000 in Modern Holdings inc. ("Modern
Holdings"), formerly known as XSource Corporation (Note 27) in the form of
promissory notes. In February 2000, those notes were converted into 1,293,095
shares of common stock, representing 8.5% of the share capital of Modern
Holdings. As of December 31, 2002 and 2001 the shares of Modern Holdings are not
quoted on a public market. Following a restructuring of Modern Holdings and an
independent valuation, MIC recognized an impairment of $7,050,000 on its
investment in Modern Holdings. The carrying value of this investment was
$2,950,000 at December 31, 2002 (2001: $10,000,000). In addition, the Group
holds other available-for-sale securities for a total fair value of $547,000 as
of December 31, 2002 (2001: $2,362,000).

As indicated in Note 27, MIC does not consolidate its investment in Great
Universal and Modern Holdings as, due to the warrant holders' right to exercise,
it considers it does not control either company, and also that there exist
severe long-term restrictions which significantly impair the ability of Great
Universal and Modern Holdings to transfer funds to MIC.

During the course of 2002, management made an impairment on 100% of Great
Universal due to uncertainty concerning its recoverability.

9.   DERIVATIVES ARISING FROM BUSINESS COMBINATIONS

MIC or its partners have agreements to purchase or sell interests in certain
operations according to fixed conditions. These agreements qualify as
derivatives under the prescribed accounting treatment in IAS 39. Details of the
agreements are described as follows :-

Colombia - The holders of the Celcaribe Ordinary Share Trust Certificates
("Certificates") (Note 17) have an option to put their Certificates to the
Company at a price that provides the holders with an internal rate of return of
15%. The option may be exercised on March 15 and September 15 each year, subject
to the Company receiving 60 days' written notice, and expires on the earlier of
a public market for Celcaribe shares and/or Stock Trust Certificates or March
15, 2004. Should MIC sell its interest in Celcaribe, the Certificates require
the holders to sell their Certificates to the buyer on the same terms and
conditions. During the course of 2002, no options were put to the Company. In
2001, holders of the Share Trust Certificates put 6,320,262 shares to the Group
for a consideration of $20,108,895. The Group entered into a conditional
agreement to sell its interest in Celcaribe to Comcel S.A. in December 2002 and
at the same time gave notice to the holders of the Certificates that they would
be required to sell their Certificates. The Group was not relieved of its
obligation under the option until the sale of Celcaribe was finalized. However,
invoking the requirement that the holders must sell their Certificates to the
buyer, reduced the value of the option to nil as the sale was highly probable at
December 31, 2002 and occurred on February 13, 2003. The fair value of the
liability of the option as of December 31, 2002, was reduced to $nil (2001:
$14,414,000). The change in the fair value during the period to the date of the
conditional sale agreement of $6,684,000 (2001: $6,176,000) has been recorded in
the profit and loss statement under the caption "Fair value result on financial
instruments". The credit


                                     F-29
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

generated on the reduction of the liability, $21,098,000, has been recorded in
the profit and loss statement under the caption "General and administrative
expenses

El Salvador - Since 1997, International Finance Corporation ("IFC"), a
shareholder and lender to Telemovil, MIC's El Salvadorian operation, held a put
option which, when exercised, required the Company to purchase IFC's shares in
Telemovil at an agreed price. Additionally, the Company had a one-time right to
purchase IFC's shares in Telemovil at an agreed price. As of December 31, 2002
and 2001, there were no remaining rights or obligations by the Company to
repurchase shares as a result of the exercising of outstanding options during
2001. The settlement of the financial asset and liability resulted in a charge
of $3,348,000 recorded in "Fair value result on financial instruments" in 2001.
As of January 1, 2001, the fair value of the call option was $8,952,000 and the
fair value of the put option was $5,604,000.

Express Telecommunications Co. Inc - As part of the sale agreement for Express
Telecommunications Co. Inc. ("Extelcom"), MIC has been granted, for the price of
$1, the option to purchase 47,9% of the issued share capital of Extelcom at
various prices up to ten years after issuance. The exercise price is $1,000,000
if exercised within 12 months increasing by an additional $1,000,000 for each
year afterwards. If exercised between five and ten years after the option is
issued, the purchase price is $8,000,000. Due to the history of losses incurred
by the operation, management considers that the option has nil value. The option
is not exercisable in part. As of December 31, 2002, the option has not been
exercised.

Vietnam - The shareholders' agreement grants the Company's partner an option to
purchase an additional 10% equity interest in CIV by (i) paying an exercise
price equal to 10% of the Company's total capital contribution with interest at
a rate of LIBOR+2% and (ii) assuming a proportionate share of all financial
guarantees and loans made by the Company to CIV. This option expires on the
first anniversary of the date the term of the license is extended to at least 15
years. In July 2002, the option was put to the Company at an exercise price of
$24,000. As of December 31, 2001, the fair value of the option that had not been
put to the Company was $21,951,000 (2000: 21,561,000). The change in fair value
to the date of exercisement of $1,174,000 (2001: $390,000) has been recorded as
a "Fair value result on financial instruments" with the reversal of the
liability, $23,125,000, credited to the profit and loss as a "Gain from sale of
subsidiaries".


                                     F-30
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

10.  PLEDGED DEPOSITS

Pledged deposits represent interest bearing collateral for certain debts of
Group companies (Note 17).

                                          2002                 2001
                                      -------------------------------
                                        US$ '000             US$ '000
                                      -------------------------------

Pledged deposits                          37,762               58,523
Offset against borrowings (note 17)      (4,841)             (11,119)
                                      -------------------------------
                                          32,921               47,404
                                      ===============================

The effective interest rate on pledged deposits as at December 31, 2002, was
2.6% (2001: 7.3%).


                                     F-31
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

11.  INVENTORIES

The Group carries the following inventories, measured at lower of cost or net
realizable value:

                                          2002                 2001
                                      -------------------------------
                                        US$ '000             US$ '000
                                      -------------------------------

Trading inventories                       5,589               10,605
Non-trading inventories                   1,373                2,327
                                      -------------------------------
Total inventories                         6,962               12,932
                                      ===============================

12.  TRADE RECEIVABLES, NET

Trade receivables comprise:

                                          2002                 2001
                                      -------------------------------
                                        US$ '000             US$ '000
                                      -------------------------------
Trade receivables, gross
Opening balance                         162,697             172,455
Additions, net                            2,983              26,736
Write-offs                               (4,065)            (11,712)
Change in ownership                     (11,442)            (12,534)
Exchange rate movement                   (9,388)            (12,248)
                                      ------------       ------------
Closing balance                         140,785             162,697
                                      ============       ============

Impairment from doubtful receivables
Opening balance                         (26,619)            (35,773)
Impairment charge                        (6,624)             (9,066)
Write-offs                                4,065              11,712
Change in ownership                         635               4,204
Exchange rate movement                      979               2,304
                                      ------------       ------------
Closing balance                         (27,564)            (26,619)
                                      ============       ============

Trade receivables, net
     Closing balance                    113,221             136,078
                                      ============       ============

     Opening balance                    136,078             136,682
                                      ============       ============

Included in the net trade receivables' balance above is $82,356,000 (2001:
$92,834,000) related to amounts due from national telecommunication companies in
respect of interconnection.


                                     F-32
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

13. OTHER CURRENT ASSETS

Other current assets are comprised as follows:

                                           2002           2001
                                       --------------------------
                                         US$ '000       US$ '000
                                       --------------------------

Employment and other taxes                   9,758         9,943
Cash receivable from VMS, net (i)           11,503         8,924
Other current assets                        17,192        16,933
                                       --------------------------
                                            38,453        35,800
                                       ==========================

(i)  This reflects the net cash receivable under the revenue sharing agreement
     in Vietnam (Note 3 b (i)).

14.  TIME DEPOSITS

Time deposits as of December 31, 2002 of $16,200,000 (2001: $21,444,000)
represent cash deposits with banks which earn market rates of interest and have
maturity periods of between six and nine months.

As of December 31, 2002, the effective interest rate on short-term bank deposits
was approximately 4.6% (2001: 14.0%).

15.  CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised as follows:

                                           2002           2001
                                       --------------------------
                                         US$ '000       US$ '000
                                       --------------------------

Cash and cash equivalents in US             42,252         23,517
dollars
Cash and cash equivalents in other          28,199         32,759
currencies
                                       --------------------------
Total cash and cash equivalents             70,451         56,276
                                       ==========================


                                     F-33
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

16.  SHAREHOLDERS' EQUITY

     a) Share capital and premium

The authorized capital of the Company totals 100,000,000 registered shares. At
December 31, 2002, the total subscribed and fully paid-in share capital and
premium amounts to $281,989,458 (2001: $281,989,458) consisting of 71,124,729
(2001: 71,124,729) registered common shares at a par value of $2 (2001: $2)
each.

As a result of the Merger (Note 1), 19,915,328 shares of MIC's common stock,
with a par value of $2 each, were issued to former Millicom stockholders on
December 31, 1993. In February 1994, under the terms of the Merger Agreement,
923,721 interim additional merger shares, with a par value of $2 each, were
issued to former Millicom stockholders and 211,864 shares of MIC's common
stock, with a par value of $2 each, were issued to Great Universal. Under the
terms of the Merger Agreement, the former Millicom shareholders also had the
non-transferable contingent right to receive a maximum of 808,047 final
additional merger shares of common stock, with a par value of $2 each, based on
the payment of certain tax liabilities of Millicom (the "Tax Liabilities").

In October 2001, the Group determined that the Tax Liabilities amounted to
$7,023,000. At the time of the Merger, the Group had recorded a provision of
$13,544,000 for the Tax Liabilities, resulting in a difference of $6,521,000.
That difference was settled by the final issuance of 374,521 shares, with a par
value of $2 each, and a realized gain of $3,521,000 (Note 21), corresponding to
the difference between the issuance price and the share price as of the date of
the transaction.

In February 2003, an Extraordinary General Meeting of the Company passed a
resolution approving a reverse share split whereby three existing shares of a
par value of $2 each would be exchanged for one new share with a par value of
$6 (Note 31).

     b) Treasury stock

As a result of the Merger, 21,647,096 shares of MIC's common stock, previously
held by Millicom, now held by subsidiaries of MIC-USA, are accounted for as
treasury stock for consolidated reporting purposes. In 2002, 386,350 (2001:
nil; 2000: nil) shares were acquired by the Company. Those acquired were
accounted for as treasury stock. In 2002, nil shares with a par value of $6
each (2001: 333 shares with a par value of $2 each; 2000: 149,989 with a par
value of $2 each) were issued from treasury stock under share option plans.

As of December 31, 2002, the total number of treasury shares held was 7,423,767
(2001: 21,884,954) MIC shares.

     c) Legal and consolidation reserves

On an annual basis, if the Company reports a net profit for the year,
Luxembourg law requires appropriation of an amount equal to at least 5% of the
annual net income to a legal reserve until such reserve equals 10% of the
issued share capital. This reserve is not available for dividend distribution.
A consolidation reserve will be required for consolidated profits that are not
available for distribution.

See Note 17 for other restrictions relating to dividend payments.


                                     F-34
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     d) Options outstanding

The following table summarizes information about stock options outstanding at
December 31, 2002, which have been issued to officers and employees of the
Group. The Company has elected not to record the expense associated with the
issuance of stock options as permitted under IFRS.

<TABLE>
                        Options Outstanding                                    Options Exercisable
---------------------------------------------------------------------  ----------------------------------------
        Range                                   Weighted Average     Number exercisable      Weighted Average
         of              Number outstanding         Exercise                 at                  Exercise
  Exercise Prices $       at Dec. 31, 2002           Price $            Dec. 31, 2002             Price $
----------------------   --------------------  --------------------  --------------------   -------------------
<S>                               <C>                    <C>                  <C>                    <C>
             15.00                200,000                 15.00                     -                     -
             36.00                238,166                 36.00                30,555                 36.00
  67.125 to 81.375                219,683                 75.63               184,516                 74.52
  114.00 to 118.98                138,201                116.43               126,756                116.22
 127.50 to 146.625                259,200                132.63               147,222                136.53
----------------------   --------------------  --------------------  --------------------   -------------------
  15.00 to 146.625              1,055,250                 74.55               489,049                101.58
======================   ====================  ====================  ====================   ===================
</TABLE>

The following table summarizes the terms of options outstanding as of December
31, 2002:

<TABLE>
                                              Number of     Exercise price
               Date issued                     options             $                 Terms of option
------------------------------------------ --------------- ------------------- ----------------------------
<S>                                            <C>         <C>                 <C>
May 1994, May 1995, May 1996, May 1997,        560,266     15.00 - 146.625     Exercisable in tranches,
January 1998, May 1998, August 1999, May                                       for an indefinite period,
2000, December 2001 and December 2002                                          after one year from the
                                                                               date of issuance

May 1994, May 1995, May 1996, August           494,984     15.00 - 127.50      Exercisable in tranches,
1996, November 1996, March 1997, May                                           with a maximum exercise
1997, May 1998, August 1999, May 2000,                                         period of six years, after
June 2000, December 2001 and December                                          three years from the date
2002                                                                           of issuance
</TABLE>

A summary of the Company's stock options as of December 31, 2002, 2001 and
2000, and changes during the years then ended is as follows:

<TABLE>
                                       2002                        2001                     2000
                             ------------------------------------------------------------------------------
                                            Weighted                   Weighted                 Weighted
                                Number      average        Number      average      Number      average
                                  of        exercise         of        exercise       of        exercise
                               options      price $        options     price $      options     price $
                             ------------------------------------------------------------------------------
<S>                           <C>              <C>       <C>              <C>     <C>              <C>
Outstanding at beginning
  of year                     3,845,357        30.40     3,142,222        36.89   2,724,956        34.34
Effect of reverse stock      (2,563,573)       60.80             -            -           -            -
 split
Granted                         200,000        15.00     1,015,400        12.00     926,489         42.19
Exercised                             -            -          (333)       22.38    (164,055)        27.86
Forfeited                      (426,534)       96.72      (311,932)       36.15    (345,168)        35.22
                             ------------------------------------------------------------------------------
Outstanding at end of year    1,055,250        74.55     3,845,357        30.40   3,142,222        36.89
                             ------------------------------------------------------------------------------
Exercisable at end of year      489,049       101.58     1,542,278        36.91   1,170,217        36.74

Weighted  average fair value
 of options granted                             3.15                       7.05                    24.45
</TABLE>


                                     F-35
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

Shares issued from the exercise of stock options are granted using treasury
shares. Total treasury shares held as of December 31, 2002 amounted to
7,423,767 with a par value of $6 each (2001: 21,884,954 with a par value of $2
each).

Other options in subsidiary companies, outstanding at December 31, 2002, have
been issued to officers and employees of the Group as follows:

Liberty Broadband Limited - An option plan was established on July 1, 2000
authorizing certain employees and officers to purchase a total of 5% of the
share capital of Liberty Broadband Limited, formerly Tele2 (UK). The strike
price of these options is calculated as the corresponding share of MIC's
historic total investment in the relevant operation. These options are
exercisable in tranches with a maximum exercise period of six years from the
date of issuance. As of December 31, 2001, all of the options have been issued
under the option plan and none of the above options have been exercised. In
September 2002, the Group disposed of its interest in Liberty Broadband Limited
and the options were cancelled.

Millicom Argentina S.A. - An option plan was established on December 15, 2000
for certain employees and officers to purchase a total of 10% of the share
capital of Millicom Argentina S.A. The strike price of these options is
calculated as the corresponding share of MIC's historic total investment in the
relevant operation. These options are exercisable in tranches until December
31, 2004. As of December 31, 2001, 8.8% of the share capital had been issued
under the option plan. During 2002 the right to exercise options over 6.0% of
the share capital was cancelled. As of December 31, 2002, none of the above
options have been exercised.

Millicom International BV - An option plan was established on December 15, 2000
for certain employees and officers to purchase a total of 1.7% of the share
capital of Millicom International BV. The strike price of these options is
calculated as the corresponding share of MIC's historic total investment in the
relevant operation. These options are exercisable in tranches until December
31, 2004 and were all issued in 2000. During 2002 the right to exercise options
over 0.7% of the share capital was cancelled. As of December 31, 2002, none of
the above options have been exercised.


                                     F-36
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

17.  BORROWINGS

Borrowings comprise:

     (i) Borrowings due after more than one year:

<TABLE>
                                                         2002               2001
                                                     -------------------------------
                                                       US$ '000           US$ '000
                                                     -------------------------------

<S>                                                    <C>                 <C>
      Corporate subordinated debt, net of
      financing fees                                    912,539            954,601
                                                     =============     =============

      Other debt and financing:
      Secured equipment financing facilities             15,709              9,658
      Secured bank financing facilities                 207,941            398,070
                                                     -------------     -------------

      Total long-term other debt and financing          223,650            407,728
      Less: portion payable within one year             (64,280)           (60,253)
                                                     -------------     -------------

      Total other debt and financing due
         after more than one year                       159,370            347,475
                                                     =============     =============
</TABLE>

     (ii) Borrowings due within one year:

<TABLE>
                                                         2002               2001
                                                     -------------------------------
                                                       US$ '000           US$ '000
                                                     -------------------------------

<S>                                                    <C>                 <C>
     Other debt and financing:
        Secured equipment financing facilities           11,200             31,955
        Secured bank financing facilities                81,186             61,690
                                                     -------------     -------------
     Total short term other debt and financing           92,386             93,645

     Portion of long-term debt payable within one
        year                                             64,280             60,253
                                                     -------------     -------------
     Total other debt and financing due within
        one year                                        156,666            153,898
                                                     =============     =============
</TABLE>

     a)  Company borrowings

Borrowings mainly comprise notes, including corporate subordinated debt, term
loans and revolving credit facilities in various countries and are mainly
denominated in US dollars. Average interest on these facilities is
approximately 12.5% (2001: 12.9%; 2000: 11.3%). Average interest on short-term
borrowings is approximately 10.2% (2001: 10.3%; 2000: 10.8%). Also included in
debt and other financing is $456,000 (2001: $1,145,000) in respect of finance
leases (note 26).


                                     F-37
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

On April 25, 1996, the Group signed a seven-year $200,000,000 Bank Credit
Agreement (the "Original Bank Credit Agreement") arranged by ABN-Amro Bank and
ING Bank. The main part of the facility was used to refinance existing
short-term credit facilities at the Company level and for investments in
existing and new operations and for corporate and interest expenses. The
financing was subsequently amended in 1998 and 1999 and secured by a portion of
MIC's shares in Tele2 AB. The loan bears interest starting at LIBOR+1.75% but
decreasing to LIBOR+1% depending on the amount and value of the security put in
place. The facility was subject to the maintenance of various restrictive and
financial covenants such as not exceeding a certain ratio of certain
consolidated debt to earnings before interest, taxation, depreciation and
amortization. This facility was fully repaid on December 14, 2001.

In December 2001, the Group entered into an equity swap transaction with
Toronto-Dominion Bank for a maximum facility amount of SEK 1,855 million
(approximately $175 million as of December 31, 2001) to replace the Original
Bank Credit Agreement. In exchange for the facility, the Group has pledged
Tele2 AB 'B' shares. The number of shares pledged is adjusted on a monthly
basis based on Tele2 AB 'B' shares market value. The facility bears an annual
interest rate calculated using the current STIBOR one-month rate plus 2%
payable on a monthly basis, and must be fully repaid by November 2004. As of
December 31, 2002 $54,638,000 (2001: $173,365,000) was outstanding under this
facility collateralized by 6,184,293 (2001: 9,115,479) 'B' shares of Tele2 AB.
This transaction has been accounted for as a borrowing and the related Tele2 AB
'B' shares are recorded as pledged securities under the caption "Investment in
securities".

As of December 31, 2002, the Group had outstanding standby letters of credit
and guarantees of $25,303,000 and $106,606,000 respectively (2001: $31,838,000
and $148,854,000) securing debt and commitments in the Group. The Group's share
of this debt is included in the balance sheet under the caption "Other debt and
financing".

In the normal course of business, MIC has issued corporate guarantees to secure
the obligations of some of its operations under bank, lease and supplier's
financing agreements. The table below describes, for each operation, the
outstanding amount under the guarantees and the remaining terms of the
guarantees.


                                     F-38
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
-----------------------------------------------------------------------------------------------------------------
                                          Terms                     Terms                    Terms
                              Bank        as at        Lease        As at     Suppliers'     As at
                           Guarantees    December    guarantees    December   guarantees    December      Total
                             US$'000     31, 2002     US$'000      31, 2002    US$'000      31, 2002     US$'000
-----------------------------------------------------------------------------------------------------------------
<S>                           <C>      <C>                <C>    <C>               <C>    <C>             <c>
MIC Latin America
-----------------------------------------------------------------------------------------------------------------
Argentina                          -                      110    0 - 2 years         485   0 - 2 years       595
-----------------------------------------------------------------------------------------------------------------
Bolivia                       40,891   0 - 4 years          -                          -                  40,891
-----------------------------------------------------------------------------------------------------------------
Peru                               -                        -                      2,064   0 - 2 years     2,064
-----------------------------------------------------------------------------------------------------------------
Colombia                           -                        -                        459   0 - 2 years       459
-----------------------------------------------------------------------------------------------------------------
El Salvador (i)               12,500   0 - 1 year           -                          -                  12,500
-----------------------------------------------------------------------------------------------------------------
Guatemala                        918   0 - 3 years          -                          -                     918
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
Sanbao Telecom (Asia)
-----------------------------------------------------------------------------------------------------------------
Pakistan                      19,743   0 - 1 year           -                        248   0 - 1 year     19,991
-----------------------------------------------------------------------------------------------------------------
Cambodia                       4,609   0 - 2 years          -                      1,223   0 - 1 year      5,832
-----------------------------------------------------------------------------------------------------------------
Sri Lanka                     17,964   0 - 4 years          -                        559   0 - 1 year     18,523
-----------------------------------------------------------------------------------------------------------------
Vietnam                            -                        -                      3,246   0 - 1 year      3,246
-----------------------------------------------------------------------------------------------------------------
Lao People's Democratic
Republic                           -                        -                        826   0 - 3 years       826
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
MIC Africa
-----------------------------------------------------------------------------------------------------------------
Ghana                            452   0 - 1 year           -                        87    0 - 1 year        539
----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
Other                              -                        -                       222    0 - 2 years       222
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
Total guarantees              97,077          110                                 9,419                  106,606
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(i): As of December 31, 2002, this entity is accounted for as a non-current
investment

The Group's share of the book value of total pledged assets held by
subsidiaries and joint ventures securing Group debt is $97,204,000 (2001:
$52,320,000). The book value of pledged assets held by Corporate at December
31, 2002 is $164,031,000 (2001: $328,479,000). The Group has pledged 6,184,293
'B' shares of Tele2 AB (2001: 9,115,479). As of December 31, 2002, the Group
had $37,762,000 (2001: $58,523,000) of blocked deposits against borrowings. The
Group's share of total liabilities secured by either pledged assets, letters of
credit or company guarantees is $189,395,000 (2001: $226,195,000).

The total interest charged in the year is $185,959,000 (2001: $209,912,000;
2000: $196,002,000).

     b)  Corporate subordinated debt

On June 4, 1996, the Company raised approximately $483,433,000 (after deducting
discount and estimated expenses) through a private offering of 13,5% Senior
Subordinated Discount Notes due 2006 (the "Notes"). The Notes were issued at
52.075% of their principal amount of $962,000,000 and the purchase discount on
the Notes accretes from issuance until June 1, 2001. Cash interest began to
accrue on the Notes on June 1, 2001 at a rate of 13,5 % per annum, payable
semi-annually in arrears on June 1 and December 1, until maturity on June 1,
2006.


                                     F-39
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

During 2002, the Company re-purchased Notes to the value of $44,000,000 at
market prices at the time, realizing a gain of $28,676,000 which is recorded in
the profit and loss under the heading "Other Income". As of December 31, 2002,
MIC has offset $5,461,000 (2001: $7,399,000) of deferred financing fees against
the value of the Notes.

The fair value of the Notes at December 31, 2002, which has been determined
from their market value, was approximately $440,066,000 (2001: $630,110,000).

The Company undertook the offering of the Notes to fund the continued
construction and expansion of its cellular systems, working capital and
operating expenses. In addition, the net proceeds of the offering were also
used to fund the acquisition and development of additional licenses or systems
or to increase the Group's ownership in its existing systems.

The Notes contain provisions that allowed the early redemption of the Notes, in
whole or in part, at the option of the Company at any time on or after June 1,
2001 and prior to maturity at prices ranging from 106.75% of the principal
amount in 2001 to 100% in 2004 and thereafter, plus accrued interest. Upon the
occurrence of a Change of Control Triggering Event, defined as a rating decline
and change in control, holders of the Notes could have required the Company to
purchase all outstanding Notes at a purchase price of 101% of the accreted
value of the Notes on or before June 1, 2001 or 101% of the stated principal
amount of the Notes, plus accrued and unpaid interest, if any, on the Notes to
the date of purchase, after June 1, 2001.

The Notes are senior subordinated unsecured obligations of the Company, which
rank pari passu in right of payment with all senior subordinated unsecured
obligations of the Company. The Notes are subordinated in right of payment to
all Senior Debt (as defined in the Indenture with respect to the Notes) of the
Company.

The Indenture pursuant to which the Notes were issued contains certain
covenants that, among other things, limit the ability of the Group to: (i)
incur additional indebtedness; (ii) pledge or dispose of assets; (iii) make
distributions on and repurchases of its common stock or make certain
investments; (iv) make dividend or other payments to the Company; (v) engage in
transactions with affiliates, and includes certain cross default clauses. The
Indenture also limits the ability of the Group to merge or consolidate with or
transfer all or substantially all of its assets to another entity.


                                     F-40
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     c)  Other debt and financing

Total other debt and financing analyzed by country is as follows:

                                             2002         2001
                                        ------------- ------------
                                           US$ '000     US$ '000
                                        ------------- ------------

     Argentina                                  337        2,471
     Bolivia  (i)                            46,660       48,703
     Cambodia                                 6,090       10,594
     Colombia  (ii)                          78,819      118,859
     Ghana                                      537       11,220
     Guatemala                               28,817       24,792
     Honduras                                 2,888        3,415
     India                                        -            5
     Luxembourg                                 529        1,765
     Lao People's Democratic Republic         1,289            -
     Mauritius                                4,533        5,171
     Pakistan (iii)                          45,373       31,488
     Paraguay                                 8,517        9,124
     Peru                                     1,009        1,511
     Philippines                                  -       11,918
     Senegal                                  8,078        7,774
     Sri Lanka  (iv)                         23,325       26,657
     Tanzania                                 2,565       10,345
     Vietnam                                  6,493      14,882
     less: pledged deposits                  (4,841)     (11,119)
                                        ------------- ------------
     Total                                  261,018      329,575

     Corporate                               55,018      171,798
                                        ------------- ------------

     Total other debt and financing         316,036      501,373
                                        ============= ============

     Of which:
         due within 1 year                  156,666      153,898
         due after more than 1 year         159,370      347,475
                                        ------------- ------------
                                            316,036      501,373
                                        ============= ============

At December 31, 2002, MIC was in breach of loan covenants for a total debt of
$22,459,000 (2001: $174,000), which is classified as short-term debt on the
balance sheet. None of the above facilities have been called by the banks
concerned. In the opinion of management, the outcome of discussions to resolve
these breaches will not materially impact the ability of these companies to
maintain adequate funding arrangements to support and develop future
operations.


                                     F-41
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

Significant individual financing facilities are described below:

     i)  Bolivia

In June 2001, Telefonica Celular de Bolivia SA signed an agreement for
additional financing in the amount of $25,000,000 with the IFC and $10,000,000
from the Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden, N.V.
(FMO), also known as the Netherlands Development Finance Company. This
financing bears interest at LIBOR+3.00% and is repayable in installments
starting in December 2002 until December 2006. Among other things, the
financing requires the company to maintain certain financial covenants such as
a debt ratio, long-term debt service coverage, and debt-to-equity ratio. As of
December 31, 2002, the company was in breach of certain covenants on the IFC
loan and the outstanding balances had been reclassified as short-term
financing. As of December 31, 2002, $31,030,000 was drawn down related to these
financings. Management considers this to be the fair value. These investments
will help to fund the expansion and further digitalization of the Group's
mobile cellular telecommunications network in Bolivia.

     ii) Colombia

MIC arranged financing during 1994 for Celcaribe SA, its operation in Colombia.
This financing consisted of units in a high yield note trust certificate
($82,504,129) and Celcaribe ordinary share trust certificates ($26,264,876) and
secured bank financing ($11,400,000). The high yield note trust certificate is
repayable in several tranches starting in March 2001 and ending in the year
2004 and bears interest at 14.5% per annum. The amount outstanding under this
financing as of December 31, 2002, was $67,700,000. The fair value of the
outstanding notes at December 31, 2002, based upon secondary market trading
information, was $48,067,000 (2001: $61,044,000).

In 2002 and 2001, Celcaribe repurchased $34,000,000 of the high yield note
trust certificates at market price at that time, realizing a gain of
$13,571,000 (2001: $8,075,000) which has been recorded as "Other income" in the
consolidated statement of profit and loss.

The high yield note and the supplier financing are both secured by a pledge of
the shares of Millicom de Colombia ("MdC"), MIC's 96.1% (2001: 96.1%) owned
company, which holds 4.8% of the share of Celcaribe, and certain other assets
of Celcaribe.

     iii) Pakcom

In November 2002, Pakcom signed a syndicated finance agreement for Rupees 800
million (approximately $13,700,000). For this agreement Faysal Bank Limited
acts as security agent and Standard Chartered Bank acts as facility agent. The
facility is repayable in monthly installments until December 31, 2004 and
attracts interest at State Bank of Pakistan discount rate plus 1.75%, with a
floor rate of 11.75%. As of December 31, 2002, $13,185,000 of this facility was
outstanding. Management considers this to be the fair value.

     iv) Sri Lanka

In September 2000, ABN-Amro arranged a seven-and-a-half-year syndicated loan of
LKR 1,534,000,000 ($20,000,000) for Celltel Lanka Limited, MIC's 99.9% owned
operation in Sri Lanka. This financing bears interest at 3% over the weighted
average Treasury Bill Rate and is repayable over 13 quarterly installments
commencing one year from signing. At December 31, 2001, the facility has been
fully drawn down. As of December 31, 2002, $13,418,000 was outstanding.
Management considers this to be the fair value.


                                     F-42
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     d)  Analysis of borrowings by maturity

The total amount repayable at December 31, 2002 and 2001 is as follows:

<TABLE>
                        Company       Operations     Total           Company      Operations       Total
                          2002           2002         2002             2001          2001           2001
                     ----------------------------------------------------------------------------------------
                        US$ '000      US$ '000      US$ '000         US$ '000     US$ '000        US$ '000
                     ----------------------------------------------------------------------------------------

<S>                         <C>        <C>             <C>            <C>            <C>           <C>
Due within:
    1 year                    -       156,666         156,666           1,033       152,865        153,898
    1 - 2 years          57,536        65,435         122,971               -        78,433         78,433
    2 - 3 years             380        19,768          20,148         173,365        62,627        235,992
    3 - 4 years         918,000        10,666         928,666             380        20,693         21,073
    4 - 5 years               -         6,676           6,676         962,000        14,260        976,260

Due after 5 years             -         1,807           1,807               -           697            697
                     ------------------------------------------    ------------------------------------------

Total repayable         975,916       261,018       1,236,934       1,136,778       329,575      1,466,353
                     ------------------------------------------    ------------------------------------------

Unamortized
portion of
financing fees           (8,359)            -          (8,359)        (10,379)            -        (10,379)
                     ------------------------------------------    ------------------------------------------
Total debt, net         967,557       261,018       1,228,575       1,126,399       329,575      1,455,974
                     ==========================================    ==========================================

Of which
  subordinated (v)      918,000        67,700         985,700         962,000       101,740      1,063,740
                     ==========================================    ==========================================
</TABLE>

(v)  The subordinated debt shown above as Operations is in respect of the high
     yield note trust certificates in Colombia (Note 17 c (ii)).


                                     F-43
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

18.  ANALYSIS OF GROUP REVENUES AND COST OF REVENUES, SEGMENTAL REPORTING

The Group mainly operates in one reportable industry segment, telecommunications
services. The Group's revenues and cost of sales comprise the following:

<TABLE>
                                                2002                 2001               2000
                                         -----------------------------------------------------------
                                              US$ '000             US$ '000           US$ '000
                                         -----------------------------------------------------------
<S>                                            <C>                  <C>                <C>
Provision of telecom services                  581,321              600,315            526,494
Connection revenues                              7,982                9,567              7,009
Equipment revenues                              15,883               34,688             37,337
                                         -------------------- --------------------------------------
Total revenues                                 605,186              644,570            570,840
                                         ==================== ======================================
</TABLE>


The Group's cost of sales comprise the following:

<TABLE>
                                                2002                 2001               2000
                                         -----------------------------------------------------------
                                              US$ '000             US$ '000           US$ '000
                                         -----------------------------------------------------------
<S>                                            <C>                  <C>                <C>
  Costs from the provision of telecom
     Services                                 (235,986)            (227,970)          (241,293)
  Connection costs                              (5,818)              (6,213)            (4,762)
  Equipment costs                              (27,817)             (49,260)           (72,261)
                                         -------------------- --------------------------------------
  Total cost of sales                         (269,621)            (283,443)          (318,316)
                                         ==================== ======================================
</TABLE>

The segmental reporting by strategic operating entity is prepared on a
geographical basis and reflects the measures of segmental profit and loss and
financial position reviewed by management. The definition of strategic segment
is defined in notes 1 and 3. Other than financing arrangements, there are no
significant transactions between the segments. For the purposes of this
presentation, corporate expenses have been fully allocated to Unallocated.

SANBAO Telecom (Asia)                          2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                      233,671    209,635    154,256
   of which divested                            1,113      5,878      9,533
Depreciation and amortization                 (47,023)   (45,041)   (35,199)
   of which divested                           (4,812)    (3,870)    (4,269)
Operating profit  (loss)                       71,547     50,559      3,656
   of which divested                           (5,601)    (4,048)    (3,666)
Non-cash expenses                                 199       (529)   (52,290)
   of which divested                                -          -    (33,639)
Profit (loss) before minority interest         47,207     23,297    (32,022)
   of which divested                          (13,318)   (11,450)   (17,083)
Assets                                        286,878    275,994
   of which divested                                -     12,568
Capital expenditure                            39,991     67,000
   of which divested                                4      1,984
Liabilities                                  (199,189)  (291,034)
   of which divested                                -    (52,490)


                                     F-44
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

MIC Latin America                              2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                      277,554    315,321    313,842
   Of which El Salvador                             -     17,311     45,555
Depreciation and amortization                 (54,286)   (67,545)   (57,132)
   Of which El Salvador                             -     (2,992)    (5,658)
Operating (loss) profit                       (10,867)    63,424     54,353
   Of which El Salvador                             -      3,517     11,094
Share of net profit of investment in
associate company                                  62          -          -
Non-cash expenses                             (27,742)    (1,422)   (18,380)
(Loss) Profit before minority interest         (1,648)     9,897      2,043
   Of which El Salvador                             -      1,603      6,577
Assets                                        451,997    538,666
   Of which El Salvador                        52,858     52,858
Capital expenditure                            33,379     75,301
   Of which El Salvador                             -      1,944
Liabilities                                  (205,192)  (333,290)


MIC Africa                                     2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                       52,080     45,323     33,897
Depreciation and amortization                  (8,883)    (6,928)    (5,399)
   of which divested                              (20)       (15)         -
Operating profit (loss)                         1,161      5,484      3,681
   of which divested                             (392)      (311)         -
Non-cash expenses                                (745)       (15)    (2,466)
Loss before minority interest                  (6,918)    (2,672)   (10,765)
   of which divested                             (500)      (378)         -
Assets                                         89,705     96,251
   of which divested                                -      9,894
Capital expenditure                            16,248     18,224
   of which divested                               12      2,065
Liabilities                                   (99,301)  (107,679)
   of which divested                                -    (10,018)


                                     F-45
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

Other                                          2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                       15,671     11,945     3,798
   of which divested                            2,620      2,156     1,422
Depreciation and amortization                  (8,586)    (5,707)   (3,534)
   of which divested                           (1,080)    (2,628)   (2,673)
Operating loss                                (18,366)   (11,124)  (10,667)
   of which divested                          (11,954)    (8,091)   (7,097)
Loss from associated companies                      -          -   (43,178)
   of which divested                                -          -   (43,178)
Non-cash expenses                             (11,960)         -         -
   of which divested                           (6,833)         -         -
Loss before minority interest                 (24,483)   (16,634)  (55,681)
   of which divested                          (14,453)   (11,976)  (51,661)
Assets                                         15,604     38,151
   of which divested                                -     11,969
Capital expenditure                             7,217     10,489
   of which divested                            1,650      3,956
Liabilities                                   (14,485)   (58,606)
   of which divested                                -    (42,394)


MIC Systems (divested in 2002)                 2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                       28,186     26,300     28,027
Depreciation and amortization                  (6,814)    (4,588)    (3,139)
Operating profit                                7,275      5,864      4,758
Non-cash expenses                                 (53)      (211)    (3,766)
Profit (loss) before minority interest          3,892      3,124     (1,816)
Assets                                              -     26,074
Capital expenditure                               774      1,184
Liabilities                                         -    (13,734)


FORA Telecom (divested 2001)                   2002       2001       2000
                                            ---------------------------------
                                             US$ '000   US$ '000   US$ '000
                                            ---------------------------------
Revenues                                            -     37,716     36,999
Depreciation and amortization                       -     (7,642)   (11,999)
Operating profit (loss)                             -      1,061    (39,115)
Non-cash expenses                                   -        214    (30,294)
Loss before minority interest                       -     (9,844)   (51,483)
Assets                                              -          -
Capital expenditure                                 -      7,238
Liabilities                                         -          -


                                     F-46
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

Unallocated items                              2002        2001       2000
                                            ---------------------------------
                                             US$ '000    US$ '000   US$ '000
                                            ---------------------------------
Revenues                                           41          15         21
Depreciation and amortization                  (5,861)     (7,633)   (12,849)
Operating profit (loss)                        71,564     (22,482)   (70,044)
   of which divested                           (1,410)     (440)      (1,624)
Loss from associated companies                      -      (3,112)         -
Non-cash expenses                              (9,865)    (19,453)    (2,436)
(Loss) profit before minority interest       (380,698)   (144,417)   501,544
   of which divested                           (6,914)     (1,009)    (2,043)
Assets                                      1,857,632   3,253,189
   of which divested                                -       3,247
Capital expenditure                               165          85
Liabilities                                (2,365,170) (3,344,803)
   of which divested                                -     (12,167)


INTER-SEGMENT ELIMINATIONS                     2002        2001       2000
                                            ---------------------------------
                                             US$ '000    US$ '000   US$ '000
                                            ---------------------------------
Revenues                                       (2,017)     (1,685)         -
   of which divested                             (463)       (378)         -
Operating loss                                      -           -          -
Profit before minority interest                     -           -          -
Assets                                     (1,498,697) (2,357,395)
Capital expenditure                                 -           -
Liabilities                                 1,408,692   2,357,372


TOTAL                                          2002        2001       2000
                                            ---------------------------------
                                             US$ '000    US$ '000   US$ '000
                                            ---------------------------------
Revenues                                      605,186     644,570    570,840
   of which divested                           31,456      71,672     75,981
Depreciation and amortization                (131,453)   (145,084)  (129,251)
   of which divested                          (12,726)    (18,743)   (22,080)
Operating profit (loss)                       122,313      92,786    (53,378)
   of which divested                          (12,082)     (5,965)   (46,744)
Profit (loss) from associated companies            62      (3,112)   (43,178)
Non-cash expenses                             (50,166)    (21,416)  (109,632)
   of which divested                           (6,886)          3    (67,699)
(Loss) profit before minority interest       (362,649)   (137,249)   351,820
   of which divested                          (31,293)    (31,533)  (124,086)
Assets                                      1,203,119   1,870,930
   of which divested                                -      63,752
Capital expenditure                            97,774     179,521
   of which divested                            2,440      16,427
Liabilities                                (1,474,645) (1,791,774)
   of which divested                                -    (130,803)

Non-cash expenses other than depreciation and amortization mainly comprise
write-downs of assets disclosed in note 20.


                                     F-47
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

19.  PERSONNEL CHARGES

The following personnel charges are included in sales and marketing expenses,
general and administrative expenses and other operating expenses:

                                    2002             2001             2000
                              ---------------- ----------------- ---------------
                                  US$ '000         US$ '000         US$ '000
                              ---------------- ----------------- ---------------

Wages and salaries
   Sales and marketing               8,761           12,073           10,375
   General and administrative       23,961           30,756           29,448
   Other operating expenses         10,609           10,625            8,498
                              ---------------- ----------------- ---------------
                                    43,331           53,454           48,321
                              ================ ================= ===============

Social security
   Sales and marketing                 948            1,468            1,367
   General and administrative        3,809            4,603            5,398
   Other operating expenses            111              264              190
                              ---------------- ----------------- ---------------
                                     4,868            6,335            6,955
                              ================ ================= ===============

                              ---------------- ----------------- ---------------
                                    48,199           59,789           55,276
                              ================ ================= ===============

The average number of permanent employees on a proportional basis during 2002
was 2,080 (2001: 3,032; 2000: 3,515).

Directors received payments of $1,711,000 (2001: $1,840,000; 2000: $2,277,000)
in respect of their services to the Group.

The Group does not have any material pension or post retirement plan
arrangements.

Stock-based compensation offered to officers and employees are disclosed in
Note 16.


                                     F-48
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

20.  GAIN AND LOSS ON EXCHANGE, DISPOSAL AND WRITE-DOWN OF ASSETS, NET

a)   Write-down of assets, net

During 2002, MIC entered into discussions concerning the sale of its cellular
operation, Celcaribe, in Colombia. Following the signing of a sale and purchase
agreement in December 2002, management recognized an impairment between the
recoverable amount and the carrying value of its intangibles in Celcaribe.
Other impairments have also been identified and recorded as disclosed in the
following table by reporting segment:

<TABLE>
                  ----------------------------------------------------------------------
                                                  2002
                  ----------------------------------------------------------------------
                    Licenses      Goodwill      Equipment       Other          Total
                      (ii)         (i)                           (ii)
                    US$ '000      US$ '000       US$ '000      US$ '000       US$ '000
                  ----------------------------------------------------------------------
<S>                    <C>             <C>          <C>            <C>          <C>
MIC Latin America     41,733        35,723              -         7,107         84,563
Sanbao Telecom             -             -              -         (199)           (199)
Africa                     -             -              -          745             745
MIC Systems                -             -              -           53              53
Unallocated                -             -              -          464             464
Other                  4,945           585          6,833          182          12,545
                  ----------------------------------------------------------------------
                      46,678        36,308          6,833        8,352          98,171
                  ======================================================================
</TABLE>

(i) Recorded under "Other operating expenses"
(ii) Recorded under "General and administrative expenses"


In December 2002, MIC invoked a drag-along clause on Celcaribe options,
resulting in a credit of $21,098,000 (note 9).

During 2001, management identified impairment of its license to operate
high-speed wireless data services in the UK due to initial market conditions
that have delayed profitable asset deployment. Therefore, an impairment was
measured as the difference between the recoverable amount, determined by
reference to discounted cash flows and the carrying value of the license at the
measurement date, resulting in a write-down of $20,074,000. Other impairments
have also been identified and recorded as disclosed in the following table by
geographic region:


                                     F-49
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

               -----------------------------------------------------------
                                          2001
               -----------------------------------------------------------
                 Licenses       Goodwill        Other           Total
                   (ii)            (i)           (ii)           (ii)
                  US$ '000       US$ '000      US$ '000        US$ '000
               -----------------------------------------------------------
Sanbao Telecom         350          1,030           179           1,559
FORA Telecom           146            622          (360)            408
Lama                     -              -         1,422           1,422
Africa                   -              -            15              15
MIC Systems              -              -           211             211
Unallocated              -              -          (655)           (655)
Other               20,074              -            34          20,108
               -----------------------------------------------------------
                    20,570          1,652           846          23,068
               ===========================================================

(i) Recorded under "Other operating expenses"
(ii) Recorded under "General and administrative expenses"


During 2000, management identified impairment of its analog fixed assets and
related licenses and intangibles due to the faster-than-expected migration of
its analog subscribers to digital platforms. This rapid migration created a
likely expectation that the analog assets would be decommissioned or disposed
of significantly before the end of their previously estimated useful life. As a
result of this rapid migration, the Company re-assessed the recoverability of
its investments in the third quarter of 2000. The analog assets will continue
to be held and used in the operations until migration to digital networks is
complete. However, the discounted cash flows projected to be generated from
analog assets have indicated that the recoverable amount of these assets is
lower than the carrying value. Therefore, impairment was measured as the
difference between the recoverable amount, determined by reference to
discounted cash flows, and the carrying value of the analog assets at the
measurement date. As a result, an impairment charge of $105,668,000 ($2.13 per
share on a diluted basis) was recognized in the consolidated income statement
and is included in the caption "General and administrative expenses". Following
is a detail of the impairment by geographical region:

<TABLE>
                  ----------------------------------------------------------------------
                                                  2002
                  ----------------------------------------------------------------------
                    Licenses      Goodwill      Equipment       Other          Total
                      (ii)         (i)                           (ii)
                    US$ '000      US$ '000       US$ '000      US$ '000       US$ '000
                  ----------------------------------------------------------------------
<S>                    <C>             <C>          <C>            <C>          <C>
Sanbao Telecom        19,203             -         33,087             -         52,290
MIC Latin America          -             -         18,379             -         18,379
FORA Telecom          10,046         2,239         20,248             -         32,533
MIC Africa                 -             -          2,466             -          2,466
MIC Systems                -             -              -         3,766          3,766
Unallocated                -             -              -         2,437          2,437
                  ----------------------------------------------------------------------
                      29,249         2,239         74,180         6,203        111,871
                  ======================================================================
</TABLE>

(i)  Recorded under "Other operating expenses"
(ii) Recorded under "General and administrative expenses"


                                     F-50
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

b) Gain (loss) from sale of subsidiaries and joint ventures, net

Year ended December 31, 2002 -

Following the sale of the Company's interest in FORA Telecom BV during 2001, as
described below, during 2002 MIC obtained the necessary GSM licenses and
therefore received the additional $30 million proceeds in cash. In addition,
certain loans for which MIC was liable were settled at less than their carrying
value. The credit realized on these less costs incurred in the acquisition of
the licenses, resulted in a net gain of $30,859,000 in 2002.

In July 2002, MIC's partner in its cellular operation in Vietnam exercised his
options to purchase 10% of the share capital of the company. MIC has recognized
a gain of $16,603,000 (note 9).

In September 2002, MIC sold its interest in its cellular operation in the
Democratic Republic of Congo recognizing a loss of $21,000.

Additionally, in September 2002, the Group sold its 100% interest in Liberty
Broadband Ltd. recognizing a loss of $10,294,000.

In May 2002, MIC sold 17% of its interest in MIC Systems BV, the direct parent
company of MACH SA, for $17,000,000 to Kinnevik BV. Further, in November 2002,
MIC Systems BV sold its 100% interest in Mach SA for a sum of Euro 95 million,
approximately $97,000,000. These two transactions resulted in the recognition
of a gain of $87,655,000 for the Group.

In December 2002, the Group completed the sale of its cellular operation in the
Philippines for a nominal sum, recognizing a loss of $35,988,000

Year ended December 31, 2001 -

In September 2001, the Company sold its 24.5% investment in SkyCell
Communications Limited, the Indian cellular company operating in Chennai
(formerly known as Madras), to Bharti Tele-Ventures Limited. The sale resulted
in a $28,354,000 gain on the disposal.

In November 2001, the Company sold 100% of its interest in FORA Telecom BV, its
Russian cellular telephony operations, to Tele2 AB. The agreement called for
$80 million of Tele2 AB class 'B' shares, (corresponding to 2,461,449 Tele2 AB
'B' shares), to be exchanged for the assets plus a maximum of $30 million in
cash or additional Tele2 AB "B" shares, depending on the outcome of GSM license
applications for three of MIC's existing cellular telephony operations in
Russia. Upon execution of the sale agreement, MIC agreed to assign deposits
held for loans by Banque Invik and to waive all intercompany balances between
the segment and the Group. The total disposal resulted in a $6,693,000 non-cash
gain recognized in 2001.

Year ended December 31, 2000 -

In May 2000, MIC sold a 20% interest in Millicom (Ghana) Limited to an existing
partner. The sale generated no gain or loss on disposal.

During 2000, the Group charged its profit and loss account with $2,755,000 in
respect of the impairment of the carrying value of investments in certain
start-up ventures.


                                     F-51
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

c)   (Loss) gain from investment securities

As of December 31, 2002, MIC holds a 6.8% interest in Tele2 AB ordinary shares
accounted for as both a current and non-current investment in securities. From
time to time MIC has sold parts of its investment in Tele2 AB and recognized a
loss or gain on the disposal. Losses or gains recognized in 2002, 2001, and
2000 are $(168,818,000), $(15,931,000) and $55,321,000, respectively (note 8).
Additionally, during 2002, MIC has recognized a significant and prolonged
decline in the value of its investment in Tele2 AB and, as a result, charged an
amount of $119,138,000 to the profit and loss account.

Also, during 2002, MIC made an impairment on its investment in Great Universal
for an amount of $5,027,000. In addition, MIC recognized an impairment on its
investment in Modern Holdings of $7,050,000 (note 8).

During 2002, the Group also disposed of its investment in Luxaviation SA,
previously held as an investment in securities, recognizing a gain of $70,000.

In September 2000, following the exchange offer of Tele2 AB, the Company
exchanged its 29.6% interest ownership in SEC realizing a gain of $609,941,000,
corresponding to the market value of the Tele2 AB shares obtained less the
value of SEC as recorded in the books of the Company.


                                     F-52
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

d) Disclosure on discontinuing operations

In May 2002 the Group publicly announced its intention to sell the MIC Systems
group of companies. These operations were sold on November 15, 2002 and are
reported in these financial statements as a discontinuing operation. The sales,
results, cash flows and net assets of the MIC Systems operations were as
follows:

<TABLE>
                                                             From January 01,
                                                             2002 to November       Year ended
                                                                 15, 2002        December 31, 2001
                                                             ----------------------------------------
                                                                  US$ '000            US$ '000
                                                             ----------------------------------------
<S>                                                                   <C>             <C>
Sales                                                                   27,723          25,921
Operating costs                                                       (20,911)        (20,423)
                                                             ----------------------------------------
Profit from operations                                                   6,812           5,498
Finance cost                                                           (1,969)         (1,521)
                                                             ----------------------------------------
Profit before tax                                                        4,843           3,977
Tax                                                                    (1,414)         (1,219)
                                                             ----------------------------------------
Profit after tax                                                         3,429           2,758
                                                             ========================================

Operating cash flows                                                   (1,088)           6,181
Investing cash flows                                                     4,499         (5,361)
Financing cash flows                                                     (281)             (4)
                                                             ----------------------------------------
Total cash flows                                                         3,130            816
                                                             ========================================

                                                                                    At December 31,
                                                               At Nov 15, 2002            2001
                                                             ----------------------------------------
                                                                  US$ '000            US$ '000
                                                             ----------------------------------------
Property, plant and equipment                                            2,293           2,297
Other non-current assets                                                 6,255           5,477
Current assets                                                          26,167          11,309
                                                             ----------------------------------------

Total assets                                                            34,715          19,083
Total liabilities                                                      (8,099)          (6,748)
                                                             ----------------------------------------
Net assets                                                              26,616          12,335
                                                             ========================================

The gain on disposal was determined as follows:
Net assets sold                                                         26,616
Proceeds from sale                                                     114,271
                                                             ------------------
Gain on disposal                                                        87,655
Tax thereon                                                                  -
                                                             ------------------

After-tax gain on disposal                                              87,655
                                                             ------------------

The net cash inflow on sale is determined as follows:
Proceeds from sale                                                     114,271
Less: cash and cash equivalents in subsidiary sold                     (4,125)
                                                             ------------------
Net cash inflow on sale                                                110,146
                                                             ==================
</TABLE>


                                     F-53
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

21.  TAXES

Group taxes are comprised of income taxes of subsidiaries and joint ventures.
As a Luxembourg commercial company, the Company is subject to all taxes
applicable to a Luxembourg Societe Anonyme. Due to losses incurred and brought
forward, no taxes based on Luxembourg-only income have been computed for 2002,
2001 or 2000.

The effective tax burden on profitable operations is approximately 25% (2001:
19%; 2000: 17%). The weighted average effective rate of tax has been reduced in
the years 1999 to 2001 largely due to the government in Paraguay creating a
foreign investment incentive program reducing the basic rate of income tax by
95% on the incremental profits generated by new capital investment. Currently
profitable operations are in jurisdictions with tax rates of 13% to 35% (2001:
8% to 40%; 2000: 14% to 40%). The utilization of tax loss carryforwards or
holidays had an impact of decreasing the effective tax rate on profitable
operations by approximately 1% in 2002 (2001: 1%; 2000: (1)%). The operations
currently incurring losses operate in tax jurisdictions with rates ranging from
25% to 35% (2001: 25% to 35%; 2000: 20% to 35%).

A reconciliation between the weighted average statutory rate applicable to
profitable operations and the effective weighted average tax rate is as
follows:

                                              2002         2001         2000
                                           -------------------------------------
                                               %            %            %
                                           -------------------------------------
Weighted average statutory rate                26           22           22
Investment incentive program (Paraguay)         -           (2)          (6)
Utilization of tax loss carryforwards          (1)          (1)           1
                                           ------------ ------------------------
Weighted average effective rate                25           19           17
                                           ============ ========================

The charge for income taxes is shown in the following table and recognizes that
revenue and expense items may affect the financial statements and tax returns
in different periods (temporary differences):

                                          2002            2001          2000
                                     --------------- ---------------------------
                                        US$ '000        US$ '000      US$ '000

Current income tax charge                 21,143          25,577        17,771
Deferred income tax charge (income)        1,591         (17,360)        8,493

                                     --------------- ---------------------------
Charge for taxes                          22,734           8,217        26,264
                                     =============== ===========================

Included in the above charge is $1,467,000 (2001: $3,323,000; 2000: $6,085,000)
in respect of divested operations and a charge of $77,000 (2001: credit of
$309,000; 2000: charge of $88,000) in respect of taxes relating to prior
periods.


                                     F-54
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

The tax effects of significant items comprising the Group's net deferred income
tax liability as of December 31, 2002 and 2001 are as follows:

                                                           2002         2001
                                                      --------------------------
                                                         US$ '000     US$ '000
                                                      --------------------------

Deferred income tax liabilities:
    Differences between book and tax
      basis of assets and liabilities                    (26,874)      (20,507)
                                                      ------------ -------------

Deferred income tax assets:
    Tax credit carryforwards                               2,734         3,110
    Temporary differences due to impairment charges        3,510             -
    Net operating and other loss carryforwards             2,226           675
                                                      ------------ -------------
Net deferred income tax assets                             8,470         3,785
                                                      ------------ -------------

Deferred income tax liability                            (18,404)      (16,722)
                                                      ============ =============

Amount included in balance sheet as non-current
  deferred tax liability                                 (26,874)      (20,507)
                                                      ============ =============

Amount included in balance sheet as non-current
  deferred taxation asset                                  8,470         3,785
                                                      ============ =============

Deferred income tax liabilities are comprised of $13,500,000 (2001:
$13,500,000) deferred US Federal income taxes and $13,374,000 (2001:
$7,007,000) deferred income taxes in other jurisdictions, reflecting temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
Deferred income tax assets are comprised of tax credit carryforwards and
operating losses in joint ventures and subsidiaries.

The Company has not recorded deferred income tax liabilities applicable to
undistributed earnings of foreign joint ventures and subsidiaries that will be
reinvested in foreign operations. Undistributed earnings amounted to
approximately $87,641,000 at December 31, 2002 (2001: $325,264,000; 2000:
$265,311,000).

Net operating and other loss carryforwards amounting to $189,080,000 (2001:
$108,069,000;2000: $84,269,000) are present in the Group. These have expiry
periods depending on their jurisdiction of greater than one year. $177,271,000
(2001: $107,394,000; 2000: $84,269,000) of these net operating and other loss
carryforwards are not anticipated to be used within expiry periods.

In October 2001, the Company determined that the Tax Liabilities, as defined by
the Merger Agreement, amounted to $7,023,000. At the time of the Merger, the
Group recorded a provision of $13,544,000 as a deferred tax liability for the
Tax Liabilities, resulting in a difference of $6,521,000 that was settled by
the final issuance of 374,521 shares and a realized gain of $3,521,000 (note
16) corresponding to the difference between the issuance price and the share
price as of the date of the transaction.

Concurrently, the Group reversed a deferred tax provision of $12,274,000. Such
amount has been recorded as a deduction to the tax provision for the year ended
December 31, 2001 as a deferred tax income.


                                     F-55
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

22.  CASH FLOW FROM OPERATING ACTIVITIES

<TABLE>
                                                                2002             2001           2000
                                                          ------------------------------------------------
                                                              US$ '000         US$ '000       US$ '000
                                                          ------------------------------------------------
<S>                                                          <C>               <C>            <C>
(Loss) profit after taxes for the year                       (385,143)         (138,053)      355,388
Adjustments for non-cash items:
   Depreciation and amortization                              141,754           154,191       143,329
   Decrease in discount on subordinated notes                       -            50,685       111,604
   Write-down of assets                                        78,167            23,998       112,719
   Loss (gain) on exchange and disposal of assets             (88,814)          (35,047)        2,755
   Loss (gain) from investment securities                     299,963            15,931      (665,262)
   Charge for financial instruments                             7,858             9,914             -
   (Profit) loss from operations in associate companies           (62)            3,112        43,178
   Increase in the impairment for doubtful debts                2,558             9,531           291
   Minority interest                                           22,494               804        (3,568)
   Other income                                               (42,247)          (11,596)            -
Adjustment to reconcile working capital:
   Increase (decrease) in trade debtors, prepaid and
     other current assets                                       5,790           (34,701)      (56,424)
   Decrease (increase) in inventories                           5,386             3,277        (5,532)
   Increase in trade and other payables                        30,732            58,347        70,938
   (Decrease) increase in accrued interest                     (8,841)            2,435         3,355
   Increase (decrease) in accrued taxation                      2,986            (8,859)       14,698
                                                          ---------------  -------------------------------
Net cash provided (used) by operating activities               72,581           103,969       127,469
                                                          ===============  ===============================
</TABLE>

Interest paid during the year amounted to $197,297,000 (2001: $208,029,000;
2000: $74,302,000). Taxes paid amounted to $21,582,000 (2001: $22,671,000;
2000: $5,552,000).

23.  ACQUISITION OF SUBSIDIARIES

The Group has, from time to time, acquired or increased its share in certain
subsidiaries and joint ventures. The fair value of the assets acquired and
liabilities assumed during the year were as follows:

<TABLE>
                                                                2002             2001           2000
                                                          ------------------------------------------------
                                                              US$ '000         US$ '000       US$ '000
                                                          ------------------------------------------------
<S>                                                          <C>               <C>            <C>
Tangible fixed assets                                               -            11,430        60,909
Goodwill                                                        2,268             8,091        30,560
Intangible fixed assets                                             -            12,851        30,632
Current assets                                                    390             3,742         6,609
Amounts due in more than one year                                   -           (1,691)      (42,966)
Amounts due in less than one year                                   -           (7,902)      (53,568)
Minority interest                                                (658)          (3,150)         (277)
                                                          ---------------  -------------------------------
Total purchase price                                            2,000            23,371        31,899
Less:     Cash acquired                                             -             (393)       (4,500)
                                                          ---------------  -------------------------------
Cash paid for acquisitions net of cash acquired                 2,000            22,978        27,399
                                                          ===============  ===============================
</TABLE>


                                     F-56
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

In 2002, the Company increased its ownership in Celcaribe throughout the year to
arrive at an ownership percentage of 95.4% as of December 31, 2002 (note 9). In
addition, in November 2002, MIC purchased the remaining 30% interest in Millicom
(Ghana) Limited. Both operations were fully consolidated at December 31, 2002
and 2001.

24.  DISPOSAL OF SUBSIDIARIES

The Group has, from time to time, disposed of or reduced its share in certain
subsidiaries and joint ventures. The impact of the change in consolidation
method and the fair value of the assets disposed of and liabilities assigned
during the year were as follows:

<TABLE>
                                                                2002             2001           2000
                                                          ------------------------------------------------
                                                              US$ '000         US$ '000       US$ '000
                                                          ------------------------------------------------
<S>                                                          <C>               <C>            <C>
Tangible fixed assets                                           11,396           36,419          2,231
Intangible fixed assets                                         26,332            9,503            780
Pledged deposits                                                30,989                -              -
Current assets                                                  72,553           60,596            845
Amounts due in more than one year                               (2,125)          (2,526)           (72)
Amounts due in less than one year                              (86,899)         (38,352)        (4,434)
Disposal of minority interest                                    5,594              (75)           650
                                                          ---------------  -------------------------------
                                                                57,840           65,565              -
Profit on sale                                                  57,955           35,047             17
                                                          ---------------  -------------------------------
Total sale price                                               115,795          100,612             17

Add:  Additional proceeds on sale of FORA less
        expenses incurred                                       27,547                -              -
Less: Cash                                                      (8,271)          (1,803)             -
        Available-for-sale securities received                      -          (79,558)              -
                                                          ---------------  -------------------------------
Cash flow on disposal net of cash                              135,071           19,251             17
                                                          ===============  ===============================
</TABLE>

The results, assets and liabilities of divested operations are summarized in
note 18.

25.  NON-CASH INVESTING AND FINANCING ACTIVITIES

<TABLE>
                                                                2002             2001           2000
                                                          ------------------------------------------------
                                                              US$ '000         US$ '000       US$ '000
                                                          ------------------------------------------------
<S>                                                          <C>               <C>            <C>
Investing activities:
    Revaluation of marketable securities                       (57,813)         (79,061)      (316,043)
    Non-cash capital expenditure, net                           28,935           12,657         26,113
    Change in consolidation method                                   -           25,464              -
      Disposal of joint ventures                                     -          (72,865)             -
    Acquisition of available-for-sale                                -          79,557              -
      securities

Financing activities:
    Increase of debt and other financing                             -           50,685        111,604
    Repayment of debt                                          (35,753)               -              -
    Issuance of capital                                              -            2,999              -
</TABLE>


                                     F-57
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

26.  COMMITMENTS AND CONTINGENCIES

The Company and its operations are contingently liable with respect to lawsuits
and other matters that arise in the normal course of business. As of December
31,2002, MIC's consolidated share of these matters that have not been provided
totaled $16,381,000. Management is of the opinion that while it is impossible
to ascertain the ultimate legal and financial liability with respect to these
contingencies, the ultimate outcome of these contingencies is not anticipated
to have a material effect on the Group's financial position and operations.

   Mach

In November 2002, MIC completed the sale of MACH SA for Euro 95 million.
Following examination of the books and records of Mach SA subsequent to
purchase, the buyers have claimed a reduction of approximately $4,550,000 in
the purchase price to reflect a claimed lower balance sheet value, as per the
terms of the purchase agreement. MIC's management is currently examining this
claim but does not expect there to be any material adjustment.

   Debt pledges, guarantees and commitments

Details of debt pledges, guarantees and commitments are contained in notes 17
and 27.

   Letters of support

In the normal course of business, the Company issues letters of support to
various companies and joint ventures within the Group.

   Operational environment

MIC has operations in emerging markets, namely Asia, Latin America and Africa,
where the regulatory, political, technological and economic environments are
evolving. As a result, there are uncertainties that may affect future
operations, the ability to conduct business, foreign exchange transactions and
debt repayments and which may impact upon agreements with other parties. In the
normal course of business, MIC is involved in discussions regarding taxation,
interconnect and tariffing arrangements, which can have a significant impact on
the long-term economic viability of its operations. In management's opinion,
the current status and anticipated evolution of the regulatory, political,
technological and economic environments as well as its business arrangements
with third parties in countries in which MIC has operations will not materially
negatively impact MIC's financial position or operations.

   Lease commitments

Operating Leases:

The Group has the following annual operating lease commitments as of December
31, 2002 and 2001 maturing at various dates through 2048.


                                     F-58
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

                                                2002             2001
                                          ----------------------------------
Minimum lease commitments                     US$ '000         US$ '000
                                          ----------------------------------

Within:    One year                                246            1,120
Between:   One - two years                         228              500
           Two - three years                       199              309
           Three - four years                      167              247
           Four - five years                       128              205
After:     Five years                              196            1,109
                                          ---------------- -----------------
Total                                            1,164            3,490
                                          ================ =================

Operating lease expense was approximately $5,018,000 in 2002 (2001: $3,466,000;
2000: $10,594,000).

Finance leases:

Future minimum payments on the finance leases are as follows:

                                                2002             2001
                                          ----------------------------------
Finance lease repayments                      US$ '000         US$ '000
                                          ----------------------------------

Within:    One year                                290              737
Between:   One - two years                         138              229
           Two - three years                        26              156
           Three - four years                        2               23
           Four - five years                         -                -

After:     Five years                                -                -
                                          ---------------- -----------------
Total                                              456               1,145
                                          ================ =================

The finance leases are comprised mainly of lease agreements relating to
vehicles used by the Group.

   Capital commitments

The Company and its joint ventures have a fixed commitment to purchase network
equipment, land and buildings and other fixed assets with a value of
$11,867,000 (2001: $56,436,000) from a number of suppliers within one year.

Included in the above commitments are those related to Comvik International
(Vietnam) AB for an amount of $9,619,000. As part of the 2000 and 2001
amendments (note 3), the operation still needs to disburse approximately $47
million before the end of the revenue sharing agreement in 2005.

   Dividends

The ability of the Company to make dividend payments is subject to, among other
things, the terms of the indebtedness, local legal restrictions and the ability
to repatriate funds from MIC's various joint ventures.


                                     F-59
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

27.  RELATED PARTY TRANSACTIONS

The Company's principal shareholder is Industriforvaltnings AB Kinnevik
("Kinnevik"). Kinnevik is a Swedish holding company with interests in the
telecommunications, media, publishing and paper industries.

On December 31, 1995, MIC acquired 17.7% of MACH from Kinnevik. The
consideration, which was to have a minimum present value of $5,000,000 at
December 31, 1995, consisted of (i) an initial payment of $1,000,000 plus
interest, at the ruling market rate, for the month of January 1996, (ii) seven
additional payments for each of the financial years 1996 to 2002, calculated as
17.7% of MACH's pre-tax profit for the relevant year and payable in April of
the following year, and (iii) a final payment payable in April 2003, calculated
as the higher of (a) the sum of the seven additional payments multiplied by a
factor of 1.3 minus the initial payment or (b) the amount required to make the
present value of all payments at December 31, 1995 equal to $5,000,000. The
final payment is to be made in common stock of MIC using a share price of
$30.50 per share. An amount of $3,958,000 (2001: $7,042,000), equal to the
estimated remaining purchase payment for this transaction based on the results
of MACH to date, is included in the balance sheet under the heading "Amounts
due to shareholders". In 1996 the remaining 2.7% of MACH was purchased from the
remaining unrelated shareholder giving MIC a 100% interest.

In May 2002, MIC sold a 17% interest in MIC Systems BV, the parent company of
MACH, to Kinnevik BV for $17,000,000.

As of December 31, 2002, MIC owed $63,000 (2001: $116,000) to Kinnevik for
additional charges.

During 2002, Kinnevik purchased MIC Notes (note 17) on the open market with a
face value of $44,000,000. MIC then exchanged these for $1,500,000 cash and
672,016 Tele2 AB shares at market prices.

During the course of 2002, MIC sold an additional 6,177,369 Tele2 AB 'B' shares
at market prices to Kinnevik for a value of $104,295,000.

On September 27, 2000, following an exchange offer made by Tele2 AB, the
Company exchanged its SEC shares into Tele2 AB shares.

In November 2001, the Company sold 100% of its interests in FORA Telecom BV,
its Russian Cellular telephony operations to Tele2 AB. The agreement called for
$80 million in Tele2 AB class 'B' shares to be exchanged for the assets plus a
maximum equivalent of $30 million in cash or additional Tele2 AB "B" shares,
depending on the outcome of GSM license applications for three of MIC's
existing cellular telephony operations in Russia. The sale resulted in a
$6,693,000 gain on the disposal in 2001 (note 20). During 2002, MIC obtained
the necessary GSM licenses referred to above and therefore received the
additional $30 million proceeds in cash. In addition, certain loans for which
MIC was liable were settled at less than their carrying value. The credit
realized on these, less costs incurred in the acquisition of the licenses,
resulted in a net gain of $30,859,000 in 2002.

The Group maintains corporate bank accounts at Banque Invik through which it
makes payments and receives monies in the normal course of business. As of
December 31, 2002, the Group had current accounts, time deposits and blocked
deposits at Banque Invik.


                                     F-60
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

MIC charged $nil (2001: $280,000; 2000: 800,000) to related parties for
services rendered.

During the course of the year, directors received payments in respect of their
services to the Group (note 19).

     Great Universal

As of December 31, 1998, the Group, through its subsidiary MIC-USA inc.
("MIC-USA"), had a 100% temporary and restricted shareholding in Great
Universal. On December 31, 1999, MIC-USA transferred its 100% ownership and
related rights in Great Universal to Great Universal LLC 1999 Trust for a
consideration of $5,027,000, corresponding to the net book value of MIC's
investment in Great Universal. This amount is recorded in Investment in
securities. During 2002, management made an impairment for 100% of this asset
due to uncertainty concerning its recoverability. Following the reorganization
described below, the rights and obligations of MIC-USA toward Great Universal
were assigned to Great Universal LLC. Great Universal continues to indemnify
MIC against certain contingent liabilities of Millicom. Great Universal is
currently engaged in the communications, information technology, teleservices
and media industries primarily in the United States.

In June 1999, Great Universal effected a reorganization of Great Universal and
its subsidiaries, in which Great Universal was merged with and into Great
Universal LLC and operations were spun off into two separate businesses, being
Great Universal and Modern Holdings. Great Universal Inc. holds the
subsidiaries in teleservices, television and media and specialized electronics
industries, and Modern Holdings holds the subsidiaries in the integrated
network services industries. Great Universal LLC holds 100% of common shares in
Great Universal Inc. and 53% of common shares in Modern Holdings. MIC does not
consolidate its investment in Great Universal as, due to the warrant holders'
right to exercise, it considers it does not control Great Universal and also
that there exist severe long-term restrictions that significantly impair the
ability of Great Universal to transfer funds to MIC.

In January 2000, Modern Holdings sold its 100% interest in MACH USA to MACH SA
for a total consideration of $1,800,000. Due to the loss situation of MACH USA
and the low expected development of MACH USA, the Company's management decided
to close the activities of MACH USA and to write down the investment.

In January 2000, MIC invested $10,000,000 in Modern Holdings in the form of
promissory notes. In February 2000, those notes were converted into 1,293,095
shares of common stock, representing 8.5% of the share capital of Modern
Holdings. This investment is recorded as a non-current available-for-sale
security (note 8).

The largest single shareholder in the Company is Kinnevik, with a direct
interest of 36%. The following purchases and outstanding balances occurred with
companies affiliated to Kinnevik. All transactions were conducted on commercial
terms and conditions at market prices. The services supplied covered fraud
detection, network and IT support, acquisition of assets and customer care
systems.


                                     F-61
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

As of December 31, 2002 and 2001, MIC had the following payables and purchases
to related parties:

                                Purchases in year           Amount payable at
                                                              December 31,
                                2002         2001           2002         2001
                           -----------------------------------------------------
                              US$ '000     US$ '000       US$ '000     US$ '000
                           -----------------------------------------------------
Bassett                            669        1,222             23          101
Great Universal                      -            -             25           39
Netcom Consultants                 157          554              9           56
Procure-it-right                   839          962            100            1
Applied Sales Management           110          100              -            -
Applied Value                    2,009          484            252            -
Praesidium                         204           70              -            3
Lothar Systems                      10        1,601            288          508
Ephibian                            38            -              -            -
Shared Value                       656          477             23            -
YXK Systems                         28            -              -            -
Search Value                       489          189              -            -
Banque Invik                       638          438             44            -
Tele2                               50           25          5,723       10,596
                           -------------------------- --------------------------
                                 5,897        6,122          6,487       11,304
                           ========================== ==========================

As of December 31, 2002 and 2001, MIC had the following receivables from
Kinnevik and other related parties:

                                           2002        2001
                                     --------------------------
                                         US$ '000    US$ '000
                                     --------------------------
Kinnevik                                    1,976       2,581
Modern Times Group                            752         281
Metro                                         734         256
Lothar                                        922          29
Tele2                                         359       4,216
Modern Holdings                             1,825       1,633
Netcom                                         64         100
Shared Value                                   18           6
Stonebrook Enterprises                        156         156
                                     --------------------------
                                            6,806       9,258
                                     ==========================


                                     F-62
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

28.  OTHER CURRENT LIABILITIES

Other current liabilities are comprised as follows:

                                           2002        2001
                                     --------------------------
                                         US$ '000    US$ '000
                                     --------------------------

Taxes payable                              25,530      26,189
Deferred revenue                            8,389      10,771
Subscriber deposits                         6,463       8,500
Prepayment cards                           11,180       7,733
Other current liabilities                  23,436      39,553
                                     --------------------------
                                           74,998      92,746
                                     ==========================

29.  (LOSS) EARNINGS PER COMMON SHARE

 (Loss) earnings per common share is comprised as follows:

<TABLE>
                                                             2002          2001           2000
                                                        -------------------------------------------
<S>                                                        <C>           <C>             <C>
Basic and diluted (loss) earnings (US $'000's)             (385,143)     (138,053)       355,388
                                                        ===========================================

Weighted average number of shares outstanding
  during the period (in 000's)                                16,318       16,314         16,273
                                                        ===========================================

Effect of dilutive securities                                      -            -            227

Weighted average number of diluted shares outstanding
  during the period (in 000's)                                16,318       16,314         16,500
                                                        ===========================================

Basic (loss) earnings per common share (US$)                  (23.60)       (8.46)         21.84
                                                        ===========================================

Diluted (loss) earnings per common share (US$)                (23.60)       (8.46)         21.54
                                                        ===========================================
</TABLE>

At December 31, 2002, the Group had nil (2001: nil; 2000: 235,000) stock
options that were not included in the computation of diluted earnings per share
because to do so would have been anti-dilutive for the period presented.


                                     F-63
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

30.  RECONCILIATION TO U.S. GAAP

     The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards ("IFRS"). If the
consolidated financial statements had been prepared under accounting principles
generally accepted in the United States ("U.S. GAAP") the following principal
differences would arise:

1.   Under IFRS, the Company's interests in joint ventures are proportionally
     consolidated. Under U.S. GAAP, interests in joint ventures should be
     reflected in the consolidated financial statements using the equity
     method. The results of the reclassification of balance sheet captions are
     illustrated in the balance sheet reconciliation on the following pages.
     Information on the Group's share of income and expenses and cash flows
     contributed on a proportional basis under IFRS are included in Note 3 to
     the consolidated financial statements.

2.   Under the equity method of consolidation, if an investor's share of losses
     of an associate equals or exceeds the carrying amount of an investment
     plus advances made by the investor, the investor ordinarily discontinues
     including its share of losses and the investment is reported at nil value.
     If the investee subsequently reports net income, the investor should
     resume applying the equity method only after its share of that net income
     equals the share of net losses not recognized during the period the equity
     method was suspended. Additional losses are provided for when the investor
     has guaranteed obligations of the investee or is otherwise committed to
     provide further financial support for the investee. Losses recognized in
     excess of the investor's total investment due to a commitment to provide
     further financial support are recorded as a liability.

     Over the years, a number of joint ventures have incurred sufficient losses
     to reduce the value of the investment below MIC's total investment value
     in the joint venture, including loans, pledged deposits, obligations and
     guarantees. Under IFRS, MIC's proportional share of these losses are
     included in the Company's losses for the year. Summarized below are the
     adjustments to the profit and loss account that would have been recorded
     under U.S. GAAP for a) discontinuing MIC's share of losses on certain
     joint ventures in excess of MIC's total investment in the joint venture,
     and b) additional losses recorded by MIC above those recorded for IFRS due
     to MIC's commitment to provide further financial support to the joint
     venture. Furthermore, an adjustment was made to either increase or
     decrease the gain recorded for IFRS on the sale of the FORA joint
     ventures, due to the joint ventures having a lower net asset value under
     U.S. GAAP.

<TABLE>
                                                                             2001              2000
                                                          2002            (Restated)        (Restated)
                                                      -------------     -------------     -------------
                                                        U.S.$'000          U.S.$'000         U.S.$'000
                                                      -------------     -------------     -------------
<S>                                                          <C>                 <C>            <C>
     Discontinued share of losses...............             (416)               119            (1,990)

     Additional losses in excess of investment
        value...................................           (3,805)            (2,126)           (9,013)
     Increase (decrease) in gain on sale of
     FORA joint ventures........................                -             18,710                 -
                                                      -------------     -------------     -------------
                                                           (4,221)            16,703           (11,003)
                                                      =============     =============     =============
</TABLE>

3.   The value of cellular properties contributed by the shareholders of
     certain of the Company's joint ventures, upon formation, were not recorded
     at the contributing shareholder's carryover basis under IFRS. Rather, the
     value of such properties were stepped-up to reflect their fair value. The
     incremental value recorded for these properties was recorded as an
     intangible asset, attributable to franchises and licenses, for
     $58,628,000. Following the implementation of IFRS 38, the step-up in value
     of the properties has been amortized through the profit and loss account.
     The amount of


                                     F-64
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     amortization expense recorded in 2002 was $2,273,000 (2001: $2,273,000;
     2000: $3,742,000). Under U.S. GAAP, the contributed properties would have
     been recorded at the contributing shareholder's carryover basis, thus no
     intangible asset and no amortization expense would have been recorded.
     Accordingly, this adjustment reverses the amortization expense recorded
     for IFRS, and the stepped-up value recorded in the balance sheet.

     Additionally, in 2000, the Company recorded an impairment charge for its
     cellular license in the Philippines. Upon formation of the Philippines
     joint venture, the value of the license was stepped-up in value, as
     described above. Because the value of this license was not stepped-up for
     U.S. GAAP, the impairment charge was reversed under U.S. GAAP for an
     amount of $9,502,000.

4.   In September 2000, the Company exchanged its shareholding in SEC for
     shares in Tele2 AB, realizing a gain of $609,941,000, corresponding to the
     market value of the Tele2 AB shares obtained less the value of SEC as
     recorded in the books of the Company. Under U.S. GAAP, the book value of
     the SEC investment would have been adjusted to reflect differences between
     IFRS and U.S. GAAP accounting resulting in a higher gain on the disposal
     of SEC in the amount of $41,575,000.

5.   Under U.S. GAAP, the accounting treatment of the options described in Note
     9 of the consolidated financial statements is as follows: (1) the
     Colombian and El Salvadoran written put options, which when exercised
     required the Company to purchase additional shares in the respective
     operations, were recorded at inception as liabilities at their fair
     values, with subsequent changes in their fair values being recorded in the
     profit and loss account; (2) the call option held by the Company which
     gave the Company the right to purchase additional shares in the El
     Salvadoran operation, was recorded as an asset at its fair value as of the
     date of its inception, and subsequently carried at the lower of the
     option's cost or fair value; and (3) the written call option giving the
     holder the right to acquire from the Company shares in the Company's
     Vietnamese subsidiary was recorded at inception as a liability at its fair
     value, with subsequent book value losses of the option being recorded in
     the profit and loss account to reflect any loss that the Company would
     realize upon the exercise of the option.

     Until January 2001, the various options' values were not recorded under
     IFRS. Therefore, the adjustment to reconcile IFRS net income to U.S. GAAP
     net income in 2000 includes charges of $22,643,000, $4,284,000, and
     $1,414,000, to recognize the change in the fair values of the Colombian
     and El Salvadoran options, and the change in the book value losses of the
     Vietnamese option, respectively. As at January 1, 2001, the Company
     adopted IFRS 39. Since adopting IFRS 39, these options have been carried
     at their fair values, with the change in fair value reflected as a
     non-operating income or expense in the statement of profit and loss.
     Therefore, the adjustments to reconcile IFRS net loss to U.S.GAAP net loss
     in 2001, includes (1) an increase to net loss of $2,125,000 for the
     Vietnamese option to adjust the change in fair value of the option
     recorded for IFRS to the change in the book value losses of the option
     recorded for U.S. GAAP and (2) a decrease to net loss of $8,533,000 for
     the El Salvadoran call option to remove the change in fair value under
     IFRS and to record the option at its cost for U.S. GAAP. The adjustment to
     reconcile stockholders' equity in 2001 between IFRS and U.S. GAAP
     considers the cumulative adjustment in retained earnings of $45,264,000
     recorded by the Company, upon adoption of IFRS 39.

     During 2002, the holder of the Vietnamese call option exercised its right
     to acquire an additional 10% of the shares of the Company's operation in
     Vietnam. The resulting adjustments to reconcile the IFRS accounts, as
     described in Note 9, and the U.S. GAAP accounts are as follows: (i) a
     decrease of $16,817,000 to the retained loss brought forward,
     corresponding to the difference, as at December 31, 2001, between the fair
     value and book value losses on the written call option, (ii)


                                     F-65
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     an increase of $295,000 to the net loss for 2002 due to the excess of the
     option's book value losses over the fair value of the option, recorded for
     IFRS, and (iii) a reversal of the gain realized on the sale of the
     subsidiary of $16,522,000 for IFRS, to reflect a gain of $nil for U.S.
     GAAP.

     As described in Note 9 of the consolidated financial statements, the fair
     value of the Colombian option, as of December 31, 2002, was reduced to
     $nil (2001: $14,414,000). The U.S. GAAP accounting treatment of this
     option is consistent with IFRS. As described in Note 9, the Company
     recorded the gain on the reduction of the Colombian option liability in
     2002 under the caption "General and administrative expenses". For U.S.
     GAAP, this gain would have been recorded to non-operating income.

     Summarized below are the adjustments to net (loss) profit under U.S. GAAP:

<TABLE>
                                                           2002                2001              2000
                                                      ----------------    ---------------   ---------------
                                                         U.S.$'000          U.S.$'000         U.S.$'000
                                                      ----------------    ---------------   ---------------
<S>                                                        <C>                  <C>             <C>
     Fair value result of financial instruments:                                    -
       Colombia put option.......................                                   -           (22,643)
       El Salvadoran put option..................                -              8,533            (4,284)
       Vietnamese put option.....................             (295)            (2,125)           (1,414)
     Reduction from gain on sale of Vietnamese
        subsidiary                                         (16,522)
                                                      ----------------    ---------------   ---------------
                                                           (16,817)             6,408           (28,341)
                                                      ================    ===============   ===============
</TABLE>

     The following table shows the change in liabilities recorded in the
     balance sheet under U.S. GAAP from IFRS :

<TABLE>
                                                            2002                2001
                                                      -----------------    ----------------
                                                         U.S.$'000            U.S.$'000
                                                      -----------------    ----------------
<S>                                                                             <C>
      Vietnamese put option....................                  -              (16,817)
                                                      -----------------    ----------------
      Total decrease in liabilities..............                -              (16,817)
                                                      =================    ================
</TABLE>

6.   Under IFRS, no compensation expense is recorded for stock based
     compensation described in Note 16(d) of the consolidated financial
     statements. Under U.S. GAAP, the Company accounts for stock compensation
     under Accounting Principles Board Opinion No. 25, "Accounting for Stock
     Issued to Employees" (APB 25).

     As described in Note 16(d), stock options have been granted by the Company
     to certain employees in Liberty Broadband Limited, Millicom Argentina S.A.
     and Millicom International B.V. Because either the exercise price or the
     number of shares granted under the option plans is not known at the grant
     date, compensation expense for these plans under APB 25 is recalculated,
     based on the intrinsic value of this stock based compensation, at each
     balance sheet date. Recalculated compensation expense is recognized over
     the vesting period. Such plans are referred to as "variable plans".
     Options granted to employees of Millicom Argentina S.A, do not qualify as
     options granted to employees in accordance with APB 25, since Millicom
     Argentina S.A. is accounted for as an equity investment for U.S. GAAP.
     Accordingly, such options are accounted for on a mark to market basis. An
     adjustment of $1,308,000 (2001: $5,315,000; 2000: $(8,155,000)) has been
     recorded in the U.S. GAAP reconciliation of net profit or loss to reflect
     these options.


                                     F-66
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     As also described in Note 16(d), the Company grants stock options to
     employees and directors for a fixed number of shares with a fixed exercise
     price. The grant date intrinsic value of such options is amortized over
     the vesting periods of the options. Such plans are referred to as "fixed
     plans". Because the exercise price of such options granted by the Company
     equals their fair market value at the date of the grant, the options have
     no intrinsic value. Accordingly, no compensation expense has been recorded
     for the Company's fixed plans.

     At December 31, 2002, a cumulative amount of $6,707,000 (2001:
     $12,021,000) has been recorded in the Company's retained loss brought
     forward, share capital and premium for prior years' compensation expense,
     under U.S. GAAP.

7.   Under IFRS, the Company recognizes revenues for initial connection fees
     when the customer is connected and able to use the service. The Company
     recognizes revenues from the sale of handsets at the time of sale.

     In December 1999, the Securities and Exchange Commission (SEC) issued
     Staff Accounting Bulletin No. 101, Revenue recognition in Financial
     Statements (SAB 101). SAB 101 outlines the SEC's view on applying
     generally accepted accounting principles to revenue recognition in
     financial statements. Specifically, the bulletin provides guidance as to
     the periods in which companies should recognize revenues. Effective
     January 1, 2000, for U.S. GAAP purposes, the Company evaluates each
     element of a customer arrangement to determine the appropriate period for
     recognition of revenues. Revenues on connection fees are deferred and
     recognized as revenues on a pro rata basis over the estimated life of the
     customer relationship which is, based on management estimates, one year.
     Revenues from handsets sales are recognized immediately if a fair value
     can be attributed to the separate element of the contract and use of the
     telephone is not dependant on the customer's continued use of network
     services. If telephone sales do not meet these conditions, the revenues
     are deferred and amortized over the estimated life of the customer
     relationship.

     Cost of sales, which include direct incremental expenses related to
     connection fees and handset sales, are deferred and amortized over the
     same period that revenues are recognized. Certain customer acquisition
     costs such as dealer commissions and handset subsidies have been
     classified as sales and marketing expenses under IFRS. Under U.S. GAAP
     these costs would have been classified as cost of sales in the same
     periods.

     Upon adoption of SAB 101 on January 1, 2000, the Company recorded a
     decrease in net profit of $3,141,000 for U.S. GAAP. The adjustment to
     defer revenue on connection fees for U.S. GAAP results in a decrease in
     revenue in 2002 of $145,000 (2001: increase of $263,000; 2000: increase of
     $397,000) and the adjustment to defer incremental cost on connection fees
     in 2002 for U.S. GAAP results in an increase in cost of sales of $192,000
     (2001: decrease of $239,000; 2000: decrease of $513,000) resulting in a
     net increase of $337,000 to the Company's 2002 net loss (2001: decrease of
     $502,000 of the net loss; 2000: increase of $910,000 of the net profit).

8.   In 2000, under IFRS, the Company recognized an impairment of its analogue
     fixed assets and related licenses and intangibles. This impairment was
     measured as the difference between the recoverable amount, determined by
     reference to discounted cash flows projected to be generated from these
     assets, and the carrying value of the analogue assets at the measurement
     date. Prior to January 1, 2002, the Company applied Statement of Financial
     Accounting Standard No. 121 (SFAS 121), Accounting for the Impairment of
     Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. Under SFAS
     121, a long-lived asset or asset group was tested whenever events or
     changes in circumstances indicated its carrying amount may not be
     recoverable, i.e. a triggering event occurred. If such a triggering event
     occurred, the book value of the asset was compared to


                                     F-67
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     the undiscounted cash flows forecast from the asset. If the undiscounted
     cash flows forecast to be generated from the asset was less than the
     asset's book value, the carrying value of the asset was regarded as not
     recoverable. When such a determination was made, impairment was measured
     as the excess of the carrying value above the asset's fair value,
     typically determined by a discounted cash flow projection of the asset.
     Therefore, the impairment charge recorded on the analogue assets of some
     of MIC's operations in an amount of $10,441,000 was reversed for U.S. GAAP
     purposes.

     During the course of 2001, certain assets of the FORA business that were
     previously impaired under IFRS were sold. Because the assets sold had a
     higher value under U.S. GAAP than IFRS, a reduction of the gain on the
     sale of the assets of $5,216,000 was recorded for U.S. GAAP purposes.
     Additionally in 2001, incremental depreciation expense of $1,373,000 for
     U.S. GAAP was recorded on the remaining assets that were previously
     impaired under IFRS.

     In 2002, the Company adopted Statement of Financial Accounting Standard
     No. 144 (SFAS 144) Accounting for the Impairment or disposal of long-lived
     assets, which requires the same two-step impairment evaluation required
     under SFAS 121. As of December 31, 2002, analogue assets belonging to
     MIC's Colombian operations, which were impaired under IFRS in 2000 but not
     under U.S. GAAP, were deemed to be impaired in connection with the
     Colombian operation being classified as a discontinued operation, as
     described in U.S. GAAP item 13 hereafter. Accordingly, the assets'
     increased net value under U.S. GAAP of $2,571,000, after incremental
     depreciation expense for the year of $936,000, has been charged to the
     profit and loss of the year as an additional impairment.

     Under IFRS, as at December 31, 2002, the Company recorded an impairment
     charge of $2,234,000 on the license value of its operation in Peru. This
     impairment was measured as the difference between the recoverable amount
     of the asset, which was determined by reference to the discounted cash
     flows projected to be generated from this asset, and its carrying value at
     the measurement date. Since the recoverable amount of the license,
     determined by reference to an undiscounted cash flow model, as required by
     SFAS 144, was higher than its carrying value, the impairment recorded
     under IFRS has been reversed for U.S. GAAP purposes.

     Summarized below are the adjustments to the Company's IFRS profit and loss
     that have been made due to the application of SFAS 121 (2001 and 2000) and
     SFAS 144 (2002):

<TABLE>
                                                        2002          2001           2000
                                                   -------------  -------------  -------------
                                                     U.S.$'000      U.S.$'000      U.S.$'000
                                                   -------------  -------------  -------------
<S>                                                     <C>           <C>            <C>
     Reversal of impairment recorded for IFRS....       2,234              -         10,441

     Increased depreciation charge...............        (936)        (1,373)          (345)

     Impairment charge on Colombian assets.......      (2,571)             -              -
     Decreased gain on sale of FORA assets.......           -         (5,216)             -
                                                   -------------  -------------  -------------
     Total adjustment to (loss)/profit in year...      (1,273)        (6,589)        10,096
                                                   =============  =============  ==============
</TABLE>

9.   With the adoption of IFRS 39, the Company began recording its debt net of
     un-amortized financing fees incurred to acquire the debt. Under U.S. GAAP,
     these financing fees should be capitalized as a deferred charge. The
     amount that would be reclassified as an asset in the balance sheet as of
     December 31, 2002, is $8,359,000 (2001: $10,379,000).

10.  In June 2001, the Financial Accounting Standards Board approved Statement
     of Financial Accounting Standard No. 142 (SFAS 142), Goodwill and Other
     Intangible Assets. SFAS 142


                                     F-68
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     requires companies to cease amortizing goodwill, which existed at June 30,
     2001. Accordingly, for U.S. GAAP purposes, the Company ceased amortization
     of existing goodwill on December 31, 2001. Additionally, under U.S. GAAP,
     the Company has reversed $7,865,000 of amortization on goodwill charged
     during 2002 under IFRS. In accordance with Statement of Financial
     Accounting Standard No. 141 (SFAS 141), Business Combinations, negative
     goodwill in the amount of $9,336,000 as of December 31, 2001, has been
     written-off as a cumulative effect of change in accounting principle in
     the first quarter of 2002, upon adoption of SFAS 141. The Company did not
     generate additional negative goodwill during 2002.

     Reported net (loss) profit under U.S. GAAP before extraordinary items and
     accounting change was $(174,766,000) and $373,714,000 in 2001 and 2000,
     respectively. Goodwill amortization, net of tax was $9,483,000 and
     $9,692,000 in 2001 and 2000, respectively. Negative goodwill amortization,
     net of tax was $1,393,000 and $755,000 in 2001 and 2000, respectively.
     Adjusted net (loss) profit before extraordinary items and accounting
     change was $(166,676,000) and $382,651,000 in 2001 and 2000, respectively.

     The table below shows MIC's adjusted U.S. GAAP net (loss) profit as if
     goodwill amortization had ceased from January 1, 2000, together with a
     reconciliation of the adjusted net (loss) profit with the reported net
     (loss) profit:

                                                        2001           2000
                                                      ---------     ---------
                                                      U.S.$'000     U.S.$'000
                                                      ---------     ---------

      Reported (loss) profit under U.S. GAAP          (174,766)       370,573
      Reversal of goodwill amortization                   9,483         9,692
      Reversal of negative goodwill amortization        (1,393)         (755)
                                                    ----------------------------
      Adjusted net (loss) profit under U.S. GAAP      (166,676)       379,510
                                                    ============================

      The following tables present the impact on MIC's basic and diluted
      earnings per share as if goodwill amortization had ceased on January 1,
      2000:

<TABLE>
                                                                        2002          2001         2000
      Basic (loss) earnings per share                                              (restated)   (restated)
                                                                  ----------------------------------------
<S>                                                                    <C>          <C>            <C>
      Reported basic (loss) earnings per share under U.S. GAAP         $(20.15)     $(10.71)       $22.77
      Reversal of goodwill amortization                                       -        $0.58        $0.60
      Reversal of negative goodwill amortization                              -      $(0.09)      $(0.05)
      Adjusted basic (loss) earnings per share under U.S. GAAP         $(20.15)     $(10.22)       $23.32
      Weighted average number of shares outstanding in the year
      (in '000)                                                          16,318       16,314       16,273


                                                                                      2001          2000
      Diluted earnings per share                                        2002       (restated)   (restated)
                                                                  ----------------------------------------
      Reported diluted (loss) earnings per share under U.S.            $(20.15)      $(10.71)      $22.46
      GAAP
      Reversal of goodwill amortization                                       -        $0.58        $0.59
      Reversal of negative goodwill amortization                              -       $(0.09)      $(0.05)
      Adjusted diluted (loss) earnings per share under U.S.
      GAAP                                                             $(20.15)      $(10.22)      $23.00
      Weighted average number of shares and diluted potential
      common shares (in '000)                                            16,318       16,314       16,500
</TABLE>


                                     F-69
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     SFAS 142 also establishes a method of testing goodwill for impairment on
     an annual basis or on an interim basis if an event occurs or circumstances
     change that would reduce the fair value of a reporting unit below its
     carrying value. In addition, SFAS 142 requires transitional impairment
     testing as of January 1, 2002. As a result, the Company tested its
     goodwill for impairment under this new standard both as of January 1,
     2002, and December 31, 2002. The transitional testing that MIC performed
     as of January 1, 2002 concluded that no impairment was required under U.S.
     GAAP. As a result of classifying the Company's Colombian operation as a
     discontinued operation in 2002 (see U.S. GAAP item 13), the Company
     performed an impairment test on the goodwill generated on the acquisition
     of the Colombian operation. This impairment test indicated that the
     goodwill was fully impaired. Under IFRS, the carrying value of this
     goodwill was set to $nil through the recording of an impairment charge of
     $35,723,000. Following the cessation of the amortization, as described
     under SFAS 142, MIC incurred an additional impairment charge of $3,136,000
     under U.S. GAAP related to the impairment write-down of goodwill on the
     Colombian operation.

11.  During 2002, MIC purchased part of its Senior Subordinated Discount Notes
     (see Note 17) at market prices for an amount of $44,000,000, realizing a
     gain of $28,676,000. Under U.S. GAAP, this gain was recognized as an
     extraordinary item.

12.  MIC holds shares in Tele2 AB recorded as investment in securities, which
     have declined in value since their acquisition dates. As of December 31,
     2001, the management of MIC did not consider that the decline in share
     price of Tele2 AB met the criteria of impairment under IFRS 39 and
     recorded the decline in the revaluation reserve. However, taking into
     account the factors discussed in Staff Accounting Bulletin 59, the
     management of MIC considered, under U.S. GAAP, the decline in its
     investment in Tele2 AB to be other than temporary and therefore recorded a
     charge for an amount of $61,325,000 in 2001. As of December 31, 2002,
     taking into account the significant and prolonged decline in value of the
     Tele2 AB shares and the losses realized on their disposals, MIC recorded
     the change in fair value of these securities of $119,138,000 to the profit
     and loss for IFRS, in accordance with the Company's policies, and for U.S.
     GAAP, since the continued decline in value was determined to be other than
     temporary. Consequently, in 2002 MIC recorded an adjustment to reverse
     $61,325,000 from net loss for the year to retained loss brought forward,
     under U.S. GAAP.

13.  As at December 31, 2002, MIC classified its investment in its Colombian
     subsidiary as an asset held for sale in accordance with SFAS 144. During
     2002, MIC entered into discussions concerning the sale of the Colombian
     operation and, in December 2002, signed a sale and purchase agreement. The
     sale was completed in February 2003. The Colombian operation's net selling
     price of $9,876,000 was considered to be the fair value of all the assets
     and liabilities of the entity. Accordingly, the Company recorded an
     impairment charge of $41,733,000 on the license value of the Colombian
     operation. This amount has been recorded under the caption 'General and
     administrative expenses' for IFRS. Additionally, other disposals made by
     the Company during the year qualify as discontinued operations in
     accordance with FAS 144. Presented below is a reconciliation of loss from
     discontinued operations:


                                     F-70
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
     Net profit (loss) from component qualifying as discontinued operations:


                                                                Year ended December 31,       Segment in which
                                                               2002      2001       2000           reported
                                                         ----------- ----------  -----------   -----------------
                                                          U.S.$'000   U.S.$'000   U.S.$'000
                                                         ----------- ----------  -----------
<S>                                                        <C>          <C>
       Colombian operations                                (63,484)    (18,868)    (37,381)    MIC Latin America
       MIC Systems                                          89,960       2,758      (1,816)          MIC Systems
       Liberty Broadband Ltd.                              (24,939)    (32,476)    (11,047)               Other
                                                         ----------- ----------  -----------
     Net profit reported from discontinued operations       1,537      (48,586)    (50,244)
                                                         =========== ==========  ==========

</TABLE>

14.  In August 2001, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standard No.143 (SFAS 143), Accounting
     for Asset Retirement Obligations. SFAS 143 applies to all entities and
     addresses financial accounting and reporting for legal obligations
     associated with the retirement of long-lived assets that result from the
     acquisition, construction, development and (or) the normal operation of a
     long-lived asset, except for certain obligations of lessees. SFAS 143 is
     effective from January 2003 and requires obligations associated with the
     retirement of a tangible long-lived asset to be recorded as a liability
     upon acquisition of the asset. The Company is in the process of evaluating
     the impact of SFAS 143 on the consolidated financial statements.

     The FASB issued Statement of Financial Accounting Standard No. 145 (SFAS
     145), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
     Statement No. 13, and Technical Corrections, effective for fiscal years
     beginning May 15, 2002 or later that rescinds FASB Statement No. 4,
     Reporting Gains and Losses from Extinguishment of Debt, FASB Statement No.
     64, Extinguishments of Debt made to satisfy sinking-fund requirement, and
     FASB Statement No. 44, Accounting for Intangible Assets of Motor Carriers.
     This Statement amends FAS No. 4 and FAS No. 13, Accounting for Leases, to
     eliminate an inconsistency between the required accounting for
     sale-leaseback transactions. This Statement also amends other existing
     authoritative pronouncements to make various technical corrections,
     clarify meanings or describe their applicability under changed conditions.
     By adopting SFAS 145 in fiscal year 2003, MIC expects to reclassify gains
     on the extinguishment of debt recorded in 2002, which are not sinking fund
     payments, of $28,676,000 from extraordinary to ordinary gains.

     In July 2002, the FASB issued Statement of Financial Accounting Standard
     146 (SFAS 146), Accounting for Costs Associated with Exit or Disposal
     Activities. SFAS 146 addresses financial accounting and reporting for
     costs associated with exit or disposal activities and nullifies Emerging
     Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
     Certain Employee Termination Benefits and Other Costs to Exit an Activity
     (including Certain Costs Incurred in a Restructuring)". SFAS 146 is
     effective for disposal activities initiated after December 31, 2002. As
     the Company has not currently commenced exit or disposal activities as
     defined in SFAS 146, adoption of the Standard is not expected to have a
     material impact on its consolidated financial statements.

     In December 2002, the FASB issued Statement of Financial Accounting
     Standard 148 (SFAS 148), Accounting for Stock-Based Compensation -
     Transition and Disclosure - an Amendment of SFAS No. 123. SFAS 148
     provides alternative methods of transition for a voluntary change to the
     fair value based method of accounting for stock-based employee
     compensation. In addition, SFAS 148 amends the disclosure requirements of
     SFAS 123, "Accounting for Stock-Based Compensation", to require prominent
     disclosures in both annual and interim financial statements about the
     method of accounting for stock-based employee compensation and the effect
     of the method used on reported results. SFAS 148 does not change the fair
     value measurement principles of SFAS 123. As MIC has elected to continue
     to account for stock compensation in accordance with APB 25, the adoption
     of the Standard is not expected to have a material impact on its


                                     F-71
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     consolidated financial statements. However, the Company has already
     adopted the disclosure requirements of SFAS 148.

     In April 2003, the FASB issued Statement of Financial Accounting Standard
     No. 149 (SFAS 149), Amendment of Statement 133 on Derivative Instruments
     and Hedging Activities. SFAS No. 149 amends and clarifies financial
     accounting and reporting for derivative instruments, including certain
     derivative instruments embedded in other contracts (collectively, referred
     to as derivatives) and for hedging activities under SFAS No. 133. This
     Statement is effective for contracts entered into or modified after June
     30, 2003, and for hedging relationships designated after June 30, 2003.
     The Company does not consider that SFAS 149 will have a material impact on
     its consolidated financial statements.

     In May 2003, the FASB issued Statement of Financial Accounting Standard
     No. 150 (SFAS 150), Accounting For Certain Financial Instruments with
     Characteristics of both Liabilities and Equity. SFAS No. 150 establishes
     standards for how a company classifies and measures certain financial
     instruments with characteristics of both liabilities and equity. It
     requires that a company classify a financial instrument that is within its
     scope as a liability (or an asset in some circumstances). Many of those
     instruments were previously classified as equity. This Statement is
     effective for financial instruments entered into or modified after May 31,
     2003, and otherwise is effective for the first fiscal period beginning
     after December 15, 2003. The Company does not consider that SFAS 150 will
     have a material impact on its consolidated financial statements.

     In November 2002, the FASB issued Financial Interpretation No. 45 (FIN
     45), Guarantor's Accounting and Disclosure Requirements for Guarantees,
     Including Indirect Guarantees of Indebtedness of Others. Under this
     interpretation, a guarantor must recognize the fair value of the
     obligation it assumes under the guarantee, upon issuance of a guarantee.
     Additionally, FIN 45 requires that the guarantor determine and disclose
     its policy for subsequently re-measuring the guarantor's liability. The
     initial recognition and initial measurement provisions of FIN 45 are
     applicable on a prospective basis to guarantees issued or modified after
     December 31, 2002. The Company is currently assessing the impact that FIN
     45 will have on its consolidated financial statements. The disclosure
     requirements of FIN 45 are applicable for financial statements that end
     after December 15, 2002. Accordingly, such disclosures are included in
     Note 17 of the consolidated financial statements.

     In January 2003, the FASB issued Financial Interpretation No. 46 (FIN 46),
     Consolidation of Variable Interest Entities. FIN 46 generally applies to
     all business enterprises and all arrangements used by business
     enterprises, and it requires that a business enterprise identify all its
     Variable Interest Entities ("VIEs"). VIEs are those entities possessing
     certain characteristics, which indicate either a lack of equity investment
     to cover expected losses of the entity or a lack of controlling financial
     interest by an investor. The party that absorbs a majority of the entity's
     expected losses, receives a majority of its expected residual returns, or
     both, as a result of holding variable interests is deemed to be the
     Primary Beneficiary and must consolidate the VIE. The measurement
     principles of this interpretation apply to all VIEs created after January
     31, 2003 and to all VIEs in which an enterprise obtains an interest after
     that date. Additionally, the measurement principles of FIN 46 for all VIEs
     held by MIC prior to January 31, 2003 will be effective for MIC's 2004
     financial statements. However, MIC has determined that it is reasonably
     possible that MIC will either consolidate or disclose information about
     its operation in Argentina and its other joint ventures (see Note 3) when
     FIN 46 becomes effective.

15.  Under IFRS 27 a subsidiary should be excluded from consolidation if it
     operates under severe long-term restrictions that significantly impair its
     ability to transfer funds to the parent. In addition,


                                     F-72
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     Standing Interpretations Committee ("SIC") No. 33 states that potential
     voting rights that are presently exercisable or presently convertible must
     be considered when, in substance, they provide the capability to exercise
     control. As discussed in Note 27, under IFRS, MIC does not consolidate its
     investment in Great Universal ("GU") and Modern Holdings ("Modern") since
     the restrictions on their ability to distribute dividends is considered a
     severe long-term restriction that significantly impairs their ability to
     transfer funds to MIC. Further, the warrants, which enable the holders to
     obtain 100% of GU and 53% of Modern, are presently exercisable and provide
     the capability, to the warrant holders, to control GU and Modern.

     Under U.S. GAAP an entity should consolidate all enterprises in which it
     has a controlling financial interest. The usual condition for a
     controlling financial interest is ownership of a majority of the
     outstanding voting shares. Accordingly, absent a reason that GU and Modern
     should not be consolidated they should be consolidated. The restriction on
     the ability of GU and Modern to distribute dividends would not preclude
     consolidation under U.S. GAAP. In addition, under U.S. GAAP, potential
     voting rights are generally not considered in determining whether an
     entity should be consolidated. Accordingly, under U.S. GAAP, both GU and
     Modern are consolidated. The line items of MIC's consolidated income
     statement for the years ended December 31, 2002, 2001 and 2000 and
     consolidated balance sheet for the years ended December 31, 2002 and 2001,
     which are materially impacted by the consolidation of GU and Modern, are
     disclosed in a separate table at the bottom of the U.S. GAAP
     reconciliation of (loss) profit after taxes and of the U.S. GAAP balance
     sheet reconciliation.

16.  The Company's U.S. GAAP net income and shareholders' equity as of, and for
     the years ended December 31, 2001 and 2000 have been restated to reflect
     the correction of certain errors as detailed below. The effects of these
     corrections are as follows:

<TABLE>
                                                                                 2001           2000
                                                                            ------------------------------
                                                                  Note        U.S.$'000      U.S.$'000
                                                                            ------------------------------
<S>                                                                            <C>             <C>
Net (loss) profit in accordance with U.S. GAAP as previously
reported:                                                                      (201,811)       375,545
Adjustment to line item "Application of equity method of
accounting"                                                        a.            28,108        (14,271)
Adjustment to line item "Adjustments to initial step-up in the
value of the licenses"                                             b.            (1,063)         9,299
Reclassification of line item "Extraordinary items - Early
extinguishment of debt"                                            c.                 -              -
                                                                            ------------------------------
Restated net (loss) profit in accordance with U.S. GAAP                        (174,766)       370,573
                                                                            ==============================

Net (loss) profit per share data:
Basic net (loss) profit per share as previously reported:                       $(12.37)        $23.08
Effect of adjustments reported above                                              $1.66         $(0.31)
Restated Basic net (loss) profit per share                                      $(10.71)        $22.77
Weighted average number of shares outstanding in the year (in
'000)                                                                            16,314         16,273

Diluted net (loss) profit per share as previously reported:                     $(12.37)        $22.76
Effect of adjustments reported above                                              $1.66         $(0.30)
Restated diluted net (loss) profit per share                                    $(10.71)        $22.46
Weighted average number of shares and diluted potential common
shares (in '000)                                                                 16,314         16,500
</TABLE>


                                     F-73
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
<S>                                                                                 <C>           <C>
Shareholders' equity in accordance with U.S GAAP as previously
reported:                                                                           66,669        302,033
Adjustment to line item "Application of equity method of
accounting"                                                        a.              (2,126)       (30,234)
Adjustment to line item "Adjustments to initial step-up in the
value of the licenses"                                             b.                8,235          9,299
                                                                            ------------------------------
Restated shareholders' equity in accordance with U.S GAAP:                        72,778          281,098
                                                                            ==============================
</TABLE>

a.   In 2001 and 2000, $2,126,000 and $30,234,000 ($14,271,000 on the profit of
     the year and $15,963,000 on prior years' profit or loss), respectively, of
     additional losses on certain joint ventures should have been recognized by
     MIC due to either a) additional investment, including guarantees, by MIC
     in the venture that was not taken into account, or b) MIC's commitment to
     providing funding to the joint venture, in excess of its investment.
     Additionally, an adjustment of $25,081,000 has been recorded in 2001, to
     reflect the impact of these adjustments on the gain recognized by MIC on
     the sale of its FORA joint ventures.

b.   In 2000 and 2001, $203,000 and $1,063,000 respectively, of amortization
     expense related to the stepped-up value on cellular licenses was
     incorrectly included in the determination of U.S. GAAP net loss. In 2000,
     an impairment charge of $9,502,000, recorded for IFRS, related to the
     stepped-up value of a cellular license in the Philippines, was incorrectly
     not reversed for U.S. GAAP.

c.   In 2001, a gain of $8,075,000 was recorded as an extraordinary gain for
     U.S. GAAP. As this gain relates to the extinguishment of debt due to
     sinking fund payments, such gain should not have been reported as an
     extraordinary item.

Reconciliation of (Loss) Profit after Taxes:

The above items give rise to the following difference in net (loss) profit from
continuing operations recorded under U.S. GAAP:

<TABLE>
                                                                                 2001           2000
                                                       Item          2002     (restated)     (restated)
                                                      ------       ---------   ---------      ---------
                                                                   U.S.$'000   U.S.$'000      U.S.$'000
                                                                   ---------   ---------      ---------
<S>                                                      <C>         <C>          <C>           <C>
(Loss) profit for the year reported under IFRS....                 (385,143)    (138,053)       355,388
Items decreasing (increasing) reported loss or
   (decreasing) increasing reported profit:
  Application of equity method of accounting......       2           (4,221)      16,703        (11,003)
  Adjustments to initial step-up in the value of
     licenses.....................................       3            2,273        2,273         13,244
  Increased gain on disposal of SEC...............       4                -            -         41,575
  Valuation of stock options......................       5          (16,817)       6,408        (28,341)
  Compensation cost for stock options granted to
     employees....................................       6            1,308        5,315         (8,155)
  Recognition of connection fees and related costs       7             (337)         502            910
  Reduced impairment of tangible and intangible
     assets.......................................       8           (1,273)      (6,589)        10,096
  Reversal of goodwill amortization...............      10            7,865             -             -
</TABLE>


                                     F-74
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
                                                                                 2001           2000
                                                       Item          2002     (restated)     (restated)
                                                      ------       ---------   ---------      ---------
                                                                   U.S.$'000   U.S.$'000      U.S.$'000
                                                                   ---------   ---------      ---------
<S>                                                      <C>         <C>          <C>           <C>
   Additional goodwill impairment.................      10           (3,136)           -              -
   Extraordinary items - Early extinguishment of
   debt...........................................      11          (28,676)           -              -
    Impairment in securities, other than temporary      12           61,325      (61,325)             -
                                                                   ---------   ---------      ---------
(Loss) profit after taxes, before extraordinary
   items and cumulative effect of change in
   accounting principle under U.S. GAAP...........                 (366,832)    (174,766)       373,714
                                                                   ---------   ---------      ---------
Extraordinary items - Early extinguishment of debt      11           28,676            -              -
                                                                   ---------   ---------      ---------
(Loss) profit after taxes and extraordinary items
   and before cumulative effect of change in
   accounting principle ..........................                 (338,156)    (174,766)       373,714
                                                                   ========    =========      =========
Cumulative effect of change in accounting
   principle......................................     7, 10          9,336            -         (3,141)
                                                                   ---------   ---------      ---------
Net (Loss) profit under U.S. GAAP.................                 (328,820)    (174,766)       370,573
                                                                   ========    =========      =========
Presented as:
Net (loss) income from continuing operations......      13         (368,369)    (126,180)       423,958
Discontinued operations:
    Loss from discontinued operations, net of
    taxes(a)......................................                  (75,824)     (48,586)       (50,244)
    Gain on disposal, net of taxes(a).............                   77,361            -              -
                                                                   ---------   ---------      ---------
Loss from discontinued operations.................                    1,537      (48,586)       (50,244)
                                                                   ---------   ---------      ---------
(Loss) profit after taxes, before cumulative effect
   of change in accounting principle and before
   extraordinary items under U.S. GAAP                             (366,832)    (174,766)       373,714
                                                                   ========    =========      =========
Extraordinary items - Early extinguishment of
   debt(a)........................................      11           28,676            -
Cumulative effect of change in accounting
   principle(a)...................................      10            9,336            -         (3,141)
                                                                   ---------   ---------      ---------
Net loss (income) under U.S.GAAP....................
   (328,820)    (174,766)       370,573
                                                                   ========    =========      =========
</TABLE>

<TABLE>
                                                                                  2001           2000
Basic and Diluted (loss) profit per Common Share                     2002      (restated)     (restated)
                                                                   ---------   ---------      ---------
<S>                                                                 <C>           <C>            <C>
Basic (loss) profit per common share under
U.S. GAAP:
     - from continuing operations                                   $(22.57)      $(7.73)        $26.05
     - from discontinuing operations                                  $0.09       $(2.98)        $(3.09)
Basic (loss) profit per common share after taxes,
   before cumulative effect of change in
   accounting principle and extraordinary items...                  $(22.48)     $(10.71)        $22.96

   Impact of extraordinary items..................                    $1.76            -             -
   Impact of cumulative effect of change in
   accounting principle...........................                    $0.57            -         $(0.19)
</TABLE>


                                     F-75
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
<S>                                                                 <C>          <C>             <C>
Basic (loss) profit per common share under U.S.
GAAP..............................................                  $(20.15)     $(10.71)        $22.77
                                                                ===========  ===========     ==========
Weighted average number of shares outstanding in
   the year (in '000)                                                16,318       16,314         16,273
                                                                ===========  ===========     ==========
Diluted (loss) profit per common share under U.S.
   GAAP:
      -from continuing operations                                   $(22.57)      $(7.73)        $25.69
     - from discontinuing operations                                  $0.09       $(2.98)        $(3.04)
   Diluted (loss) profit per common after taxes,
   before cumulative effect of change in
   accounting principle and extraordinary items...                  $(22.48)     $(10.71)        $22.65
   Impact of extraordinary items..................                    $1.76            -              -
   Impact of cumulative effect of change in
   accounting principle...........................                    $0.57            -         $(0.19)
Diluted (loss) profit per common share under U.S.
GAAP..............................................                  $(20.15)     $(10.71)        $22.46
                                                                ===========  ===========     ==========
Weighted average number of shares and diluted
   potential common shares (in '000)..............                   16,318       16,314         16,500
                                                                ===========  ===========     ==========

(a) The tax impact on these items is $nil (2001: $nil; 2000: $nil).
</TABLE>

     Impact of consolidation of Great Universal

As explained in adjustment item No. 15, under U.S. GAAP, both Great Universal
("GU") and Modern Holdings ("Modern") should be consolidated. Presented in the
table below are the main line items of MIC's consolidated income statement for
the years ended December 31, 2002, 2001 and 2000 that would be materially
impacted had GU and Modern been consolidated.

<TABLE>
---------------------------------------------------------------------------------------------------
                                                      2002              2001               2000
---------------------------------------------------------------------------------------------------
                                                   U.S.$'000          U.S.$'000          U.S.$'000
---------------------------------------------------------------------------------------------------
<S>                                                  <C>                <C>                <C>
Consolidated revenues under U.S. GAAP
before the effect of the consolidation of
Great Universal and Modern                           418,251            419,542            571,237
---------------------------------------------------------------------------------------------------
Impact of consolidation                               97,287            112,966            142,624
---------------------------------------------------------------------------------------------------
Consolidated revenues under U.S. GAAP
after the effect of the consolidation of
Great Universal and Modern                           515,538            532,508            713,861
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Consolidated expenses under U.S. GAAP
before the effect of the consolidation of
Great Universal and Modern                          (362,549)          (405,603)          (606,909)
---------------------------------------------------------------------------------------------------
Impact of consolidation                              (99,034)          (119,799)          (174,727)
---------------------------------------------------------------------------------------------------
Consolidated expenses under U.S. GAAP
after the effect of the consolidation of
Great Universal and Modern                          (461,583)          (525,402)          (781,636)
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Consolidated other income (expense) under
U.S. GAAP before the effect of the
consolidation of Great Universal and
Modern                                              (252,503)           (72,406)               594
---------------------------------------------------------------------------------------------------
Impact of consolidation                               (5,665)            10,881                235
---------------------------------------------------------------------------------------------------
Consolidated other income (expense) under
U.S. GAAP after the effect of the
consolidation of Great Universal and
Modern                                              (258,168)           (61,525)               829
---------------------------------------------------------------------------------------------------
</TABLE>


                                     F-76
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
---------------------------------------------------------------------------------------------------
<S>                                                   <C>                <C>              <C>
Consolidated operating (loss) profit
under U.S. GAAP before the effect of the
consolidation of Great Universal and
Modern                                                55,702             13,939            (35,672)
---------------------------------------------------------------------------------------------------
Impact of consolidation                               (1,747)            (6,833)           (32,103)
---------------------------------------------------------------------------------------------------
Consolidated operating (loss) profit
under U.S. GAAP after the effect of the
consolidation of Great Universal and
Modern                                                53,955              7,106            (67,775)
---------------------------------------------------------------------------------------------------
</TABLE>

 Balance Sheet Reconciliation:

The following significant balance sheet differences arise under U.S. GAAP:

<TABLE>
                                                                                    Held
                                                      Proportional                for sale
                                                      Consolidation              assets and      Under
Balance sheet as of December 31,          Per Balance   Adjustment     Other     liabilities   U.S. GAAP
2002                               Item   Sheet Group (Items 1 & 2)  Adjustments  (Item 13)      Group
--------------------------------  ------  ----------- -------------  ----------- ----------    ---------
                                           U.S.$'000    U.S.$'000     U.S.$'000   U.S.$'000    U.S.$'000
                                           ---------    ---------     ---------   ---------    ---------
<S>                                <C>       <C>                        <C>                      <C>
Non-Current Assets
Goodwill, net ................     10        10,172            -        14,065           -       24,237
Licenses, net ................     3,8       84,471       (4,083)       (7,911)    (52,070)      20,407
Deferred costs and other
   non-current assets, net ...      9         4,919       (2,351)        8,359          (9)      10,918
Tangible assets, net..........              458,933     (135,699)            -     (36,862)     286,372
Investment in securities......              220,386          (21)            -           -      220,365
Investments in associated                                                    -           -
   companies..................                1,013      110,609                                111,622
Pledged deposits..............               32,921            -             -        (508)      32,413
Deferred taxation.............                8,470       (1,165)            -           -        7,305
                                          ---------    ---------     ---------   ---------    ---------
   Total Non-Current Assets...              821,285      (32,710)       14,513     (89,449)     713,639
                                          ---------    ---------     ---------   ---------    ---------
Current Assets
Investment in securities......              101,540            -             -           -      101,540
Inventories...................                6,962       (3,209)            -         (56)       3,697
Trade receivables, net........              113,221      (27,629)            -     (14,019)      71,573
Amounts due from joint                                                                 (33)
   ventures...................               14,053        6,647             -                   20,667
Amounts due from other
   related parties............                6,806         (351)            -           -        6,455
Prepaid and accrued income....      7        14,148       (4,882)        1,328      (2,164)       8,430
Other current assets..........               38,453       (6,592)            -       4,734       36,595
Time deposits.................               16,200       (1,428)            -      (1,111)      13,661
Cash and cash equivalents.....               70,451      (25,612)            -      (1,988)      42,851
                                          ---------    ---------     ---------   ---------    ---------
   Total Current Assets.......              381,834      (63,056)        1,328     (14,637)     305,469
                                          ---------    ---------     ---------   ---------    ---------
Total Assets from disposal
   group classified as held
   for sale...................     13             -            -             -     104,086      104,086
                                          ---------    ---------     ---------   ---------    ---------
Total Assets..................            1,203,119      (95,766)       15,841           -    1,123,194
                                          =========    =========     =========   =========    =========
Shareholders' Equity and
   Liabilities
Share capital and premium.....      6       281,989            -         5,398           -      287,387
Treasury stock ...............              (54,521)           -             -           -      (54,521)
Legal reserve.................                4,256            -             -           -        4,256
Retained loss brought forward.              (57,719)      (1,710)       (3,226)          -      (62,655)
Profit for the year, after
   cumulative effect of
   change in accounting
   principle..................             (385,143)      (4,221)       60,544                 (328,820)
Currency translation reserve .              (84,121)           -             -           -      (84,121)
Excess of contribution over
   assets acquired ...........      3             -            -       (58,628)          -      (58,628)
                                          ---------    ---------     ---------   ---------    ---------
</TABLE>


                                     F-77
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
                                                                                    Held
                                                      Proportional                for sale
                                                      Consolidation              assets and      Under
Balance sheet as of December 31,          Per Balance   Adjustment     Other     liabilities   U.S. GAAP
2002                               Item   Sheet Group (Items 1 & 2)  Adjustments  (Item 13)      Group
--------------------------------  ------  ----------- -------------  ----------- ----------    ---------
                                           U.S.$'000    U.S.$'000     U.S.$'000   U.S.$'000    U.S.$'000
                                           ---------    ---------     ---------   ---------    ---------
<S>                                <C>       <C>                        <C>                      <C>
Total Shareholders' Equity....             (295,259)      (5,931)        4,088                 (297,102)
                                          ---------    ---------     ---------   ---------    ---------
   Minority Interest..........               23,733            -             -           -       23,733
                                          ---------    ---------     ---------   ---------    ---------
Liabilities
Non-Current liabilities
   Other non-current                                                                     -
   liabilities................               26,874      (12,831)            -                   14,043
   Corporate subordinated debt      9       912,539            -         5,461           -      918,000
   Other debt and financing...      9       159,370      (26,803)        2,898     (33,765)     101,700
                                          ---------    ---------     ---------   ---------    ---------
   Total Non-Current
       Liabilities............            1,098,783      (39,634)        8,359     (33,765)   1,033,743
                                          ---------    ---------     ---------   ---------    ---------
Current liabilities
   Other debt and financing...              156,666      (20,244)            -     (45,064)      91,358
   Trade payable..............               90,945       (5,043)            -      (6,216)      79,686
   Amounts due to shareholders                4,021            -             -           -        4,021

   Amounts due to other
   related parties ...........                6,487          472             -          (8)       6,951
   Accrued interest and other
   expenses...................      7        42,745      (10,547)        3,394      (3,389)      32,203
   Other current liabilities..               74,998      (14,839)            -      (3,468)      56,691
                                          ---------    ---------     ---------   ---------    ---------
                                            375,862      (50,201)        3,394     (58,145)     270,910
                                          ---------    ---------     ---------   ---------    ---------
Total Liabilities from
   disposal group classified
   as held for sale...........                    -            -             -      91,910       91,910
                                          ---------    ---------     ---------   ---------    ---------
Total Shareholders' Equity
   and Liabilities............            1,203,119      (95,766)       15,841           -    1,123,194
                                          =========    =========     =========   =========    =========
</TABLE>

     The following significant balance sheet differences arise under U.S. GAAP:

<TABLE>
                                                             Proportional
                                                             Consolidation                Under
Balance sheet as of December 31,                 Per Balance   Adjustment     Other     U.S. GAAP
2001 (Restated)                           Item   Sheet Group (Items 1 & 2)  Adjustments   Group
--------------------------------         ------  ----------- -------------  ----------- ---------
                                                  U.S.$'000    U.S.$'000     U.S.$'000  U.S.$'000
                                                  ---------    ---------     ---------  ---------
<S>                                       <C>       <C>                        <C>        <C>
Non-Current Assets
Goodwill, net ........................               52,575        (982)            -      51,593
Licenses, net ........................      3       164,541     (14,214)      (12,417)    137,910
Deferred costs and other non-current
   assets, net .......................      9        15,685      (2,378)       10,379      23,686
Tangible assets, net..................      8       512,236    (139,067)        3,507     376,676
Investment in securities .............              676,829        (964)            -     675,865
Investments in associated companies...      2        52,858      78,758             -     131,616
Pledged deposits......................               47,404         (71)            -      47,333
Deferred taxation.....................                3,785           -             -       3,785
                                                  ---------   ---------     ---------   ---------
   Total Non-Current Assets...........            1,525,913     (78,918)        1,469   1,448,464
                                                  ---------   ---------     ---------   ---------
Current Assets
Inventories...........................               12,932      (4,560)            -       8,372
Trade receivables, net................              136,078     (33,668)            -     102,410
Amounts due from joint ventures.......               46,001       4,640             -      50,641
Amounts due from other related parties                9,258           -             -       9,258
</TABLE>


                                     F-78
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

<TABLE>
                                                             Proportional
                                                             Consolidation                Under
Balance sheet as of December 31,                 Per Balance   Adjustment     Other     U.S. GAAP
2001 (Restated)                           Item   Sheet Group (Items 1 & 2)  Adjustments   Group
--------------------------------         ------  ----------- -------------  ----------- ---------
                                                  U.S.$'000    U.S.$'000     U.S.$'000  U.S.$'000
                                                  ---------    ---------     ---------  ---------
<S>                                       <C>       <C>                        <C>        <C>
Prepaid and accrued income............      7        27,228      (5,027)        1,521      23,722
Other current assets..................               35,800     (10,107)            -      25,693
Time deposits.........................               21,444      (1,649)            -      19,795
Cash and cash equivalents.............               56,276     (20,192)            -      36,084
                                                  ---------   ---------     ---------   ---------
   Total Current Assets...............              345,017     (70,563)        1,521     275,975
                                                  ---------   ---------     ---------   ---------
Total Assets..........................            1,870,930    (149,481)        2,990   1,724,439

Shareholders' Equity and Liabilities
Share capital and premium.............      6       281,989           -         6,707     288,696
Treasury stock .......................              (52,033)          -             -     (52,033)
Legal reserve.........................                4,256           -             -       4,256
Retained profit brought forward.......               80,334     (18,413)       50,190     112,111
Profit for the year, after cumulative                                                            )
   effect of change in accounting
   principle..........................             (138,053)     16,703       (53,416)   (174,766
Revaluation reserve ..................     12       (61,325)          -        61,325           -
Currency translation reserve .........              (46,274)       (584)            -     (46,858)
Excess of contribution over assets                                                               )
   acquired ..........................      3             -           -       (58,628)    (58,628
                                                  ---------   ---------     ---------   ---------
Total Shareholders' Equity............               68,894      (2,294)        6,178      72,778
                                                  ---------   ---------     ---------   ---------
   Minority interest..................               10,262           -             -      10,262
                                                  ---------   ---------     ---------   ---------
Liabilities
Non-Current Liabilities
   Other non-current liabilities......               20,507      (2,136)            -      18,371
   Corporate subordinated debt........      9       954,601           -         7,399     962,000
   Other debt and financing...........      9       347,475     (28,738)        2,980     321,717
                                                  ---------   ---------     ---------   ---------
                                                  1,322,583     (30,874)       10,379   1,302,088
                                                  ---------   ---------     ---------   ---------
Current Liabilities
   Other debt and financing...........              153,898     (43,321)            -     110,577
   Trade payables.....................              109,739     (26,464)            -      83,275
   Amounts due to shareholders........                7,158           -             -       7,158
   Amounts due to other related
   parties ...........................               11,304           -             -      11,304
   Financial liabilities..............      5        36,365           -       (16,817)     19,548
   Accrued interest and other expenses      7        57,981     (17,416)        3,250      43,815
   Other current liabilities..........               92,746     (29,112)            -      63,634
                                                  ---------   ---------     ---------   ---------
                                                    469,191    (116,313)      (13,567)    339,311
                                                  ---------   ---------     ---------   ---------

Total Liabilities.....................            1,791,774    (147,187)       (3,188)  1,641,399
                                                  ---------   ---------     ---------   ---------
Total Shareholders' Equity and
   Liabilities........................            1,870,930    (149,481)        2,990   1,724,439
                                                  =========   =========     =========   =========
</TABLE>

     Impact of consolidation of Great Universal

As explained in adjustment item No. 15, under U.S. GAAP, both Great Universal
("GU") and Modern Holdings ("Modern") should be consolidated. Presented in the
table below are the main line items of MIC's


                                     F-79
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

consolidated balance sheet as of December 31, 2002 and 2001 that would be
materially impacted had GU and Modern been consolidated.

-------------------------------------------------------------------------------
                                                     2002              2001
                                                                    (restated)
-------------------------------------------------------------------------------
                                                   U.S.$'000        U.S.$'000
-------------------------------------------------------------------------------
Consolidated total assets under U.S. GAAP            928,633        1,724,439
-------------------------------------------------------------------------------
Impact of consolidation                               71,592           90,782
-------------------------------------------------------------------------------
Consolidated total assets after consolidation      1,000,225        1,815,221
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Consolidated total shareholders' equity under U.S.
GAAP                                                (297,102)          72,778
-------------------------------------------------------------------------------
Impact of consolidation                               (8,611)          (6,814)
-------------------------------------------------------------------------------
Consolidated total shareholders' equity after
consolidation                                       (305,713)          65,964
-------------------------------------------------------------------------------

     Comprehensive Income:

The Company's statement of comprehensive income under U.S.GAAP for the
three-year period ended December 31, 2002, is as follows:

<TABLE>
                                                                                                 2001           2000
                                                                                   2002       (restated)     (restated)
                                                                                ---------      ---------      ---------
                                                                                U.S.$'000      U.S.$'000      U.S.$'000
                                                                                ---------      ---------      ---------
<S>                                                                              <C>            <C>             <C>
Net (loss) profit under U.S. GAAP......................................          (328,820)      (174,766)       370,573
                                                                                ---------      ---------      ---------
Other comprehensive income (loss):
   Holding gain (loss) excluding effect of sale of marketable securities
     sold during the year, net of tax(b)...............................           (37,422)       (35,616)      (265,790)

   Holding gain for securities sold during the year, net of tax(b).....          (131,396)         1,949          5,069

   Reclassification adjustment for net gain realized on sale of
     marketable securities, net of tax(b)..............................           168,818         15,931        (55,321)

Foreign CTA............................................................           (37,263)       (13,510)         2,445
                                                                                ---------      ---------      ---------
Other comprehensive income (loss)......................................           (37,263)       (31,246)      (313,597)
                                                                                ---------      ---------      ---------
Comprehensive (loss) income under U.S. GAAP............................          (366,083)      (206,012)        56,976
                                                                                =========      =========      =========
(b)  The tax impact on these items is $nil (2001: $nil; 2000: $nil).
</TABLE>

     Additional Stock Option Disclosure:

As described above, under U.S. GAAP, the Company accounts for stock options
under APB25. Had compensation costs been determined in accordance with SFAS 123,
the Company's net income and earnings per share would have been reduced to the
following pro forma amounts.

                                                    Year ended December 1,
                                              2002           2001        2000
                                                          (restated)  (restated)
                                            ---------     ---------    ---------
                                            U.S.$'000     U.S.$'000    U.S.$'000
                                            ---------     ---------    ---------
Net income, as reported .................   (328,820)     (174,766)     370,573

Deduct:  total stock-based employee
expense determined under fair value
based method for all awards, net of
related tax effects......................     16,275        (5,728)      (5,066)
                                            ---------     ----------   ---------
Pro forma net income.....................   (312,545)     (180,494)     365,507
                                            ---------     ----------   ---------
Earnings per share:
    As reported (basic) - $..............     (20.15)       (10.71)       22.77
    Pro forma (basic) - $................     (19.15)       (11.06)       22.46

    As reported (diluted) - $............     (20.15)       (10.71)       22.16
    Pro forma (diluted) - $..............     (19.15)       (11.06)       22.15


                                     F-80
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     The fair value of the options granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
risk free interest rates of 4.4% (2001: 4.4%), expected lives of 6 years, no
dividends and expected volatility of 58.4% (2001: 58.4%).

31.  SUBSEQUENT EVENTS (Unaudited)

     On January 21, 2003, MIC made an exchange offer and consent solicitation
to bondholders of the 13.5% Senior Subordinated Notes due 2006 (the "Notes").
On May 8, 2003, MIC announced the closing of this offer with the tendering of
approximately 85% of the Notes.


                                     F-81
<PAGE>


Notes to the Consolidated Annual Accounts                Millicom International
As of December 31, 2002 and 2001                                  Cellular S.A.
-------------------------------------------------------------------------------

     On January 21, 2003, MIC announced that it had received written
confirmation from The Nasdaq Stock Market Inc. that it would be de-listed from
the Nasdaq National Market ("Nasdaq") unless its equity was raised to at least
$10 million or it were able to maintain its minimum bid price per share at $3
for a period of at least ten consecutive trading days on or before February 17,
2003. As a consequence of this, a resolution was passed at an Extraordinary
General Meeting held on February 17, 2003, for a reverse stock split of the
Company's issued shares, exchanging three existing shares of a par value of $2
each for one new share with a par value of $6. The new shares commenced trading
on the Nasdaq on February 20, 2003. On March 6, 2003, the Company received
confirmation from Nasdaq that it now complied with all the current listing
requirements and that de-listing was no longer necessary.

     On February 13, 2003, the Group announced the successful completion of the
sale of Celcaribe, its cellular operation in Colombia.

     In January 2003, MIC sold an additional 44,129 Tele2 AB shares to Kinnevik
at market price in settlement of an amount payable. In addition, MIC has sold a
further 1,000,000 Tele2 AB shares to third parties. Total proceeds from these
sales were approximately $34 million.



                                     F-82
<PAGE>


                                 EXHIBIT INDEX


Exhibit No.    Description
-----------    -----------

    1.1        Memorandum and Articles of Association and bylaws of Millicom
               International Cellular S.A.

    4.1        Indenture dated May 8, 2003, between the Company and The Bank
               of New York, as trustee, relating to $562,219,000 11% Senior
               Subordinated Notes due 2006

    4.2        Indenture dated May 8, 2003, between the Company and The Bank
               of New York, as trustee, relating to $63,714,000 2% Senior
               Convertible PIK Notes due 2006.

    4.3        Supplemental indenture dated May 23, 2003, between the Company
               and The Bank of New York, as trustee, relating to the 13 1/2%
               Senior Subordinated Notes due 2006

    7.1        Explanation of the calculation of earnings per share

   99.1        Section 906 Certifications