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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



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FORM 20-F

|           |  |                                                                                                                                    
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                                                    
|           |  |                                                                                                                                    
|[   ]      |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934                                     
|           |  |                                                                                                                                    
|           |  | OR                                                                                                                                 
|           |  |                                                                                                                                    
|[X]        |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2002  
|           |  |                                                                                                                                    
|           |  | OR                                                                                                                                 
|           |  |                                                                                                                                    
|[   ]      |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from          to

Commission file number 0-29738

TELESYSTEM INTERNATIONAL WIRELESS INC./
TÉLÉSYSTÈME MOBILES INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

(Translation of Registrants name into English)

CANADA(Jurisdiction of incorporation or organization)

1000 de La Gauchetière Street West, 16th Floor, Montreal, Quebec, Canada, H3B 4W5(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

|                         |  |                                               
|------------------------ |  | ----------------------------------------------
|Title of each class
None |  | Name of each exchange on which registered
None

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares without par value
(Title of Class)


Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

Series B 13 1/4% Senior Discount Notes due 2007
Series C 10 1/2% Senior Discount Notes due 2007
14% Senior Guaranteed Notes due 2003
(Title of Class)


Indicate the number of outstanding shares of each of the issuers classes of
capital or common stock as of the close of the period covered by the annual
report.

467,171,850 common shares without par value
35,000,000 series 1 preferred shares without par value


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.

[X]   Yes      [   ]   No

Indicate by check mark which financial statement item the registrant has
elected to follow.

[   ]   Item 17      [X]   Item 18





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|                                       |                                                                                        |  |  |  |  |  |  | 
|-------------------------------------- | -------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|EXPLANATORY NOTES                     
|EXCHANGE RATE INFORMATION             
|PART I                                
|                                       | ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        
|                                       | ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                      
|                                       | ITEM 3  KEY INFORMATION                                                              
|                                       | ITEM 4  INFORMATION ON THE COMPANY                                                   
|                                       | ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 
|                                       | ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   
|                                       | ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            
|                                       | ITEM 8  FINANCIAL INFORMATION                                                        
|                                       | ITEM 9  THE OFFER AND LISTING                                                        
|                                       | ITEM 10  ADDITIONAL INFORMATION                                                      
|                                       | ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                  
|                                       | ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|                                       | ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES                            
|                                       | ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|                                       | ITEM 15  CONTROLS AND PROCEDURES                                                     
|                                       | ITEM 16 [RESERVED]                                                                    
|                                       | ITEM 17  FINANCIAL STATEMENTS                                                        
|                                       | ITEM 18  FINANCIAL STATEMENTS                                                        
|                                       | ITEM 19  EXHIBITS                                                                    
|Mutual Release                        
|Uses of Premises and Service Agreement
|List of Significant Subsidiaries      
|Certification                         



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##### Table of Contents



TABLE OF CONTENTS

EXPLANATORY NOTES
EXCHANGE RATE INFORMATION

PART I

|                                                                                       |  |  |    | 
|-------------------------------------------------------------------------------------- |  |  | -- | 
|ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         |  |  | 5  | 
|ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                       |  |  | 5  | 
|ITEM 3  KEY INFORMATION                                                               |  |  | 6  | 
|ITEM 4  INFORMATION ON THE COMPANY                                                    |  |  | 16 | 
|ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                  |  |  | 39 | 
|ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                    |  |  | 59 | 
|ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                             |  |  | 70 | 
|ITEM 8  FINANCIAL INFORMATION                                                         |  |  | 72 | 
|ITEM 9  THE OFFER AND LISTING                                                         |  |  | 73 | 
|ITEM 10  ADDITIONAL INFORMATION                                                       |  |  | 78 | 
|ITEM
11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  |  | 90 | 
|ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  |  | 92 | 
|ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES                             |  |  | 93 | 
|ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
OF PROCEEDS |  |  | 93 | 
|ITEM
15  CONTROLS AND PROCEDURES                                                      |  |  | 94 | 
|ITEM 16 [RESERVED]                                                                     |  |  | 95 | 
|ITEM 17  FINANCIAL STATEMENTS                                                         |  |  | 96 | 
|ITEM 18  FINANCIAL STATEMENTS                                                         |  |  | 97 | 
|ITEM 19  EXHIBITS                                                                     |  |  | 98 | 





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EXPLANATORY NOTES

References herein to the Company, we, us or our are references to
Telesystem International Wireless Inc. (TIW) , a Canadian corporation, and,
where the context requires, its subsidiaries and operating companies including
Telesystem International Wireless Corporation N.V. (TIWC), a Netherlands
corporation. TIWC is a wholly owned subsidiary of TIW and a guarantor of TIWs
14% senior guaranteed notes. Substantially all of our assets are owned
indirectly through our interest in TIWC. References herein to the historical
businesses and operations of the Company give effect to the 1997 corporate
reorganization whereby TIW was formed.

All references herein to dollars and $ refer to the lawful currency of
the United States of America, unless otherwise expressly stated. All references
herein to Cdn$ refer to the lawful currency of Canada; all references herein
to Euro or  refer to lawful single currency of the European Monetary
Union; all references herein to R$ refer to the lawful currency of Brazil;
all references herein to Leu refer to the lawful currency of Romania; and all
references herein to Koruna refer to the lawful currency of the Czech
Republic.

Although we present our financial statements in U.S. dollars, all
financial statements and financial information derived therefrom presented
herein have been prepared in accordance with Canadian generally accepted
accounting principles (Canadian GAAP). For a discussion of the principal
differences between Canadian GAAP and U.S. generally accepted accounting
principles (U.S. GAAP), see Note 17 to the consolidated financial statements.

Information contained in this document concerning the wireless
telecommunications industry, our general expectations concerning this industry
and our market positions and market shares are based on estimates we prepared
using data from publicly available industry sources as well as from various
research analysts reports, market research and industry analyses, and on
assumptions made, based on our knowledge of this industry, which we believe to
be reasonable. We believe, however, that this data is inherently imprecise,
although generally indicative of relative market positions and market shares.

Certain data concerning the wireless telecommunications industry found in
this document was taken from the independent publication Global Mobile®,
published by Baskerville Communications Corporation. Industry and company data
is approximate and reflects rounding in certain cases.

Unless otherwise indicated, all operating data presented herein is as of
December 31, 2002.




EXCHANGE RATE INFORMATION

The following table sets forth the exchange rates for one U.S. dollar in
effect at the end of the periods noted and the average of the exchange rates on
the last day of each month during such periods. The exchange rates expressed
in Canadian dollars and Euros are based on the noon buying rate as reported by
the Federal Reserve Bank of New York; the exchange rates expressed in Romanian
Leu are based on the daily fixing rate as reported by the National Bank of
Romania; and the exchange rates expressed in Czech Koruna are based on the
daily fixing rate as reported by the Czech National Bank. As of May 14, 2003,
such exchange rates were Cdn$1.3786 = $1.00; 1.1498 = $1.00; Leu 32,622.00 =
$1.00; Koruna 27.4230 = $1.00.





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|                |  |      |           |         |  |      |           |         |  |      |           |         |  |     |           |         |  |     |           |         |  |  |           |  |  |  |           |  |  |  |           |  |  |  |           |  |  |  |          | 
|--------------- |  | ---- | --------- | ------- |  | ---- | --------- | ------- |  | ---- | --------- | ------- |  | --- | --------- | ------- |  | --- | --------- | ------- |  |  | --------- |  |  |  | --------- |  |  |  | --------- |  |  |  | --------- |  |  |  | -------- | 
|                |  | 2002 |           | 2001    |  | 2000 |           | 1999    |  | 1998
|                |  |      |           |         |  |      |           |         |  |     
|                |  | End  |           | Average |  | End  |           | Average |  | End  |           | Average |  | End |           | Average |  | End |           | Average
|                |  |      |           |         |  |      |           |         |  |      |           |         |  |     |           |         |  |     |           |        
|Canadian Dollar |  |      | 1.5718    |         |  |      | 1.5666    |         |  |      | 1.5956    |         |  |     | 1.5490    |         |  |     | 1.4995    |         |  |  | 1.4855    |  |  |  | 1.4440    |  |  |  | 1.4852    |  |  |  | 1.5375    |  |  |  | 1.4874   | 
|Euro            |  |      | 1.0492    |         |  |      | 1.0241    |         |  |      | 1.1235    |         |  |     | 1.1167    |         |  |     | 1.0652    |         |  |  | 1.1132    |  |  |  | 0.9930    |  |  |  | 0.9891    |  |  |  | 0.8519    |  |  |  | 0.8508   | 
|Romanian Leu    |  |      | 33,475.00 |         |  |      | 33,525.70 |         |  |      | 31,597.00 |         |  |     | 29,060.90 |         |  |     | 25,926.00 |         |  |  | 21,662.00 |  |  |  | 18,250.00 |  |  |  | 15,621.00 |  |  |  | 11.000.00 |  |  |  | 9,009.00 | 
|Czech Koruna    |  |      | 30.1410   |         |  |      | 30.5470   |         |  |      | 36.2590   |         |  |     | 38.0380   |         |  |     | 37.8130   |         |  |  | 38.5900   |  |  |  | 36.0000   |  |  |  | 34.6000   |  |  |  | 29.9000   |  |  |  | 32.3000  | 

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements concerning our
future operations, economic performances, financial conditions and financing
plans, including such things as business strategy and measures to implement
strategy, competitive strengths, goals, expansion and growth of the wireless
telecommunications industry and our business and operations and references to
future success. Forward-looking statements may be identified by use of
forward-looking terminology such as believe, intend, may, will,
expect, estimate, anticipate, continue, or similar terms, variations of
those terms or the negative of those terms. These statements are based on
certain assumptions and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected future
developments as well as other factors we believe are appropriate in the
circumstances. However, whether actual results and developments will conform
with our expectations and predictions is subject to a number of risks and
uncertainties, including, among other things, the risk factors discussed above.
Consequently, all of the forward-looking statements made in this document are
qualified by these cautionary statements, and there can be no assurance that
the actual results or developments anticipated by us will be realized or, even
if substantially realized, that they will have the expected consequences to or
effects on us and our subsidiaries or their businesses or operations.





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PART I




ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.




ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.





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ITEM 3  KEY INFORMATION

SELECTED FINANCIAL DATA

The following table sets forth certain consolidated financial information
derived from TIWs consolidated financial statements for the fiscal years ended
December 31, 2002, 2001, 2000, 1999 and 1998, which have been audited by Ernst
& Young LLP. You should read the information set forth below in conjunction
with Our Operating and Financial Review and Prospects and TIWs consolidated
financial statements, and the notes thereto, incorporated by reference in this
Form 20-F. TIWs consolidated financial statements have been prepared in
accordance with Canadian GAAP. For a discussion of the principal differences
between Canadian GAAP and U.S. GAAP, see note 17 to TIWs consolidated
financial statements.

|                                                                           |  |                         |          |      |  |                                       |          |      |  |      |          |   |  |  |          |   |  |  |          |  
|-------------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ------------------------------------- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | - |  |  | -------- | -
|                                                                           |  | Year Ended December 31,
|                                                                           |  |                        
|(U.S.$)                                                                    |  | 2002                    |          | 2001 |  | 2000                                  |          | 1999 |  | 1998
|                                                                           |  |                         |          |      |  |                                       |          |      |  |     
|                                                                           |  |                         |          |      |  | (in thousands, except per share data) |          |      |  |     
|Statement of Loss Data:                                                    |  |                         |          |      |  |                                       |          |      |  |      |          |   |  |  |          |   |  |  |          |  
|Revenues                                                                   |  |                         | 694,454  |      |  |                                       | 526,225  |      |  |      | 354,052  |   |  |  | 251,825  |   |  |  | 178,508  |  
|Operating income (loss)                                                    |  |                         | 87,586   |      |  |                                       | (441     | )    |  |      | (85,022  | ) |  |  | (38,517  | ) |  |  | (62,176  | )
|Income (loss) from continuing operations                                   |  |                         | 61,959   |      |  |                                       | 162,389  |      |  |      | (19,672  | ) |  |  | (74,641  | ) |  |  | (99,896  | )
|Net income (loss) (4)                                                      |  |                         | (127,174 | )    |  |                                       | (253,714 | )    |  |      | (355,356 | ) |  |  | (154,802 | ) |  |  | (179,042 | )
|Basic earnings (loss) per share from continuing operations (1)             |  |                         | 0.13     |      |  |                                       | 7.71     |      |  |      | (2.83    | ) |  |  | (5.43    | ) |  |  | (7.18    | )
|Diluted earnings (loss) per share from continuing operations               |  |                         | 0.13     |      |  |                                       | 4.05     |      |  |      | (2.83    | ) |  |  | (5.43    | ) |  |  | (7.18    | )
|Basic loss per share                                                       |  |                         | (0.29    | )    |  |                                       | (16.29   | )    |  |      | (24.41   | ) |  |  | (10.90   | ) |  |  | (12.87   | )
|Diluted loss per share                                                     |  |                         | (0.29    | )    |  |                                       | (6.28    | )    |  |      | (24.41   | ) |  |  | (10.90   | ) |  |  | (12.87   | )
|Income (loss) from continuing operations (U.S. GAAP)                       |  |                         | 344,743  |      |  |                                       | 54,183   |      |  |      | (41,770  | ) |  |  | (84,376  | ) |  |  | (99,896  | )
|Net income (loss) (U.S. GAAP)                                              |  |                         | 113,627  |      |  |                                       | (319,937 | )    |  |      | (377,454 | ) |  |  | (164,537 | ) |  |  | (179,042 | )
|Basic earnings (loss) per share from continuing operations (U.S. GAAP) (1) |  |                         | 0.76     |      |  |                                       | 3.13     |      |  |      | (2.68    | ) |  |  | (5.75    | ) |  |  | (7.17    | )
|Diluted earnings (loss) per share from continuing operations (U.S. GAAP)   |  |                         | 0.76     |      |  |                                       | 2.09     |      |  |      | (2.68    | ) |  |  | (5.75    | ) |  |  | (7.17    | )
|Basic earnings (loss) per share (U.S. GAAP)                                |  |                         | 0.25     |      |  |                                       | (18.45   | )    |  |      | (24.26   | ) |  |  | (11.22   | ) |  |  | (12.87   | )
|Diluted earnings (loss) per share (U.S. GAAP)                              |  |                         | 0.25     |      |  |                                       | (7.19    | )    |  |      | (24.26   | ) |  |  | (11.22   | ) |  |  | (12.87   | )

|                                              |                            |  |                    |             |      |  |                           |            |      |  |           |            |  |  |           |            |  |  |           |            | 
|--------------------------------------------- | -------------------------- |  | ------------------ | ----------- | ---- |  | ------------------------- | ---------- | ---- |  | --------- | ---------- |  |  | --------- | ---------- |  |  | --------- | ---------- | 
|                                              |                            |  | As of December 31,
|                                              |                            |  |                   
|                                              |                            |  | 2002               |             | 2001 |  | 2000                      |            | 1999 |  | 1998     
|                                              |                            |  |                    |             |      |  |                           |            |      |  |          
|                                              |                            |  |                    |             |      |  | (in thousands of dollars) |            |      |  |          
|Balance Sheet Data:                           |                            |  |                    |             |      |  |                           |            |      |  |           |            |  |  |           |            |  |  |           |           
|Total Assets                                  |                            |  | 1,450,303          |             |      |  | 1,906,666                 |            |      |  | 3,294,165 |            |  |  | 2,486,892 |            |  |  | 2,145,000 |           
|Share Capital and Paid-In Capital             |                            |  | 1,301,470          |             |      |  | 696,954                   |            |      |  | 684,639   |            |  |  | 528,151   |            |  |  | 527,853   |           
|Shareholders Equity                          |                            |  | 51,537             |             |      |  | 169,057                   |            |      |  | 76,389    |            |  |  | 47,431    |            |  |  | 208,187   |           
|Total Assets (U.S. GAAP)                      |                            |  | 1,444,298          |             |      |  | 1,431,488                 |            |      |  | 2,665,620 |            |  |  | 1,861,191 |            |  |  | 1,386,770 |           
|Share Capital (U.S. GAAP)                     |                            |  | 1,136,167          |             |      |  | 775,609                   |            |      |  | 763,294   |            |  |  | 606,806   |            |  |  | 606,508   |           
|Shareholders Equity
(Deficiency) (U.S. GAAP) |                            |  | 1,771              |             |      |  | (570,986                  | )          |      |  | (314,210  | )          |  |  | (41,826   | )          |  |  | 208,187   |           
|Other Data:(1)                                |                            |  |                    |             |      |  |                           |            |      |  |           |            |  |  |           |            |  |  |           |           
|Number of Shares Issued: (2)                  |                            |  |                    |             |      |  |                           |            |      |  |           |            |  |  |           |            |  |  |           |           
|                                              | Multiple voting shares (3) |  |                    |            |      |  |                           | 817,462    |      |  |           | 789,204    |  |  |           | 734,921    |  |  |           | 734,921    | 
|                                              | Common shares (3)          |  |                    | 467,171,850 |      |  |                           | 15,509,700 |      |  |           | 14,991,375 |  |  |           | 13,933,566 |  |  |           | 13,928,256 | 
|                                              | Preferred shares           |  |                    | 35,000,000  |      |  |                           |           |      |  |           |           |  |  |           |           |  |  |           |           | 



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|(1) |  | All earnings (loss) per share and number of shares data has been adjusted
to reflect the June 22, 2001 consolidation of our common shares on the
basis of one (1) post-consolidated share for five (5) pre-consolidated
shares.                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | We have never declared dividends.                                                                                                                                                                                                                              
|   
|(3) |  | On February 5, 2002, all of the multiple voting shares were exchanged for
subordinate voting shares on a one-for-one basis and on May 17, 2002, the
subordinate voting shares were redesignated as common shares. This has had
no impact on earnings per share.
|   
|(4) |  | Includes net loss from discontinued operations for the years ended
December 31, 2002, 2001, 2000 and 1999 of $189.1 million, $416.1 million,
$335.7 million, and $80.2 million, respectively.                                                                  





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CAPITALIZATION AND INDEBTEDNESS

Not applicable.

REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

RISK FACTORS

We may not be able to obtain the financing we need to meet our capital
requirements.

We have significant capital requirements to meet in the next twelve
months. The total outstanding principal amount of TIWs 14% senior guaranteed
notes, of which TIWC is a guarantor, is due in full on December 30, 2003. As
at December 31, 2002, due to the short-term maturity of our senior
indebtedness, our committed sources of funds and cash on hand for the following
twelve months were not sufficient to meet our committed cash obligations for
that period. There can be no assurance that we will be able to secure the funds
required to meet such cash needs, either through refinancing of our senior
indebtedness, the cash flow from our operations, the disposition of certain of
our assets, the sale of debt or equity securities, or through any other means
of financing. Failure to obtain such required funds or postpone the maturity
of our senior indebtedness could have a material adverse effect on us and could
result ultimately in our insolvency or bankruptcy.

The business of our operations is capital-intensive. Our operating
companies also expect to have significant future capital requirements,
particularly in relation to the expansion of their cellular operations and the
servicing of their debt. Our operating companies intend to finance such future
capital requirements from cash flow from operating activities, borrowing under
existing credit facilities, funding from shareholders contributions and
through other externally generated funds such as disposition of assets, the
sale of debt and equity securities, vendor financing and project financing from
commercial banks and international financial agencies. The ability to generate
sufficient short-term and long-term capital in the future is dependent upon
many factors, including general economic conditions in the countries where we
conduct our principal operations, financial market conditions, our and such
operating companies financial and operating performance and prospects and
market perceptions thereof, which will be adversely impacted by the going
concern qualification currently included in our financial statements. There
can be no assurance that the operating companies will be able to obtain the
financing required to meet debt service requirements, make planned capital
expenditures, provide working capital or meet other cash needs. Failure to
obtain required financing could have a material adverse effect on us and, among
other things, could result in the loss or revocation of licenses held by the
operating companies or require that certain planned projects be delayed or
abandoned.

We are highly leveraged, which could make it difficult for us to service our
debt or comply with the covenants in the documents governing our indebtedness.

We continue to have a substantial amount of indebtedness outstanding,
including as at December 31, 2002, $272.6 million in secured indebtedness at
the corporate level consisting mainly of $47.4 million drawn on our senior
credit facility and $223.9 million in 14% senior guaranteed notes (including
conditional indebtedness of $3.4 million accrued on such notes as at December
31, 2002). As at April 30, 2003, our senior credit facility had been repaid in
full and $48 million in 14% senior guaranteed notes had been redeemed leaving
approximately $172.5 million in senior indebtedness. Also, as at December 31,
2002, our consolidated debt was $1.0 billion. The terms of certain of our debt
instruments currently limit, but do not prohibit, the incurrence of additional
indebtedness by our subsidiaries, our operating companies, or us.

The level and the terms of our indebtedness could have important consequences, including that:



| |  | the debt service requirements may become so high that we have difficulty making debt service payments on our outstanding
indebtedness or satisfying our obligations with respect to such indebtedness;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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| |  | our ability to pay dividends will be reduced, assuming we are otherwise permitted to pay dividends under the restrictive
covenants contained in our debt instruments;                                                                                                                                                  
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | our ability to obtain additional debt financing may be limited;                                                                                                                                                                                                                                                        
| 
| |  | our ability to pay interest on our debt and finance our activities at the corporate level may be limited by cash sweep
provisions requiring us to repay the principal outstanding on our senior indebtedness from cash raised from financing
activities, asset sales and certain distributions from our affiliates; and
| 
| |  | our flexibility in reacting to changes in our business and market conditions may be reduced.                                                                                                                                                                                                                           

Any failure to pay such indebtedness or other liabilities when due could
have a material adverse effect on us.

To date, assets of our operating companies have secured certain of the
debt financing obtained by the operating companies, and it is likely that any
debt financing our operating companies obtain in the foreseeable future will
also be secured. The pledge of assets to secure debt financing may make it
substantially more difficult to obtain additional financing from other sources.

Along with certain of our operating companies, we must maintain certain
financial ratios, satisfy financial conditions and comply with other covenants
pursuant to the terms of our indebtedness. If we are unable or if any of such
operating companies is unable to generate sufficient cash flow or otherwise
obtain funds necessary to make required payments, or otherwise fails to comply
with the various covenants in such indebtedness, we would be in default under
the terms thereof, which would permit the holders of such indebtedness to
accelerate the maturity of the indebtedness, prohibit further drawings
thereunder or exercise other remedies.

We have a history of operating losses, and may continue to lose money in the
future.

Our
subsidiary Ceský Mobil has generated substantial operating losses
since inception. In addition, while Ceský Mobil currently generates positive
cash flow from operations, it has generated negative cash flow from operations
in the past and continues to generate net losses. There can be no assurance that our operations can improve their
profitability or that they will generate net earnings and positive cash flow in the future. The
growth of these operations will depend on a number of significant financial,
logistical, technical, marketing, legal, competitive, economic and other
factors, the outcome of which cannot be predicted. We have sustained
significant losses since inception. As of December 31, 2002, we had an
accumulated deficit of $1.3 billion. Although we generated income from
continuing operations before non-controlling interest and income taxes of $67.3
million and $116.5 million in 2002 and 2001 respectively, these results include
non recurring gains on investments and financing activities of $81.0 million
and $228.2 million respectively. Our net losses were $127.2 million $253.7
million and $355.4 million for the years ended December 31, 2002, 2001 and
2000. While we have achieved operating profitability in 2002 with respect to
our continuing operations, there can be no assurance that we will be able to
sustain or improve operating profitability in the future. Failure to sustain
or improve operating profitability would adversely affect our ability to
service our indebtedness.

Our holding company structure may make it difficult to access cash flow from
the operating companies and may result in structural subordination of certain
of our outstanding securities

We are a holding company with no material sources of income or assets of
our own other than the equity interests that we own in our subsidiaries and
operating companies. We conduct substantially all of our operations through
such subsidiaries and Ceský Mobil a.s., MobiFon S.A. and Hexacom India Limited,
our indirectly held operating companies. Our cash flow and, consequently, our
ability to service our indebtedness depend upon the ability of our subsidiaries
and operating companies to pay dividends or otherwise make distributions to us.
Our subsidiaries and operating companies are separate and distinct legal
entities and, except for the TIWC guarantee of the 14% senior guaranteed notes
and any intercompany loans owed to us, will have no obligation, contingent or
otherwise, to pay any dividends or make any other distributions to us or to
otherwise pay amounts due with respect to our indebtedness or to make funds
available for such payments. Because the subsidiaries, other than TIWC, and
operating companies will not





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be required to guarantee the payment of principal of or interest on the
14% senior guaranteed notes, any right we may have to receive assets of our
subsidiaries or operating companies upon their liquidation or reorganization
will be structurally subordinated to the prior claims of such subsidiaries and
operating companies respective creditors, including, without limitation, tax
authorities, trade creditors and lenders.



|  |  | We may be unable to access the cash flow, if any, of our operating companies because:                                                                                                                                                                                                                                                               
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | we may not have the necessary control, by ourselves, to cause such entities to pay dividends to their equity holders;                                                                                                                                                                                                                               
| 
| |  | certain of such entities are currently or may become parties to credit or other borrowing agreements that restrict or
prohibit the payment of dividends and distributions, and such entities are likely to continue to be subject to such
restrictions and prohibitions for the foreseeable future;                                                 
| 
| |  | It can be expected that Ceský Mobil will generally reinvest all of its cash flow in its business for the foreseeable future
and that MobiFon may reinvest part of its cash flow in its business for the foreseeable future; and                                                                                                                     
| 
| |  | some of the countries in which such entities conduct business impose legal limitations on the declaration of dividends and
tax the payment and repatriation of such dividends or otherwise restrict the repatriation of funds, even though we
typically structure our operations to minimize any such tax on such payment and repatriation of funds.

Although our subsidiary MobiFon has declared and paid dividends in the
recent past and has initiated a share repurchase in 2002, we may not be able to
generate any significant cash through dividends or other distributions from the
operating companies in the near future, and there can be no assurance that we
will be able to generate any significant cash flow from the operating companies
at any time in the future.

The international nature of our operations may make the outcome of litigation,
bankruptcy proceedings or enforcement of your rights difficult to predict.

We are incorporated under the laws of Canada and our subsidiaries are
incorporated under the laws of various jurisdictions, including The
Netherlands, and conduct operations in different countries. Consequently, the
laws and regulations of Canada, The Netherlands or one or more countries in
which our subsidiaries are organized or operate could apply to litigation or
bankruptcy proceedings. Under bankruptcy laws in the United States, courts
typically have jurisdiction over a debtors property, wherever located,
including property situated in other countries. There can be no assurance,
however, that courts in Canada, The Netherlands or elsewhere would recognize
the United States bankruptcy courts jurisdiction. Accordingly, difficulties
may arise in administering a United States bankruptcy case involving a Canadian
or Dutch debtor or a debtor with its principal operating assets outside the
United States, and any orders or judgments of a bankruptcy court in the United
States may not be enforceable.

You may find it difficult to enforce your rights because we are a foreign
company.

Judgments of U.S. courts including judgments against us or our board of
directors, or TIWC, its supervisory board and board of management, or the
officers of either company, that are predicated on the civil liability
provisions of the federal securities laws of the United States are not directly
enforceable in Canada and The Netherlands. Even if an investor prevails on a
claim in a United States court, it may find it difficult or impossible to
enforce its rights in Canada or The Netherlands and might have to relitigate
the merits of the matter before the competent court in Canada or The
Netherlands in order to enforce its rights. Furthermore, an investor may find
it difficult or impossible to effect service of process on the members of our
board or the board of directors of our subsidiaries, their officers and others
connected to them.

Because we might have to pay judgments in Canadian dollars or Euros, our
creditors could be exposed to currency risk.

Upon any declaration of our bankruptcy, our obligations with respect to
our indebtedness:





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| |  | would be converted into Canadian dollars at the exchange rate
prevailing at the time of such declaration, and payment will occur at
the time claims of our creditors are satisfied;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | would be subject to the outcome of the bankruptcy proceedings; and                                                                                                                 
| 
| |  | would not be adjusted to take into account any depreciation of the
Canadian dollar against the U.S. dollar occurring after such
declaration of bankruptcy.                         

Litigation regarding the ownership of our disposed Brazilian operations has
been settled but could recommence should the sale be unwound.

On March 26, 2003, we disposed of our entire interest in Telpart and
settled or terminated all litigation which related to such interest. In July
2000 we and certain co-investors in our Brazilian operations had initiated
legal proceedings against certain affiliates of Banco Opportunity which were
co-investors in or managed certain funds invested in Telpart Participaçoes S.A.
The proceedings sought to enjoin the affiliates of Banco Opportunity in
respect of the control over Telpart. Considerable litigation in various
jurisdictions among the partners followed the institution of these proceedings.
Although all such litigation has now been settled or terminated as part of the
sale of our interest in Telpart, the parties may recommence the litigation
should such sale be unwound for any reason.

We may not be able to sell or transfer our ownership interests in our operating
companies on commercially acceptable terms.

Our ability to sell or transfer our ownership interests in our operating
companies is generally subject to:



| |  | contractual limitations in favor of strategic partners including, in
certain cases, co-sale rights or rights of first refusal (see
 Arrangements among shareholders of our Romanian subsidiary could
make it harder for us to engage in transactions that could benefit our
shareholders); and
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | provisions in local operating licenses and local governmental
regulations that, in certain cases, may restrict or prohibit the
transfer of our ownership interests in such operating companies.                                                                                                  

Moreover, we have been required, along with local partners, to pledge our
equity interests in certain operating companies to secure credit facilities
obtained by those operating companies, and we may be prohibited from or
restricted in transferring or otherwise disposing of such equity interests so
long as they are pledged as collateral for those credit facilities. In
addition, our operating companies currently have no publicly traded securities,
and there can be no assurance that there will in the future be either a public
or private market for the securities of our operating companies. As a result,
our ability to liquidate any or all of our investments may be substantially
limited.

Even if any sales are completed, the prices realized on those sales could
be less than our investment, and there may be substantial local taxes, currency
exchange controls or other restrictions on repatriation of monies imposed on us
in the case of any such sales.

Arrangements among shareholders of our Romanian subsidiary could make it harder
for us to engage in transactions that could benefit our shareholders.

Any issuance, sale or transfer of shares of ClearWave may trigger rights
of first refusal given to shareholders of ClearWaves Romanian subsidiary,
MobiFon, under MobiFons contract of association. Such rights apply to direct
sales of shares of MobiFon and, as long as the shares of MobiFon held by
ClearWave represent more than 25% of the fair market value of ClearWaves
assets, to indirect sales. These rights entitle shareholders of MobiFon to
purchase a proportionate number of shares of MobiFon held by ClearWave upon an
issuance, sale or transfer of shares of ClearWave, at the same proportionate
price in the case of cash transactions in ClearWaves shares, or at the fair
market value of the MobiFon shares, in the case of non-cash transactions in
ClearWaves shares. On December 12, 2000, we obtained from Vodafone Europe
B.V., a holder of 20.1% of the outstanding shares of MobiFon, a waiver of such
rights in respect of transactions in ClearWave shares under certain
circumstances such as certain future primary issuances of shares of ClearWave
and the issuance and resale of certain shares of ClearWave.





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As consideration for the waiver, we agreed with Vodafone that we or our
affiliates will control the voting of the shares in MobiFon held by ClearWave.
We further agreed to directly or indirectly maintain voting control of
ClearWave except as provided below. We also agreed that for so long as
Vodafone continues to hold at least 10% of the outstanding equity of MobiFon:



| |  | Until December 11, 2003, TIWC will not sell to a third party shares of
ClearWave that would convey voting control over ClearWave unless
Vodafone is afforded the right to submit an offer to acquire all of
TIWCs interest in ClearWave. If Vodafone submits such an offer, TIWC
cannot sell a controlling interest in ClearWave to another party for
six months after the Vodafone offer is received except on terms more
advantageous to TIWC than Vodafones offer.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | In the event of a change of voting control of ClearWave, TIWC will
ensure that Vodafones right of first refusal over MobiFon shares will
be exercisable for a number of MobiFon shares equal to the greater of                                                                                                                                                                                                                                                        



| | (1) |  | the number of MobiFon shares determined by the contract
of association to be covered; and
| | --- |  | -----------------------------------------------------------------------------------------
|
| | (2) |  | the lesser of:                                                                           



| | (a) |  | the number of such shares required to
increase Vodafones equity interest in MobiFon to 50.1% and
| | --- |  | -------------------------------------------------------------------------------------------------
|
| | (b) |  | 30% of MobiFons issued equity.                                                                  

Vodafones right of first refusal continues to apply in respect of any
direct transfer of MobiFon shares that we hold or of the shares of our
affiliates which own MobiFon shares.

Given that TIWC has pledged the shares it holds in ClearWave as collateral
to its guarantee of 14% Senior Guaranteed Notes, a realization on TIWCs
interest in ClearWave, as well as any foreclosure by the trustee on such
capital stock may trigger certain rights under these arrangements.

In the event there has not been an initial public offering of the shares
of MobiFon by October 1, 2004, certain minority shareholders in MobiFon holding
in aggregate approximately 21% of the outstanding shares of MobiFon, may
require TIWC or, at TIWCs option, ClearWave to make an offer to acquire their
shares of MobiFon at a price representing the fair market value of such shares
as determined by an independent valuation. This price shall be payable, at our
option, in cash or in our marketable securities. This right terminates upon an
initial public offering of ClearWave shares that meets certain criteria. Should
such right be exercised, we may not have the necessary cash on hand to pay the
purchase price and we may have to issue shares which could dilute our share
capital.

We may not be able to satisfy conditions in our agreements dealing with changes
in control.

ClearWaves Romanian and Czech operating companies have entered into
senior credit facilities with bank syndicates under which a direct or indirect
change of control of such operating companies could trigger default provisions
under these borrowing facilities, unless the lenders consent. A foreclosure by
the trustee on the capital stock of ClearWave subject to the lien would likely
trigger these change of control provisions, which could impede the ability of
the trustee to rapidly realize on this security interest or could reduce the
value of the security interest.

The indenture governing our 14% senior guaranteed notes requires us, upon
a change of control, to make an offer to purchase the notes at a price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid
interest. There can be no assurance that, upon a change of control, we would
have sufficient funds to purchase all notes tendered.

We compete with companies that have greater resources than we have and use
technology different than ours.

The wireless telecommunications industry is highly competitive. A number
of large international telecommunications companies are actively engaged in
programs to develop and commercialize wireless telecommunications services in
both developing and developed countries. In many cases, we will also compete
against landline carriers, including government-owned telephone companies. Most
of these companies have substantially greater financial and other resources,
research and development staffs and





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technical and marketing capabilities than we do. We believe that there is
increasing competition for additional licenses and increased competition to the
extent others obtain such licenses.

Rapid technological changes or the adoption of incompatible standards could
render our services obsolete or non-competitive.

We may face competition from new technologies and services introduced in
the future. The wireless telecommunications industry is experiencing
significant technological change, as evidenced by the introduction of new
standards for mobile communications, such as universal mobile
telecommunications systems and generalized packet radio service, ongoing
improvements in the capacity and quality of digital technology, shorter
development cycles for new products and enhancements and changes in end-user
requirements and preferences. Such continuing technological advances make it
difficult to predict the extent of the future competition we may face. As a
result, there can be no assurance that existing, proposed or as yet undeveloped
technologies will not become dominant in the future and render the technologies
we use less profitable or even obsolete. There can be no assurance that new
products and services that are more commercially effective than our products
and services will not be developed. Furthermore, there can be no assurance
that we will be successful in responding in a timely and cost-effective way to
keep up with these developments. Changing our products or services in response
to market demand may require the adoption of new technologies that could render
many of the technologies that we are currently implementing less competitive or
obsolete. To respond successfully to technological advances and emerging
industry standards, we may require substantial capital expenditure and access
to related or enabling technologies in order to integrate the new technology
with its existing technology. We may not be successful in modifying our
network infrastructure in a timely and cost-effective manner to facilitate such
integration, which could adversely affect our quality of services, our results
of operations and our business and prospects.

Ceský Mobil has decided not to participate in the auction for licenses
giving the right to operate networks using universal mobile telecommunications
systems or other recently developed technologies. The acquisition of these
licenses and the build out of these networks by our competitors could make the
products and services of Ceský Mobil less attractive and consequently have an
impact on our revenues and profitability.

Any development or growth on our part could increase our indebtedness and our
expenses.

We have grown rapidly since our inception in 1992. As part of our
development strategy, we consider development and acquisition opportunities in
the wireless telecommunications industry on an ongoing basis and at any time
may be engaged in various stages of discussions regarding such opportunities or
the increase of our equity participation in our existing operations. Such
growth strategy presents the risks inherent to identifying and assessing the
value, strengths and weaknesses of development and acquisition opportunities,
to evaluating the costs and uncertain returns of building and expanding the
facilities for operating systems and to integrating and managing the operations
of additional operating systems. Our growth strategy will place significant
demands on our operational, financial and marketing resources and will result
in our subsidiaries, operating companies, and us incurring substantial
additional indebtedness. In addition to the risks associated with increased
leverage, there can be no assurance that:



| |  | we will be able to correctly identify appropriate investment
opportunities or successfully manage any businesses we may acquire; or
|- |  | -----------------------------------------------------------------------------------------------------------------------------------
| 
| |  | we will not incur significant unanticipated expenses.                                                                              

We are subject to governmental regulation and licensing requirements, which may
increase our operating costs and may dictate where and how we operate.

Our operations are subject to governmental regulation, which may change
from time to time. To date, certain operating companies have been subject to
service requirements, restrictions on interconnection of wireless systems to
government-owned or private telephone networks, subscriber rate-setting and
requirements that the operating companies or development projects complete
construction, meet network coverage tests or commence commercial operation of
the networks by specified deadlines and other requirements. In addition,
licenses may contain restrictions on foreign ownership or share transfers.
These restrictions or conditions may be difficult to comply with, particularly
given demographic, geographic or





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other issues in a particular market. Failure to comply with these
restrictions or conditions may result in penalties or in the loss or revocation
of a license. Furthermore, changes in the regulatory framework may limit the
ability to add subscribers to developing systems.

The ability of our operations to retain and exploit their existing
telecommunications licenses and to renew them on favorable terms when they
expire is essential to our operations. The governmental agencies responsible
for the administration of licenses may, however, unilaterally limit, revoke or
otherwise adversely modify the terms of these licenses in the future, and we,
along with our operating companies, may have limited or no legal recourse if
these events occur. In certain cases, the governmental issuer has explicitly
reserved the right to modify certain license terms, to terminate the license in
the public interest and to take over the operating companys network and
services in the interest of national security. There can be no assurance that
our operations will be able to retain or renew their licenses or satisfy the
conditions of such licenses or that the restrictions imposed upon such licenses
will permit the commercial exploitation of such licenses, any of which could
have a material adverse effect on us.

We believe that the opportunity to acquire substantial new wireless
telecommunications licenses in developed and developing countries will exist
only for a limited time. Although our operating companies have obtained certain
operating licenses through private negotiations or without having to
participate in competitive financial bidding processes, governments of
developed and developing countries are increasingly requiring financial bidding
for licenses. This requirement has increased the cost of these licenses, and
may restrict our ability to obtain additional licenses. Furthermore, relevant
governmental authorities may grant additional licenses with respect to the same
or different technologies and covering the same geographical areas as the
operating companies licenses and may preclude us from competing for such
additional licenses. The availability of only limited frequency ranges may
provide some protection against the issuance of competing licenses.

Our operations also are subject to laws and regulations governing
environmental protection, including requirements for the management, use and
disposal of hazardous substances. Such laws and regulations can impose
substantial fines and criminal sanctions for violations, and may require us to
remediate contaminated soil and groundwater affecting property we operate.

We operate in developing countries, which may increase our operating costs and
restrict our ability to transfer funds from our operating companies to ourself.

We invest in developing countries where governments have exercised and
continue to exercise influence over many aspects of the private sector. In some
cases, the government controls companies that are or may in the future become
our competitors or companies, such as national telephone companies, upon which
our operations may depend for required interconnections to landline telephone
networks and other services. Expropriation, confiscatory taxation,
nationalization, political, economic or social instability, regulatory changes,
electricity shortages, or other developments could also materially adversely
affect our interests in operating companies in particular developing countries.
Moreover, where foreign law governs applicable agreements relating to our
interests in our operations, enforcement may be difficult, especially where
local commercial law has not developed appropriate rights or recourses.
Accordingly, we may have little or no recourse upon the occurrence of any of
these developments or if any of our partners seek to re-negotiate existing or
future memoranda of understanding or other agreements. In addition, the process
whereby governments grant licenses, through privatization or otherwise, are
sometimes challenged by judicial proceedings.

In addition, local taxes, foreign exchange controls or other restrictions
may effectively prevent the transfer of funds to us or the exchange of local
currency for dollars. Foreign exchange controls also could restrict the ability
of our operating companies to pay debt. The operating companies may also
experience increased credit and collection difficulties in certain developing
countries where credit verification systems are not yet adequately developed.

Competition in our markets could increase our churn rates and decrease our
average revenue per user, which would adversely affect our operating income.

Churn rates reflect the number of customers who disconnect or are
disconnected from our networks in a





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given period. An increase in our churn rates may raise our operating
costs, as we seek to add a greater number of new customers to maintain our
subscriber growth. Our aggressive pricing strategy in the Czech Republic, and
the anticipated response to that strategy by our competitors, as well as the
recent aggressive pricing strategies of our competitors in Romania, could lead
to increased, or more volatile, churn rates as well as lower average revenue
per user. The growth of consumer awareness, additional service offerings from
competitors and an increased focus on the retail consumer market segment may
increase churn rates and reduce average revenue per user.

Our inability to maintain agreements with other telecommunications providers
upon which we rely to connect calls originating or terminating outside of our
networks may result in an interruption of our service and a possible loss of
customers.

The success of our wireless systems will in some cases depend upon
services provided by other telecommunications providers, some of which are our
competitors. For example, the operating companies generally require
interconnection agreements with national or regional telephone companies in
order for their wireless systems to connect with landline telephone systems,
and may require the use of other microwave or fiber optic networks to link
their wireless systems. Although our operating companies have entered into
required interconnection agreements or have interconnection arrangements in
place, these agreements and arrangements typically have limited terms and must
be periodically renegotiated or renewed. The revocation, loss or modification
of any of these existing agreements or arrangements or the failure to obtain
necessary agreements or arrangements in the future on terms favorable to the
operating company could have a material adverse effect on us.

We are subject to currency exchange risks, which may negatively impact our
financial results and may increase our costs to repay our debts.

Our operations depend, in large part, on the economics of the markets in
which we have interests. Those 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. Many developing
countries, such as Romania, have experienced substantial, and in some periods
extremely high, rates of inflation and resulting high interest rates for many
years. Inflation and rapid fluctuations in interest rates have had and may
continue to have negative effects on the economies and securities markets of
certain developing countries which in turn may have adverse effects on
operations in those countries, including the ability to obtain financing, the
ability of subscribers to pay for services provided by the operating companies
or the ability to support the growth of such operations.

The
value of our investment in Ceský Mobil is partially a function of the
currency exchange rate between the U.S. dollar and the Czech Koruna, its
functional currency. The devaluation of the functional currency applicable to
an operating company will result in a reduction in the carrying value of our
investment in such operating company. Such reduction is accounted for as a
reduction of shareholders equity until the sale of the investee, at which time
the cumulative gain or loss is recorded as part of the gain or loss on sale. In
addition, Ceský Mobil reports its results of operations in the local currency,
and accordingly, our results of operations will be affected by changes in
currency exchange rates between the Koruna and the U.S. dollar. We have entered
into hedging arrangements in the Czech Republic to systematically hedge against
foreign currency exchange rate risks on long-term debt denominated in Euro. In
certain circumstances, we may decide to accept the inherent currency risk,
principally because of the relatively high cost of buying, or the inability to
buy, forward cover in currencies of the countries in which we operate. We do
not anticipate any near-term changes in managements objectives and strategies
with respect to managing such exposures. Until December 31, 2002, Romania was
defined for accounting purposes as a highly inflationary economy and the U.S.
dollar, our functional currency, was used as their measurement currency. In
2003, an assessment as to which currency is MobiFons functional currency will
be made. MobiFons borrowings are in U.S. dollars and tariffs are adjusted to
account for the effects of the devaluation of the Romanian lei versus the U.S.
dollar due to inflation. Consequently, exchange fluctuations have not had a
material effect on our consolidated results in the past. However, Romania is
currently a second wave European Union accession candidate and it is
foreseeable that the Euro will take prominence in Romania in the future.
Consequently, depending on the result of our assessment and the progression of
Romania towards the Euro, exchange rate fluctuations may have a more
significant
impact on our results of operations in the future. As a result, we may
experience economic loss with respect to our





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investments and fluctuations in our results of operations solely as a
result of currency exchange rate fluctuations. Many of the currencies of
developing countries have experienced steady, and at times significant,
devaluations relative to the U.S. dollar, and significant exchange rate
fluctuations have occurred in the past and may again occur in the future, all
of which could have a material adverse effect on us.

Any revenues operating companies generate will generally be paid to the
operating companies in the local currency. By contrast, some significant
liabilities of the operating companies, such as liabilities for the financing
of telecommunications equipment, may be payable in U.S. dollars or in
currencies other than the local currency. As a result, any devaluation in the
local currency relative to the currencies in which such liabilities are payable
could have a material adverse effect on us.

Because any future investment by us may be limited to a minority interest, we
may not be able to determine or influence significant decisions of the
businesses in which we invest.

In some cases, we take minority interests in our operations because either
applicable laws limit foreign investors to minority equity positions or the
financial resources required to make bids for large market licenses have
resulted in us joining consortia to pursue such opportunities. Our strategy is
to obtain influence through board of directors and management representation,
supermajority voting requirements, veto rights and financial controls, although
we are not always successful in obtaining such rights.

Our minority positions may preclude us from controlling such entities and
implementing strategies that we favor, including strategies involving the
expansion or development of projects or the pursuit of certain financing
alternatives. We may also be unable or unwilling to provide additional equity
to minority-owned affiliates, which would result in the dilution of our equity
interest or a significant impairment or loss of the value of our investment. We
may depend on our partners to construct or operate projects. There can be no
assurance that such partners will have the same level of experience, technical
ability, human resources and other attributes that we possess or that the
projects require. Any such partners may have conflicts of interest, including
those relating to their status as a provider of goods and services to the
operating company. In addition, we may be unable to access cash flow, if any,
of our operating companies.

We may not be able to attract and retain key personnel and adequately staff our
operations, which could impair the execution of our business plans.

Our success and our growth strategy depend in large part on our ability to
attract and retain key management, marketing, finance and operating personnel,
both at holding and operating company levels. There can be no assurance that we
will continue to attract and retain the qualified personnel needed for our
business. In addition, the loss of the services of one or more members of our
senior management team could have a material adverse effect on us.

If we are not able to obtain qualified subcontractors, equipment or sites on a
timely or cost-efficient basis, we will be unable to build out and operate our
networks as planned.

The operating companies in which we invest typically require substantial
construction of new telecommunications networks and additions to existing
wireless networks. Construction activity will require the operating companies
to obtain qualified subcontractors and necessary equipment on a timely basis,
the availability of which varies significantly from country to country.
Construction projects are subject to cost overruns and delays not within the
control of the operating company or its subcontractors, such as those caused by
acts of governmental entities, including failure to issue required permits with
respect to siting and other matters, financing delays and catastrophic
occurrences. Delays also can arise from design changes and material or
equipment shortages or delays in delivery. The successful build-out of our
wireless networks will also depend on the lease or acquisition of sites for the
location of cells or transmission equipment. The site selection process may
require obtaining zoning variances or other state and local governmental
permits for certain of such sites. There can be no assurance that lease or
acquisition agreements will be negotiated on terms favorable to our operations
or that necessary permits and approvals will be obtained. Accordingly, there
can be no assurance that the operating companies will be able to complete
current or future construction projects for the amount budgeted or within the
time periods projected, or at all.

Failure to complete construction for the amount budgeted or on a timely
basis could jeopardize





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subscriber contracts, franchises and licenses and could have a material
adverse effect on us. In particular, telecommunications licenses often are
granted on the condition that network construction be completed or commercial
operations be commenced by a specified date. Failure to comply with these
deadlines could result in the loss or revocation of the licenses.

Concerns about radio frequency emission may lead to increased regulation or
discourage the use of cellular telephones, which could result in our having to
change our business plan or reduce our subscriber revenues.

Media reports have suggested that certain radio frequency emissions from
cellular telephones may be linked to certain medical conditions such as cancer.
In addition, certain interest groups have requested investigations into claims
that digital transmissions from handsets used in connection with digital
wireless technologies pose health concerns and cause interference with hearing
aids and other medical devices. There can be no assurance that the findings of
such studies will not have a material adverse effect on our business or will
not lead to governmental regulation. The actual or perceived health risks of
wireless communications devices could adversely affect wireless communications
service providers, including our operating companies, through reduced
subscriber growth, reduced network usage per subscriber, threat of product
liability lawsuits or reduced availability of financings to the wireless
telecommunications industry.





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ITEM 4  INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

We develop, acquire, own and operate wireless telecommunications networks.
As of December 31, 2002, we had continuing operations in Romania, the Czech
Republic and India representing 3.9 million subscribers which, based on our
percentage ownership in these operations as of December 31, 2002, represent
1.68 million equity subscribers. As of December 31, 2002, our principal
operations also included cellular operations in Brazil which we disposed of on
March 26, 2003 for a total cash consideration of US$70 million.

We were incorporated under the Canada Business Corporations Act on
September 9, 1996 under the name 3293505 Canada Inc. to acquire directly and
indirectly all the issued capital stock of Telesystem International Wireless
Corporation N.V. (TIWC). Telesystem Ltd. founded TIWC under Dutch law on May
21, 1992 to pursue international opportunities in the wireless
telecommunications services market. On March 12, 1997 we changed our name from
3293505 Canada Inc. to Telesystem International Wireless Inc. In May 1997, we
completed our initial public offering. On June 23, 2001 we consolidated our
share capital on the basis of one post-consolidation share for every 5
pre-consolidation shares.

Our head office and principal place of business are located (i) until May
31, 2003 at 1000 de la Gauchetière Street West, 16th Floor, Montreal, Québec,
H3B 4W5, Canada and (ii) after June 1, 2003 at 1250 René-Lévesque West, 38th
floor, Montreal Québec, H3B 4W8, Canada. Our telephone number is (514)
673-8497. CT Corporation System, 111 Eighth Avenue, New York, NY 10011, (212)
894-8500, acts as agent for service in the United States and us.

The following table sets forth, by segment, the progression since 1998 in
the number of subscribers and equity subscribers excluding discontinued
operations. The table excludes subscribers of certain Brazilian operating
companies in which we held an interest as at December 31, 2002 and which we
sold subsequent to year end.

|               |                        |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |         | 
|-------------- | ---------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  |  | ------- |  |  |  | ------- | 
|               |                        |  | Years ended December 31
|               |                        |  |                        
|               |                        |  | 2002                    |           | 2001 |  | 2000 |           | 1999 |  | 1998
|               |                        |  |                         |           |      |  |      |           |      |  |     
|Romania        |                        |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|               | Subscribers            |  |                         | 2,635,200 |      |  |      | 2,003,600 |      |  |      | 1,171,800 |  |  |  | 702,100 |  |  |  | 325,300 | 
|               | Equity
Subscribers (1) |  |                         | 1,407,200 | (3)  |  |      | 580,000   | (2)  |  |      | 690,200   |  |  |  | 384,000 |  |  |  | 201,700 | 
|Czech Republic |                        |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|               | Subscribers            |  |                         | 1,179,800 |      |  |      | 858,400   |      |  |      | 301,700   |  |  |  |         |  |  |  |         | 
|               | Equity
Subscribers (1) |  |                         | 233,600   |      |  |      | 86,700    | (2)  |  |      | 65,200    |  |  |  |         |  |  |  |         | 
|India          |                        |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|               | Subscribers            |  |                         | 112,400   |      |  |      | 74,000    |      |  |      | 35,400    |  |  |  | 15,000  |  |  |  | 9,000   | 
|               | Equity
Subscribers (1) |  |                         | 14,300    |      |  |      | 7,500     |      |  |      | 3,600     |  |  |  | 1,500   |  |  |  | 3,000   | 
|Total          |                        |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|               | Subscribers            |  |                         | 3,927,400 |      |  |      | 2,936,000 |      |  |      | 1,508,900 |  |  |  | 717,100 |  |  |  | 334,300 | 
|               | Equity
Subscribers (1) |  |                         | 1,655,100 |      |  |      | 673,200   | (2)  |  |      | 759,000   |  |  |  | 385,500 |  |  |  | 204,700 | 



---

|(1) |  | Equity subscribers represent our ultimate proportionate ownership in
subscribers figures of our operations, based on our equity ownership
percentage in such operations.        
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The decrease in equity subscribers for Central/Eastern Europe reflects
the issuance of units in February 2001 which reduced our equity interest
in ClearWave from 100% to 45.5%.





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##### Table of Contents



|(3) |  | We increased our interest in ClearWave in the first quarter of 2002 from
45.5% to 85.6%. During the fourth quarter of 2002, ClearWave tendered, as
part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250
shares of MobiFon for total cash consideration of $24.6 million, bringing
ClearWaves ownership in MobiFon to 62.4%. Other shareholders of MobiFon
have until June 30, 2003 to tender their shares in the share repurchase
which may cause ClearWaves ownership interest in MobiFon to increase. On
March 19, 2003 we closed the sale of 11,135,555 shares of MobiFon for
total cash consideration of $42.5 million. Following the share repurchase
and the sale, ClearWaves ultimate ownership of MobiFon is expected to be
between 56.6% and 57.7% depending on the extent of the participation of
other MobiFon shareholders in the share repurchase. For the same reasons,
our ultimate equity interest in MobiFon could vary between 48.4% and 49.4%
and, as a result, our equity subscribers on a pro forma basis as at
December 31, 2002 for Romania may vary between 1,275,440 and 1,301,793.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BUSINESS OVERVIEW

Strategy

Our strategy is to create shareholder value by taking advantage of growth
opportunities in the international wireless telecommunications industry. To
achieve this objective, we are currently providing wireless telecommunications
services in developing countries with significant unmet demand and attractive
competitive environments for telecommunications services. Furthermore, we
selectively consider strategic opportunities in the wireless telecommunications
industry on an ongoing basis, and engage from time to time in various stages of
discussion regarding potential development projects or acquisitions. We are
especially interested in the geographic markets where we already operate and in
new complementary technologies.

ORGANIZATIONAL STRUCTURE

The following chart summarizes the equity interests we hold, directly and
indirectly, in each of our principal operating companies as at December 31,
2002, unless otherwise specified. The chart excludes the interest we held in
certain Brazilian operating companies as at December 31, 2002, which we
accounted for as at that date as discontinued operations and which we sold on
March 26, 2003. Percentages in brackets represent the voting interests we hold
where they differ from the equity interests we hold.

ORGANIZATIONAL CHART



| | (1) |  | This chart is a simplification of the corporate structure as at
December 31 and omits certain companies.
| | --- |  | --------------------------------------------------------------------------------------------------------





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##### Table of Contents





| | (2) |  | As at April 30, 2003. During the fourth quarter of 2002, ClearWave
tendered, as part of a share repurchase initiated by MobiFon, an
aggregate of 6,460,250 shares of MobiFon for total cash consideration
of US $24.6 million, bringing ClearWaves ownership in MobiFon to
62.4%. Other shareholders of MobiFon have until June 30, 2003 to
tender their shares in the share repurchase which may cause ClearWaves
ownership interest in MobiFon to increase. On March 19, 2003 we closed
the sale of 11,135,555 shares of MobiFon for total cash consideration
of $42.5 million. Following the share repurchase and the sale,
ClearWaves ultimate ownership of MobiFon is expected to be between
56.6% and 57.7% depending on the extent of the participation of other
MobiFon shareholders in the share repurchase. As at March 31, 2003,
ClearWave owned 56.6% of MobiFon
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (3) |  | Capital contributions funded prior to year end but formalized only
in the first quarter of 2003 increased TIW Czech N.V.s ownership in
Ceský Mobil to 96.3 %.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Operations

The following table sets forth our operations and interests and certain
information related thereto, as of December 31, 2002, unless otherwise
specified. The table excludes the interest we held in certain Brazilian
operating companies as at December 31, 2002, which we accounted for as at that
date as discontinued operations and which we sold subsequent to year end.

|                       |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 
|---------------------- |  | ---------- | ------- | ------------------- |  | --------------------- | ---- | ------------- |  | ------- | --------- | --------------- |  | ------------- | ---- | --- |  |  | ---- |  |  |  | --------- | 
|                       |  | Start-up   |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  | 
|                       |  | date of    |         | Licensed Population |  |                       |      |               |  | Equity  |           | Equity          |  | Equity       
|                       |  | operations |         | Coverage            |  | Total
Subscribers (1) |      | Ownership (2) |  | persons |           | Subscribers (5)
|                       |  |            |         |                     |  |                       |      |               |  |         |           |                
|                       |  |            |         |                     |  | (in millions)         |      |               |  |         |           | (%)             |  | (in millions) |      |     |  | 
|Central/Eastern
Europe |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 
|Romania                |  |            | Q2 1997 |                     |  |                       | 22.4 |               |  |         | 2,635,208 |                 |  |               | 53.4 | (3) |  |  | 12.0 |  |  |  | 1,407,200 | 
|Czech
Republic (4)     |  |            | Q1 2000 |                     |  |                       | 10.3 |               |  |         | 1,179,752 |                 |  |               | 19.8 |     |  |  | 2.0  |  |  |  | 233,600   | 
|                       |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 
|                       |  |            |         |                     |  |                       | 32.7 |               |  |         | 3,814,960 |                 |  |               |      |     |  |  | 14.0 |  |  |  | 1,640,800 | 
|Other                  |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 
|India (Rajasthan)      |  |            | Q2 1997 |                     |  |                       | 56.5 |               |  |         | 112,393   |                 |  |               | 12.7 |     |  |  | 7.2  |  |  |  | 14,300    | 
|                       |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 
|Total                  |  |            |         |                     |  |                       | 89.2 |               |  |         | 3,927,353 |                 |  |               |      |     |  |  | 21.2 |  |  |  | 1,655,100 | 
|                       |  |            |         |                     |  |                       |      |               |  |         |           |                 |  |               |      |     |  |  |      |  |  |  |           | 



---

|(1) |  | As of December 31, 2002, unless otherwise specified. Figures include our
pre-paid subscribers: 1,693,987 for Romania, 760,014 for the Czech
Republic and 65,909 in India.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Figures represent the Companys ultimate ownership interests in its
operations before the exercise of options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) |  | During the fourth quarter of 2002, ClearWave tendered, as part of a share
repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of
MobiFon for total cash consideration of US $24.6 million, bringing
ClearWaves ownership in MobiFon to 62.4%. Other shareholders of MobiFon
have until June 30, 2003 to tender their shares in the share repurchase
which may cause ClearWaves ownership interest in MobiFon to increase. On
March 19, 2003 we closed the sale of 11,135,555 shares of MobiFon for
total cash consideration of $42.5 million. Following the share repurchase
and the sale, ClearWaves ultimate ownership of MobiFon is expected to be
between 56.6% and 57.7% depending on the extent of the participation of
other MobiFon shareholders in the share repurchase. For the same reasons,
our ultimate equity interest in MobiFon could vary between 48.4% and 49.4%
and, as a result, our equity subscribers on a pro forma basis as at
December 31, 2002 for Romania may vary between 1,275,440 and 1,301,793.
|   
|(4) |  | Through an intermediate holding company, we have voting control of Ceský
Mobil.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(5) |  | Proportional operational data represent the combination of our ultimate
proportionate ownership in each of its subsidiaries and is not intended to
represent any measure of performance in accordance with generally accepted
accounting principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





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##### Table of Contents



CLEARWAVE: CENTRAL AND EASTERN EUROPEAN CELLULAR

We are a leading provider of wireless telecommunications services in
Romania through MobiFon, and a rapidly growing wireless telecommunications
services provider in the Czech Republic through Ceský Mobil. MobiFon received
its 900 MHz national license in November 1996 and launched commercial service
in April 1997. MobiFon operates in Romania under the highly recognized brand
name CONNEX. Ceský Mobil was awarded an 1800 MHz national license in October
1999 and launched commercial service in the Czech Republic in March 2000 under
the brand name Oskar.

In September 1999, we created TIW Eastern Europe N.V., a wholly-owned
subsidiary, to serve as the platform for our Central and Eastern European
strategy and hold our interests in MobiFon and Ceský Mobil. On May 30, 2000,
TIW Eastern Europe N.V. changed its name to ClearWave N.V. ClearWave is
organized under the laws of The Netherlands. ClearWave is a reporting issuer in
each of the provinces in Canada and a registrant with the Securities Exchange
Commission of the United States. As such, ClearWave is subject to the
continuous disclosure requirements of the securities regulatory authorities in
each of the provinces in Canada and of the Securities Exchange Commission in
the United States.

As of December 31, 2002, ClearWave had licenses covering 32.7 million
persons. ClearWave grew at an average of more than 79,400 net new subscribers
per month in 2002 and added a total of over 953,000 net new subscribers in
2002. As of December 31, 2002, ClearWave had approximately 3,815,000
subscribers which based on our ultimate percentage of ownership of MobiFon and
Ceský Mobil as of that date represents approximately 1,640,800 proportionate
subscribers. We intend to use our existing operations as a platform from which
to pursue new opportunities, including broadening our service offerings through
innovative technologies and expanding our presence in Central and Eastern
Europe.

Romania.MobiFon was the first GSM operator to launch services in
Romania and offers a full range of voice services as well as advanced data
applications. MobiFon serves its customers on its state-of-the-art network,
which covers approximately 97% of the population and all major highways in
Romania. During the twelve months ended December 31, 2002, MobiFon added
631,600 net subscribers, an increase of 32% from December 31, 2001. MobiFon
grew at a rate of 52,600 subscribers per month in 2002 and had 2,635,200
subscribers at December 31, 2002, up from 2,003,600 at the end of 2001. Our
reports indicate that this represents a 53% market share. Since launching
service in April 1997, MobiFon has developed an exceptional track record both
in terms of subscriber growth and financial performance. MobiFon achieved
operating income before depreciation and amortization break-even in the third
quarter of 1998, 17 months after launch of services. It recorded an operating
income before depreciation and amortization of $231.6 million in 2002, a 24%
increase over the $186.4 million recorded in 2001.

Czech Republic.Ceský Mobil received the third national GSM license in
the Czech Republic in October 1999. Ceský Mobil is committed to compete not
only in traditional voice services, but also in new technologies such as (i)
general packet radio service or GPRS, an evolved technology that permits
increased high-speed wireless Internet access and data transmissions, and (ii)
wireless application protocol or WAP, a technology that allows direct Internet
access through cellular devices. When Ceský Mobil launched commercial service
in March 2000, its network covered 50% of the Czech Republics population,
including all major Czech cities. Ceský Mobil achieved 98% population coverage
by December 31, 2000, in advance of its mid-2001 license requirement. The
Czech Republic cellular market grew during 2002 by 1,635,000 subscribers, or
23%, to a total of 8,581,000 subscribers, representing a penetration rate of
84.2% of the population. With the addition of 321,325 net subscribers in 2002,
representing a 37% increase since the beginning of 2002, Ceský Mobil continues
to be one of the fastest growing start-up cellular operators in Central and
Eastern Europe. It reached 1,179,800 subscribers as at December 31, 2002.

Market Opportunity

Europe represents one of the worlds largest wireless communications
markets, with, according to EMC World Cellular Database, approximately 35.6% of
the 1,135.4 million cellular subscribers worldwide as of December 2002. Since
1996, the European cellular market has grown, according to EMC World Cellular
Database, at a compound annual growth rate of 48.8%, from 37.7 million
subscribers in 1996 to 403.9 million in 2002. As a result of this rapid growth,
the European market is now almost three times as large as the USA/Canada
market, based on number of subscribers.





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##### Table of Contents



The universal GSM standard in Europe, established by the European
Telecommunications Standards Institute, as well as the calling party pays
approach and the early adoption of pre-paid packages, have contributed to this
significant growth. The creation of a single open standard and the large market
size has fostered significant competition among network equipment providers,
which has driven down the costs associated with network deployment and
handsets. The wireless operators have been able to pass these savings directly
to consumers through reducing both handset and service plan prices. European
wireless service providers are also rapidly adding data transmission,
multimedia and Internet applications to their networks, which are expected to
contribute to future growth.

While the majority of the growth in Europe has historically occurred in
the Western European markets which are now close to saturation, growth has
accelerated in some countries in Central and Eastern Europe in recent years.
The wireless communications market in Central and Eastern Europe grew at a
compound annual growth rate of 91.3%, from 1.5 million subscribers in 1996 to
approximately 76.0 million in 2002. During 2002, according to EMC World
Cellular Database, wireless markets in Central and Eastern Europe added 25.2
million cellular subscribers, representing an annual growth rate of 49.6%. In
comparison the wireless market in Western Europe grew at a rate of 8.9% in
2002. Despite this accelerated growth in subscribers, the penetration rate in
Central and Eastern European countries wireless markets lags behind that of
Western European markets with penetration rates as at December 31, 2002 of 4.1%
in Belarus to 90.4% in Slovenia in Central and Eastern Europe and of 61.6% in
France to 104.1% in Luxembourg in Western Europe. We believe this further
highlights the growth potential of Central and Eastern Europe. As at December
31, 2002, the penetration rates in Romania and the Czech Republic were
respectively 22.3% and 84.2%.

There is a growing trend in certain countries for mobile phone users to
subscribe to services of more than one operator for the same region through the
use of a single handset but different subscriber identity module cards commonly
referred to as SIM cards. This trend suggests that penetration rates could
expand beyond the 100% mark since penetration is calculated based on number of
subscriptions to cellular services rather than number of persons using cellular
services.

In addition to the growing demand for traditional voice services, we
believe that many markets in Central and Eastern Europe will embrace data
transmission and Internet-based services via technologies such as general
packet radio service and Enhanced Data GSM Environment (EDGE).

We believe that several other factors make Central and Eastern Europe
attractive for wireless telecommunications services, especially as a substitute
for traditional fixed-line services:



| | 1. |  | the region typically has relatively less developed fixed-line
telecommunications systems than Western Europe. For example, according
to the 2001 annual report of the Greek telecommunications company OTE,
Romania had fixed-line penetration of approximately 18.8% as at January
1, 2002 and the Czech Republic had fixed-line penetration of 36%, versus
58% in the United Kingdom;                                                                      
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | waiting lists for the installation of fixed-line phones can be
lengthy. In Romania, the estimated waiting time for a domestic-only
fixed-line phone was 2.7 years at the end of 2001 (with 580,000 persons
on the waiting list), with a longer wait for an international line. In
the Czech Republic, although waiting list periods have declined over
recent years to an average of one month in 2002, a negative perception
of fixed line service persists.

The cost to consumers of wireless service is becoming increasingly
competitive with fixed-line rates. For example, during peak hours, MobiFons
average price per minute under certain plans for business customers and other
high-end users is less than that of the national fixed-line phone company for
national long-distance calls.

The telecommunication market deregulation which became effective on
January 1, 2003 in Romania has caused the entrance of new players in the
Romanian telecommunications industry. New technology and data networks will be
used by these new players to capture a share of international, fixed and
fixed-wireless voice revenues, mostly from the business segment of the market. Thus,
our revenue market share may be adversely affected by this increased
competition. In addition, deregulation may result in increased pressure on
pricing and profit margins for some revenue streams. Expanding our services
portfolio will allow us to protect our revenue and exploit other areas of
communication connectivity such as international incoming calls. Also, MobiFon
intends to offer packages to its business customers providing custom solutions
that integrate mobile and fixed voice communication together with mobile and
fixed data transmission.





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##### Table of Contents



Products and Services

We currently offer GSM and GPRS (General Packet Radio Service) wireless
services as well as data services. Our service packages offer users a variety
of practical, simple services and are priced competitively with the service
packages of the other operators in our markets. We also sell handsets and offer
customers access to web-based services via their handsets.

Basic and Value-added Voice Services

We provide basic voice services for wireless telephone communications over
a GSM network. As with the rest of Europe, we follow the calling party pays
model in billing. We supplement these basic voice services with a range of
value-added services, many of which are standard in each of our service
packages. These additional services include voice mail, short messaging system,
international roaming and call management capabilities such as call forwarding,
call waiting, call hold, call barring, conference calls and caller
identification. In most cases, we were the first cellular wireless operator to
introduce these value-added services in Romania.

Both in Romania and the Czech Republic, based on short messaging system,
we developed a wide range of entertainment services, some of them unique on the
market, targeting mostly the youth segment. We provide, among other things, the
ability to chat, to play games, to read horoscopes and to send voice quotes
from one phone to another. Personalization of handsets through ring tones and
logos is also available. Revenues and penetration of short messaging service is
stimulated by the continuous introduction of innovative SMS-based services and
promotions.

In Romania we began the implementation in 2002 of partnerships with
thirdparties, on a revenue sharing model, to provide services based on
interactive voice response systems and short messaging systems. These value
added services marketed by our partners and including mostly entertainment
services started to represent a growing revenue potential from the Romanian
market in 2002.

Data, Internet and Advanced Messaging Services

We offer a range of data applications, including (1) wireless application
protocol commonly referred to as WAP, (2) general packet radio service commonly
referred to as GPRS, and (3) basic data and fax transmission.

Wireless application protocol-enabling technologies permit the deployment
of data applications, including the ability to access e-mail and the Internet.
WAP allows to offer utility services as well as games and other entertainment
services. We launched wireless application protocol services at MobiFon on
August 1, 2000 and on October 30, 2000 at Ceský Mobil. GPRS permits the
transfer of data and use of data services at much faster speeds than current
GSM capabilities and represents the next step in the evolution of GSM networks
toward third-generation technologies. Possible service capabilities via general
packet radio service include remote high-speed Internet and Local Area Network
access, high quality audio clips and still image capabilities.

In Romania, we launched GPRS services at the end of 2001 and currently
provide GPRS and Local Area Network access adressing mostly the needs of the
business segment, being the segment where we identify the highest interest and
potential for vertical applications implementation. We offer at MobiFon a
flexible selection of GPRS packages in order to address the many different
needs of our customer based and to remain competitive in the market.

In the Czech Republic we launched GPRS services for our postpaid customers
in February 2002 after an innovative trial period in which 150 users of GPRS
technology participated. These 150 participants thoroughly tested and used our
GPRS offering and continued to provide technical support to other users. This
was enabled through a dedicated website where these 150
technoid users could
converse with one another and on an additional website where they could
converse with the public at large about their GPRS experiences with our
service. On January 27, 2003, Ceský Mobil launched GPRS services also for
prepaid subscribers. Ceský Mobil currently has over 40 000 activated GPRS
subscribers. In February 2003, Ceský Mobil launched Oskar GPRS Connect services
which enable our business subscribers to access their corporate networks via a
secure GPRS connection.

Using WAP, GPRS and also SMS we offer our customers a variety of Content
Services enabling them to gather information such as weather reports, traffic
reports, lottery results and news headlines, access





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##### Table of Contents



entertainment applications, and to perform banking transactions from a
handset. These services are typically offered in partnership with 3rd party
Content Providers on a revenue-sharing basis. We earn revenues on these
services by charging not only for access to these services but also for the
content that they provide.

In the Czech Republic, Ericsson provides general packet radio service
functionality with dedicated platforms serving the interconnected general
packet radio service support node, gateway general packet radio service support
node and packet control unit, and Siemens provides our wireless application
protocol infrastructure. At MobiFon, GPRS functionality is provided by Siemens
with dedicated platforms SGSN (Serving GPRS Support Node) and GGSN (Gateway
GPRS Support Node), and Ericsson provides the wireless application protocol
platform.

MMS, a Multi Media Messaging Service which enables users to send and
receive pictures, sounds and animations in addition to text, is being deployed
throughout Europe. In the Czech market our competitors introduced MMS in late
2002. We are readying the infrastructure for this service and expect to launch
it in both the Czech Republic and Romania in 2003.

Our GSM technology can migrate easily to provide advanced wireless data
services, either by deploying further enhancements to GPRS, such as faster
coding schemes, and/or introducing EDGE, a technology upgrade to the GSM
standard that the European Telecommunications Standards Institute has
standardized. EDGE, which has been deployed in North America and Asia, enables
data to travel at the same speed as that of the first phase of third-generation
technology, and thus could allow GSM operators who do not have third-generation
licenses to compete with operators that do. Older wireless technologies are not
as flexible and cannot offer similar services as easily.

In Romania, we currently offer dial-up Internet access nationally and are
currently the largest internet service provider in Romania with more than
200,000 dial-up customers. We also offer dedicated internet access and virtual
private network data services to the business segment of the market and we have
more than 2,000 dedicated access and virtual private network ports. In response
to the needs of our customers we have developed some specific added value
services such as virtual private dial-up network, web hosting, server
collocation and Connex Netzone, the first WLAN (wireless local area network)
service launched in Romania.

MobiFon has developed a wide range of data services for both business and
individual customers. For businesses we offer internet dedicated access,
virtual private networks, quality fixed voice access running on customer data
infrastructure, frame relay access, dial-up gold, dial-up ISDN, virtual private
dial-up networks, WLAN, web hosting and server collocation. For individuals we
offer pre-paid dial-up, domain name registration, and various services
delivered and included within our myX Portal package.

Handsets

We sell a broad selection of high-quality handsets. We currently offer
multi-mode handsets manufactured by Sony-Ericsson, Mitsubishi, Motorola, Nokia,
Siemens and Alcatel and expect to offer handsets from more manufacturers as
they become available. We offer dual-mode and tri-mode handsets, which can
operate on the GSM 900, GSM 1800 and GSM 1900 networks. These multi-mode
handsets allow us to offer our customers roaming across a number of GSM
networks in North America, Europe and Asia.

The handsets have many advanced features, including word prompts and
easy-to-use menus, one-touch dialing, multiple ring settings and call logs.
Handsets may also be programmed to allow us to offer value-added services, such
as voice mail, call waiting, call forwarding, call barring, conference calling
and caller identification. In certain cases, our handsets are enabled for WAP,
GPRS, MMS, EMS and/or Java. All the handsets we are selling are phase 2/2+
compliant and support OTA in order to help us introduce new value added
services to our customer base.

Our historical policy generally has been to limit the extent to which we
subsidize the cost of handsets. We believe that the lack of significant handset
subsidies contributes to reduced churn, as the incentive to switch operators to
obtain a more modern handset at a subsidized rate is reduced. In addition, the
lack of a complete handset subsidy accelerates our per subscriber payback
period, which recently in both Romania and the Czech Republic has been reached
in approximately three months, and decreases the cost of subscriber
acquisition. Furthermore, we believe that a non-subsidized handset reduces the
likelihood of bad





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debt because those users who can cover the full cost of a handset are also
more likely to be able to pay their bills.

We intend to continue where feasible our practice of minimally subsidizing
handsets. Currently, we do not subsidize handsets for new acquisition of
prepaid consumers. However, we may subsidize handset costs in some of our
service packages as part of our initiative to promote new technologies and gain
market share. Also, in Romania, we may have to match any future introduction of
increased handset subsidies by our three competitors there, which could affect
our subscriber payback period and increase the cost of subscriber acquisition.
Furthermore, as the third GSM market entrant in the Czech Republic, we may
subsidize handset costs in some of our service packages as part of our
initiative to gain market share. We have partially offset handset subsidies in
the Czech Republic through a reduction in distribution costs, made possible by
our direct sales and delivery network.

Service Packages and Pricing

We tailor our service packages to be competitive and simple to understand
and to allow each customer to choose a package that suits his or her usage
requirements. We bill customers for post-paid service, that is, via monthly
bills rendered after the service is provided, on the basis of either
per-second, and in some cases per-minute, rates or a packaged-minute plan.
Customers can also choose to subscribe to our service under pre-paid packages,
whereby a customer may purchase an airtime card that gives him or her calling
time equivalent to the amount paid for the card. Our pricing strategies depend
on the competitive environment, the subscriber profiles and the regulatory
requirements in each of our operating markets.

Post-paid and Pre-paid Service Plans

Post-paid service. We offer a number of post-paid cellular service
packages that are targeted to specific types of subscribers and their expected
usage patterns. These packages often include a specified number of minutes, as
part of the monthly fee, with an overcall rate charged after such minutes are
used. GSM roaming is available to subscribers traveling in other countries
where we have signed roaming agreements with the local GSM operators. When
roaming on a foreign GSM network, the subscriber is charged for the service of
relaying the call internationally and for the actual number of minutes used.
The per minute charges are at the rates charged by the local GSM operator plus
a margin.

Pre-paid service. We offer pre-paid cellular pricing packages to enable
customers who prefer a pre-payment option or whose credit profiles do not
qualify for post-paid service, to take advantage of our wireless services.
Pre-paid service requires no contract and no monthly fee. The customer
purchases an airtime card that gives him or her calling time equivalent to the
amount paid for the card, and the customer can easily access further airtime by
purchasing additional airtime cards. As of December 31, 2002, pre-paid
subscribers accounted for 64% of each of our Romanian and Czech Republic
subscriber bases, as compared to 63% and 71% respectively as of December 31,
2001. Pre-paid customers accounted for 68% and 46% of the net added
subscribers in Romania and the Czech Republic, respectively, during the
twelve-month period from December 31, 2001 to December 31, 2002. We began
offering pre-paid service in the Czech Republic on April 19, 2000.

In line with our strategy of offering diversity and flexibility to our
customers, with a focus on increased profitability, in Romania we introduced in
2002 the first innovative airtime recharging mechanism for voice and data
pre-paid customers, available at the points of sales and the ATMs of the
largest bank in Romania. Ceský Mobil also has a recharging system available at
numerous ATMs in the Czech Republic. The main benefits of the e-voucher system
are the wide range of the credit values, its 24 hour availability and the
reduction of the costs associated with production and distribution of plastic
recharging cards.

Pricing

We believe that our pricing structures compare favorably to the prices
offered both by our Romanian and Czech wireless competitors and by wireless
operators in neighboring markets. In Romania, our services are also priced to
be competitive with the fixed line services of RomTelecom, the national fixed
line phone company. For some post-paid programs, our rates for making
in-country long distance calls historically have been cheaper than RomTelecoms
fixed line rates at certain times of the day, which encourages customers to use
wireless instead of fixed line phone service.





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MobiFons initial launch strategy emphasized feature-rich service
offerings that appealed to corporations, governmental agencies and other
high-end subscribers. As part of our strategy to address the Romanian retail
consumer market, we introduced programs that appeal to specific mass-market
segments, based on disposable income research. Consequently, our prepaid
portfolio was diversified to attract not only customers who preferred to use
the service mainly for incoming calls, but also those customers who could not
afford a postpaid program but had a higher propensity to make outgoing calls.
On the postpaid side, we introduced low-end programs, with affordable monthly
fees and flexible per minute rates, stimulating usage during non-peak hours,
week-ends and/or for certain destinations. Our pre-paid products, together with
the post-paid programs for the low-end consumer segment, were the major driving
force in increasing our acquisition of new subscribers.

As the third GSM market entrant in the Czech Republic, we initially
differentiated ourselves from our competitors through our pricing strategy by
aggressively pricing our feature-rich service plans. In the Czech Republic, we
estimate that our prices are generally lower than those of our current
competitors, Eurotel Praha and T-Mobile, for comparable plans and based on
various usage assumptions. Our Czech competitors have already lowered their
prices in response to our launch and may further lower their prices in the
future. We have designed simplified service packages to provide our subscribers
with everyday low pricing. We offer several service packages with per-second
billing after the first minute and allow customers to carry over unused minutes
for use in the following month. We have also lowered barriers to subscribing
to our services by eliminating activation fees.

We offer several post-paid and pre-paid pricing plans targeted at specific
market clusters. Two plans, marketed under the names Write Me and Between
Us, are contained in our Czech Republic license and are required to be offered
until December 31, 2003. The Write Me package is designed for low-usage
subscribers who desire wireless access, are high-SMS users and also appreciate
the convenience of wireless at affordable rates. The Between Us package is
designed for subscribers who incur over 300 outgoing minutes of use per month,
with the majority of their calls occurring within the Oskar Network. The
Between Us plan is our only consumer plan that is available as a contract
plan. In addition to these plans, and in connection with our new marketing
campaigns designed to attract higher value customers in the Czech Republic, we
also offer new packages targeted toward high-end users and business
subscribers.

Marketing and Distribution

Marketing

In Romania, our marketing strategy focuses on protecting and growing
revenue and profitability from the existing customer base, strengthening
leadership by maintaining market share advantage, strengthening brand image and
improving customer satisfaction. Taking the advantage of the opportunities
offered by the newly deregulated telecom market, Connex has developed a new
approach to the business customers designed to protect GSM revenues and capture
as much as possible from the potential telecom needs of our high-end subscribes
by integrating mobile voice, fixed voice and data in a single concept which we
refer to as Integrated Service Strategy.

A consumer survey we commissioned in November 2002 showed that we achieved
a Connex brand awareness level of 95.3% in Romania. The survey revealed that
the top-of-mind brand awareness was 52% for Connex, versus 43% for Orange. We
accomplished such brand recognition through an extensive advertising campaign
that focused on brand visibility through television, billboard and magazine
advertisements. After having achieved brand awareness in Romania, we are now
building on our brand image through various programs and campaigns to ensure
brand loyalty.

In the Czech Republic, we have established brand recognition through
extensive use of our advertising icon, Oskar. Our brand is developed around a
personality that is friendly, human, and Czech. These attributes are reflected
in everything we do, from developing services to designing the layout of our
stores. We believe that our brand strategy clearly differentiates us from the
other market competitors. In less than two years after launch of operations we
had achieved in-country brand awareness which was on par with or exceeded that
of the competition but more importantly, Oskar has now achieved brand
recognition levels similar to world premiere brands such as Coca Cola. Over
the past two years Oskar has positioned itself as an agent of innovation and a
leading force behind changes in the Czech mobile market. Oskar has built one
of the strongest Czech brands and laid down a new style of communication.





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Having launched with a mass market brand and tagline of Everybody,
Everyday, Oskar has since repositioned its brand to appeal to mid and high
value subscribers and the small business market. Oskar has positioned itself
as the customer advocate that challenges conventions on behalf of customers.

A number of MobiFons advertising campaigns have won international awards
in the specialized fora: in 1999, the award for best advertising campaign of
the year was granted by the Advertising Association for the image campaign
The future sounds good; in 2001, Connex was awarded a Golden Drum award for
television advertising in the Telecommunications category, granted at the
Portoroz Festival; in 2002, at the Cannes 3GSM Conference, the advertising
campaign for Connex Play was among the nominees for best marketing campaigns.
Since launch, Oskar has won over 45 domestic and international awards. Oskar
was also nominated for Best Mobile operator in 2001 and 2002 and Best Branding
Campaign in 2001 at the prestigious World Communication Awards.

Distribution

We tailor our distribution schemes to our service packages and according
to our strategic position in our markets.

In Romania, Connex distributes through 3 channels; a direct sales force
that serves the top 6,500 business accounts, a network of corporate stores in
strategic cities for consumers and small business and through both exclusive
and non exclusive independent distributors. Distribution is also separated by
our product offerings  postpaid and prepaid. Exclusive independent
distributors distribute both post and prepaid products and services with a
heavy emphasis on postpaid (handsets and activations). We have also developed
non-exclusive channels with a variety of specialty retail stores and
hypermarkets. In addition, prepaid products are distributed through high
traffic retail locations such as gas stations, lottery outlets and kiosks.
Recent electronic means of recharging prepaid products through Automated Teller
Machines have also resulted in partnerships with financial institutions such as
Banca Commerciala Romana. As of the beginning of 2003 our distribution network
includes 10 corporate stores, more than 750 exclusive postpaid locations and
more than 4,700 points of sale for prepaid cards. Also, a special distribution
channel was developed for selling data services. Due to the data services
characteristics (need for integration in a complete information technology
solution, services complexity, high value, need for customized support) we have
developed a non-exclusive channel of data partners. Connex Data Partners are
national and regional resellers, including system integrators and service
providers, who have the resources, skills and assets to meet the demands of the
large enterprise and metro markets for integrated information technology
solutions.

In the Czech Republic, Oskar relies on direct channels of distribution to
target both consumer and business customers. One of Oskars primary channels
of distribution is direct delivery. Through this channel, customers can order
service packages and handsets over the phone from a fully dedicated telesales
team. Delivery to your office or your home is free and expected within 48
hours. Direct delivery allows us to minimize the number of the external
parties involved in the sale, build closer customer relationships and reduce
acquisition costs by eliminating costs associated with dealers and dealer
commissions. Additionally, eliminating intermediaries helps us to maintain
standardized distribution processes and procedures and allows us to ensure that
every contact with our customers is consistent with the Oskar brand image.

Oskar also operates a retail channel of distribution through its 38
corporate stores and 2 mobile stores. The larger corporate stores are located
in the larger urban centers of the Czech Republic, while the smaller stores
focus on providing a physical presence in regional shopping centers and
secondary cities. Our distribution strategy in the Czech Republic also includes
a team of dedicated sales representatives for larger business accounts and
third-party distributors of pre-paid airtime cards.

Customer Care

We view customer care as an essential element in our strategy and seek to
promote our customer focus to minimize customer churn. With our increasing
focus on the retail consumer segments in our markets, we are making increasing
use of automated customer service that matches the level of service with what
customers pay for their subscription. Customers who subscribe to more expensive
services receive personalized customer service, while customers who subscribe
to more economical packages are served through our interactive voice response
unit and through internet access to key features of their account and general
information. We have established toll-free customer care call center telephone
lines staffed by





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trained employees to answer inquiries by existing and potential
subscribers. We utilize fully integrated, flexible customer care and billing
systems to ensure that customer service representatives are fully equipped to
deal with customer concerns on a real time basis. We closely monitor customer
care calls and use information gathered from these calls to identify and remedy
system shortfalls and to customize marketing strategies and pricing and
promotional plans.

As the first GSM entrant in Romania, we established the benchmark quality
and service standards for that market. We believe that our customer care
initiatives in Romania have been key in allowing us to maintain our low churn
rates and high levels of customer satisfaction. Through permanent refining of
internal processes, we reached very high levels of productivity in the call
center and we make an on-going effort to control the number of calls per
customer in a market where the need for education regarding cellular service is
still very high. In the Czech Republic we offer customer care options to our
subscribers including our extensive and user-friendly self-care program which
has allowed us to handle large growths in the subscriber base without adding
corresponding staff in the customer service group.

Billing

Billing is governed by the nature of the subscribers service package. Our
billing and customer care systems are fully convergent. The integration of
billing data and customer service information in a single system provides our
staff with a comprehensive view of our subscribers account. We use an
automated collections process, making use of short text messaging services,
interactive voice response and voice mail.

In the Czech Republic, we have chosen a best-in-class billing system that
enables us to maintain competitive advantages in the area of flexibility, speed
to market, convergence and scalability. Its state-of-the-art flexibility allows
the rapid configuration of new products and services and supports innovative
discounting and packaging concepts. Multi-tiered tariff schemes, bundling of
services and cross-product discounts are all integral parts of this convergent
billing solution, which also provides room for expansion into other lines of
business. The ability to sort information in this way allows us to further
customize our pricing and billing plans, and offer our customers additional
value-added services, which we believe will help us increase market penetration
and capture market share.

In Romania, we started a process of replacing our old billing system in
mid-2002, as it reached limitations in terms of functionality and it approached
capacity limits. The new system is a best-in-class product that will provide
maximum flexibility, will allow for rapid configuration of new products and
services and will support innovative discounting and packaging concepts. It
employs state-of-the-art technology that will provide both GSM/data and
prepaid/postpaid convergence, allowing us to offer bundled services and
cross-product discounting in a consistent manner across all product lines and
payment channels. The new billing system has been in use since November 2002
for new subscribers in parallel with the old solution, which it will completely
replace in mid-2003 providing Connex with a significant competitive advantage.

Bad Debt and Churn Management

Exposure to bad debt is managed through account spending limits. Each
operating companys fraud department reviews billing reports to monitor
potential fraud or credit abuse. In Romania, actual bad debt write-offs have
historically been fully covered by reserves which, in 2002, amounted
to 2.0% of billable revenue. Once customers are deactivated for non-payment, an extended
legal collection process is performed, in order to recover losses and increase
the level of awareness in the market about the importance of clearing
customers debt. All of the GSM operators in Romania have access to a shared
database of subscribers who have been removed from their network for
nonpayment. An individual in this database who wishes to subscribe to our
service must pay a deposit.

To assist in managing and reducing both bad debt and churn levels in the
Czech Republic, we have implemented an initial mandatory deposit for any
postpaid activation and an account spending limit. With the account spending
limit, as a customer reaches 50% and 75% of this limit, he or she is notified
that he or she is within the percentage of his or her spending limit. At 100%,
the customer is hotlined, which prevents him or her from making outgoing
calls until the account is brought under the spending limit. As the customers
creditworthiness is proven, we proactively increase their credit limit (similar
to credit card companies) to increase spending and ARPU. New post-paid
subscribers who do not pay their invoice have their service restricted 5 days
after the invoice due date. They are removed from our subscriber numbers 31
days after the due date of their invoice. Uncollectible account balances are
written off 180 days after their





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due date. In the Czech Republic actual bad debt write-offs amounted to
7.7% of applicable service revenues in 2000, 5.0% in 2001 and 1.8% in 2002.

In the telecommunications industry, the term churn refers to the rate at
which customers leave an operators network. This can occur for a number of
reasons. In the case of voluntary churn, the customer may decide that he cannot
afford the service, move out of the coverage area or decide to subscribe to a
competing service. In the case of involuntary churn, post-paid customers who
have not paid their bill are, after a period of attempted collection, removed
from the network by us. At MobiFon, we include in our churn calculation those
pre-paid subscribers whose services we terminated after several months have
lapsed since they last placed an outgoing call. MobiFon adjusts the number of
months of permitted inactivity based on market practice and currently churns
customers after 12 months. At Ceský, our pre-paid churn policy is based upon
the amount of time that has elapsed since the customer replenished his account
rather than on activity. Churn rates increase our operating costs by forcing
us to increase our spending on marketing and incentive plans to maintain
current subscribers and continue to attract new ones. A future increase in
churn would likely increase our costs in those areas.

MobiFons average monthly churn rate was 2.12% in 2000, 1.68% in 2001 and
1.85% in 2002.

Ceský Mobils average monthly churn rate, which includes for 2002
subscribers who have had no activity in their account for more than 6 months,
was 1.32% in 2000, 1.86% in 2001 and 2.4% in 2002.

Competition

During the past 10 years, the international wireless telecommunications
industry has experienced rapid growth. The continued emergence of new service
and bearer technologies and deregulation of the industry in a significant
number of countries have created a number of business opportunities and,
consequently, led to increased competition and proliferation of services.
Pan-American, Pan-European and even global network operators have emerged to
leverage economies of scale. Our success will depend on our ability to compete
with other wireless telecommunications network operators, particularly with
respect to brand recognition, services, pricing, network quality and coverage,
management, reliability, marketing and distribution.

In some instances, our competitors or their principal corporate
shareholders have been operating for a number of years in our markets or in
other markets for wireless services, are currently serving a substantial
subscriber base, have greater name recognition and have significantly greater
financial, technical, marketing, sales and distribution resources than those
available to us. However, we believe that our brand recognition and pricing
strategies will provide us with an edge over these competitors. Although we
currently face competition from other forms of telecommunications technologies,
we believe that our GSM-based wireless networks should continue to enjoy cost
and accessibility advantages over these other technologies.

Romania.Besides MobiFon, Romania currently has three other licensed
mobile operators holding a total of four separate licenses: (1) MobilRom, the
other digital GSM 900 operator, (2) RomTelecom, a digital GSM 1800 operator,
and (3) Telemobil, a digital CDMA/2000 and an analog NMTP operator using the
Nordic mobile telephone protocol.



| | (1) |  | MobilRom, majority owned by France Telecom and operated initially
under the name Dialog, won its 900 MHz license at the same time as
MobiFon in November 1996 and launched its services in June 1997.
MobilRom is owned by a consortium led by France Telecom. Dialog
re-branded its services under the Orange brand on April 5, 2002.                                 
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | RomTelecom, the national fixed-line phone company, in which the
part-privatized Greek telecommunications company OTE has a 54.0% equity
interest, acquired its 1800 MHz license in connection with its
privatization in November 1998. It launched its operations under the
brand name Cosmorom in 2000.                                                               
|
| | (3) |  | Telemobil won its analog nordic mobile telephone protocol license
in March 1992 and launched operations in May 1993 but never succeeded
in reaching significant market penetration. In December 2001,
Telemobil launched a new service based on an advanced form of code
division multiple access technology known as CDMA/2000. Inquam
Romania, in which Qualcomm Inc.





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| |  |  | and Omnia Holdings are investors, is now the main shareholder of
Telemobil. Telemobil is the first European mobile operator to use code
division multiple access technology and the first to use the 450 MHz band
worldwide. Telemobil has titled its new service Zapp and is trying to
position its technology as the first third-generation service in Romania.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

According to their respective 2002 year end financial reports, as of
December 31, 2002, MobiFon/Connex had a market share of 52.5%, MobilRom of
44.1%, Cosmorom of 2.0% and Telemobil of 1.4%.

|              |  |               |  |                |  |               |  |                     |  |              |      |   |  |  |  |  |  |  |  | 
|------------- |  | ------------- |  | -------------- |  | ------------- |  | ------------------- |  | ------------ | ---- | - |  |  |  |  |  |  |  | 
|Operator      |  | Brand Name    |  | Technology     |  | License Award |  | Start of Operations |  | Market Share
|              |  |               |  |                |  |               |  |                     |  |             
|1) MobilRom   |  | Dialog/Orange |  | GSM 900        |  | November 1996 |  | June 1997           |  |              | 44.1 | %
|2) RomTelecom |  | Cosmorom      |  | GSM 1800       |  | November 1998 |  | June 2000           |  |              | 2.0  | %
|3) Telemobil  |  | Zapp          |  | CDMA 2000/NMTP |  | March 1992    |  | May 1993            |  |              | 1.4  | %
|4) MobiFon    |  | CONNEX        |  | GSM 900        |  | November 1996 |  | April 1997          |  |              | 52.5 | %

Czech Republic.Besides Ceský Mobil, the Czech Republic currently has two
other licensed mobile operators holding a total of five licenses: (1) Eurotel
Praha, a digital GSM 900/1800 Mobile Telephone Protocol operator and analog
nordic mobile telephone protocol (NMT450) operator and a holder of a UMTS
license; and (2) Radiomobil, another digital GSM 900/1800 operator and holder
of a Universal Mobile Telecommunications System license.



| | (1) |  | Eurotel Praha won its NMT450 license in November 1990 and launched
commercial analog service operations in September 1991. The entry of
GSM services reversed Eurotel Prahas earlier nordic mobile telephone
protocol subscriber growth. Eurotel Praha won its 900 MHz GSM license
in March 1996 and launched commercial operations in July 1996. Eurotel
Praha was allocated 1800 MHz frequencies in July 2001. Shareholders of
Eurotel Praha include Ceský Telecom, the national fixed-line operator.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Radiomobil won its 900 MHz license in March 1996 and began
providing commercial service under the brand name Paegas in September
1996. Radiomobil was allocated 1800 MHz frequencies in July 2001.
Radiomobils shareholders include Deutsche Telekom AG. In April 2002
Radiomobil rebranded its services to the T-Mobile brand name, and is
underway with changing its company name to T-Mobile Czech Republic.                                                                                       

As of December 31, 2002, Eurotel was the market leader with a 45.4% market
share (including the subscribers using its nordic mobile telephone protocol
services  1% of total Eurotel subscribers); T-Mobile had a 40.9% market
share. As of December 31, 2002, Ceský Mobil had a market share of 13.7%.

Both T-Mobile and Eurotel acquired UMTS licences in December 2001 but have
not yet officially announced when they expect to launch their respective UMTS
operations. The terms of the UMTS licenses provide that the operations
ventures must cover 90% of Prague by January 2005. In February 2003, Eurotel
announced that it is performing a technical trial of UMTS in Prague in
conjunction with Nokia. Customer trials and/or public relations events are
expected as early as the third quarter of 2003. According to industry sources,
Eurotel and T-Mobile are expected to launch UMTS service in the second or third





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quarter of 2004 in Prague. Depending upon customer demand, other major
centres such as Brno, Ostrava and Plzen might be covered post 2005.

|                     |  |                       |   |               |  |               |  |                     |  |              |      |   |  |  |  |  |  |  |  | 
|-------------------- |  | --------------------- | - | ------------- |  | ------------- |  | ------------------- |  | ------------ | ---- | - |  |  |  |  |  |  |  | 
|Operator             |  | Brand Name            |   | Technology    |  | License Award |  | Start of Operations |  | Market Share
|                     |  |                       |   |               |  |               |  |                     |  |             
|Eurotel Praha        |  | Eurotel/Go            |   | GSM 900/1800  |  | March 1996    |  | July 1996           |  |              | 45.4 | %
|                     |  | Eurotel               |   | NMT 450       |  | November 1990 |  |                     |  |              |      |   |  | 
|                     |  |                       |  |               |  | UMTS          |  | December 2001       |  |              |      |   |  |  |  | 
|T-Mobile/ Radiomobil |  | T-Mobile/Paegas/Twist |   | GSM 900/1800  |  | March 1996    |  | September 1996      |  |              | 40.9 | %
|                     |  |                       |  |               |  | UMTS          |  | December 2001       |  |              |      |   |  |  |  | 
|Ceský Mobil          |  | Oskar                 |   | GSM 1800/900* |  | October 1999  |  | March 2000          |  |              | 13.7 | %



---

* Used outside of Prague

Future Competition

In the future, as we build out our GSM networks and offer enhanced services, we
will face competition from other wireless communication technologies, such as
specialized mobile radio systems, enhanced specialized mobile radio systems,
data-only, packet-switched networks and satellite-based voice and data
transmissions technologies, as well as other technologies that have not yet
been developed.

We may also compete directly with additional conventional fixed line
telecommunications service providers and with cable operators who expand into
offering two-way communications services over their networks.

The introduction of two-way messaging services may allow the paging industry to
compete with us for some of the enhanced services we intend to introduce. Some
manufacturers and network operators have studied further modifications to the
GSM standard to provide enhanced specialized mobile radio-like services, in
particular providing automated conferencing calls. Several entities are
currently operating or developing global satellite networks to provide domestic
and international cellular communications services from geostationary and low
earth orbit satellites. We do not expect them to compete with land-based
wireless communication services on price. However, they may eventually augment
or replace communications that have segments of land-based wireless systems. At
the very least, we may also be challenged by existing wireless systems that
have been upgraded from analog to digital, evolving industry standards, ongoing
improvements in the capacity and quality of digital technology, shorter
development cycles for new products and enhancements, and changes in end-user
requirements and preferences.

Regulatory Environment

Romania. In 2002 the old Telecommunication Law was replaced by The
Emergency Government Ordinance 79/2002 (The Ordinance) and the 591/2002 Law
regarding The General Regulatory Framework in Communication (the New
Telecommunication Law). This new framework has been complemented by other
regulations regarding, among other things, access and interconnection, data
protection, numbering and significant market power designation and obligations.

Under the new regulatory regime the old license has been replaced by three separate licenses:



| |  | An authorization to provide electronic communication networks and services
| | - | --------------------------------------------------------------------------





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| |  | A license to use allocated numbering resources         
|- |  | -------------------------------------------------------
| 
| |  | GSM frequency license to use radio-electric frequencies

Companies that provide any communications networks or services are now
subject to general authorization procedures.

While the Ministry of Communication and Information Technology (MCIT) will
be in charge of radio spectrum management at the national level, the National
Regulatory Authority for Communications (NRAC) will be in charge of numbering
resources management. MCIT will grant radio spectrum only to the
companies that obtained the general authorizations. The
same treatment will be regarding numbering resources, only that the license
will be issued by NRAC.

The new regulatory framework contains provisions regulating significant
market power positions. In December 2002, an obligation to publish a Reference
Interconnection Offer with respect to interconnection termination rates set by
the regulatory authority was imposed on RomTelecom, given its significant
market power as provider of access to the public networks of fixed telephony.
In February 2003 RomTelecom complied with their obligation and published the
requested RIO.

MobiFon has been designated as having significant market power and, as a
result, regulatory authorities have imposed maximum interconnection termination
rates of $0.11/min until December 31, 2003 and $0.10 from January 1, 2004 to
July 2004 and on the basis of the long run incremental cost model thereafter.
Regulatory authorities have also imposed on MobiFon certain interconnection
obligations with respect to transparency (the publishing of interconnection
rates) and account separation. The same obligations were applied to Orange,
MobiFon main competitor. Only transparency obligations were imposed on Cosmorom
and Zapp.

Czech Republic.A resolution of the Czech Republic government dated
August 10, 1994 set out the principles of the national telecommunications
policy and maintained Ceský Telecom monopoly, until December 31, 2000, on the
fixed-line long distance and international telephone services market. The same
resolution also restricted competition in the fixed-line local telephone
services market for the same period. In 1997, the Czech Republic became a
signatory to the World Trade Organization Reference Paper on Telecommunications
through its Additional Commitments to the Schedule on Basic telecommunications
services, which committed the country to liberalizing its telecommunications
market. Following this agreement, in April 1999, the Czech government adopted
a resolution setting out the principles of a new national telecommunications
policy. Among the main goals of this policy was the preparation of a
Telecommunications Act to open the Czech Republics telecommunications market
to competition by December 31, 2001. The new Telecommunications Act came into
force July 1, 2000.

The Telecommunications Act:



| |  | regulates the telecommunications industry;                                                                                                                                                             
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | provides for a certain level of state regulation and control over the telecommunications sector; and                                                                                                   
| 
| |  | provides for the full liberalization of the telecommunications market, including the implementation of
call-by-call carrier selection and full number portability for fixed network subscriber numbers.

The Czech Telecommunications Office, known as the CTU, constituted under
the Act as the national regulatory authority, is responsible for
telecommunications, including licenses, pricing and pricing policies and
dispute resolution. As of January 1, 2003, responsibilities for the telecom
industry policies moved from the Ministry of Transport and Communications to
the newly established Ministry of Informatics. The Telecommunications Act of
2000 is now currently under review by this Ministry, and is scheduled to be
replaced, most likely in 2004, by a new Act on Electronic Communications, so as
to harmonize applicable laws to those of the European Union.

Licenses





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Romania.Until January 1, 2003, MobiFon held one of three licenses issued
to provide nationwide GSM-based cellular telecommunications services throughout
Romania. MobiFon paid an initial license fee of $50 million in 1996 and an
additional $25 million in 1999 for the extension of the license term to 2011.
In addition, MobiFon must pay a recurring annual fee of $5 million per year for
the 22 channels allocated in the 900 MHz range under the license. MobiFon
purchased 40 additional channels in the 900 MHz frequency ranges, at an annual
price per channel of $230,000 for national coverage, $35,000 for Bucharest and
$2,300 for each other city. Of the 62 channels, MobiFon uses 31 on a national
basis. MobiFon has access to 12.4 MHz of spectrum in the 900 MHz band, and
since December 31, 2002, MobiFon may have access to spectrum in the
1800 MHz band for additional fees. This additional spectrum will enable it to increase network
capacity and to maintain the performance criteria required by its license. As
of January 1, 2003, the old license has been replaced by three
separate grants,
namely, an authorization to provide electronic communication networks and
services, a numbering license and a GSM frequency license all of which have
been granted except for the GSM frequency license which has been continued by
government ordinance on the terms of the pre-January 2003 license. In
addition, MobiFon must pay annual fees of approximately $0.2 million
for the right to operate microwave frequencies to connect GSM base
stations to switching centers.

If we fail to comply with the authorization to provide electronic
communication networks, the regulatory authority may apply administrative fines
up to 5% of turnover. Breaches which are subject to administrative fines
include the following: (1) breach of obligations regarding the general
authorization, (2) using radio frequency without having a license, (3) using
numbering resources without a license and (4) not complying with the license
terms and obligations.

Czech Republic.In 2002, so as to more accurately reflect the language of the
Telecommunications Act, the former GSM Authorization has been replaced by CTU
decision 5379/2002-610 on granting of the telecommunications license to
establish and operate public mobile telecommunication networks under the GSM
standard issued on June 17, 2002, and by CTU decision 8951/2002-610 on granting
of the telecommunications license to provide the public telephone service
through the public mobile telecommunication network issued on June 20, 2002.
Both of these decisions came into force on November 13, 2002, following an
appeal process, and the licenses are valid for a period of 18 years.

Ceský Mobil paid an initial license fee of one billion Koruna ($28.5
million), and must also pay a recurring annual fee for the right to operate GSM
base stations and radio operating stations, which amounts to approximately 72
million Koruna ($2.2 million) now that Èeský Mobil has reached 98% population
coverage. In addition, Èeský Mobil must pay a recurring annual fee for the
right to operate microwave frequencies to connect GSM base stations to
switching centers. In 2002, this fee amounted to approximately 77 million
Koruna ($2.4 million).

Ceský
Mobil is now entitled to 18 MHz of spectrum in the 1800 MHz band. In
addition, it has the right to use 4 MHz of spectrum in the 900 MHz band. The
Czech Telecommunication Office can reallocate frequencies with six months
notice. In the process that resulted in the issuance of the new licences, 20
additional channels in the 1800 MHz band were allocated to Ceský Mobil.

The new Telecommunication Act, issued in July 2000, regulates a number of
issues that were previously included in the former Authorization, thus removing
the need to incorporate such issues in the licenses. Consequently, the new
licenses are much less detailed than the Authorization, basically only
maintaining the price obligations (old tariffs T1 I Hear You and T2
Agreement with Oskar  pricing plans) until December 31, 2003, and some
minimum quality parameters of coverage of area and population.

The Czech Telecommunication Office is entitled to restrict,
suspend or terminate Ceský Mobils license for a number of reasons, including a
significant public interest, or a material breach of the provisions of the
License, or of the Telecommunication Act. Furthermore, when the initial Authorization was issued, Ceský Mobil had
undertaken to construct the technological infrastructure required to provide
Internet access to schools and libraries throughout the Czech Republic, by
October 8, 2002. Ceský Mobil has submitted a comprehensive proposal to fulfill
its obligation within the required deadline, and negotiations are still
underway with different ministries to discuss the potential implementation of
the proposal.

Ownership Restrictions





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Some of our licenses place restrictions on our ability to dispose of our
interests in our operating companies. For example, Ceský Mobils initial
Authorization requires us to notify the Czech Telecommunication Office in
writing at least 45 days before Ceský Mobil or any shareholder holding more
than 25% of its registered capital is involved in a transaction involving more
than 10% of its registered capital. This is only a notice requirement; the
license does not give the Czech Telecommunication Office a right to approve the
transfer. However, this notification obligation was not replicated in the new
Licenses of Ceský Mobil that came into force on November 13, 2002, and
therefore is no longer applicable.

Co-Investors

Romania.Our strategic partners in MobiFon are (1) Vodafone Europe B.V.,
(2) Deraso Holding B.V., a group of financial investors led by J.P. Morgan
Partners, LLC and (3) certain other minority investors including, since March
2003, an affiliate of Emerging Market Partnership (EMP).

During the fourth quarter of 2002, our subsidiary ClearWave tendered as
part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250
shares of MobiFon for total cash consideration of US $24.6 million bringing
ClearWaves ownership percentage in MobiFon from 63.5% to 62.4%,
as of December
31, 2002. As at that date, the participation of our partners in MobiFon was
20.8% for Vodafone, 14.9% for Deraso, and less than two percent for the
minority investors. Other shareholders of MobiFon have until June 30, 2003 to
tender their shares in the share repurchase which may cause their ownership
interest in MobiFon to decrease and ClearWaves ownership interest in MobiFon
to increase

On March 19, 2003 we announced the sale to an affiliate of Emerging Market
Partnership of 11,135,555 of our shares of MobiFon for total cash consideration
of US $42.5 million. Following this sale, ClearWaves ownership of MobiFon
decreased to 56.6%. This ownership percentage could vary between 56.6% and
57.7% depending on the extent of the participation of other MobiFon
shareholders in the share repurchase which ends on June 30, 2003. For the same
reason, EMPs ultimate ownership may vary between 5.7% and 5.9%.

Czech Republic.Our interest in Ceský Mobil is held through TIW Czech
N.V. Our strategic and financial partners in TIW Czech N.V. are large
institutional investors. ClearWave holds a 50.8% voting interest and 24.2%
equity interest in TIW Czech N.V. with the institutional investors holding the
remaining 49.2% voting and 76.6% equity interest. TIW Czech N.V. holds a 96.3%
direct interest in Ceský Mobil and its co-shareholders in Ceský Mobil,
Ceská konsolidacní agentura and United Pan-Europe Communications N.V.,
hold the remaining 3.7% interest. Through this shareholding structure, we
currently control 96.3% of Ceský Mobil.

Liquidity Agreements

ClearWave entered into agreements with its co-shareholders in TIW Czech,
as well as with certain minority shareholders in MobiFon holding in aggregate
approximately 22% of the outstanding shares of MobiFon, to allow these parties
to participate in certain transactions that create liquidity for ClearWaves
shares. Two types of events trigger tag-along rights for these shareholders
under the agreements:



| |  | sales by TIWC of shares of ClearWave pursuant to a bona fide arms
length transaction for cash or liquid stock; or
|- |  | ------------------------------------------------------------------------------------------------------------------
| 
| |  | public sales of shares of ClearWave.                                                                              

Accordingly, such shareholders would have the right to participate in the
particular transaction on terms as close as possible to those applicable to
TIWC or ClearWave by selling all or some of their shares in TIW Czech and
MobiFon. ClearWave and TIWC also have the right, under certain conditions, to
require such participation.

In the event there has not been an initial public offering of the shares
of MobiFon by October 1, 2004, certain minority shareholders in MobiFon
holding in aggregate approximately 21% of the outstanding shares of MobiFon,
may require TIWC or, at TIWCs option, ClearWave to make an offer to acquire
their shares of MobiFon at a price representing the fair market value of such
shares as determined by an





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independent valuation and shall be payable, at our
option, in cash or in our marketable securities. This right terminates upon an
initial public offering of ClearWave shares that meets certain criteria.

As part of the creation of Ceský Mobil, a minority shareholder was granted
by TIWC a put option on all common shares in the capital of Ceský Mobil that
the minority shareholder holds. As a result of the assignment of this put by
TIWC to TIW Czech, TIW Czech may have to purchase this minority shareholder
shares of Ceský Mobil for a price equal to the total subscription price paid
for the shares plus interest calculated from their respective dates of issuance
at a rate of 7% per annum. This option remains exercisable until October 8,
2003. As at December 31, 2002, this minority shareholder had contributed $13.0
million to the equity of Ceský Mobil.

Networks

We chose major cellular equipment vendors to design and build networks
that provided us with state-of-the-art service that allowed us to begin
operating quickly and to expand and upgrade our service as we acquired more
subscribers and new technology became available. Flexibility to keep up with
new technology is essential to comply with license requirements and compete
effectively. We have also invested significantly in advanced operation and
maintenance systems to provide quality service to our existing network
subscribers. We continuously monitor network traffic and measure the real-time
technical performance of our services against global benchmarks. Our
comprehensive surveillance of traffic-related activities enables us to respond
quickly to conditions in which the traffic load exceeds expected levels.

We purchase most equipment for our networks through competitive tendering.
The two key principles guiding procurement decisions are benchmarking, to the
extent available, and quality of products that provide value to the customer.
Another principle influencing procurement decisions is avoidance of conflicts
of interests. We and the other shareholders in our operating companies provide
experts who review contracts and prices, and then benchmark them against
contracts and prices obtained in cellular networks throughout the world. As a
rule, when an equity partner is to provide equipment or services, or if any
potential conflict of interest arises for any other reason, the shareholders,
above a size threshold, and the Board of Directors, as applicable, of our
operating companies must approve the final purchase for items exceeding a
specified threshold.

Romania.MobiFon began the development of its GSM-based cellular network,
using 900 MHz frequencies, in December 1996. By March 1, 1997, MobiFons
network was operational and covered Bucharest, the capital of Romania,
including access roads and airports, as well as eight other major cities. As at
December 31, 2002, MobiFons state-of-the-art network covered 96% of the
population of Romania and all major highways in Romania. As of that date,
MobiFons network consisted of 1021 remote base stations, 386 repeaters, 24
base station controllers, 11 cellular switching centers, 2 transit switching
centers and 10 public switched telephone network (PSTN) interconnection points.
Use of ATM technology and voice compression techniques led to significant
increase in network efficiency, preserving a high quality level. Starting
Jan.1, 2003 MobiFon ensures direct international traffic interconnection with
four carriers, no longer using transit through the local PSTN for such traffic.
We will be installing additional base stations and other equipment to increase
capacity and enhance coverage and quality of service, and starting 2003 we have
access to the 1800 MHz frequencies, to be used when needed for additional
capacity. We have also installed the first-ever wind and solar powered cell
sites in Central and Eastern Europe.

Czech Republic.The design for the Czech network employs both 900 MHz and
1800 MHz frequencies, taking into account certain availability restrictions on
the 900 MHz band. This design offers benefits with respect to greater rural
coverage and greater capacity in dense urban environments. Ceský Mobil was
using Ericsson and Siemens exclusively to construct its network, but now
tenders the construction work to the most competitive contractors. While Ceský
Mobil is utilizing Ericsson mobile switching centers throughout the network, it
uses Ericsson cellsite equipment in the eastern part of the country and
Siemens cellsite equipment in the western part of the country. As at March 31,
2003, Ceský Mobil network covered 99% of the population. As of that date,
Ceský Mobil network consisted of over 2,429 base stations, 58 base station
controllers, 6 cellular switching centers and diverse network interconnection
points to all the major telecom operators in the Czech Republic including Cesky
Telecom, Eurotel, T-mobile, Aliatel, Contactel, and GTS. Of the 6 cellular
switching centers, 3 of them also perform the function of transit switching.
We believe the network addresses current capacity adequately.





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We plan and construct each of our wireless telecommunications networks to
meet a forecasted level of subscriber density and traffic demand. Once this
level is exceeded, we are normally able to increase network capacity to
maintain service standards by using techniques such as sectorization and cell
splitting. Other wireless telecommunications network operators and
infrastructure manufacturers have also developed techniques we can use to
ensure service quality at minimal cost, such as microcells. Until technological
limitations on network capacity are reached, we can usually add additional
capacity in increments that closely match demand and at less than the
proportionate cost of initial capacity.

Operations and Maintenance

We design, in consultation with our vendors, state-of-the-art operation
and maintenance systems and efficient network management structures. Our
primary objectives are high customer satisfaction and compliance with license
requirements.

Our network management structures are divided into two main functional
areas:



| |  | Operations. This group operates the entire network, including base
stations or cellsites, base station controllers, transmission and
microwave systems, switches and value added services platforms and
systems.                                                                             
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Network planning, engineering and implementation. This group plans,
designs and implements the network, including cell planning, frequency
planning, network dimensioning and switching systems upgrades, and
develops and introduces new products, services and technologies in the
network.

Our networks use standard monitoring and supervision features provided by
the cellular switching centers, base stations, base station controllers and
transmission equipment. These functions enable us to examine the state of the
network in real-time and to produce both fault reports and performance reports.
We continuously monitor the traffic on the networks and respond to conditions
that may affect service or traffic levels.

To ensure peak network reliability and service quality, our maintenance
plans feature preventive and corrective maintenance programs, as well as
procedures backed by system tools proven in other GSM systems throughout
Europe. Our operations group continuously monitors and analyzes traffic trouble
reports and potential network problems and analyzes network event data to
determine where non-routine maintenance may be needed. Our operations group
also sets appropriate alarm threshold levels for detection of equipment
problems such as low batteries, equipment or circuit outages and security
violations. They also continually refine maintenance procedures and
documentation to improve mean-time-to-restoration for problems that directly
affect subscribers and establish routine maintenance and testing of all
switching, radio equipment and interconnect facilities.

We have safeguarded our networks against disaster by using, at various
locations, redundant/physically diverse transmission systems,
redundant/physically diverse system components, battery back-ups, generators,
fire suppression systems, and of course regional support staff. Regional
centers maintain replacement parts for critical components in the event of
switching center or other system failures. As a result of these precautions, we
were able to keep our Romanian and Czech networks up and operating an average
of respectively 99.89%% and 99.90% of the time in 2001 and an average of
respectively 99.91% and 99.94% of the time in 2002. We, through our local
expertise and our suppliers, through their servicing and maintenance
departments, work together to adequately support and maintain our networks.

Roaming and Interconnection Agreements

Romania.MobiFon is a signatory of the GSM Memorandum of Understanding
which is now known as the GSM Association. This association establishes common
technology standards, thus facilitating worldwide roaming. As of December 31,
2002, MobiFon had negotiated roaming agreements with 221 operators in 95 countries and is continuing to negotiate additional
roaming agreements. The roaming agreements allow MobiFons post-paid
subscribers to use their own handsets in locations wherever GSM cellular
service is provided, or to roam in such locations with a handset that is
compatible with the local





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network. Presently the main objective is to increase
the number of new roaming destinations for MobiFons customers, with a special
emphasis on remote holiday destinations and Latin American countries. To
maximize inbound roaming revenue, MobiFon has designed its network to emit the
strongest signal in key international entry points, such as airports, so that
visitors have a higher probability of picking up the MobiFon signal on arrival
in Romania.

In order to further maximize the roaming revenue MobiFon has started to
negotiate and open prepaid roaming relations based on CAMEL Phase1 and Phase 2
technologies. The prepaid roaming agreements allow MobiFons Kamarad prepaid
subscribers to use their own handsets and prepaid cards wherever the prepaid
roaming service is available. As of December 31, 2002, MobiFon was offering
for its prepaid customers the possibility to roam in 16 networks covering 11
countries. On the other hand at the same date MobiFon was offering prepaid
inbound roaming services for 13 of our roaming partners.

In August 1997, MobiFon signed an initial one-year interconnection
agreement with RomTelecom, extendable for additional 12-month periods. MobiFon
and RomTelecom have extended this agreement to August 2003. Under this
agreement, MobiFon will share revenues with RomTelecom for calls routed on the
two networks. On March 12, 1998, the parties signed a first addendum to the
interconnection agreement detailing the settlement procedure and the exchange
of traffic information between parties. They signed a second addendum on May
2, 1999, providing the procedures for applying the fixed national-mobile tariff
and for the settlement method in case of possible differences due to exchange
rate fluctuations. On July 30, 1999, RomTelecom and MobiFon signed an addendum
to the interconnection agreement providing that, with the exception of those
services specified by the two networks, users of either RomTelecoms or
MobiFons services can access the services supplied on either network. The
addendum further contemplates that the two companies would address the terms
and conditions applying to services other than basic interconnection services
through separate agreements. The leasing of RomTelecoms facilities for
MobiFons use is not subject to interconnection conditions but to the
negotiation of an agreement between the parties.

A December 2002 decision of the Romanian National Regulatory Agency for
Communications (NRAC) designated RomTelecom as a significant market power with
respect to the access to public networks of fixed telephony. The decision
imposed on RomTelecom an obligation to publish a Reference Interconnection
Offer with interconnect termination rates set by the NRAC. In February 2003
Romtelecom published the RIO.

Another decision of NRAC, issued in March 2003, designated MobiFon as a
significant market power with respect to call termination into its own network.
The decision set the maximum level of the interconnect termination rate that
MobiFon can charge. Other obligations resulting from the significant market
power designation include offering interconnection services for call
termination into MobiFon network to any authorised operator, to publish the
interconnection rates and to offer non-discriminatory conditions to all
operators requesting interconnection for call termination into MobiFons
network.

Due to the changes in the regulatory environment resulting in the
obligations imposed by NRAC to both operators, in March 2003, MobiFon and
RomTelecom have entered into the negotiation of a new interconnection agreement
based on RomTelecoms RIO and MobiFons Interconnect Offer.

On May 5, 1997, MobiFon concluded a Bill & Keep interconnection
agreement with MobilRom which applied until May 12, 1999, when MobiFon entered
into another interconnection agreement with an initial term of 12 months,
extendable for additional 12-month periods. MobiFon extended its agreement
with MobilRom for an additional 12 months to May 2003. This interconnection
agreement, like the one entered into with RomTelecom, provides for the
interconnection of MobiFons network with that of MobilRom and the sharing of
revenues from calls routed on the two networks. MobiFon and MobilRom signed
two addenda to the interconnection agreement, one on May 28, 1999, and another
on October 9, 2000, providing procedures for settlement and monthly traffic
information exchanges and also providing the availability of the short
messaging system service between the two networks.

In March 2003, MobilRom (Orange) was also designated as a significant
market power with respect to call termination in its own network. The same
obligations as those imposed on MobiFon were imposed on MobilRom as a result of
the decision.





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Due to changes in the regulatory environment resulting from the
obligations imposed by NRAC on both operators in February 2003, MobilRom and
MobiFon have entered into negotiations for a new interconnection agreement.

MobiFon also entered into an interconnection agreement with Cosmorom on
March 20, 2000, for an initial term of 24 months, now extended for an
additional 24-month period. This interconnection agreement, like the ones
previously signed with other parties, provides for the interconnection of
MobiFons network with that of Cosmorom and the sharing of revenues from calls
routed on the two networks. On April 12, 2001 MobiFon entered into an addendum
to the interconnection agreement providing the availability of the short
messaging system service between the two networks. MobiFon concluded the
latest interconnection agreement with Telemobil S.A., the nordic mobile
telephone protocol operator, on March 20, 2001, with an initial term of 24
months, extendable for additional 24-month periods. In 2001, Telemobil
re-branded its service to the brand Zapp and obtained a licence for operating
CDMA technology. On 9 August 2002 MobiFon and Telemobil (Zapp) entered into an
addendum to the interconnection agreement providing the availability of the
short message system service between the two networks.

Due to the Romanian telecommunications market liberalisation in 2003,
which ended RomTelecoms monopoly for international traffic to and from
Romania, MobiFon entered into bilateral international interconnection agreement
to secure international traffic with certain international carriers including
carriers in Germany, Italy and Austria

Czech Republic.Ceský Mobil is a full member of the GSM Association
(formerly known as the group of signatories of the GSM Memorandum of
Understanding). As of March 31, 2003 Ceský Mobil had launched commercial
roaming service with 137 operators in 71 countries including all of the
operators in its neighboring countries.

Ceský Mobil is directly or indirectly interconnected with all major
players in the Czech telecommunications market. This list of directly
interconnected parties includes: Ceský Telecom, Aliatel, GTS, Contactel,
Pragonet, who each provide fixed line services in the Czech market and Eurotel
and T-Mobile, who are the other two mobile operators in the market. Due to the
current regulatory requirements, Ceský Mobil will have to interconnect directly
with others licensed alternative operators that request change from indirect to
direct interconnection.

Over the past years, Ceský Mobil had been actively lobbying with the CTU
to bring traditionally high interconnection rates closer to the true costs of
providing mobile call termination services. On November 27, 2001, the CTU
issued a price decision establishing a fully allocated cost-based methodology
for setting interconnection rates for calls terminating in mobile networks, as
well as a establishing a maximum rate of 3.66 Korunas per minute. This
represented a 43% decrease compared to the previously valid rate. As the
traffic exchanged between Ceský Mobil and its two competitors (Eurotel and
T-Mobile) has not been balanced and works to Ceský Mobils disadvantage, such
rate reduction has a significant positive impact on Ceský
Mobils net position
on interconnection payments to other mobile networks. Both Eurotel and T-Mobile
have challenged this price decision and are requesting rates that are, on
average, approximately 1 Koruna higher than the maximum established.

On September 3, 2002, the CTU issued a new price decision setting the
interconnection rates for calls terminating into fixed networks based on a
version of the long-run incremental cost model. This resulted in a 22% decrease
of the rates compared to the previous blended termination rate. Although this
new methodology has not been implemented as of yet in mobile networks, it is
expected that the CTU will adopt a similar costing method in the near future
which may lead to additional decreases in the level of mobile interconnection
rates, and thus further improve our net position on interconnection payments.
Ceský Mobil is advocating for the regulator to mandate the use of a similar
methodology to established interconnection rates for calls terminating in
mobile networks as soon as practicable.

Procurement and Financing





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Romania. MobiFon met its cash requirements as of December 31, 2002, by
aggregate capital contributions of $270.6 million, of which approximately $25
million has been returned, as at December 31, 2002, to shareholders through a
share repurchase, and borrowings under its new bank facilities of $255 million.

In August 2002, MobiFon replaced its long term credit facility with a new
senior secured corporate loan facilities for an aggregate $300 million.
MobiFon used those amounts primarily to repay the remaining debt totalling $231
million (including principal, interest and cancellation fees) under its
previous facility and to pay for continued network deployment and equipment
costs. MobiFon also has a total of $20 million of working capital facilities
with ABN AMRO Bank Romania and Citibank SA.

MobiFons future capital requirements will include network expansion, debt
repayment, new license and dividends. We expect cash flows from MobiFons
operations to be sufficient to cover all requirements.

Czech Republic.Ceský Mobil has met its cash requirements through
December 31, 2002, primarily from shareholder contributions of $350.0 million
and from $443.1 million of borrowings under its senior secured syndicated
credit facility entered into on July 19, 2000.

Ceský
Mobils senior secured syndicated credit facility consists of
approximately 295.7 million and Koruna 5.5 billion, totalling approximately
$492 million, carrying interest for Euro drawings at a rate of EURIBOR plus
1.75%, (2.25% in the case of the non-revolving tranche representing
approximately 10% of the entire Euro drawings) and for Koruna drawings at a
rate of PRIBOR plus 1.75% (2.25% in the case of the non-revolving tranche
representing approximately 34% of the entire Koruna drawings) reimbursable
through instalments between June 2004 to December 2009. As at December 31,
2002, Ceský Mobil had drawn approximately $443.1 million under this facility.
Ceský Mobil has and will continue to use the funds to finance the construction,
operation, working capital, debt service and related requirements of its GSM
network in the Czech Republic including the repayment of amounts financed under
supply contracts with Siemens and Ericsson.

Ceský Mobils capital requirements will include expanding its cellular
network and financing its working capital requirements. Ceský Mobil expects
that these requirements will be financed by drawings under its senior secured
syndicated credit facility, by way of shareholders# funding commitments, and
from operating cash flow. In conjunction with our partners, we have provided
$350.0 million in funding to Ceský Mobil as at December 31, 2002.

Environmental

We are subject to certain local, regional, national and foreign laws and
regulations governing environmental protection. Such laws and regulations
impose strict requirements for the use, management and disposal of hazardous
substances. We believe that we are in substantial compliance with existing
environmental laws and regulations and do not expect the costs of complying
with environmental laws to have a material impact on our capital expenditures,
earnings or competitive position in the foreseeable future. As requirements in
the countries in which we operate become more stringent, however, we may become
subject to increasingly rigorous requirements governing fuel storage for our
towers, investigation and cleanup of contaminated properties on which our
towers are located, and emissions of, and human exposure to, radio frequency
emissions.

Employees.

Romania.As of December 31, 2002, MobiFon had a total of approximately
1,700 employees.

Czech Republic.As of December 31, 2002, Ceský Mobil had a total of 1,350
employees.





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HEXACOM: INDIA CELLULAR

We hold a 30% equity interest in TIW Asia N.V., a holding company which
holds, directly and indirectly, a 42.2% equity interest in Hexacom India
Limited (Hexacom), an Indian company formed to provide GSM-based cellular
services in India. Hexacom obtained a cellular license for the State of
Rajasthan in 1995. Rajasthan is located approximately 150 miles southwest of
Indias capital, New Delhi, and has a population of approximately 56.5 million.
Hexacom launched its commercial operations in Jaipur, the capital of
Rajasthan, in June 1997 and had 112,393 subscribers as at December 31, 2002.

Regulatory Environment

In 1997, the Indian government established the Telecom Regulatory
Authority of India (TRAI) as an autonomous body with the mandate to regulate
the telecommunications industry. TRAI has the authority to ensure compliance
with telecommunications regulation, protect the interests of consumers and
promote competition between service providers. However, the granting and the
renewal of licenses remain under the authority of the Department of
Telecommunications (DoT), Government of India. Foreign direct equity
investments in companies holding licenses from the DoT to operate cellular,
basic and other value-added telecommunications services in India cannot exceed
49%.

Co-Investors

TIW Asias two partners in Hexacom are Telecommunications Consultants
India Ltd. (TCIL) and Shyam Telecom Ltd. (STL). TCIL is a wholly-owned
subsidiary of the DoT and deals primarily with turnkey international projects
in the telecommunications industry. It has activities in more than 50
countries and participates in several joint ventures with international
manufacturers to operate manufacturing plants in India. STL is a public
company listed on Indian stock exchanges, including those in Mumbai and New
Delhi, and manufactures radio-based telecommunications equipment for rural
telephony, private automatic branch exchanges, satellite receivers,
multiplexers and fiber-optic terminal equipment. TCIL and STL hold 30.0% and
25.3% equity interests, respectively, in Hexacom. The remaining 2.5% equity
interest in Hexacom is held by other minority investors.

Networks and Operations

In September 1996, Hexacom was awarded a 10-year license to provide
GSM-based cellular services for the State of Rajasthan, extendable by five
years. The term of the license was extended to 20 years pursuant to the
National Telecommunication Policy 1999 (NTP-99). Hexacom launched commercial
operations in Jaipur, the capital of Rajasthan, in June 1997 and has
subsequently extended its network coverage to 38 other cities across the state.
Hexacom currently has overall network capacity to service approximately
180,000 subscribers.

A uniform interconnection agreement exists between each of the regional
cellular operators in India and the two incumbent Public Switched Telephone
Network (Bharat Sanchar Nigam Limited and Mahanagar Telecom Nigam Limited).

Marketing and Distribution

Hexacom markets its cellular services as a necessity, rather than a luxury
item, and as an alternative to landline services. Hexacom markets its services
under the trade name OASIS Cellular, which has created brand name recognition
and product awareness.

Competition

Including Hexacom, there are presently five wireless operators in the
State of Rajasthan. The other four are: (1) Aircell Digilink India Limited,
which holds the second GSM license granted; (2) Bharat Sanchar Nigam Limited,
the erstwhile Department of Telecommunications Services, which as the basic
incumbent was granted the third GSM license; (3) Shyam Telelink Limited, which
provides CDMA-based limited mobility services via its basic license; and (4)
Reliance Infocomm, which also provides CDMA-based





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limited mobility services via its basic license. As at December 31, 2002,
we estimate that Hexacom had a market share of 60%.

Employees

As at December 31, 2002, Hexacom had a total of 201 employees.

BRAZILIAN DISCONTINUED OPERATIONS

As at December 31, 2002, we also held, through a wholly subsidiary, TIW do
Brazil Ltda., an interest in cellular operations in Brazil in the State of
Minas Gerais and in the Amazon region. TIW do Brasil Ltda., now called TPSA do
Brasil Ltda., holds a 48.9% interest in a consortium, Telpart Participaçoes
S.A., which holds 19.9% of the equity and 52.1% of the voting shares of Telemig
Celular Participaçoes S.A., a holding company that owns an equity interest of
82.9% in Telemig Celular S.A. Telpart also holds 19.3% of the equity and 51.9%
of the voting shares of Tele Norte Celular Participaçoes S.A. Tele Norte in
turn owns a 74.95% equity interest in Amazonia Celular S.A. As at December 31,
2002, Telemig Celular S.A. and Amazonia Celular S.A. had a total of 2,863,814
subscribers and licenses covering 32.1 million persons. On March 26, 2003, we
disposed of TIW do Brazil for total consideration of US$70 million.

COMPETITION

The international wireless telecommunications industry has been
characterized by rapid growth, the emergence of new technologies and a
progressive deregulation of telecommunications services in a significant number
of countries in order to favor the introduction of new services and competition
among service providers. Although these industry conditions have created many
business opportunities, they have also intensified competition between service
providers in all of our business segments.

The success of our operations and development projects will depend on
their ability to compete, particularly with respect to pricing, services,
network quality and coverage, reliability and availability of features.

We are facing competition from telecommunications service providers using
similar wireless technologies and by other wireless telecommunications
technologies that now exist. In some instances, our competitors have been
operating for a number of years, are currently serving a substantial subscriber
base, have greater name recognition and have significantly greater financial,
technical, marketing, sales and distribution resources than those available to
us.

In the future, as we construct our GSM networks and offer enhanced
services, we will face competition from other wireless communication
technologies, such as specialized mobile radio systems, enhanced specialized
mobile radio systems, data-only, packet-switched networks and satellite-based
voice and data transmissions technologies, as well as other technologies that
have not yet been developed. We may also compete directly with additional
conventional fixed line telecommunications service providers and with cable
operators who expand into offering two-way communications services over their
networks. The introduction of two-way messaging services may allow the paging
industry to compete with us for some of the enhanced services we intend to
introduce. Several entities are currently operating or developing global
satellite networks to provide domestic and international cellular
communications services from geostationary and low earth orbit satellites. We
do not expect them to compete with land-based wireless communication services
on price. However, they may eventually augment or replace communications that
have segments of land-based wireless systems. At the very least, we may also be
challenged by existing wireless systems that have been upgraded from analog to
digital, evolving industry standards, ongoing improvements in the capacity and
quality of digital technology, shorter development cycles for new products and
enhancements, and changes in end-user requirements and preferences.

Finally, governments of developed and developing countries are
increasingly requiring bidding for licenses, which increases competition for
additional licenses and increases competition within markets to the extent
licenses are obtained by others. Our competitors in these auctions may have
substantially greater financial and other resources than we do.





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PROPERTY, PLANTS AND EQUIPMENT

We lease approximately 7,000 square feet of office space in Montreal from
the SITQ, the real estate arm of the Caisse de dépôt et placement du Québec,
for our corporate headquarters. The lease provides for average monthly rent of
approximately Cdn$30,000 including expenses. The lease terminates on May 31,
2003. As of June 1, 2003, our offices will be relocated to 1250 René-Lévesque
West, 38th floor in Montreal where we will occupy the premises pursuant to a
use of premises and service agreement entered into with Telesystem Ltd. This
sublease provides for approximately 8,700 square feet of office space for an
annual rent of approximately Cdn$385,000 including furniture.

In addition, our subsidiaries and operating companies have leases for
office space, switching facilities and transmission sites in each of the
countries where we operate the most material of which include the leases of
MobiFon and Ceský Mobil described below.

Romania. MobiFon leases approximately 9,500 square meters of office space
for its head office in Bucharest for approximately $3 million annually
including operating expenses. MobiFon also leases:



| | (1) |  | 12,700 square meters for its call center, 3 MSCs & IT operations at
its AVRIG facility in Bucharest for approximately $4.5 million annually
including operating expenses;                  
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | 9,200 square meters for its MSCs, engineering offices and warehouse
at our DBC facility in Bucharest for approximately $2.6 million
annually including operating expenses;                 
|
| | (3) |  | 2,500 square meters for our network spares warehouse in Bucharest for
approximately $225,000 annually including operating expenses;                                                         
|
| | (4) |  | 1,400 square meters for our call center in Brasov for approximately
$300,000 annually including operating expenses;                                                                         
|
| | (5) |  | an aggregate of 3,100 square meters throughout Romania for its
remaining MSCs for an aggregate of approximately $580,000 annually
including operating expenses;                            
|
| | (6) |  | an aggregate of 2,000 square meters throughout Romania for its
corporate stores for an aggregate of approximately $680,000 annually
including operational expenses;                         
|
| | (7) |  | an aggregate of 3,400 square meters for its 6 regional sales offices
and for its regional engineering offices for a total of approximately
$500,000 annually including operational expenses;
|
| | (8) |  | various locations for the operation of cell sites for an aggregate of
approximately $12.2 million annually including operating expenses.                                                    

In addition, cleaning and security costs for all MobiFon facilities are
$1.3 million annually. Also, all MobiFon expenses noted above exclude value
added tax of 19%.

Czech Republic. Ceský Mobil leases approximately 12,394 square meters of
office space for its head office in Prague for approximately $2.6 million
including operating expenses, cleaning and security. Ceský Mobil also leases:



| | (1) |  | 2,785 square meters for its call center in Chrudim for approximately
$332,000 annually including operating expenses, cleaning and security;                                                                                                     
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | an aggregate of 2,350 square meters throughout the Czech Republic
for its regional stores, retail stores and mobile stores for a total of
approximately $1.24 million annually including operating expenses but
excluding security and cleaning;
|
| | (3) |  | an aggregate of 522 square meters for its 3 regional sales offices
and for its regional operating center for a total of approximately
$68,000 annually including operating expenses, cleaning and security;                                     
|
| | (4) |  | an aggregate of 4,500sqm square meters for its 3 Mobile Switch
Centers (MSC) for a total of approximately $883,000 annually including
operating expenses, cleaning and security;                                                                
|
| | (5) |  | an aggregate of 785 square meters for its 6 Regional Operation
Centers (ROC) for a total of approximately $88,000 annually including
operating expenses, cleaning and security;                                                                 
|
| | (6) |  | lines that connect cell sites to switching centers for an aggregate
annual amount of approximately                                                                                                                                              





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| |     |  | $6.3 million; and                                                                                                                                            
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (7) |  | various properties for the operation of cell sites for an aggregate
of approximately $19 million annually including operating expenses and
maintenance costs.




ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OUR OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Our Operating and Financial Review and Prospects is intended to assist in
the understanding and assessment of the trends and significant changes in the
results of operations and financial condition of Telesystem International
Wireless Inc. Historical results may not indicate future performance. Our
forward-looking statements are subject to a variety of factors that could cause
actual results to differ materially from those contemplated by these
statements. This review should be read in conjunction with our consolidated
financial statements and accompanying notes.

OVERVIEW

We develop, acquire and operate wireless telecommunications networks. As
at December 31, 2002, our continuing operations had 3,927,000 subscribers,
which, based on our percentage ownership in our operations, represent 1,655,100
equity subscribers. Our continuing operations consist of cellular operations
in Romania, the Czech Republic and India.

Our operations licenses entitle us to serve geographical areas that
include approximately 89.2 million persons which, based on our percentage
equity ownership in our operations, represent approximately 21.2 million
persons as at December 31, 2002. As a part of our development strategy, we
selectively consider strategic opportunities in the wireless telecommunications
industry on an ongoing basis, especially in Central and Eastern Europe where we
are already present, and at any time may be engaged in various stages of
discussion regarding potential development projects, mergers, acquisitions or
divestitures in these markets.

On June 22, 2001, our shareholders adopted a special resolution approving
a consolidation of our Subordinate Voting and Multiple Voting Shares on the
basis of one post-consolidated share for five pre-consolidated shares. On
February 5, 2002, all of the Multiple Voting Shares were converted 1:1 into
Subordinate Voting Shares. On May 17, 2002, our Articles of Incorporation were
amended to re-designate the Subordinate Voting Shares as Common Shares and to
eliminate the Multiple Voting Shares from our authorized share capital. All of
our share data included in the consolidated financial statements and in this
operating and financial review and prospects document have also been adjusted
to reflect the consolidation and re-designation of Subordinate Voting Shares as
Common Shares as if they had always existed.

On July 27, 2001, we discontinued our specialized mobile radio and
enhanced specialized mobile radio operations in Western Europe which were
operated through Dolphin and its subsidiaries. Dolphin and certain of its
subsidiaries took legal steps to reach a compromise with their creditors. On
March 31, 2001, we disposed of our interest in Americel and Telet, two of our
Brazilian cellular operations and on March 5, 2002, we adopted a formal plan to
dispose of our remaining Brazilian cellular operations by way of sale of our
equity interest in Telpart within the next twelve months. However, in light of
the deterioration of the market conditions that existed at the date of the
adoption of the formal plan to dispose, the horizon for disposal has been
extended by an additional twelve months. The proceeds from the sale will
mainly be used to reimburse corporate debt. The financial position and results
of operations of Dolphin and of the Brazilian cellular operations have been
reported in our consolidated financial statements as discontinued operations.
The results of discontinued operations and the impact of the discontinuation on
our consolidated financial statements are described in the period over period
discussion of this operating and financial review and prospects.

OPERATIONS

Our cellular operations in Romania and the Czech Republic are held through
ClearWave, which was a wholly-owned subsidiary until February 14, 2001. At such
date, we issued 43.8 million Units each comprised of a ClearWave share and an
option to exchange five Units for one of our shares for no





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additional consideration, by tendering five Units back to us at any time
on or prior to June 30, 2002. We refer to this option as the exchange option.
Subsequent to such transaction, we issued an additional 2.1 million Units. As
a result of these transactions, our equity interest and voting rights in
ClearWave then decreased to 45.5% and 80.7%, respectively. In February 2002, we
purchased back 33.7 million Units outstanding pursuant to an exchange offer.
As a result, our equity interest and voting rights in ClearWave are now 85.6%
and 94.9%, respectively. (See Sources of financing).





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Romania  Cellular

Cellular services in Romania are provided by MobiFon, which holds a
license for national GSM-based cellular services. Our initial investment in
Romania was made in November 1996 and commercial operations were launched in
April 1997. ClearWaves equity interest in MobiFon increased from 54.7% to
58.9% in June 2000 and then to 63.5% in February 2001, following the sale by
certain minority shareholders of their MobiFon shares to ClearWave. On October
30, 2002, the shareholders of MobiFon approved distributions of up to $38.8
million by means of a share repurchase. Shareholders can tender their shares
between October 30, 2002 and June 30, 2003 in order to realize their pro-rata
share of this distribution amount of which ClearWaves share is $24.6 million.
In the event not all MobiFon shareholders exercise their options to sell their
entire pro-rata portion, any of the MobiFon shareholders shall have the right
to buy-back the shares sold to MobiFon at the same purchase price by December
31, 2003. A first distribution of $16.6 million was paid on October 30, 2002,
of which $15.8 million was paid to ClearWave. A further distribution of $8.8
million was paid to ClearWave on December 19, 2002. The effect of these
distributions was to decrease ClearWaves equity interest in MobiFon from 63.5%
to 62.4% and to decrease our ultimate equity interest in MobiFon from 54.4% to
53.4%. MobiFons shareholders are not required to participate pro-rata in the
share repurchase and ClearWave has also retained its right to buy-back the
shares sold to MobiFon. Accordingly, our ultimate ownership of MobiFon may
vary between 53.4% and 54.4%, throughout the tender period, depending on the
timing and the extent of each shareholders participation in the repurchase.

On December 18, 2002 we reached an agreement for the sale of 11.1 million
shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then
issued and outstanding share capital of MobiFon for a total cash consideration
of $42.5 million. The transaction, expected to close in the first quarter of
2003, is subject to the fulfillment of certain conditions. As a result of the
above transactions, our ultimate ownership in MobiFon may be reduced from the
pre share repurchase level of 54.4% down to between 48.4% and 49.4% depending
on the outcome of the share repurchase.

Czech Republic  Cellular

Ceský Mobil holds a license to provide GSM-based cellular services in the
Czech Republic and launched commercial services in March 2000. ClearWave
indirect ownership in Ceský Mobil increased from 22.3% to 23.3% following the
January 20, 2003 negotiation of capital contributions in 2001 and 2002.

ClearWave equity interest in Ceský Mobil is held through TIW Czech, in
which ClearWave owns 50.8% voting rights and a 24.2% equity interest.

As part of the creation of Ceský Mobil, a minority shareholder was given a
put option and, as a result, TIW Czech may be required to purchase the Ceský
Mobil shares owned by this minority shareholder for an amount equal to the
amount paid, in Czech Koruna, for such shares by the minority shareholder plus
interest of 7.0% per annum. This put option is exercisable during a period of
two years beginning in October 2001. As at December 31, 2002, this minority
shareholder has contributed $13 million to the equity of Ceský Mobil.
ClearWaves share of this commitment, if exercised, is $4.6 million as at
December 31, 2002 and would result in ClearWaves ultimate ownership of Ceský
Mobil increasing from 23.3% to 24.2%.

Corporate and Other

We have a 30% equity interest in TIW Asia, which has a 42.2% indirect
interest in Hexacom. Hexacom holds a license to provide GSM-based cellular
services in the state of Rajasthan, India.

On December 24, 2001, we disposed of our 49% interest in Enlaces, a paging
operation in Mexico and relinquished our joint control of the investment. On
September 27, 2001, we disposed of our interest in W-Aura, a wireless internet
operation based in Brazil.

In June 2000, following our successful bid for a third-generation mobile
services license in the U.K., TIW UMTS, the bidding entity, was sold for a
nominal amount. Concurrently with this transaction, we were granted an option
to maintain a right of ownership of up to 9.9%. In July 2000, we waived 3.5% of





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our right for net proceeds of $75.4 million. On November 8, 2000 we took
the decision not to exercise the remaining option.

In April 2000, Hunan Huajia, our 14.7% indirectly owned Chinese investee
sold all of its assets to China Unicom and Hunan Huajia was liquidated. We
also sold our 100% interest in CallMax, which held a national paging license in
the Netherlands.

ACCOUNTING TREATMENT AND SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise indicated, all financial data and discussion herein is
based upon financial statements prepared in accordance with Canadian GAAP. For
a discussion of the principal differences between Canadian GAAP and U.S. GAAP,
see Note 17 to our consolidated financial statements.

Investments

In accordance with Canadian GAAP, we consolidate revenues and expenses of
each subsidiary that we have the ability to control. In this regard, we
consolidate the results of MobiFon and Ceský Mobil. Investments, which are
jointly controlled, are reported using the proportionate consolidation method.
Under this method, our proportionate share of the assets, liabilities, income
and expenses of the joint ventures are consolidated in our financial
statements. In this regard, we proportionately consolidate the results of TIW
Asia. Americel and Telet were proportionately consolidated up to March 30,
2001, the date of their sale and Enlaces up to December 24, 2001, the date we
relinquished joint control. Investments over which the Company has significant
influence are accounted for using the equity method. In July 2000, other
partners and ourselves initiated common legal proceedings in order to
invalidate certain changes to the ownership structure of Telpart, the
consortium which holds our A-Band operations, effected by one of the partners
which, we believe, contravened the general telecommunications law and breached
certain agreements. Although we occupy one of three seats on Telparts Board
of Directors, we ceased in July 2002 to have board representation at Telparts
subsidiaries as a result of legal proceedings which we are vigorously
contesting. We maintain that we have the legal right to joint control over
these investments and are still pursuing legal proceedings to enforce this
right but for which final judgments have not yet been issued. In light of
these changes, we have ceased to proportionately account for these discontinued
operations and account for our 48.9% investment in Telpart using the equity
method. Telpart fully consolidates the results of Telemig Celular
Participaçoes S.A., and Tele Norte Celular Participaçoes S.A., in each of which
it has voting rights of 52.1% and 51.9%, respectively and equity interests of
19.9% and 19.3%, respectively.

Revenue Recognition

Revenues from airtime and roaming, including those billed in advance, are
recognized when services are provided or when contracts expire in cases where
services have not been used. Revenues from handsets and related equipment are
recognized upon shipment except for those included in a bundled package with
airtime, which are deferred and amortized over the term of the contract. When
handsets, related equipment and access to network are bundled with airtime, the
revenue for the airtime is measured at the price of the airtime on a
stand-alone basis. When prepaid cards are sold to dealers, the revenue from the
airtime is measured at the face value of the time sold but such revenue is
initially deferred until the airtime is actually used by the customer or the
card expires. Commissions to dealers are classified within selling, general
and administrative expenses.

Use of Estimates

The preparation of our consolidated financial statements in accordance
with generally accepted accounting principles in Canada requires us to use
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses during the reporting period. Such
estimate includes our assessment of the net realizable value of our investment
held for sale. Actual results could differ from these estimates.

Our business is capital intensive and property plant and equipment and
licenses had a carrying value as at December 31, 2002 of $1.1 billion. These
long-lived assets are assessed for recoverability based on our business plans
which include key assumptions and estimates regarding, among other items,
interest rates,





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growth of the economies in which we operate, the renewal of our licenses,
local tax rates, competition, foreign currency and cellular penetration rates.
Changes in these key assumptions could have significant implications on our
business plans.

Discontinued Operations

The results of our enhanced specialized mobile radio and specialized
mobile radio operations which we refer to as ESMR/SMR and the results of our
Brazilian operations have been reported as discontinued operations and are
included in net loss but reported separately for current and prior periods. The
consolidated balance sheet separately presents the current and long-term assets
and liabilities related to the discontinued operations for prior periods. For
2002, discontinued operations consist solely of our equity accounted for
investment in Telpart which is reported at the lower of its carrying value and
net realizable value as an investment held for sale. The value of our
discontinued Brazilian assets presented as investment held for sale remains
subject to periodic reassessment to the date of disposal. For the year ended
December 31, 2002, the loss from discontinued operations consists of the
realization of foreign exchange translation losses related to Telparts
operations and additional provisions for exist costs and impairments in value.
For the year ended December 31, 2001 these results include both Americels and
Telets loss from operations to March 31, 2001 and the realized gain on their
disposal as well as the loss from operations of our A-Band operations which
included accrued estimated losses to the disposal date and partial realization
of the cumulative translation adjustment account which we estimated would not
be recovered from the sale. Also included in 2001 is the loss from ESMR/SMR
operations to July 27, 2001, the date Dolphin voluntarily petitioned for
administration, and a loss we realized as a result of the deconsolidation of
Dolphin due to the loss of control to the court appointed administrators.

U.S. GAAP Accounting Treatment

U.S. GAAP requires consolidation of subsidiaries controlled by us and the
equity method of accounting for joint ventures and investees in which we have
significant influence but not a controlling interest. Net loss and
shareholders equity under the above presentations are the same.

In accordance with U.S. GAAP, the Brazil discontinued operations continued
to be reported as continuing operations until the financial statements
encompassing the date the decision to dispose of the operations were issued.
The decision to dispose of the remaining Brazilian cellular operations occurred
on March 5, 2002 and accordingly, these operations were presented as
discontinued operations in the subsequent reporting periods starting in the
three months ended March 31, 2002 whereas under Canadian GAAP, these operations
were presented as discontinued operations for the year ended December 31, 2001.
Consequently, the estimated exit costs and the loss resulting from the partial
realization of the cumulative translation adjustment, which were recognized for
Canadian GAAP in the year ended of December 31, 2001, were recognized in the
current period under U.S. GAAP.

In February 2001, as mentioned previously, we issued 43.8 million Units
pursuant to an offer for sale under a rights issue to holders of our Common
Shares. We also issued 2.1 million Units as a partial payment on acquisition of
MobiFons shares held by a non-controlling interest. On February 4, 2002,
pursuant to a court order, a provision of the Units indenture which provided
that holders of the Units would have been deemed to have exercised their
exchange option if less than $100 million of the Units, based on the issuance
price, were not exercised at June 30, 2002 was removed from the indenture.
Until February 4, 2002, the Units were accounted for as equity under Canadian
GAAP and we consolidated 100% of ClearWave as there was uncertainty at the date
of issuance as to whether the holders would elect the exchange option or be
deemed to elect the exchange option. Under U.S. GAAP, the Units are considered
to be a hybrid instrument which has embedded equity and debt components. Such
instruments are treated as liabilities under U.S. GAAP. Subsequent to February
4, 2002 and until their expiry on June 30, 2002 as a result of the deletion of
the above-described deemed exercise provision, the Units were treated as a
compound instrument under Canadian GAAP which resulted in a treatment similar
to U.S. GAAP. Consequently, the remaining Units were presented within current
liabilities for accounting purposes from February 4, 2002 until their expiry on
June 30, 2002 at which date they were accounted for as non-controlling interest
and a gain on disposal of the ClearWave shares contained in the expired Units
of $44.0 million was recognized, being the difference between the carrying
value of the Units and the related ClearWave shares.





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Between January 1, 2002 and March 13, 2002, we completed, among other
transactions, an issuer bid to acquire the Cdn$150 million 7% Equity
Subordinate Debentures (ESD) and converted 100% of the $300 million in
principal amount of 7.75% Convertible Debentures and the accrued and unpaid
interest thereon. These financial instruments were classified as debt for U.S.
GAAP whereas they were considered substantially as equity instruments for
Canadian GAAP. Consequently, the difference in the fair value of the
consideration given for them and their carrying value is being recognized as a
gain on debt restructuring for U.S. GAAP purposes whereas the difference in
their carrying value and the consideration given in exchange for them was
recorded as additional paid-in capital for Canadian GAAP purposes. [See
Sources of Financing].

On September 19, 2001, we completed an exchange of $379.5 million
principal amount at maturity of our 13 1/4% Senior Discount Notes due 2007 and
$167.0 million principal amount at maturity of our 10 1/2% Senior Discount
Notes due 2007 for $50.0 million of cash and $194.8 million of 14% Senior
Guaranteed Notes due December 30, 2003 which we refer to as 14% Notes and which
resulted in the realization of a gain on forgiveness of debt of $238.9 million.
Under Canadian GAAP, the gain on the debt exchange was determined as the
difference between the accreted value of the original debt net of unamortized
deferred issuance costs less the face value of the 14% Notes and the cash
payment of $50.0 million. Under U.S. GAAP, all future cash payments including
interest and contingent additional payments relative to the 14% Notes, as
specified by their terms, are netted against the realized gain on forgiveness
of debt. Thereafter, all cash payments under the 14% Notes will be accounted
for as reductions of the carrying amount of the 14% Notes and no interest
expense will be recognized on the 14% Notes for any period between the
restructuring and maturity of the 14% Notes.

Change in Accounting Policies

Effective January 1, 2002, we adopted the standard in Section 3062,
Goodwill and Other Intangible Assets, of the Canadian Institute of Chartered
Accountants Handbook, to be applied prospectively. Under the new standard,
goodwill is no longer amortized but tested for impairment on an annual basis
and the excess of the carrying amount over the fair value of goodwill is
charged to earnings.

The following table reconciles the reported net loss and adjusted net loss
excluding amortization of goodwill:

|                                                      |         |      |          |       |   |      |          |        |   |  |          |        |  
|----------------------------------------------------- | ------- | ---- | -------- | ----- | - | ---- | -------- | ------ | - |  | -------- | ------ | -
|For the years ended December 31,                      |         | 2002 |          | 2001  |   | 2000
|[in thousands of dollars]                             |         | $    |          | $     |   | $   
|                                                      |         |      |          |       |   |      |         
|Reported net loss                                     |         |      | (127,174 | )     |   |      | (253,714 | )      |   |  | (355,356 | )     
|Amortization of goodwill from continuing operations   |         |      |         |       |   |      | 2,607    |        |   |  | 811      |       
|Amortization of goodwill from discontinued operations |         |      |         |       |   |      | 7,969    |        |   |  | 9,900    |       
|                                                      |         |      |          |       |   |      |          |        |   |  |          |       
|Adjusted net loss                                     |         |      | (127,174 | )     |   |      | (243,138 | )      |   |  | (344,645 | )     
|                                                      |         |      |          |       |   |      |          |        |   |  |          |       
|Adjusted loss per share                               |         |      |          |       |   |      |          |        |   |  |          |       
|                                                      | Basic   |      |          | (0.29 | ) |      |          | (15.61 | ) |  |          | (23.72 | )
|                                                      | Diluted |      |          | (0.29 | ) |      |          | (6.02  | ) |  |          | (23.72 | )
|                                                      |         |      |          |       |   |      |          |        |   |  |          |       

Effective January 1, 2002, we adopted CICA 3870 Stock-based Compensation
and Other Stock-based Payments. As permitted by CICA 3870 we have applied this
change prospectively for new awards granted on or after January 1, 2002. We
have chosen to recognize no compensation when stock options are granted to
employees and directors under stock options with no cash settlement features.
The fair value of stock options is determined using the Black Scholes Option
Pricing Model. In periods prior to January 1, 2002, we recognized no
compensation when stock or stock options were issued to employees. Pro-forma
information regarding net income is required and has been determined as if we
had accounted for the employee stock options under the fair value method. The
fair value of these options was estimated at the date of grant using a Black
Scholes Option Pricing Model with the following assumptions for 2002:
weighted-average risk-free interest rates of 5.0%; dividend yields of 0%;
weighted-average volatility factors of the expected market price of the
Companys Common shares of 40.0%; and a weighted-average expected life of the
options of 5 years. For purposes of pro-forma disclosures, the estimated fair
value of the options is amortized to expense over the options vesting periods.
Our pro-forma net loss under Canadian GAAP would be increased by $4.3 million
for the year ended December 31, 2002 considering all





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options issued since the beginning of the plans and would have increased
basic and diluted loss per share by $0.01.

In 2001, we retroactively adopted the new accounting recommendations with
respect to accounting for foreign exchange gains or losses on monetary items
and non-monetary items carried at market that have a fixed or ascertainable
life extending beyond the end of the following year. Previously, these gains
and losses were deferred and amortized on a straight-line basis over the term
of the related items. As is required under U.S. GAAP, the new recommendations
require that these gains and losses be included in the determination of net
income as they arise. This change in accounting policy has been applied
retroactively and has had the following impact on the financial statements: for
2001, total assets decreased by $17.9 million, non-current liabilities related
to discontinued operations decreased by $8.4 million and deficit increased by
$9.5 million, loss from discontinued operations increased by $4.6 million, and
net loss per share increased by $0.26. For 2000, total assets decreased by $9.0
million, non-current liabilities related to discontinued operations decreased
by $23.9 million and deficit decreased by $14.9 million, loss from discontinued
operations decreased by $2.9 million, and net loss per share decreased by$0.19.

Basis of Presentation

The consolidated financial statements have been prepared on a going
concern basis, which assumes we will continue in operation for the foreseeable
future and will be able to realize our assets and discharge our liabilities and
commitments in the ordinary course of business. These financial statements do
not include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should we not be successful in our efforts to
refinance debt, raise new financing and sell assets. (See Liquidity and
Capital Resources.)

RECENT ACCOUNTING DEVELOPMENTS

The Canadian Institute of Chartered Accountants recently issued Section
3063, Impairment of long-lived Assets. This Section established standards for
the recognition, measurement and disclosure of the impairment of long-lived
assets held for use. The new standard replaces requirements on the write-down
of assets previously contained in Section 3061, Property, Plant and Equipment
and is effective for 2004. We are currently assessing the new requirements and
the impact that adoption will have on our consolidated financial statements.

COMPOSITION OF OPERATING REVENUES AND EXPENSES

Cellular operations are the primary source of our revenues. Operating
revenues include service revenues, as well as equipment revenues. Cellular
service revenues primarily consist of variable airtime charges, in-bound
interconnection charges and recurring fixed access charges. Equipment revenues
consist of revenues from the sale of handsets. Equipment sales are not
fundamental to our business. In fact, we generally offer handsets below cost,
as an incentive for our customers to subscribe to our services, and these
subsidies are accounted for as cost of revenues at the time of sale.

Our operations are capital intensive and our operating costs are composed
of significant fixed costs with relatively low variable costs that are a
function of the subscriber base level. Accordingly, subscriber growth is
critical to the improvement of operating margins and results of operations.

Operating expenses include cost of revenues, selling, general and
administrative expenses and depreciation and amortization expenses. Cost of
revenues consists of fixed costs such as leased line charges, recurring
spectrum fees, site rental and network maintenance, including overhead, as well
as variable costs such as cost of equipment sold, and interconnection charges.
Selling, general and administrative expenses consist primarily of salaries,
wages and related benefits for selling, general and administrative personnel,
advertising, promotional expenses, distribution costs, bad debt, corporate
business development and other overhead expenses. Depreciation and amortization
expenses consist primarily of depreciation recorded for our wireless
telecommunication networks, as well as amortization of definite life
intangibles such as wireless telecommunication license costs.

RESULTS OF OPERATIONS





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The following discussions compare the results of operations for the years
ended December 31, 2002, December 31, 2001 and December 31, 2000.

Consolidated Results of Operations

|                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|--------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|For the years ended December 31,                    |  | 2002 |          | 2001 |  | 2000
|(in thousands of dollars)                           |  | $    |          | $    |  | $   
|                                                    |  |      |          |      |  |     
|Operating revenues                                  |  |      | 694,454  |      |  |      | 526,225  |   |  |  | 354,052  |  
|Total operating expenses                            |  |      | 606,868  |      |  |      | 526,666  |   |  |  | 439,074  |  
|                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Operating income (loss)                             |  |      | 87,586   |      |  |      | (441     | ) |  |  | (85,022  | )
|Interest expense                                    |  |      | (106,202 | )    |  |      | (121,257 | ) |  |  | (95,689  | )
|Interest income                                     |  |      | 2,228    |      |  |      | 6,417    |   |  |  | 16,894   |  
|Foreign exchange gain (loss)                        |  |      | 2,635    |      |  |      | 3,577    |   |  |  | (5,043   | )
|Gain (loss) on investments                          |  |      | (528     | )    |  |      | (10,741  | ) |  |  | 85,669   |  
|Gain (loss) on forgiveness
(extinguishment) of debt |  |      | (10,100  | )    |  |      | 238,940  |   |  |  |         |  
|Gain on Recapitalization, Units
exchange and expiry |  |      | 91,655   |      |  |      |         |   |  |  |         |  
|Income taxes                                        |  |      | 32,502   |      |  |      |         |   |  |  |         |  
|Non-controlling interest                            |  |      | 27,187   |      |  |      | 45,894   |   |  |  | 63,519   |  
|                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations            |  |      | 61,959   |      |  |      | 162,389  |   |  |  | (19,672  | )
|Loss from discontinued operations                   |  |      | (189,133 | )    |  |      | (416,103 | ) |  |  | (335,684 | )
|                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss                                            |  |      | (127,174 | )    |  |      | (253,714 | ) |  |  | (355,356 | )
|                                                    |  |      |          |      |  |      |          |   |  |  |          |  

All subscriber numbers in the operating and financial review have been
adjusted to reflect the discontinuation of Dolphin on July 27, 2001 and our
Brazilian joint venture operations on March 5, 2002.

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

Revenues increased to $694.5 million in 2002 from $526.2 million in 2001.
MobiFons continued growth contributed $74.4 million and Ceský Mobil, which was
launched in early 2000, contributed $103.7 million of the increase. During
2001, Enlaces contributed $9.9 million in revenues.

Total operating expenses increased to $606.9 million in 2002 from $526.7
million in 2001. Included in total operating expenses are cost of revenues,
which increased to $269.0 million from $221.5 million due to the $25.5 million
and $11.6 million increase in cost of services in the Czech Republic and
Romania, respectively, incurred in support of their revenue increase. Selling,
general and administrative expenses remained stable at $183.4 million in 2002
compared to $183.1 million as a result of cost control initiatives at both
corporate and the operating subsidiaries.

Depreciation and amortization increased to $154.4 million in 2002 from
$122.0 million in 2001, an increase of $32.4 million. A higher tangible asset
base in Romania and in the Czech Republic contributed $9.1 million and $24.8
million to such increase, respectively.

Interest expense decreased by $15.1 million to $106.2 million in 2002
mainly reflecting the decrease in interest costs at the corporate level due to
debt reduction partially offset by increased costs at Ceský Mobil as a result
of their drawings on their syndicated credit facility. The foreign exchange
gain was $2.6 million in 2002, compared to $3.6 million in 2001. The 2002 gain
is represented by gains in Ceský Mobil of $4.0 million which primarily related
to the appreciation of the Czech Koruna over the Euro, partially offset by a
$1.9 million loss realized by MobiFon.

The 2002 results include a loss on investment of $0.5 million whereas the
2001 results include a loss of $9.3 million from the sale of W-Aura, a $5.9
million loss on our investment in Mexico, partly offset by a $4.4 million gain
realized from the sale of our assets in China.

The loss on debt extinguishment relates to MobiFons refinancing of its
long-term facility and consists of unamortized deferred financing costs in the
amount of $5.2 million and additional interest paid and cancellation fees
totalling $4.9 million. The 2001 gain on debt forgiveness of $238.9 million
relates to the exchange of our Senior Discount Notes for cash and 14% Notes
mentioned previously.

-49-



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The gain on recapitalization, Units exchange and expiry consists of a
$46.1 million gain realized on the exchange of the Units, $1.5 million gain
realized on the redemption of the ESDs and a $44.0 million gain on disposal of
the ClearWaves shares contained in the Units which expired on June 30, 2002.
(See Sources of Financing).

The income tax expense of $32.5 million relates to MobiFon which has
generated net income and has utilized all its net operating loss carryforwards.
We had available, as at December 31, 2002, net operating loss carry forwards
in the amount of $233.4 million of which $61.0 million was from corporate which
expire in 2009 and $172.4 million from Ceský Mobil which consists of $6.4
million, $90.7 million, $65.2 million and $10.1 million expiring in 2006, 2007,
2008 and 2009, respectively. We may be limited in our ability to use these
loss carry forwards in any one year due to the uncertainty of generating
sufficient taxable income and, as a result, the related future tax asset has
been fully provided for by the valuation allowance.

Our share of losses allocated to non-controlling interest amounted to
$27.2 million in 2002, compared to $45.9 million in 2001. The 2002
non-controlling interest is composed of our share of losses of subsidiaries
attributed to non-controlling interest in TIW Czech, partly offset by our share
of earnings attributed to non controlling interest in MobiFon and ClearWave.

As a result of the foregoing, income from continuing operations for the
year ended December 31, 2002 was $62.0 million compared to $162.4 million in
2001, and the corresponding basic and diluted earnings per share from
continuing operations was $0.13, compared to basic earnings per share of $7.71
and diluted earnings per share of $4.05 for 2001.

Our loss from discontinued operations is presented net of income tax
expenses of $0.1 million in 2002 and a recovery of $30.7 million and $13.0
million in 2001 and 2000, respectively. Subsequent to March 5, 2002, the date
we adopted our formal plan of disposal, there has been a significant
deterioration in the value of the Brazilian real relative to the U.S. dollar
and in the trading value of shares of our Brazilian cellular operations and
those of other wireless telecommunications companies in Brazil. In light of
these declines, we recorded a loss from discontinued operations of $189.1
million in 2002. Of this amount, $155.3 million consist of foreign exchange
translation losses related to these investments, of which $85.2 million were
already recorded as a reduction of shareholders equity as of December 31,
2001, and $33.8 million consist of additional provisions for exit costs and
impairment in value.

For the year ended December 31, 2001, the loss from discontinued
operations amounts to $416.1 million consisting of a loss of $446.8 million and
an income of $30.7 million related to ESMR/SMR operations and Brazilian
cellular operations, respectively. The ESMR/SMR operations include an
impairment charge for assets of $264.8 million and a loss of $4.0 million on
deconsolidation of Dolphin on July 27, 2001. The Brazilian cellular operations
include a net gain of $95.4 million from the sale on March 31, 2001 of our
16.3% equity interest in our two Brazilian entities, Americel and Telet, for
cash proceeds of $153.3 million, which reduced cash used in discontinued
operations in 2001. It also includes a loss of $15.5 million related to the
estimated operating losses and costs from the measurement date to the date of
disposal and a loss of $27.2 million as a result of a partial realization on
the cumulative translation adjustment account as we estimate that such amount
will not be recovered from the sale of our investment in Telpart.

Net loss for the year ended December 31, 2002 was $127.2 million compared
to $253.7 million in 2001. Basic net loss per share was $0.29 compared to
$16.29 in 2001 based on average shares outstanding of 455.0 million and 17.3
million, respectively.

Year Ended December 31, 2001 Compared to the Year Ended December 31, 2000

Revenues increased to $526.2 million in 2001 from $354.1 million in 2000.
MobiFons continued growth contributed $64.7 million and Ceský Mobil, which had
its first full year of operations in 2001, contributed $109.9 million of the
increase.

Total operating expenses increased to $526.7 million in 2001 from $439.1
million in 2000. Included in total operating expenses are cost of revenues,
which increased to $221.5 million from $146.7 million due





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largely to the $60.6 million increase in cost of service in the Czech
Republic incurred in support of its revenue increase. Selling, general and
administrative expenses decreased by $18.9 million to $183.1 million from
$202.0 million in 2000. Corporate and MobiFon contributed $13.5 million and
$7.9 million to such decrease, respectively.

Depreciation and amortization increased to $122.0 million in 2001 from
$90.4 million in 2000, an increase of $31.6 million. A higher tangible asset
base in Romania and in the Czech Republic contributed $11.8 million and $20.5
million to such increase, respectively.

Interest expense increased by $25.5 million to $121.2 million in 2001.
Ceský Mobil accounted for almost all of the increase due to increased
borrowings under its syndicated senior credit facility. Interest income
decreased to $6.4 million in 2001 from $16.9 million in 2000, primarily due to
the reduction in the amount of cash and equivalents held during the year at the
corporate level. The foreign exchange gain was $3.6 million in 2001, compared
to a loss of $5.1 million in 2000. The 2001 gain is a result of the
appreciation of the Czech Koruna over the Euro, which accounted for $6.8
million, partially offset by a $3.8 million loss realized by MobiFon.

Included in the loss on investments is a loss of $9.3 million from the
sale of W-Aura, a $5.9 million loss on our investment in Mexico, partly offset
by a $4.4 million gain realized from the sale of our assets in China. The 2000
results included gains on investments of $85.7 million, which included a $75.4
million gain realized for having waived our right to acquire 3.5% of the
outstanding shares of 3G UK Holdings for equivalent proceeds.

The gain on debt forgiveness of $238.9 million relates to the exchange of
our Senior Discount Notes for cash and 14% Notes mentioned previously.

We had available, as at December 31, 2001, net operating loss carry
forwards in the amount of $251.8 million of which $96.2 million was from
corporate and $155.6 million from the operating subsidiaries. The related
future tax asset has been fully provided for by the valuation allowance.

Our share of losses allocated to non-controlling interest amounted to
$45.9 million in 2001, compared to $63.5 million in 2000. The 2001
non-controlling interest is composed of our share of losses of subsidiaries
attributed to non-controlling interest in TIW Czech, partly offset by our share
of earnings attributed to non-controlling interest in MobiFon.

As a result of the foregoing, income from continuing operations for the
year ended December 31, 2001 was $162.4 million compared to a loss of $19.7
million in 2000, and the corresponding basic earnings per share from continuing
operations was $7.71, diluted earnings per share was $4.05 compared to basic
diluted loss per share of $2.83 million for 2000.

Our loss from discontinued operations is presented net of income tax
recoveries of $30.7 million and $13.0 million in 2001 and 2000, respectively.
For the year ended December 31, 2001, the loss from discontinued operations
amounts to $416.1 million consisting of a loss of $446.8 million and an income
of $30.7 million related to SMR/ESMR operations and Brazilian cellular joint
ventures operations, respectively.

The SMR/ESMR operations include an impairment charge for assets of $264.8
million and a loss of $4.0 million on deconsolidation of Dolphin on July 27,
2001. The Brazilian cellular operations include a net gain of $95.4 million
from the sale on March 31, 2001 of our 16.3% equity interest in our two
Brazilian entities, Americel, and Telet, for cash proceeds of $153.3 million,
which reduced cash used in discontinued operations in 2001. It also includes a
loss of $15.5 million related to the estimated operating losses and costs from
the measurement date to the date of disposal and a loss of $27.2 million as a
result of a partial realization on the cumulative translation adjustment
account as we estimate that such amount will not be recovered from the sale of
the Companys A-Band operations in Brazil.

Net loss for the year ended December 31, 2001 was $253.7 million compared
to $355.4 million in 2000. Basic net loss per share was $16.29 compared to
$24.41 in 2000 based on average shares outstanding of 17.3 million and 15.6
million, respectively.





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Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Revenues increased to $354.1 million in 2000 from $251.8 million in 1999.
MobiFons continued growth contributed $73.6 million and Ceský Mobil, which was
launched in early 2000, contributed $34.0 million of the increase.

Total operating expenses increased to $439.1 million in 2000 from $290.3
million in 1999. Included in total operating expenses are cost of revenues,
which increased to $146.7 million from $95.3 million due in part to the
commercial launch of Ceský Mobil in March 2000. Selling, general and
administrative expenses increased by $69.1 million to $202.0 million in 2000.
Ceský Mobils launch in early 2000 accounted for $58.7 million of the increase.

Depreciation and amortization increased to $90.4 million in 2000 from
$62.2 million in 1999, an increase of $28.2 million. A higher tangible asset
base in Romania accounted for $13.7 million of the increase. The depreciation
of the Czech Republic network assets commenced in 2000 and accounted for $22.0
million.

Interest expense increased by $21.8 million to $95.7 million in 2000.
MobiFons and our higher level of borrowings under our credit facilities
accounted for this increase. Interest income increased to $16.9 million in 2000
from $1.8 million in 1999, primarily due to the temporary cash surplus during
the year at the corporate level, resulting from the issuance of shares and
convertible debentures, as well as the proceeds from the waiver of our rights
in the U.K. UMTS operations. The foreign exchange loss was $5.1 million in
2000, compared to $17.7 million in 1999. The 2000 loss is a result of the
devaluation of the Lei in Romania, which accounted for $6.5 million.

In connection with the entry of new shareholders in 3G UK Holdings, in
July 2000, we received $75.4 million and recognized a corresponding gain in
exchange for waiving our right to acquire 3.5% of the outstanding shares of 3G
UK Holdings. Included in the gain on investments is also the gain of $4.4
million recognized from the sale of the assets of our Chinese investee and the
recovery of a loan previously written-down, for an amount of $6.2 million. The
1999 results included gains on investments of $37.8 million.

Due to the uncertainty of generating sufficient taxable income, the tax
benefit of our losses has been fully provided for by the valuation allowance.

Share of losses allocated to non-controlling interest amounted to $63.5
million in 2000, compared to share of earnings to non-controlling interests of
$15.9 million in 1999. The 2000 non-controlling interest is composed of the
share of losses of subsidiaries attributed to non-controlling interest in TIW
Czech, partly offset by the share of earnings attributed to non-controlling
interest in MobiFon.

As a result of the foregoing, loss from continuing operations for the year
ended December 31, 2000 was $19.7 million compared to $74.6 million in 1999,
and the corresponding basic and diluted loss per share from continuing
operations was $2.83 in 2000 compared to $5.43 in 1999.

Loss from discontinued operations increased to $335.7 million for the year
ended December 31, 2000 compared to $80.2 million for the prior year period.
Included against loss from discontinued operations for the year ended December
31, 1999 are dilution gains of $152.2 million. Excluding these gains, loss from
discontinued operations was $232.4 million for the year ended December 31,
1999.

Net loss for the year ended December 31, 2000 was $355.4 million compared
to $154.8 million in 1999. Basic and diluted net loss per share was $24.41 in
2000 compared to $10.90 in 1999 based on average shares outstanding of 15.6
million and 14.7 million, respectively.





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MobiFon

|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |         | 
|--------------------------------------------------------- | -------------------------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  |  | ------- | ------- | 
|For the years ended December 31,                          |                                              | 2002 |         | 2001    |  | 2000
|(in thousands of dollars)                                 |                                              | $    |         | $       |  | $   
|                                                          |                                              |      |         |         |  |     
|Revenues                                                  |                                              |      |         |         |  |      |         |         |  |  |         |        
|                                                          | Services                                     |      |         | 425,567 |  |      |         | 359,868 |  |  |         | 299,470 | 
|                                                          | Equipment                                    |      |         | 21,214  |  |      |         | 12,475  |  |  |         | 8,097   | 
|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |        
|                                                          |                                              |      | 446,781 |         |  |      | 372,343 |         |  |  | 307,567 |        
|                                                          | Cost of services                             |      |         | 81,462  |  |      |         | 69,835  |  |  |         | 62,366  | 
|                                                          | Cost of equipment                            |      |         | 39,160  |  |      |         | 27,236  |  |  |         | 18,347  | 
|                                                          | Selling, general and administrative expenses |      |         | 94,613  |  |      |         | 88,836  |  |  |         | 96,735  | 
|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |        
|Operating income before depreciation and
amortization (1) |                                              |      | 231,546 |         |  |      | 186,436 |         |  |  | 130,119 |        
|                                                          | Depreciation and amortization                |      |         | 86,919  |  |      |         | 77,791  |  |  |         | 65,965  | 
|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |        
|Operating income                                          |                                              |      | 144,627 |         |  |      | 108,645 |         |  |  | 64,154  |        
|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |        

We use the term operating income before depreciation and amortization,
also defined as EBITDA, which may not be comparable to similarity titled
measures reported by other companies. Operating income before depreciation and
amortization should not be considered in isolation or as an alternative
measurement of operating performance or liquidity to net income (loss),
operating income (loss), cash flows from operating activities or any other
measure of performance under GAAP. We believe that operating income (loss)
before depreciation and amortization is viewed as a relevant supplemental
measure of performance in the wireless telecommunications industry.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

MobiFons service revenues increased to $425.6 million in 2002 from $359.9
million in 2001, reflecting the continued subscriber growth. MobiFon added
631,600 cellular subscribers, compared to 831,800 net additions in the same
period in 2001 to reach 2,635,200 subscribers at as December 31, 2002 compared
to 2,003,600 at the end of 2001.

Cost of service revenues decreased as a percentage of service revenues to
19.1% in 2002 compared to 19.4% in 2001 and was $81.5 million in 2002 compared
to $69.8 million in 2001. The decrease as a percentage of service revenues was
largely attributable to a lower proportion of interconnection costs associated
with higher on network calling. The cost of equipment continues to exceed
associated equipment revenues, consistent with our policy to sell equipment at
prices that will attract new subscribers.

Selling, general and administrative expenses increased to $94.6 million in
2002 compared to $88.8 million in the previous year. However, as a percent of
service revenue, selling general and administrative expenses decreased to 22.2%
for 2002 compared to 24.7% for 2001 as a result of both the continued success
from the implementation of a cost control program in 2001 and strong credit
policies which reduced bad debt expense. MobiFons operating income before
depreciation and amortization increased to $231.5 million in 2002 from $186.4
million in 2001 due to the above factors.

Depreciation and amortization increased to $86.9 million in 2002 from
$77.8 million the previous year as a result of network expansion in Romania
during 2002 and 2001 and due to the shortening of estimated lives on certain
assets in the fourth quarter of 2002. As a result of the foregoing, the
operating income increased to $144.6 million in 2002 from $108.6 million in
2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

MobiFons service revenues increased to $359.9 million in 2001 from $299.5
million in 2000, reflecting the continued subscriber growth. MobiFon added
831,800 cellular subscribers, compared to 469,700 net additions in the same
period in 2000, to reach 2,003,600 subscribers at as December 31, 2001 compared
to 1,171,800 at the end of 2000.

Cost of service revenues decreased as a percentage of service revenues to
19.4% in 2001 compared to 20.8% in 2000 and was $69.8 million in 2001 compared
to $62.3 million in 2000. The decrease as a percentage of service revenues was
attributable to continued tight control over operating costs and economies of
scale. The cost of equipment continues to exceed associated equipment revenues,
consistent with our policy to sell equipment at prices that will attract new
subscribers.





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Selling, general and administrative expenses decreased to $88.8 million in
2001 compared to $96.7 million in the previous year, as a result of both the
continued success from the implementation of a cost control program in 2000 and
strong credit policies which reduced bad debt expense. MobiFons operating
income before depreciation and amortization increased to $186.4 million in 2001
from $130.1 million in 2000 due to the above factors.

Depreciation and amortization increased to $77.8 million in 2001 from
$66.0 million the previous year as a result of network expansion in Romania
during 2001 and 2000. As a result of the foregoing, the operating income
increased to $108.6 million in 2001 from $64.2 million in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

MobiFons service revenues increased to $299.5 million in 2000 from $211.4
million in 1999, reflecting continued subscriber growth. MobiFons subscriber
base increased to 1,171,800 at the end of 2000 from 702,100 at the end of 1999.

Cost of service revenues decreased as a percentage of revenues to 20.8% in
2000 compared to 24.0% in 1999 and was $62.4 million in 2000 compared to $50.7
million in 1999. Most of the decrease as a percentage of revenues was
attributed to continued tight controls over operational expenses and economies
of scale. The cost of equipment continued to exceed associated revenues,
consistent with our practice to sell equipment at prices that will attract new
subscribers.

Selling, general and administrative expenses remained stable at $96.7
million in 2000 compared to $95.7 million in the previous year, despite the
growth of its subscriber base reflecting the implementation of a cost control
program and a reduction in selling and marketing expenses compared to 1999.
MobiFons operating income before depreciation and amortization increased to
$130.1 million in 2000 from $54.9 million in 1999 due to subscriber growth.

Depreciation and amortization increased to $66.0 million in 2000 from
$52.2 million the previous year as a result of the significant network
expansion in Romania during late 1999 and 2000. As a result of the foregoing,
the operating income increased to $64.2 million in 2000 from $2.7 million in
1999.

Ceský Mobil

|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 
|------------------------------------------------------------ | -------------------------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  |  | -------- | ------ | 
|For the years ended December 31,                             |                                              | 2002 |         | 2001    |  | 2000
|(in thousands of dollars)                                    |                                              | $    |         | $       |  | $   
|                                                             |                                              |      |         |         |  |     
|Revenues                                                     |                                              |      |         |         |  |      |         |         |  |  |          |       
|                                                             | Services                                     |      |         | 227,342 |  |      |         | 125,928 |  |  |          | 21,508 | 
|                                                             | Equipment                                    |      |         | 20,331  |  |      |         | 18,037  |  |  |          | 12,529 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |       
|                                                             |                                              |      | 247,673 |         |  |      | 143,965 |         |  |  | 34,037   |       
|                                                             | Cost of services                             |      |         | 122,741 |  |      |         | 97,275  |  |  |          | 36,654 | 
|                                                             | Cost of equipment                            |      |         | 25,594  |  |      |         | 22,323  |  |  |          | 15,969 | 
|                                                             | Selling, general and
administrative expenses |      |         | 79,143  |  |      |         | 65,921  |  |  |          | 63,418 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |       
|Operating income (loss) before
depreciation and amortization |                                              |      | 20,195  |         |  |      | (41,554 | )       |  |  | (82,004  | )     
|                                                             | Depreciation and amortization                |      |         | 67,367  |  |      |         | 42,562  |  |  |          | 22,056 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |       
|Operating loss                                               |                                              |      | (47,172 | )       |  |      | (84,116 | )       |  |  | (104,060 | )     
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |       

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Ceský Mobils service revenues increased to $227.3 million in 2002 from
$125.9 million in 2001, reflecting continued subscriber growth and the effect
of the appreciation of the Koruna versus the U.S. dollar. Ceský Mobil added
321,400 net cellular subscribers, compared to 556,700 net additions in the same
period in 2001, to reach 1,179,800 subscribers as at December 31, 2002 compared
to 858,400 at the end of 2001.





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Cost of service revenues increased by 26.2% to $122.7 million in 2002
compared to $97.3 million in 2001 in support of the 80.5% increase in service
revenues. Cost of equipment continued to be greater than associated revenues
consistent with our practice to sell equipment at prices to attract new
subscribers.

Selling, general and administrative expenses increased by 20.1% to $79.0
million despite the 37.4% subscriber growth in 2002. Ceský Mobils operating
income before depreciation and amortization increased to $20.2 million in 2002
from an operating loss before depreciation and amortization of $41.6 million in
2001 due primarily to revenue increases from subscriber growth coupled with
economies of scale and tight controls over operating costs which constrained
operating costs increases.

Depreciation and amortization increased to $67.4 million in 2002 from
$42.6 million the previous year as a result of network expansion during 2002
and 2001. As a result of the foregoing, the operating loss decreased to $47.2
million in 2002 from $84.1 million in 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Ceský Mobils service revenues increased to $125.9 million in 2001 from
$21.5 million in 2000, reflecting continued subscriber growth and a full year
of operations in 2001 compared to 10 months of commercial operations in 2000.
Ceský Mobil added 556,700 net cellular subscribers, compared to 301,700 net
additions in the same period in 2000, to reach 858,400 subscribers as at
December 31, 2001 compared to 301,700 at the end of 2000.

Cost of service revenues increased by 165% to $97.3 million in 2001
compared to $36.7 million in 2000 in support of the 486% increase in service
revenues. Cost of equipment continued to be slightly greater than associated
revenues consistent with our practice to sell equipment at prices to attract
new subscribers.

Selling, general and administrative expenses remained stable at $65.9
million despite the strong subscriber growth in 2001 due to tight cost controls
compared to $63.4 million in the previous year. Ceský Mobils operating loss
before depreciation and amortization decreased to $41.6 million in 2001 from
$82.0 million in 2000 due primarily to subscriber growth.

Depreciation and amortization increased to $42.6 million in 2001 from
$22.1 million the previous year as a result of network expansion during 1999
and 2000. As a result of the foregoing, the operating loss decreased to $84.1
million in 2001 from $104.1 million in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Ceský Mobils service revenues were $21.5 million in 2000, reflecting the
launch of commercial operations in March 2000. Ceský Mobils subscriber base
was 301,700 at the end of 2000.

Cost of service revenues was $36.7 million in 2000. Cost of equipment was
higher than associated revenues consistent with our practice to sell equipment
at prices to attract new customers and incentives offered on commercial launch.

Selling, general and administrative expenses were $63.4 million in 2000
compared to $4.7 million in the previous year, due to the commercial launch of
operations in March 2000 and related subscriber and operations growth. Ceský
Mobils operating loss before depreciation and amortization increased to $82.0
million in 2000 compared to $4.7 million in 1999 due to the above.

Depreciation and amortization increased to $22.1 million in 2000 from nil
the previous year as a result of network expansion during 1999 and 2000. As a
result of the foregoing, the operating loss was $104.1 million in 2000 compared
to $4.7 million in 1999.

Liquidity and Capital Resources

The following table is a summary of our consolidated cash flows for the
years ended December 31, 2002, 2001, and 2000.





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Cash Flow Data

|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|For the years ended December 31,                                    |  | 2002 |          | 2001 |  | 2000
|(in thousands of dollars)                                           |  | $    |          | $    |  | $   
|                                                                    |  |      |          |      |  |     
|Cash provided by operating activities                               |  |      | 125,147  |      |  |      | 8,779    |   |  |  | 51,950   |  
|Cash used in investing activities                                   |  |      | (242,213 | )    |  |      | (306,571 | ) |  |  | (264,749 | )
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|                                                                    |  |      | (117,066 | )    |  |      | (297,792 | ) |  |  | (212,799 | )
|Cash provided by financing activities                               |  |      | 98,654   |      |  |      | 332,602  |   |  |  | 796,827  |  
|Net effect of exchange rate translation on cash
and cash equivalent |  |      | 721      |      |  |      | (628     | ) |  |  | 4,436    |  
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Cash provided by (used in) continuing operations                    |  |      | (17,691  | )    |  |      | 34,182   |   |  |  | 588,464  |  
|Cash used in discontinued operations                                |  |      | (7,063   | )    |  |      | (79,397  | ) |  |  | (504,148 | )
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Increase (decrease) in cash and cash equivalents                    |  |      | (24,754  | )    |  |      | (45,215  | ) |  |  | 84,316   |  
|Cash and cash equivalents, beginning of period                      |  |      | 85,460   |      |  |      | 130,675  |   |  |  | 46,359   |  
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Cash and cash equivalents, end of period                            |  |      | 60,706   |      |  |      | 85,460   |   |  |  | 130,675  |  
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

For the year ended December 31, 2002, operating activities provided cash
of $125.1 million compared to $8.8 million for the same period last year. The
increase year-over-year is mainly explained by the $120.5 million increase in
operating income before depreciation and amortization. Furthermore, results
for 2001 include a significant increase in working capital mainly related to
Ceský Mobil.

Investing activities used cash of $242.2 million for the year ended
December 31, 2002, essentially for the expansion for cellular networks in
Romania and the Czech Republic. This compares to cash used in investing
activities of $306.6 million for the year ended December 31, 2001. MobiFons
and Ceský Mobils operations utilized cash of $100.3 million and $142.6
million, respectively, for 2002 capital expenditures.

For the year ended December 31, 2002, financing activities generated cash
of $98.7 million mainly explained by proceeds from our recapitalization as
described in Note 8 of our consolidated financial statements, subsidiarys
shares issued to non-controlling interests and net borrowings of debt of $41.2
million, $29.9 million and $47.0 million, respectively, offset by subsidiarys
distributions paid to non-controlling interests of $10.8 million and financing
costs of $8.6 million. For the year ended 2001, cash provided by financing
activities was $332.6 million mainly explained by net proceeds from the
issuance of shares, warrants and units of $263.8 million, proceeds from
subsidiarys shares issued to non-controlling interest of $65.8 million and by
borrowings of debt net of repayments of $3.1 million.

Cash and cash equivalents as of December 31, 2002 totaled $60.7 million,
including $14.3 million at the corporate level. As of December 31, 2002, total
consolidated indebtedness was $1.0 billion, of which $272.6 million was at the
corporate level, $267.7 million at MobiFon and $470.2 at Ceský Mobil. Total
indebtedness at the TIW level was mainly comprised of $47.4 million due under
the corporate credit facility and $223.9 million in 14% Notes and related
accrued contingent payments.

Cash used in discontinued operations was $7.1 million and reflects the
costs incurred in relation to the plan of disposal of our Brazilian assets.
For 2001, cash used in discontinued operations was to $79.4 million. The use
of cash in 2001 reflects the increase in operating loss before depreciation and
amortization caused in Dolphin by lower service revenues and higher costs
related to the build-out in the U.K., the launch of services in France as well
as costs associated with network deployment in Germany offset by proceeds of
$153.3 million from the sale of our Brazilian B-Band joint venture operations.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Cash provided by operating activities was $8.8 million for the year ended
December 31, 2001, compared to $52.0 million for 2000. The year-over-year
decline is entirely attributable to increased working capital needs at Ceský
Mobil as MobiFons operating income before depreciation and amortization showed
continued growth and Ceský Mobils operating loss before depreciation and
amortization was reduced relative to that experienced in 2000.





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Investing activities used cash of $306.6 million during the year ended
December 31, 2001, reflecting $286.5 million of cash used for acquisitions of
property, plant and equipment and $23.2 million for the acquisition of
additional shares of MobiFon. MobiFon and Ceský Mobil operations accounted for
$125.4 million and $161.1 million of the capital spending, respectively.

Financing activities generated cash of $332.6 million for the year ended
December 31, 2001, reflecting the issuance of Units under a rights offering for
net proceeds of $248.6 million. We also generated $114.1 million and $65.8
million by borrowing under our long-term debt facilities and from proceeds from
investees shares issued to non-controlling shareholders, respectively. These
sources of funds were offset by $55.8 million of payments made in connection
with the previously described high yield notes exchange, repayment of other
long-term debt, and by the use of $29.5 million in connection with the decrease
of short-term loans.

Total consolidated indebtedness as of December 31, 2001 was $912.2
million, including $290.7 million at the corporate level.

Cash used in discontinued operations increased to $79.4 million for the
year ended December 31, 2001. The use of cash reflects the increase in
operating loss before depreciation and amortization caused in Dolphin by lower
service revenues and higher costs related to the build-out in the U.K., the
launch of services in France as well as costs associated with network
deployment in Germany offset by proceeds of $153.3 million from the sale of our
Brazilian B-Band joint venture operations.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Cash provided by operating activities in 2000 was $52.0 million compared
to cash used in operating activities of $12.1 million in 1999. The difference
is mainly due to an improvement in working capital partially offset by a
reduction in operating income before depreciation and amortization.

Cash used in investing activities in 2000 amounted to $264.7 million.
This amount mainly relates to the acquisition and build-out of property, plant
and equipment in MobiFon and Ceský Mobil for $85.0 million and $239.5 million,
respectively, partly offset by proceeds of $75.4 million from the waiver of our
right to acquire a 3.5% interest in 3G Holdings.

Cash provided by financing activities in 2000 was $796.8 million compared
to $279.8 million in 1999. Of the 2000 amount, $107.8 million related to
proceeds of shares issued, $107.2 million relates to increase in short-term
loans, $169.4 million relates to increase of long-term debt, net of repayments,
of which $187.2 million is attributable to Ceský Mobil, and $291.0 million was
provided by the issuance of convertible debentures at the corporate level.

Cash used in discontinued operations was $504.1 million for the year ended
December 31, 2000 compared to $141.3 million for the corresponding prior
period. The increase is mainly due to the build-out of the ESMR network in the
U.K., and the investment of $155.7 million in our Brazilian cellular joint
ventures.

SOURCES OF FINANCING

At the corporate level, as at December 31, 2002, we had cash and cash
equivalents of $14.3 million and we had total debt of $272.6 million,
consisting mainly of the 14% Notes and related accrued contingent payments and
loans under the corporate credit facility. The following is a summary
discussion of financing activities conducted at the corporate level.

From our inception to May 1997, substantially all of our cash requirements
were met by the proceeds from private sales of equity securities, which were
made pursuant to subscription agreements entered into over the 1994 to 1996
period, and totalled $240.0 million. In May 1997, we completed an initial
public offering on the the TSX of 13,000,000 Common Shares (pre-share capital
consolidation) at a price of Cdn$13.50 per share (pre-share capital
consolidation) for proceeds of $118.5 million, net of issue costs in the amount
of $7.6 million. In June and July 1998, we completed a public equity offering
issuing 7,899,094 Common Shares (pre-share capital consolidation) and 416,794
Multiple Voting Shares (pre-share capital consolidation) at prices of $21.35
per share and $21.50 per share (pre-share capital consolidation),





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respectively. Concurrently, our shares were listed on the Nasdaq. The
proceeds from this issue were $169.3 million, net of issue costs in the amount
of $8.3 million. In February 2000, we completed the issuance of Cdn$148.5
million (or $102.0 million at the time of issue) of Common Shares. Concurrently
with such public offering, Telesystem Ltd., purchased Cdn$8.6 million (or $5.9
million at the time of issue) of Multiple Voting Shares in order to maintain
the voting interest of its Multiple Voting Shares. The net proceeds of the public offering, combined with Telesystem Ltds purchase
of Multiple Voting Shares, were approximately $102.8 million after deducting
underwriting fees and other expenses in the amount of $5.1 million.

In June
1997, we issued 13 1/4% Senior Discount Notes with a nominal value
of $380.0 million. In October 1997, we issued 10 1/2% Senior Discount Notes with
a nominal value of $167.0 million. Total gross proceeds from these issues were
$299.9 million, before issue costs in the amount of $11.8 million. On
September 19, 2001, we completed the exchange mentioned previously, of
substantially all of our Senior Discount Notes for $50.0 million of cash and
$194.8 million of 14% Notes due December 30, 2003 resulting in the realization
of a gain on forgiveness of debt of $238.9 million.

Our 14% Notes mature on December 30, 2003. Interest on our 14% Notes
accrues at a rate of 14% per annum and is payable semi-annually on each June 30
and December 30. The interest payments on December 30, 2001 and June 30, 2002
were made by the issuance of $6.7 million and $14.1 million of additional 14%
Notes. We have the option to redeem our 14% Notes, at any time, in whole or in
part, at a price equal to 100% of the principal amount plus accrued and unpaid
interest. The 14% Notes are guaranteed by our wholly-owned subsidiary
Telesystem International Wireless Corporation, which we refer to as the
Guarantor. The guarantee is secured by a lien on the capital stock of TIW
Latin America, a holding company which holds our investments in cellular
operations in Brazil and by a lien on capital stock of ClearWave held by the
Guarantor. The liens granted by the Guarantor in favor of the holders of the
14% Notes rank second in priority to the lien it granted to the lenders under
the corporate credit facility.

Our 14% Notes contain mandatory redemption provisions, which will require
their repayment upon the sale of our interests in either ClearWave, or our
direct or indirect interests in TIW Latin America; TIW do Brasil and Telpart.
Furthermore, distributions from Telpart or ClearWave will trigger mandatory
repayments second to the repayment of the corporate credit facility. Our 14%
Notes have covenants which, among others things, limit our ability to incur
indebtedness, create liens and require us to make an offer to repurchase all or
any part of our 14% Notes subsequent to a change in control. In addition, our
14% Notes prohibit us from reducing, under certain conditions, our ownership in
ClearWave. On December 30, 2002, $5.0 million of additional 14% Notes were
issued to holders and $10.0 million will be issued on June 30, 2003 unless, on
or prior to such date, at least $72.4 million in principal amount of 14% Notes
have been redeemed or repurchased.

In February 1999, we completed the issuance of Cdn$150.0 million (or $98.6
million at the time of issue) of 7.00% equity subordinated debentures due
February 15, 2002, which we refer to as our ESD, with cash interest payable
semi-annually commencing August 1999. The net proceeds from the issuance of the
7.00% equity subordinated debentures were Cdn$145.7 million (or $95.8 million
at the time of issue).

On February 5, 2002, we completed an issuer bid to acquire the Cdn$150
million ESDs. Pursuant to the issuer bid and concurrent consent request, we
paid Cdn$6.8 million, issued 2.5 million warrants, each entitling the holder to
purchase one Common Share at a price of Cdn$1.61 at any time before March 31,
2003, issued approximately 37.7 million Common Shares and approximately 3.7
million warrants, each entitling the holder to purchase one Common Share at a
price of Cdn$1.61 at any time before September 30, 2002 for substantially all
of the ESDs. We amended the remaining Cdn$5.0 million in principal amount of
ESDs to, among other things, extend the maturity of the ESDs to December 2006,
reduce the principal amount of each ESD to Cdn$250, provide for our right to
convert the ESDs at maturity into Common Shares at a price equal to the greater
of Cdn$1.00 and the then current market price of the Common Shares and provide
for the optional conversion at maturity into Common Shares at a price of
Cdn$4.40. As a result, we currently have an aggregate of Cdn$1.25 million
[$0.8 million] in amended ESDs outstanding.

In July 1999, we entered into a corporate credit facility with certain
financial institutions, providing for aggregate borrowing capacity of $140.0
million. Our corporate credit facility was amended on July 3, 2001





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and subsequently on February 4, 2002, August 8, 2002 and December 6, 2002
resulting in the extension of the maturity to June 30, 2003. We made loan
repayments during 2002 of $36.1 million bringing the amount available and fully
drawn under the facility to $47.4 million. The facility is collateralized by
substantially all of our assets and bears interest at U.S. base rate plus a
margin of 8.36% or LIBOR plus a margin of 9.36%. Under the amended terms of
the facility, any amount received by us and flowing from distributions paid by our Central and Eastern European operations, other
than amounts representing ClearWaves and our operational and investment
requirements to June 30, 2003, will be used to further reduce the amount
outstanding on the corporate credit facility.

On March 8, 2000, we issued $300.0 million of 7.75% Convertible Debentures
for net cash proceeds of $291.0 million. On February 5, 2002, we converted 100%
of the $300 million in principal amount of 7.75% Convertible Debentures and the
accrued and unpaid interest of $11.6 million due September 2001 for 154.5
million Common Shares. We also issued warrants to a holder to purchase up to a
total of 15 million Common Shares at $1.00 per share on or before September 30,
2002 which were not exercised.

On February 14, 2001 we issued 43.8 million Units for gross proceeds of
Cdn$396.5 million ($260.4 million) before issue costs of Cdn$18.2 million
($11.9 million) pursuant to a rights offering made to holders of our Multiple
and Common Shares. We also issued 2.1 million Units as a partial payment on
acquisition of MobiFons shares held by a non-controlling interest. On
December 11, 2001, we launched an exchange offer to repurchase all outstanding
Units. On February 5, 2002, in connection with such exchange offer and the
financing commitments under a private placement subscription agreement between
Telesystem Ltd, and certain of our other stakeholders, we acquired 33.7 million
Units and raised $51.7 million in gross proceeds. The raising of these funds
was in addition to a December 14, 2001 private placement resulting in the
issuance of 24.5 million warrants at a negotiated price of approximately $0.61
each, exercisable for one Common Share or one non-voting Preferred Share
convertible at the holders option into our common equity at no additional cost
for a cash consideration of $14.5 million net of issuance costs of $0.5
million. We refer to these warrants as our Special Warrants. Pursuant to the
February 5, 2002 private placement and exchange offer on the Units, we have
issued (a) an additional 269.2 million in aggregate of Common Shares and
Special Warrants (b) 4.8 million warrants, each allowing the holder to purchase
one Common Share at a price $1.00 on or before March 31, 2003 and (c) 8.5
million warrants, each allowing the holder to purchase one Common Share at a
price Cdn$1.59 on or before March 31, 2003. The Unit acquisition has resulted
in an increase in our equity interest and voting rights in ClearWave from 45.5%
and 80.7% respectively, to 85.6% and 94.9%, respectively.

On March 13, 2002, the outstanding 35,000,000 Special Warrants were
converted into 35,000,000 non-voting Preferred Shares for no additional
considerations.

As a result of the above transactions, as of December 31, 2002, we had
467.2 million Common Shares, 35.0 million Preferred Shares and 15.8 million
outstanding warrants expiring March 31, 2003.

During 2002, MobiFon approved aggregate distributions of $66.3 million
consisting of dividends of $27.5 million and share repurchases of $38.8
million. ClearWave received $42.0 million of these distributions in 2002 and
we received $34.0 million by way of the repayment of the inter-company demand
loan and accrued interest thereto between us and ClearWave. On October 30,
2002, the shareholders of MobiFon approved distributions of up to $38.8 million
by means of a share repurchase.

Shareholders can tender their shares between October 30, 2002 and June 30,
2003 in order to realize their pro-rata share of this distribution amount of
which ClearWaves share is $24.6 million and is included in the $42.0 million
of distributions received by ClearWave in 2002. In the event not all MobiFon
shareholders exercise their options to sell their entire pro-rata portion, any
of the MobiFon shareholders shall have the right to buy-back the shares sold to
MobiFon at the same purchase price by December 31, 2003. The effect of these
distributions was to decrease our ultimate equity interest in MobiFon from
54.4% to 53.4%. MobiFons shareholders are not required to participate
pro-rata in the share repurchase and ClearWave has also retained its right to
buy-back the shares sold to MobiFon. Accordingly, our ultimate ownership of
MobiFon may vary between 53.4% and 54.4%, throughout the tender period,
depending on the timing and the extent of each shareholders participation in
the repurchase. As it is not determinable that all shareholders of MobiFon
will participate pro-rata in the share repurchase, pending expiration of the
tender period, distributions made through share repurchases have been accounted
for in a manner similar to





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dividends declared by a subsidiary and the amount that MobiFon is
committed to distribute to non-controlling interests is presented within
current liabilities.

On December 18, 2002, we reached an agreement for the sale of 11.1 million
shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then
issued and outstanding share capital of MobiFon for a total cash consideration of $42.5 million. The transaction,
expected to close in the first quarter of 2003, is subject to the fulfillment
of certain conditions. As a result of the above transactions, our ultimate
ownership in MobiFon may be reduced from the pre share repurchase level of
54.4% down to between 48.4% and 49.4% depending on the outcome of the share
repurchase. Proceeds from this sale will be used to reduce the corporate
credit facility.

At the operating company level, we seek, where possible, to finance the
cash requirements of developing and expanding our operations on a
project-by-project basis. Although projects are typically financed by
contributions from our partners and us in the form of equity and shareholder
advances, we seek to obtain third party financing after the initial stages of a
projects development. Sources of financing at the operating company level may
include vendor financing provided by equipment suppliers, project financing
from commercial banks and international financial institutions such as the
European Bank for Reconstruction and Development, which we refer to as the
EBRD, bank lines of credit and the sale of debt securities by the operating
companies.

MobiFon

MobiFons cash requirements as at December 31, 2002 have been met by
aggregate capital contributions of $270.6 million and borrowings under its bank
facilities, net of repayments and capital leases, of $255.0 million and $12.7
million, respectively.

In September 1997, the EBRD arranged a $190.0 million loan facility for
MobiFon. This EBRD facility included a $10.0 million subordinate loan bearing
interest at 15% maturing in 2003, nine-year senior loans totalling $110.0
million bearing interest at LIBOR plus 3.25% and a $70.0 million eight-year
syndicated senior loan bearing interest at LIBOR plus 3.05%. MobiFon entered
into agreements, including interest rate swap agreements, pursuant to which
$167.2 million of the above borrowings had effective fixed interest rates from
8.35% to 9.75% until April 2002.

In January 1999, MobiFon closed a second long-term loan facility totalling
$105.0 million, jointly arranged by ABN AMRO N.V. and the EBRD. This second
EBRD facility comprised loans of $40.0 million and a $65.0 million syndicated
export credit facility. Borrowings under this facility bore variable interest
rates and were repayable in installments through 2006. MobiFon used the
proceeds to complete the build-out of its cellular network and to pay $25.0
million to extend its ten-year license by five years to November 2011.

On August 27, 2002, MobiFon closed a $300 million senior loan facility.
This new facility is composed of two tranches. Tranche I consists of a term
loan of $238 million, fully drawn as at December 31, 2002, for which the
proceeds were used to repay the interest and principal balance of the
syndicated senior credit facilities entered into in 1997 and 1999 and the
subordinated loans. A loss on extinguishment of debt of $10.1 million was
recognized on early payment. Tranche II consists of a term loan of up to $62
million of which $17 million was drawn as at December 31, 2002. Each tranche
is repayable in quarterly installments starting in January 2004 and maturing in
October 2008. The interest rate on the facility is LIBOR + 3.5% up to December
31, 2003. Thereafter, the interest rate will range from LIBOR + 2.5% to LIBOR
+ 4.0% depending on certain financial ratios, including debt and capital
ratios. As permitted by the loan agreement, the LIBOR portion of the interest
rates on $87.3 million of Tranche I and $6.2 million of Tranche II have been
fixed at 3.64% and 3.52% respectively.

Under the facility, MobiFon must comply with certain affirmative covenants
such as the maintenance of certain financial covenants and ratios, including
debt and capital ratios. The facility allows for distributions of cash
provided from operations net of capital expenditures and scheduled debt service
subject to MobiFon meeting certain financial ratios and maintaining minimum
cash balances. To the extent such ratios are not met, a portion or all of
these cash flows may be required to be used for mandatory prepayments of the
facility. The facility is collateralized by a pledge of ours and of the
minority interests shares in MobiFon and by substantially all of the assets of
MobiFon. A commitment fee of 1% per annum





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is applicable to the unused Tranche II facility [$45 million at December 31,
2002] up to December 31, 2003 when the unused facility will expire under the
credit agreement.

MobiFon entered into interest rate swap arrangements on notional principal
amounts of $100 million and $30 million whereby the LIBOR portion of the
interest on the related loan principal has been effectively fixed at 3.6% and
3.7%, respectively. The weighted average effective interest rate on the
balance outstanding on this facility at December 31, 2002 is 6.9%.

MobiFon also has available $20.0 million of uncommitted operating capital
facilities secured by a first right over the proceeds from any foreclosure of
the pledge of MobiFons bank accounts.

Ceský Mobil

The cash requirements of Ceský Mobil through December 31, 2002 have been
met primarily by shareholder contributions of $350.0 million and by borrowings
under their senior secured syndicated credit facility and financing under
supply contracts to be refinanced by the syndicated facility entered into on
July 19, 2000 which using December 31, 2002 exchange rates, amount to $470.3
million.

In July 2000, Ceský Mobil entered into an agreement for a senior secured
syndicated credit facility. The syndicated credit facility is composed of two
tranches. Tranche A is in the form of a committed revolving credit facility
converting to a term loan of up to 269.1 million and Koruna 3.8 billion,
[totalling $407.0 million] carrying interest at a rate of EURIBOR plus 1.75%
for Euro drawings and PRIBOR plus 1.75% for Koruna drawings, reimbursable by
installments determined as a percentage of amounts drawn under the facility
until June 2004 which will continue to be repaid until the maturity in December
2008. Tranche B consists of a term loan of up to 26.6 million and Koruna 1.7
billion, [totalling $84.9 million] carrying interest at EURIBOR plus 2.25% for
Euro drawings and PRIBOR plus 2.25% for Koruna drawings, reimbursable by
installments determined as a percentage of amounts drawn under the facility
starting in December 2008 until the maturity in December 2009. Drawings under
either tranche must be on a dollar-for-dollar basis with the other tranche.

Ceský Mobil entered into interest rate and currency swaps arrangements
pursuant to which 116.3 million [$122.0 million] of the Euro based borrowings
as at December 31, 2002 are effectively Koruna based and, together with an
additional 3.0 billion Koruna [$98.6 million] have effective fixed interest
rates ranging from 8.59% to 9.98% until November 2005. Swaps have also been
entered into on 71.7 million [$75.3 million] drawn which has the effect of
fixing the Euro to Koruna conversion rate on the interest payments and changing
the referenced interest rate from EURIBOR to PRIBOR. Interest on this 71.7
million draw has also been capped through the use of option agreements which
are detailed as follows. 21.5 million [$22.6 million] and a further 287.6
million Koruna [$9.5 million] are subject to interest rate option agreements
which provide that the PRIBOR component of the interest rate on these
borrowings will not exceed 8.61%, until November, 2005; 50.2 million [$52.7
million] and 701.2 million Koruna [$23.3 million] are subject to interest rate
option agreements which provide that the interest rate on these borrowings will
not exceed 9.99%, until November, 2005. The effective weighted average
interest rate on this credit facility is 7.0% at December 31, 2002 [8.0% in
2001].

Ceský Mobil used the funds drawn under its senior secured syndicated
credit facility to finance the construction, operation, working capital, debt
service and related requirements of their GSM network in the Czech Republic
including the repayment of amounts financed under supply contracts with Siemens
and Ericsson.

The
facility is collateralized by a pledge of TIW Czechs shares in Ceský
Mobil and of substantially all of the assets of Ceský Mobil. Under this
facility, Ceský Mobil must respect certain financial covenants and coverage
tests. Furthermore, prior to each draw down, the ratio of senior debt to
invested capital in Ceský Mobil must not exceed 60:40 or the total invested
capital in Ceský Mobil will equal or exceed the Euro equivalent of $350.0
million. We and our partners have funded all of the required capital.

As a result of MobiFons and Ceský Mobils syndicated senior credit
facilities, substantially all of ClearWaves net assets are restricted,
however, subject to fulfillment of certain conditions, cash distributions to
shareholders are permissible under MobiFons credit facilities.





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FUTURE CAPITAL REQUIREMENTS

We expect to have significant future capital requirements, particularly in
relation to the expansion of our Czech Republic cellular network, the servicing
of debt including the refinancing of our corporate indebtedness, the addition
to capacity to our existing networks and the acquisition, if an option is
exercised, of certain shares of Ceský Mobil owned by non-controlling interests.
We intend to finance such future capital requirements from cash flow from
operating activities, borrowing under our existing credit facilities,
non-controlling shareholders funding under share subscriptions and through
other externally generated funds such as the disposition of assets and the sale
of debt and equity securities.

MobiFons future capital requirements will include debt repayment and
network expansion, both of which are expected to be financed by cash flows from
operations and by drawings on its senior facility. Ceský
Mobils capital
requirements will include the expansion of its cellular network and the
financing of its losses. These requirements are expected to be financed by
drawings under its senior secured syndicated credit facility and by way of
shareholders subscriptions. As at December 31, 2002, our operations had
purchase commitments of approximately $14 million with network equipment and
systems support providers.

As of December 31, 2002, MobiFon is also committed to a frame leasing
agreement with a national power supplier for 17 years or the end of the GSM
license period whichever is shorter commencing in 2003, whereby the power
supplier agreed to lease out 2 fiber optic strands over certain voltage poles
and technical space to MobiFon, and MobiFon agreed to lease out communication
capacity to the power supplier over a minor portion of the capacity of the
enabled fiber. The leases payments and receipts, which individually are
estimated to reach $5 million per annum by the end of the contract, are
expected to offset one another such that minimal cash payments, if any, will be
made by either party. The estimated cost to MobiFon to enable the entire
leased fiber to be utilized is $8.5 million of which $3.4 million has been
incurred as at December 31, 2002.

In the event there has not been an initial public offering of the shares
of MobiFon by October 1, 2004, a holder of 14.4% of the shares of MobiFon may
require us or ClearWave, at our option, to make an offer to acquire such
minority shareholders shares. The purchase price of such shares will be the
then fair market value as determined by an independent evaluator and shall be
payable in cash or shares of the Company at our option. An additional 5.7%
share ownership of MobiFon will be the object of a similar arrangement upon
closing of the December 18, 2002 agreement to sell 11.1 million shares of
MobiFon previously described.

We are a holding company with no material business operations, sources of
income or operating assets of our own other than the shares of our subsidiaries
and operating companies.

Our cash flow and, consequently, our ability to meet our debt service
obligations is dependent upon the payment of funds by our subsidiaries in the
form of loans, dividends, advances or otherwise. Under certain of our long-term
debt agreements, we are subject to certain financial and negative covenants,
including restrictions on our ability to incur indebtedness, pay dividends,
make certain other payments, create liens, sell assets and engage in mergers.
Restrictions also exist on the ability of operating our subsidiaries to
transfer funds in the form of dividends, loans or otherwise.

As at December 31, 2002, due to the short-term maturities of our corporate
credit facility and our 14% Notes, our committed cash obligations for the
upcoming twelve months exceed our committed sources of funds and our cash and
cash equivalents on hand. In addition, it will be necessary for us to comply
with our debt covenants in order to have access to our financing arrangements
according to the terms of the related agreements. As a result, there is
significant uncertainty as to whether we have the ability to continue as a
going concern. Specifically, our committed uses of cash include the repayment
of our corporate credit facility of $47.4 million, the debt service of and
repayment at maturity of our 14% Notes, the funding by ClearWave of its share
of a Ceský Mobil minority shareholders put of $4.6 million, if exercised, and
corporate overhead, inclusive of discontinued operations, of approximately
$12.5 million. In addition to the available sources of funds from MobiFons
distributions and the sale of 5.7% of our shares of MobiFon, we will therefore
continue to review opportunities to refinance our corporate debt, raise new
financing and sell assets. We regularly evaluate opportunities for the
expansion of our operations or for further investments in wireless
telecommunications projects, including increases in ownership in our current
operations. The future capital requirements related to such investment
activities, if any, will be incremental





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to the anticipated capital
contributions to existing operations, and therefore additional corporate
financing will be required to fund such development projects or to further
support current operations. The ability to generate short-term and long-term
capital in the future is dependent upon many factors, including general
economic conditions in the countries where we conduct our principal operations
and financial market conditions.

EXCHANGE RATES

We report our financial statements in U.S. dollars. We operate in
different currency jurisdictions and virtually all of our revenues and a
substantial portion of our operating expenses are in currencies other than our
reporting currency. As a result, we are exposed to exchange rate risk. Any
significant change in the relevant exchange rates, whether of a short-term
nature or a steady long-term change in relative valuation, could have a
material effect on our financial statements. In Romania, significant
devaluation relative to the U.S. dollar has occurred in the past and may occur
again in the future. In addition, we experience fluctuations in our results of
operations solely as a result of exchange rate fluctuations. Where possible,
we adjust our tariffs for the effects of inflation, one of the factors
affecting relative exchange rates. However, we may be unable, due to regulatory
restrictions and market conditions, to adjust our local tariffs in response to
changes in the exchange rates relative to our reporting currency and may
therefore be unable to protect ourselves from exchange rate fluctuations.

Until December 31, 2002, Romania was defined for accounting purposes as a
highly inflationary economy and the U.S. dollar, our functional currency, was
used as their measurement currency. In 2003, an assessment as to which
currency is MobiFons functional currency will be made. MobiFons borrowings
are in U.S. dollars and tariffs are adjusted to account for the effects of the
devaluation of the Romanian lei versus the U.S. dollar due to inflation.
Consequently, exchange fluctuations have not had a material effect on our
consolidated results in the past. However, Romania is currently a second wave
European Union accession candidate and it is foreseeable that the Euro takes
prominence in Romania in the future. Consequently, depending on the result of
our assessment and the progression of Romania towards the Euro, exchange rate
fluctuations may have a more significant impact on our results of operations in
the future.

At the corporate level, we may elect to enter hedging arrangements from
time to time in the future, although we are not currently party to any such
transaction and do not have a policy to systematically hedge against foreign
currency fluctuations. At the operating company level, we seek to reduce our
foreign exchange exposure arising from transactions through a policy of
matching, where possible, assets and liabilities. In some cases, we may borrow
in U.S. dollars or Euro because it is either advantageous for the operating
companies to incur debt obligations in such currency or because such currency
denominated borrowings are the only funding source available to the operating
company at the time. Ceský Mobil has hedged a portion of its variable rate
debt, by entering into interest rate and cross currency swaps in which Ceský
Mobil has agreed to exchange, at specified intervals, the difference between
fixed and variable interest on
116.3 million and 3.0 billion Koruna of
variable rate debt until November 2005.

Additionally, these swaps have fixed the foreign currency rates on the
Euro based debt from the Euro to Koruna. A swap was entered into on a further
71.7 million of borrowings which fixed the foreign currency rate on the
interest payments from Euro to Koruna and changed the referenced interest rate
from EURIBOR to PRIBOR. Interest on this 71.7 million draw has also been
capped through the use of option agreements which are detailed as follows:
21.5 million [$22.6 million] and a further 287.6 million Koruna [$9.5 million]
are subject to interest rate option agreements which provide that the PRIBOR
component of the interest rate on these borrowings will not exceed 8.61%, until
November 2005; 50.2 million [$52.7 million] and 701.2 million Koruna [$23.3
million] are subject to interest rate option agreements which provide that the
interest rate on these borrowings will not exceed 9.99%, until November 2005.
Ceský
Mobil also entered into a 6-month Euro to Koruna cross currency swap
arrangement for 60.0 million [$63.0 million] on May 11, 2002 and upon
expiration, Ceský Mobil entered into a similar swap arrangement for a further 6
months. In January 2003, a further
40.0 million of Ceský Mobils Euro based
borrowing exposure was hedged in this manner and Ceský Mobil purchased a
currency call option to hedge currency risk on the principal of an additional
10.0 million of Euro based debt. For the remaining amounts, we have decided
to accept for the time being the inherent currency risk, principally because of
the relatively high cost of buying, or the inability to buy, forward cover in
currencies of the countries in which we operate.





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INFLATION

Inflation has not been a material factor affecting our business to date.
Although system equipment costs may increase over time as a result of
inflation, we expect that the cost of subscriber equipment will decrease over
time as volume increases, although there can be no assurance that this will be
the case. General operating expenses such as salaries, employee benefits and
lease costs are, however, subject to normal inflationary or deflationary
pressures.

In Romania and certain other countries, the effects of inflation may
become significant to our operations. Where permitted, and subject to
competitive pressures, we intend to increase our tariffs to account for the
effects of inflation. However, in those jurisdictions where tariff rates are
regulated or specified in the license, such as in India, we may not be able to
mitigate the impact of inflation on our operations.

REGULATORY ENVIRONMENT

We operate in regulated industries and in the normal course of business,
our operational subsidiaries actions are subjected to scrutiny by various
regulatory agencies, which, from time to time, will initiate administrative
proceedings against us for alleged breaches to different regulations including
arrangements for interconnection fees. We believe that the ultimate outcome of
any of such proceedings currently in progress will not be materially adverse to
us.

MobiFon and Ceský Mobil hold one of three licenses issued to provide
nationwide GSM-based cellular telecommunications services in their respective
countries. Our operational subsidiaries are committed to pay minimum annual
spectrum fees of approximately $10.0 million. Starting in 2003, the new
Romanian regulatory act will provide for other fees based on a percentage of
revenue and other bases that have yet to be determined. The conditions to the
various license agreements require our operational subsidiaries to
substantially meet the deployment plans set out in their license agreement and,
in certain instances, to provide a specified level of services in their
respective coverage areas. The Companys future performance may be affected by
factors such as political changes including government actions relating to its
licenses, changes in technology and competition.




ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

TIW

Board of Directors

The following table and notes thereto set out as at March 20, 2003:



| | (1) |  | the name of each individual elected at our annual and special
meeting of shareholders held on May 2, 2003 as a director to serve
for a one year term beginning May 3, 2002;
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | all other positions and offices with us now held by each such
individual, if any;                                                                                          
|
| | (3) |  | the principal occupation or employment of each director; and                                                                                                               
|
| | (4) |  | their respective periods of service as a director.                                                                                                                         

We have no service contracts with the directors. The shareholders elected
each of the directors serving on our board at the annual general meeting of
shareholders held on May 17, 2002. Certain members of our Board of Directors
were appointed pursuant to an investors rights agreement that we describe in
more details under the caption Related Party Transactions of Item 7 of this
Form 20-F.

|                                                      |  |                                                                                                        |  |               
|----------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | --------------
|Name and Position or Office with TIW                  |  | Principal Occupation or Employment                                                                     |  | Director Since
|                                                      |  |                                                                                                        |  |               
|CHARLES SIROIS (2)
Director and Chairman of the Board |  | Chairman of the Board and Chief Executive
Officer, Telesystem Ltd. (a privately
owned holding company) |  | March 1997    

-64-



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|                                       |  |                                                                                                                        |  |               
|-------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | --------------
|DANIEL CYR (1)
Director                |  | Senior Vice-President and Chief Financial
Officer, Telesystem Ltd. (a privately
owned holding company)                 |  | May 2000      
|                                      
|JACQUES A. DROUIN (2)
Director         |  | Managing Director, Lazard Brothers & Co.
Limited (an investment bank) and Canada
Country Head based in London, England |  | March 1997    
|                                      
|FRANÇOIS LAURIN (2)
Director           |  | Vice-President, Investments, CDP Capital
Communications (a fund manager)                                               |  | April 2003 (3)
|                                      
|MICHAEL R. HANNON (1)
Director         |  | Partner J. P. Morgan Partners, LLC
(a private equity organization)                                                     |  | March 2002 (4)
|                                      
|C. KENT JESPERSEN (1)
Director         |  | Chairman of the Board, La Jolla Resources
International Ltd. (an international
advisory and investment company)        |  | March 1999    
|                                      
|EVA LEE KWOK (1)
Director              |  | Chair and Chief Executive Officer
Amara International Investment Corp.
(a private real estate investment company)      |  | March 2002    
|                                      
|JONATHAN CHARLES C. MEGGS
(2)
Director |  | Partner J. P. Morgan Partners Europe Ltd.
(a private equity organization)                                              |  | March 2002    



---

|(1) |  | Member of our audit committee.                                                                                                                                                 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Member of our human resources and compensation committee.                                                                                                                      
|   
|(3) |  | François Laurin was appointed to our Board of Directors in replacement of
Martin Fafard who resigned in April 2003.                                                            
|   
|(4) |  | Mr. Hannon had been a member of the Board of Directors of the Corporation
from May 2000 until his resignation on August 13, 2001. He was
re-appointed a director in March 2002.

Daniel Cyris Senior Vice-President and Chief Financial Officer of
Telesystem, which he joined in 1992. Mr. Cyr holds a Bachelors degree in
Business Administration from Laval University and was admitted to the Canadian
Institute of Chartered Accountants in 1985.

Jacques A. Drouinis Managing Director of Lazard Brothers & Co. Limited
and Country Head for Canada in London, United Kingdom. Prior to joining Lazard
in 2000, Mr. Drouin was Director and Country Head for Canada of J. Henry
Schroder & Co. Limited from 1994 to 2000, Chairman and Chief Executive Officer
of The Laurentian Group Corporation from 1989 to 1994 and President and Chief
Executive Officer of The Laurentian General Insurance Corporation Inc. from
1983 to 1989. Mr. Drouin is a director of SNC Lavalin Group Inc., a governor
of McGill University and the University of Montreal, and a member of the Order
of Engineers of Quebec, The Canadian Institute of Engineers and the Institute
of Management Consultants. Mr. Drouin holds a Bachelors degree of Applied
Science in Engineering from the University of Montreal and a Master of Business
Administration degree from McGill University.

Francois Laurin, CA, CFA, is Vice-President Investments at Capital
Communication CDPQ Inc., the telecommunications private equity arm of Caisse de
dépôt et placement du Québec. Mr. Laurin has extensive financial expertise as a
senior executive in the telecommunications, broadcasting and transportation
industries. He has been involved in the reporting, financing, planning,
acquisitions and divestitures aspects of corporate finance as well as the
various financial operations of both service and manufacturing businesses.
Prior to joining Capital Communication CDPQ in April 2003, he was
vice-president controller of Bombardier Transportation since 2001 and from 2000
to 2001 he was Vice-
President, Finance and administration at Microcell i5, a start-up
operation in Internet solutions for mobile handsets. Prior to that, Mr. Laurin
held positions at Teleglobe Inc. as corporate controller from 1992 to 1995 and
as Vice-President, Finance and Controller from 1995 to 2000. Mr Laurin earned a
Bachelor of





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Commerce degree in Accounting and Finance and a graduate diploma in
accounting at McGill University. He is a member of the Ordre des Comptables
Agréés du Québec, the Canadian Institute of Chartered Accountants and the
Association for Investment Management and Research.

Michael R. Hannonis a General Partner of J.P. Morgan Partners (JPMP), a
general partnership with over $20 billion under management. Prior to joining
JPMP in 1988, Mr. Hannon was with Morgan Stanley & Co. Mr. Hannon serves on the
boards of directors of various companies in the technology, media and
telecommunications industry. Mr. Hannon holds a B.A. from Yale University and a
Masters degree in Business Administration from Columbia Business School.

C. Kent Jespersenis Chairman of La Jolla Resources International Ltd.
From 1997 to 1998, Mr. Jespersen was President Chief Executive Officer Elect of
Nova Energy Services. From 1994 to 1997, Mr. Jespersen served as President of
NOVA Gas International Ltd. and Senior Vice-President of NOVA Corporation.
From 1993 to 1994, Mr. Jespersen was President of NOVA Gas Services Ltd. and
from 1992 to 1993, he served as Senior Vice-President, Corporate Development of
NOVA Corporation. From 1984 to 1992, Mr. Jespersen was President and Director
of Foothills Pipe Lines Ltd. Mr. Jespersen is Chairman of the Institute of the
Americas and of the C.D. Howe Institute. Mr. Jespersen also serves on the
boards of directors of Axia Net Media Corporation, Bow Valley Energy, Gentra
Inc. and Inventronics Limited and he is Chairman of the Board of CCR
Technologies Ltd. and of Vista Midstream Solutions.

Eva Lee Kwokis, since 1992, Chair and Chief Executive Officer of Amara
International Investment Corp, a Vancouver based, private corporation involved
in real estate, strategic partnerships and the development of cross-cultural
opportunities for investors in Canada and the Asia Pacific Region. From 1995 to
1996, Ms. Kwok was also President and Managing Director of Melcorp Mercantile
Inc., a Vancouver based company developing and facilitating international trade
and global commercial business. Prior to 1992, Ms. Kwok acted as Vice-President
of the Asia Pacific Foundation of Canada. Ms. Kwok currently sits on the Board
of Directors of Bank of Montreal, Air Canada, Husky Oil Ltd., B.C. Womens
Hospital and Health Center Foundation and Canadas Outstanding CEO of the Year
Award Program. Ms. Kwok is also a member of the Advisory Board of the National
Awards in Governance of the Conference Board of Canada and of the Advisory
Council of the Faculty of Graduate Studies at the University of British
Columbia.

Jonathan Charles C. Meggsis a General Partner of J.P. Morgan Partners of
J.P. Morgan Chase & Co, based in London and Group Head of the European
business. Prior to joining J.P. Morgan Partners in 1996, Mr. Meggs was a
Director of the Chase Manhattan Bank, N.A. responsible for mezzanine and equity
investments. Mr. Meggs has held many board seats and directorships in
companies in the telecoms and financial services sectors.

Charles Siroisis Chairman of the Board, Chief Executive Officer and
controlling shareholder of Telesystem Ltd., one of our principal shareholders.
From 1992 to February 2000, Mr. Sirois was Chairman and Chief Executive Officer
of Teleglobe Inc. From 1988 to 1990, Mr. Sirois was Chairman of the Board and
Chief Executive Officer of BCE Mobile Communications Inc., and prior to that he
was Chief Executive Officer of two of the companies that formed BCE Mobile,
National Pagette Ltd. and National Mobile Radio Communications Inc. He is
currently a director of the Canadian Imperial Bank of Commerce and the CGI
Group Inc. Mr. Sirois is also a member of the Business Council on National
Issues, and is a founding member of the Washington-based Global Information
Infrastructure Commission. Mr. Sirois received the Order of Canada in 1994 and
was made a knight of the Ordre national du Québecin April 1998. Mr. Sirois
holds a Bachelors degree in Finance from the University of Sherbrooke and a
Masters degree in Finance from Laval University.

Board Practices

Background

The Board of Directors considers good corporate governance to be important
to the effective operations of TIW. In 1997, the Board of Directors formed the
Nominating and Corporate Governance Committee
responsible for, among other things, monitoring our corporate governance
practices in relation to the guidelines adopted by the Toronto Stock Exchange,
or TSX, and overseeing disclosure obligations related





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thereto.

In addition to the disclosure requirements imposed by the TSX through the
guidelines, we are also subject to the new disclosure rules adopted by the
Securities and Exchange Commission following the enactment of the
Sarbanes-Oxley Act of 2002 in the United States.

Our corporate governance framework also features an investor rights
agreement among our four major shareholders entered in 2002, which provides for
proportionate representation rights, including in favour of minority
shareholders, on the Board of Directors and setting out certain principles of
corporate governance. Pursuant to the investor rights agreement, we agreed to
reduce the size of our Board of Directors to eight members and allow major
shareholders to present for appointment between one and two nominees on the
Board of Directors, depending on their level of equity interest. Any
candidate, other than those nominees of the major shareholders, is required by
the investor rights agreement to be independent not only of our management but
also of the major shareholders. In addition, the investor rights agreement
requires that certain major decisions be approved by no less than two-thirds
or, in certain cases, three-quarters of the votes cast by the directors present
and eligible to cast votes at a duly constituted meeting of the Board of
Directors. The decisions requiring the approval of two-thirds of the votes
include, among other things, (1) security issuances, (2) debt incurrence or
pledging of assets, (3) creation of subsidiaries and (4) execution of any
contract with a related party for an amount in excess of Cdn$200,000. The
decisions requiring the approval of three-quarters of the votes include, among
other things, (a) business plan approval or amendment, (b) repurchase of debt,
(c) investment, acquisition, capital expenditure or development projects and
(d) termination of employment or hiring of executive officers.

Under the investor rights agreement, each major shareholder agreed to vote
in favor of the nominees put forward for election on the Board of Directors by
the other major shareholders.

In 2002, following the implementation of our equity recapitalization plan,
the functions of the Nominating and Corporate Governance Committee were divided
between the Audit Committee and the Human Resources and Governance Committee.

The following disclosure sets out our corporate governance practices which
conform with the TSX guidelines unless specifically noted otherwise.

Role and Responsibilities of the Board

The Board of Directors oversees the conduct and supervises the management
of our business and affairs pursuant to the powers vested in it by the Canada
Business Corporations Actand in accordance with the requirements of the Canada
Business Corporations Act. The Board of Directors holds regular meetings to
consider particular issues or conduct specific reviews whenever deemed
appropriate.

Before the start of every financial year, the Board of Directors receives
and approves an annual budget and corporate strategic objectives submitted by
the President and Chief Executive Officer.

In addition to those matters requiring the Board of Directors approval
pursuant to law or our articles and by-laws, the Board of Directors decides on
significant matters such as those provided for in the investor rights
agreement.

Composition of the Board

The Board of Directors is currently comprised of eight directors and
believes that its size enables it to conduct its meetings and take decisions
effectively and efficiently. All directors are unrelated directors, defined
in the TSX guidelines as directors who are independent of management and free
from any interest and any business or other relationship, other than interests
and relationships arising from shareholding, which would, or could reasonably,
be perceived to materially interfere with the directors ability to act in view
of our best interest. We have no shareholder with the ability to exercise a
majority of the votes for the
election of the directors.

Committees





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##### Table of Contents



The Audit Committee reviews our annual and interim financial statements
before they are approved by the Board of Directors, oversees management
reporting on internal audits and controls and reviews our accounting systems
and external audit plan. Also in 2002, the Audit Committee began monitoring
our corporate governance practices and more specifically our compliance with
stock exchange and securities commissions disclosure requirements. The Audit
Committee also has direct communication channels with internal and external
auditors to discuss and review specific issues as required. As at April 2003,
the Audit Committee was comprised of four outside directors, all of whom were
unrelated, namely, Daniel Cyr, François Laurin, Michael R. Hannon and C. Kent
Jespersen (Chair). Composition of the committee is subject to modification
following our 2003 shareholder meeting.

The principal mandate of the Human Resources and Governance Committee is
described under the heading Compensation of Directors and Officers. The
responsibilities of the Human Resources and Governance Committee that deal with
matters of corporate governance include assisting the Audit Committee in
monitoring our approach to corporate governance, to annually recommend the
members proposed for election to the Board of Directors as well as the
membership and chairs of the committees of the Board of Directors, to develop a
process to periodically review the functioning of the Board of Directors and
conduct a periodic review of the powers, mandates and performance of committees
of the Board of Directors. The Human Resources and Governance Committee is
also in charge of periodically reviewing the effectiveness of our policies,
guidelines and manuals in relation to governance matters, other than those
pertaining to disclosure requirements, which are the responsibility of the
Audit Committee, and make recommendations to the Board of Directors to ensure
compliance with best practices on such matters. As at April 2003, the Human
Resources and Governance Committee was composed of four outside directors, all
of whom are unrelated, namely Jacques A. Drouin (Chair), Eva Lee Kwok, Jonathan
Charles C. Meggs and Charles Sirois. Composition of the committee is subject to
modification following our 2003 shareholders meeting.

Measures for Receiving Shareholders Feedback and Dealing with their Concerns

In addition to our required public filings, we regularly communicate with
our shareholders and the investment community by means of our quarterly and
annual reports as well as press releases issued as appropriate from time to
time. Annual meetings allow shareholders to ask questions directly to the
President and Chief Executive Officer as well as to other senior executive
officers.

The Board of Directors Expectations of Management

The Board of Directors expects management to meet the following basic
objectives: (1) report in a comprehensive, accurate and timely fashion on our
business and affairs and on any specific matters that it considers of
significant material consequence for us and our shareholders; (2) take timely
action and make all appropriate decisions required by our activities in
accordance with all applicable requirements or obligations and within the
framework of the corporate policies in effect, with a view to enhancing
shareholder value; (3) conduct a comprehensive annual budget process and
monitor closely our financial performance in conjunction with the annual budget
approved by the Board of Directors; and (4) review on an on-going basis our
strategies and their implementation taking into account changes to our business
environment.

Executive Officers

The following table sets out information concerning our corporate
officers, including name and position with us.

|                    |  |                                           
|------------------- |  | ------------------------------------------
|Name                |  | Position                                  
|                    |  |                                           
|Bruno Ducharme      |  | President and Chief Executive Officer     
|André Gauthier      |  | Vice-President and Chief Financial Officer
|Jacques P. Langevin |  | Senior Human Resources Officer            
|Margriet Zwarts     |  | General Counsel and Secretary             

Bruno Ducharmeis our President and Chief Executive Officer, an Executive
Vice-President of





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##### Table of Contents



Telesystem Ltd. and, prior to May 1997, was President and Chief Executive
Officer of Telesystem International Wireless Services Inc. since 1994. Mr.
Ducharme joined the Telesystem group of companies in 1990 as Vice-President of
Telesystem Financial Corporation and became Executive Vice-President of
Telesystem in 1991. Mr. Ducharme has held a number of executive positions with
companies within the Telesystem group. Mr. Ducharme holds a Bachelors degree
in Civil Law from McGill University, a Masters degree in Business
Administration from the Wharton School of Business of the University of
Pennsylvania and a Masters degree in International Relations from the
University of Pennsylvania.

André Gauthieris our Vice-President and Chief Financial Officer. Prior
to June 2001, Mr. Gauthier was our Vice-President, Finance, and Treasurer.
Prior to May 1999, Mr. Gauthier was our Vice-President and Controller, and,
prior to May 1997, was Controller of Telesystem International Wireless Services
since 1994. From 1988 to 1994, Mr. Gauthier held successive positions,
including Director, Finance and Administration, at Cosmair Canada Inc., a
cosmetics manufacturer. Prior to 1988, Mr. Gauthier was a Senior Manager at
Ernst & Young in Montreal. Mr. Gauthier holds a Bachelors degree in Business
Administration from the École des Hautes Études Commerciales in Montreal and is
a member of the Canadian Institute of Chartered Accountants.

Jacques P. Langevinis our Senior Human Resources Officer. Prior to
joining TIW in February 1999, Mr. Langevin was Vice-President, Human Resources,
with Tricon Restaurants International in Asia form 1997 to 1999. From 1992 to
1995, he was Area Director, Human Resources (Asia-Pacific) and, in 1996,
Regional General Manager (Central and Northern China) with Avon Products Inc.
Previously, Mr. Langevin was with Avon Canada Inc., first as Director, Legal
Affairs, and then as Vice-President, Human Resources and Corporate Affairs.
Mr. Langevins earlier career was in a private practice with Lavery OBrien &
Associates, in Montreal. Mr. Langevin holds a Bachelor of Civil Law degree
(L.L.L.) from the University of Sherbrooke and holds a Bachelor of Arts degree
with Honors in Political Science from Concordia University.

Margriet Zwartsis our General Counsel and Secretary. Prior to her
appointment in March 1998, she was in private practice, initially with the law
firm Martineau Walker and from 1989 with the law firm Ogilvy Renault, where she
was a partner from 1991. She holds Bachelors degrees in Civil Law and in
Common Law from McGill University and a Masters degree in English Literature
from the University of Toronto. She is a member of the Quebec Bar and the Law
Society of Upper Canada.

Appointment of the President and Chief Executive Officer

Pursuant to an agreement entered into between Telesystem Ltd. and us on
April 30, 1997, nominees for the position of our president and chief executive
officer are selected by Telesystem Ltd. for recommendation to and approval by
our board of directors.

COMPENSATION OF DIRECTORS AND OFFICERS

Reproduced in this section, with applicable adjustments to reflect certain
resolutions passed by our shareholders in May 2003, are extracts taken from our
Notice of Annual and Special Meeting of Shareholders and Management Proxy
Circular dated March 20, 2003 filed with the United States Securities and
Exchange Commission on Form 6-K on April 8, 2003 and as Exhibit 11.3 hereto and
with the Securities Commissions and other similar authorities in Canada.

For the year ended December 31, 2002, an aggregate amount of Cdn$6,618,279
million was paid to the members of the Board of Directors of the Corporation
and to the executive officers of the Corporation and its subsidiaries,
including compensation for salary, bonuses and benefits. In 2002, 40,275,675
options were granted to executive officers of the Corporation and 997,493
options to directors of the Corporation under the Corporations Employees Stock
Option Plan (the Employees Stock Option Plan), including the November 2001
Option Grants, as defined, and the November 2002 Option Grants, as defined.
See Compensation of Directors and Executive Officers  Option and Unit Grants
in Last Financial Year. As of December 31, 2002, no amounts had been set
aside for pension and retirement benefits for directors and executive officers.

Compensation of Directors





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##### Table of Contents



Since April 1, 2002, the compensation policy for directors provides that
directors who are neither employees nor consultants of the Corporation or of
the four principal shareholders of the Corporation shall receive US$20,000 per
year as a retainer fee and a fee of US$1,500 for each meeting of the Board of
Directors or of a Committee attended by them in person and a fee of US$750 if
such participation is made by telephone. Where a Board of Directors meeting and
a Committee meeting are held on the same day and in the same location, a
director attending both meetings shall receive a fee of US$1,500. If a second
Committee meeting is held on the same day and in the same location, a director
attending such meeting shall receive an additional fee of US$1,500. The
Chairman of the Board of Directors shall receive a fee of Cdn$20,000 per month
and the Chairman of any Committee of the Board of Directors shall receive a fee
of US$3,500 per year. In addition, directors who are not employees or
consultants of the Corporation or of the four principal shareholders shall
receive on an annual basis an option grant having a target compensation value
of US$25,000. They shall also receive a travel fee of US$1,500 if they have to
travel more than three hours to attend a meeting in person.

Prior to April 1, 2002, directors who were not employees of the
Corporation received a fee of $1,200 for each meeting of the Board of Directors
or of a Committee attended by them in person and a fee of $800 if such
participation was made by telephone. Where a Board of Directors meeting and a
Committee meeting were held on the same day and in the same location, a
director attending both meetings received a fee of $1,200. If a second
Committee meeting was held on the same day and in the same location, a director
attending such meeting received an additional fee of $1,200.

Compensation of Named Executive Officers

The table below shows certain compensation information for Mr. Bruno
Ducharme, the President and Chief Executive Officer of the Corporation, and the
four other most highly compensated executive officers of the Corporation and
its subsidiaries during the financial year ended December 31, 2002
(collectively, the Named Executive Officers). This information includes the
dollar value of base salaries, bonus awards and long-term incentive plan
payments, the number of options granted, and certain other compensation, if
any, whether paid or deferred.





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##### Table of Contents



|                                                                       |  |                            |                |                        |  |           |                         |              |  |               |                         |                |  |                         |  |                                       |  |                   |  |                     |  |          
|---------------------------------------------------------------------- |  | -------------------------- | -------------- | ---------------------- |  | --------- | ----------------------- | ------------ |  | ------------- | ----------------------- | -------------- |  | ----------------------- |  | ------------------------------------- |  | ----------------- |  | ------------------- |  | ---------
|                                                                       |  | Summary Compensation Table
|                                                                       |  |                           
|                                                                       |  | Annual Cash Compensation   |                | Long-Term Compensation |  |          
|                                                                       |  |                            |                |                        |  |          
|Name and Principal                                                     |  |                            |                |                        |  |           |                         |              |  |               |                         |                |  | Other Annual            |  | Securities Under                      |  | Restricted Shares |  | Long-Term Incentive |  | All Other
|Position                                                               |  | Year                       |                | Salary                 |  | Bonus (1) |                         | Compensation |  | Options/Units |                         | or Share Units |  | Program Payouts         |  | Compensation                         
|                                                                       |  |                            |                |                        |  | (Cdn$)    |                         | (Cdn$)       |  | (Cdn$) (2)    |                         | (#)            |  | (#)                     |  | (Cdn$)                                |  | (Cdn$)           
|                                                                       |  |                            |                |                        |  |           |                         |              |  |               |                         |                |  |                         |  |                                      
|Bruno Ducharme
President and Chief
Executive Officer                   |  |                            | 2002
2001
2000 |                        |  |           | 500,000
500,000
446,667 |              |  |               | 350,000
100,000
224,000 |                |  | 

                   |  | 12,116,942 (3)/33,058 (4)

74,477    |  | 

             |  | 

               |  | 

    
|                                                                      
|Mario Bertrand(5)
President,
New Ventures                              |  |                            | 2002
2001
2000 |                        |  |           | 279,173
279,173
251,212 |              |  |               | 134,226
63,652
98,123   |                |  | 305,089
256,775
227,068 |  | 3,743,484 (3)/10,203 (4)
7,374
18,750 |  | 

             |  | 

               |  | 

    
|                                                                      
|René Patoine
President, TIW do
Brazil                                  |  |                            | 2002
2001
2000 |                        |  |           | 272,382
261,909
231,325 |              |  |               | 111,922
95,335
105,901  |                |  | 465,012
720,976
287,901 |  | 2,505,664 (3)/6,836 (4)

16,833      |  | 

             |  | 

               |  | 

    
|                                                                      
|James J. Jackson (6)
Chief Financial
Officer,
ClearWave N.V.           |  |                            | 2002
2001
2000 |                        |  |           | 202,209
115,170
186,167 |              |  |               | 81,136
68,756
104,440   |                |  | 332,113
238,477
419,277 |  | 2,505,664 (3)/6,836 (4)

16,667 (7)  |  | 

             |  | 

               |  | 

    
|                                                                      
|Alexander Tolstoy
President and Chief
Executive Officer,
ClearWave N.V |  |                            | 2002
2001
2000 |                        |  |           | 312,736
298,555
273,515 |              |  |               | 170,629
222,125
205,136 |                |  | 579,037
709,913
603,287 |  | 6,134,083 (3)/0 (4)

11,382          |  | 

             |  | 

               |  | 

    



---

|(1) |  | Bonus awards are paid in cash in the year following the financial year
for which they are awarded.                                                                                                                                                                                                                                                        
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Represents primarily premiums for services rendered outside of Canada,
including foreign currency conversions from Canadian to U.S. dollars.                                                                                                                                                                                                              
|   
|(3) |  | Indicates the number of options granted under the Corporations Employees
Stock Option Plan in 2002, including the November 2001 Option Grants and November 2002 Option Grants, as defined. See Compensation of Directors and Executive
Officers  Option and Unit Grants in Last Financial Year.                                                       
|   
|(4) |  | Indicates the number of units granted under the Corporations Performance
Unit Plan in 2002, including the November 2001 Unit Grants, as defined, net of the number of units cancelled as a result of the November 2002 Option Grants, as defined. See Compensation of Directors and Executive Officers
 Option and Unit Grants in Last Financial Year.
|   
|(5) |  | Mr. Bertrands principal position with the Corporation was changed to
President of Telesystem (Antilles) Corporation N.V. on January 1, 2003.                                                                                                                                                                                                             
|   
|(6) |  | Mr. Jackson left the Corporation on February 1, 2001 and returned on July
1, 2001.                                                                                                                                                                                                                                                                        
|   
|(7) |  | These options were cancelled when Mr. Jackson left the Corporation as
described in note 6.                                                                                                                                                                                                                                                                

Stock Option Plans for Directors, Senior Executives and Key Employees

On April 30, 1997, the Corporation established the Employees Stock Option
Plan. All of the options granted under the Employees Stock Option Plan to
acquire Common Shares may be exercised within a maximum period of five years
following the date of grant. Options may be exercised as follows: (i) options
granted under the plan to employees, officers and consultants are exercisable
after the first anniversary of the date of grant as to one-third of the
optioned shares, after the second anniversary as to an additional one-third and
after the third anniversary as to the remaining one-third of the optioned
shares and are exercisable as to 100% upon a change of control of the
Corporation; (ii) options granted under the plan to directors are exercisable
after the first anniversary of the date of grant as to 100% of the optioned
shares. All options are granted at a price not lower than the market price of
the Common Shares on the day preceding the date of grant. Any option granted
pursuant to the Employees Stock Option Plan will lapse 30 days after the holder
thereof ceases to be a director, officer, employee or consultant of the
Corporation (or within 90 days if the holder is dismissed without cause). In
the event of death, retirement or disability, any option held by the optionee
lapses twelve months after the date of any such death, retirement or
disability. If an option holders employment or office with the Corporation is
terminated within 18 months of a change of control of the Corporation, his or
her options will be exercisable during a period of 12 months following such
termination. The maximum number of Common Shares that are currently
issuable under the Employees Stock Option Plan is 50,000,000 Common Shares.
The maximum number of Common Shares that may be





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##### Table of Contents



optioned in favor of any individual is 3% of the issued and outstanding
shares from time to time.

On April 30, 1997, the Corporation also established the Directors Stock
Option Plan. Since March 5, 2002, directors are now eligible participants
under the Employees Stock Option Plan. Therefore, it is not expected that
options will continue to be granted under the Directors Stock Option Plan.

Performance Unit Plan

On November 15, 2001, the Board of Directors, on the recommendation of the
HR Committee, approved a Performance Unit Plan. Under the Performance Unit
Plan, units are issuable to certain holders of options granted under the
Employees Stock Option Plan. Units give right, upon a change of control of the
Corporation, to the payment in cash of the difference between the then market
price of the Common Shares of the Corporation and the threshold price of the
units. Unless a change of control occurs before such dates, units expire on
the earlier of November 15, 2006 and the participants date of termination of
employment.

On November 15, 2001, an aggregate of 15,430,000 units were issued to
option holders at an average threshold price of US$1.50 or Cdn$2.38 per unit.
For every two options granted to key employees under the Employees Stock Option
Plan on November 15, 2001, one performance unit was granted. For each option
granted in the future under the Employees Stock Option Plan to a holder of
unit, one unit held by such holder will be cancelled. No additional units are
expected to be granted under the Performance Unit Plan.

Option and Unit Grants in Last Financial Year

Taking into consideration (a) options granted on November 15, 2001 subject
to the approval by shareholders of certain amendments to the Employees Stock
Option Plan presented at the annual shareholders meeting in May 2002, (the
November 2001 Option Grants) and (b) options granted on November 12, 2002
subject to the approval by shareholders of certain amendments to the Employees
Stock Option Plan presented at the annual shareholders meeting in May 2003 (the
November 2002 Option Grants), a total of 47,070,027 options were granted to
directors, officers, employees and consultants and 97,366 options were
cancelled under the Employees Stock Option Plan in the last financial year.

In 2002, no units were granted under the Performance Unit Plan. However,
on November 15, 2001, 15,430,000 units were granted under such plan, subject to
shareholders approving the amendments to the Employees Stock Option Plan
presented at their annual meeting held in May 2002 (the November 2001 Unit
Grants). In accordance with the provisions of the Performance Unit Plan, most of these units were cancelled as a result of the November 2002 Option Grants, as defined, leaving a net number of 103,826 units granted in 2002 and still outstanding as at May 18, 2003.

The table below shows information regarding stock option and unit grants
made to the Named Executive Officers under the Employees Stock Option Plan and
the Performance Unit Plan during the financial year ended December 31, 2002,
taking into consideration the November 2001 Option Grants, the November 2001
Unit Grants and the November 2002 Option Grants.





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##### Table of Contents



|                  |  |                   |  |                   |  |                                                                                                   |  |                                                                                                   |  |                                                                                                   
|----------------- |  | ----------------- |  | ----------------- |  | ------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------
|                  |  |                   |  |                   |  |                                                                                                   |  | Market Value of                                                                                   |  |                                                                                                   
|                  |  |                   |  | Percentage of Net |  |                                                                                                   |  | Securities                                                                                        |  |                                                                                                   
|                  |  |                   |  | Total of          |  |                                                                                                   |  | Underlying                                                                                        |  |                                                                                                   
|                  |  | Securities Under  |  | Options/Units     |  |                                                                                                   |  | Options/Units                                                                                     |  |                                                                                                   
|Name of Executive |  | Options (1)/Units |  | Granted in        |  | Exercise Price or                                                                                 |  | on the Date of                                                                                    |  |                                                                                                   
|Officers          |  | Granted           |  | Financial Year    |  | Threshold Price                                                                                   |  | Grant (2)                                                                                         |  | Expiration Date                                                                                   
|                  |  | (#)               |  | (%)               |  | (#/Cdn$)                                                                                          |  | (#/Cdn$)                                                                                          |  |                                                                                                   
|                  |  |                   |  |                   |  |                                                                                                   |  |                                                                                                   |  |                                                                                                   
|Bruno Ducharme    |  | 2,116,942/33,058  |  | 25.7%/31.8%       |  | 4,200,000/$1.90
3,900,000/$1.25
11,019/$1.67
11,019/$2.38
11,020/$3.09 4,016,942/US$0.43          |  | 4,200,000/$0.62
3,900,000/$0.62
11,019/$0.62
11,019/$0.62
11,020/$0.62
 4,016,942/$0.60           |  | Nov. 14, 2006

Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006 Nov. 11, 2007                 
|                 
|Mario Bertrand    |  | 3,743,484/10,203  |  | 8.0%/9.8%         |  | 3,687/$1.23
1,300,000/$1.90
1,200,000/$1.25
3,401/$1.67
3,401/$2.38
3,401/$3.09 1,239,797/US$0.43 |  | 3,687/$1.23
1,300,000/$0.62
1,200,000/$0.62
3,401/$0.62
3,401/$0.62
3,401/$0.62
 
1,239,797/$0.60 |  | Mar. 6, 2008
Nov. 14, 2006
Nov. 14, 2006
Nov. 14, 2006
Nov. 14, 2006
Nov. 14, 2006
 
Nov. 11, 2007
|                 
|René Patoine      |  | 2,505,664/6,836   |  | 5.3%/6.6%         |  | 875,000/$1.90
800,000/$1.25
2,279/$1.67
2,279/$2.38
2,278/$3.09 830,664/US$0.43                   |  | 875,000/$0.62
800,000/$0.62
2,279/$0.62
2,279/$0.62
2,278/$0.62 830,664/$0.60                     |  | Nov. 14, 2006
Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006 
Nov. 11, 2007                 
|                 
|James J. Jackson  |  | 2,505,664/6,836   |  | 5.3%/6.6%         |  | 875,000/$1.90
800,000/$1.25
2,279/$1.67
2,279/$2.38
2,278/$3.09 830,664/US$0.43                   |  | 875,000/$0.62
800,000/$0.62
2,279/$0.62
2,279/$0.62
2,278/$0.62 830,664/$0.60                     |  | Nov. 14, 2006
Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006Nov. 14, 2006 
Nov. 11, 2007                 
|                 
|Alexander Tolstoy |  | 6,134,083/0       |  | 13.0%/0.0%        |  | 2,000,000/$1.90
1,900,000/$1.25
 
2,234,083/US$0.43                                               |  | 2,000,000/$0.62
1,900,000/$0.62 2,234,083/$0.60                                                   |  | Nov. 14, 2006
Nov. 14, 2006 Nov. 11, 2007                                                         



---

|(1) |  | Underlying securities: Common Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The closing price of the Common Shares on the TSX on the last trading day
preceding the grant date was, in the case of options granted on November
15, 2001, $3.44. However, given the volatility of the Common Shares
during this period, the TSX consented to the grant of options at a price
reflecting more adequately the market price of the Common Shares in the
weeks preceding the date of the grant. Therefore, the market value of the
Common Shares for the purpose of this table is determined based on their
closing price on November 8, 2001.

Aggregated Options and Units Exercised in Last Financial Year and Financial
Year End Option and Unit Values

The following table summarizes, for each of the Named Executive Officers,
the number of stock options and units, if any, exercised during the financial
year ended December 31, 2002, the aggregate value realized upon exercise and
the total number of unexercised options and units, if any, held at December 31,
2002. Value realized upon exercise is the difference between the market value
of the underlying Common Shares on the exercise date and the exercise or
threshold price of the option or unit. The value of unexercised in-the-money
options or units at financial year-end is the difference between its exercise
or threshold price and the market value of the underlying Common Shares on
December 31, 2002, which was Cdn$0.50 per share. These values, unlike the
amounts set forth in the column Aggregate Value Realized, have not been, and
may never be, realized. The options and units may never be exercised, and
actual gains, if any, on exercise will depend on the value of the Common Shares
on the date of exercise. There can be no assurance that these values will be
realized. Unexercisable options are those which have been held for less than
the time required for vesting. Units are exercisable only upon a change of
control of the Corporation.





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##### Table of Contents



|                  |  |            |   |           |  |                   |   |                                |  |                                |             |               |  |  |                  |  |  |                      |   |  |  |  |   | 
|----------------- |  | ---------- | - | --------- |  | ----------------- | - | ------------------------------ |  | ------------------------------ | ----------- | ------------- |  |  | ---------------- |  |  | -------------------- | - |  |  |  | - | 
|                  |  |            |   |           |  |                   |   |                                |  |                                |             |               |  |  |                  |  |  | Value of Unexercised
|                  |  | Securities |   |           |  |                   |   | Unexercised Options/Units at   |  | In-the-Money (1) Options and
|                  |  | Acquired   |   | Aggregate |  | December 31, 2002 |   | Units at December 31, 2002 (2)
|Name of Executive |  | on         |   | Value     |  |                   |   |                               
|Officers          |  | Exercise   |   | Realized  |  | Exercisable       |   | Unexercisable                  |  | Exercisable                    |             | Unexercisable
|                  |  | (#)        |   | (Cdn$)    |  | (#)               |   | (#)                            |  | (Cdn$)                         |             | (Cdn$)       
|                  |  |            |   |           |  |                   |   |                                |  |                                |             |              
|Bruno Ducharme    |  |            |  |           |  |                   |  |                                |  |                                | 2,788,232/0 |               |  |  | 9,461,588/33,058 |  |  |                      |  |  |  |  |  | 
|Mario Bertrand    |  |            |  |           |  |                   |  |                                |  |                                | 860,709/0   |               |  |  | 2,928,400/10,203 |  |  |                      |  |  |  |  |  | 
|René Patoine      |  |            |  |           |  |                   |  |                                |  |                                | 584,167/0   |               |  |  | 956,997/6,836    |  |  |                      |  |  |  |  |  | 
|James J. Jackson  |  |            |  |           |  |                   |  |                                |  |                                | 558,333/0   |               |  |  | 947,331/6,836    |  |  |                      |  |  |  |  |  | 
|Alexander Tolstoy |  |            |  |           |  |                   |  |                                |  |                                | 1,322,124/0 |               |  |  | 4,839,498/0      |  |  |                      |  |  |  |  |  | 



---

|(1) |  | In-the-money options or units are options or units for which the market
value of the underlying securities is higher than their exercise or
threshold price.                                                                               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The value of unexercised in-the-money options and units is calculated
using the closing price of the Common Shares on the TSX on December 31,
2002, i.e. Cdn$0.50, less the exercise or threshold price of
in-the-money options and units

Retention Incentive

The Named Executive Officers are covered by the Corporations retention
incentive which, based on independent advice, is in line with industry
standards. The retention incentive provides for a payment, upon an involuntary
termination of employment for any reason other than performance or cause, of an
amount equal to between three months and 36 months of base salary, depending on
certain factors including seniority and functions filled, plus a portion of
target bonus for the same period. In the case of the Named Executive Officers,
the amounts payable under the retention incentives range from 12 to 36 months.

Short-Term Incentive Compensation

The short-term incentive plan offers bonuses tied to the achievement of
pre-determined corporate strategic objectives (e.g. financing plan),
quantitative operational objectives (e.g. number of subscribers, EBITDA and
revenues) and individual performance objectives supporting these business
objectives. The objectives, and the bonus payouts corresponding to their level
of achievement, are established on a yearly basis. The strategic and
operational objectives are presented to and approved by the Board of Directors.

For the Named Executive Officers, bonuses range from 30% to 50% of base
salary when the strategic, operational and individual objectives are achieved.
When such objectives are exceeded, bonuses are higher but cannot exceed twice
the target bonuses. When objectives are not met, bonuses are lower and not
paid at all when they are met at less than certain specified thresholds.

For financial year 2002, the Human Resources Committee (HR Committee)
reviewed and recommended to the Board of Directors approval of bonuses under
the short-term incentive plan that were in line with the level of achievement
of the strategic and operational objectives.

Long-Term Incentive Compensation

The long-term incentive compensation is made up of the Employees Stock
Option Plan and the Performance Unit Plan.

Introduced in 1997, the Employees Stock Option Plan is designed to
motivate directors, officers, employees and consultants, align their interests
with the Corporations shareholders over the long-term and create an ownership
mentality. It is of limited duration and is subject to the HR Committee review
to ensure maintenance of its market competitiveness.

The current Employees Stock Option Plan provides for the issuance of
options to directors, officers,
employees and consultants to purchase Common Shares. The number of options
granted to directors, officers and employees is determined so as to deliver an
intended target annual compensation value, which,





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##### Table of Contents



for officers and employees,
is expressed as a multiple of their base salary. Under the current policy, the
multiples range from 17.5% to 337.5% (95% to 337.5% for the Named Executive
Officers) of the annual base salary.

Pursuant to the Employees Stock Option Plan, the option grants are
reviewed and recommended by the HR Committee for approval by the Board of
Directors. The exercise price of the options is determined by the Board of
Directors at the time of granting the options, subject to compliance with the
rules of all stock exchanges on which the Common Shares are listed and with all
relevant securities legislation.

Introduced in 2001 in the context of the Corporations equity
recapitalization plan, the Performance Unit Plan was designed, as a supplement
to the Employees Stock Option Plan, to provide an additional incentive to
employees in various divestiture scenarios. Payout under the Performance Unit
Plan will therefore only be made if the Corporation experiences a change of
control.

Special Cash Incentive Compensation

On November 12, 2002, the Board of Directors, on the recommendation of the
HR Committee, approved a mid-term incentive plan called the Special Cash
Incentive Plan.

The Special Cash Incentive Plan rewards the achievement of pre-determined
corporate strategic objectives or milestones, including certain asset sales,
aimed at maximizing the Corporations value in the medium term.

The Special Cash Incentive Plan is effective from November 12, 2002 to
December 31, 2003 and only employees of the Corporation holding managerial
positions are eligible to participate in the Plan.

Each of the pre-determined corporate strategic objectives has a
pre-defined incentive pool, whose size reflects its impact on the
Corporations value. Each participants share of the pool is also pre-defined
based on his or her level and degree of influence/impact on the achievement of
the said objective.

The actual cash payouts under the Plan are determined on a pass or fail
basis and there are no grading schedules and no stretches. If the objective is
achieved, the pre-defined payouts corresponding to the said objective are made.
If it is not achieved, there are no payouts in respect of such objective. The
achievement of the objective is determined by the acceptance of the
corresponding transaction by the Board of Directors or by the completion of the
corresponding transaction as per the business plan approved by the same board,
as applicable.

For the Named Executive Officers, the potential cash payouts range from
US$40,787 to US$607,310 depending on the objective. No payouts were made under
the Special Cash Incentive Plan during the financial year ended December 31,
2002.

Compensation Plan Control and Review

The HR Committee is responsible for ensuring that executive compensation
conforms to the Corporations total compensation policy. The Corporations
relative position in terms of compensation levels, including the proper balance
between cash and incentive compensation, is determined, as needed, through
studies performed by independent consulting firms using a selected reference
market of comparable companies. Internal pay equity studies are a key factor to
complete the process and provide necessary adjustments where required.

Indemnification of Directors and Officers and Limitation of Liability

Pursuant to our by-laws, subject to the limitations provided by law, we will
indemnify our present or former directors and officers or any persons who act
or acted at our request as directors or officers of a body corporate of which
we are or were a shareholder or creditor, and for all costs, losses, charges
and expenses that arose or may arise by reason of their status as directors or
officers of TIW or such body corporate.





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##### Table of Contents



We maintain insurance protection against liability incurred by our
officers and directors, as well as those of our subsidiaries, in the
performance of their duties. We pay the entire premium, amounting approximately
to $1.1 million in 2002. The aggregate limit of liability in respect of any and
all claims is $50 million for the insured period of April 1, 2002 to April 1,
2003.

Indebtedness of Directors and Executive Officers

We made no loans to our directors and officers during the financial year
ended December 31, 2002 and no loan was outstanding as of that date.

SHARE OWNERSHIP OF DIRECTORS AND OFFICERS

Ownership of Securities by Directors and Senior Officers

The table below sets forth as of March 31, 2003 the common shares, stock
options to acquire common shares, units, 7.00% equity subordinated debentures
and senior notes (13 1/4% senior discount notes due 2007, 10 1/2% senior
discount notes due 2007 or 14% senior guaranteed notes) held by each of our
directors and officers and their associates and majority owned subsidiaries.
Besides Mr. Sirois indirect ownership of 27.6% of the common shares, to our
knowledge, no director or officer exercises control over more than 1% of each
class of our securities.

|                    |  |               |             |             |  |                  |            |                 |  |  |   |  |  |  |         | 
|------------------- |  | ------------- | ----------- | ----------- |  | ---------------- | ---------- | --------------- |  |  | - |  |  |  | ------- | 
|                    |  | Common Shares |             | Options (1) |  | 7.00% Debentures |            | Senior Notes   
|                    |  |               |             |             |  |                  |            |                
|Directors           |  | #             |             | #           |  | $ of Face Value  |            | $ of Face Value
|                    |  |               |             |             |  |                  |            |                
|Daniel Cyr          |  |               | 12,742      |             |  |                  | 25,531     |                 |  |  |  |  |  |  |        | 
|Jacques A. Drouin   |  |               | 77,975      |             |  |                  | 275,015    |                 |  |  |  |  |  |  |        | 
|François Laurin     |  |               |            |             |  |                  |           |                 |  |  |  |  |  |  |        | 
|Michael R. Hannon   |  |               |            |             |  |                  |           |                 |  |  |  |  |  |  |        | 
|C. Kent Jespersen   |  |               | 12,293      |             |  |                  | 274,228    |                 |  |  |  |  |  |  |        | 
|Eva Lee Kwok        |  |               |            |             |  |                  | 273,698    |                 |  |  |  |  |  |  |        | 
|Jonathan Meggs      |  |               |            |             |  |                  |           |                 |  |  |  |  |  |  |        | 
|Charles Sirois(2)   |  |               | 128,786,239 |             |  |                  |           |                 |  |  |  |  |  |  |        | 
|Officers            |  |               |             |             |  |                  |            |                 |  |  |   |  |  |  |         | 
|Bruno Ducharme      |  |               | 442,078     |             |  |                  | 12,249,820 |                 |  |  |  |  |  |  | 111,000 | 
|André Gauthier      |  |               | 2,930       |             |  |                  | 2,517,365  |                 |  |  |  |  |  |  |        | 
|Jacques P. Langevin |  |               |            |             |  |                  | 2,526,953  |                 |  |  |  |  |  |  |        | 
|Margriet Zwarts     |  |               | 20          |             |  |                  | 2,519,764  |                 |  |  |  |  |  |  |        | 



---

|(1) |  | These options vest and expire on pre-determined dates and are exercisable
at prices ranging between Cdn$0.52 and Cdn$340.00.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Mr. Sirois exercised control over 128,765,419 subordinate voting shares
through Telesystem and certain of its subsidiaries. 

EMPLOYEES

As of March 1, 2003, we had 27 employees at the corporate level including
expatriate employees assigned to foreign operations. As at December 31, 2002,
we had approximately 3,190 employees, including employees of our continuing
operations, compared to approximately 3,150 and 2,610 as at December 31, 2001 and December
31, 2000 respectively. These numbers include for 2002, 2001 and 2000,
respectively, 1,700, 1,560 and 1,510 employees of MobiFon, 1,350,
1,350 and 850
employees of Ceský Mobil, and 200, 180 and 150 for Hexacom. None of these
employees are members of labor unions. We believe that our subsidiaries and us
enjoy good relationships with our respective employees.




ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





---



##### Table of Contents



TIW

Major Shareholders

The following table and notes thereto set forth certain information
regarding ownership of our voting securities and securities convertible or
exchangeable into our voting securities, outstanding as of March 31, 2003,
namely our common shares, preferred shares and 7.00% equity subordinated
debentures, for the following persons:



|(1) |  | each person who is known by us to be the beneficial owner of 5% or more
of our outstanding common shares, being our only class of voting
securities; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | all other stakeholders as a group.                                                                                                                      

|                              |  |                                     |       |                      |  |                      |       |  |  |  |       | 
|----------------------------- |  | ----------------------------------- | ----- | -------------------- |  | -------------------- | ----- |  |  |  | ----- | 
|                              |  | Expressed as a % of all Outstanding
|                              |  |                                    
|                              |  | Subordinate                         |       |                      |  |                      |       |  |  | 
|Name of Beneficial Owner      |  | Voting Shares (5)                   |       | Preferred Shares (6) |  | 7.00% Debentures (7)
|                              |  |                                     |       |                      |  |                     
|Telesystem (1)                |  |                                     | 27.6  |                      |  |                      |      |  |  |  |      | 
|CDPQ (2)                      |  |                                     | 13.9  |                      |  |                      |      |  |  |  |      | 
|UFI (3)                       |  |                                     | 16.6  |                      |  |                      | 100.0 |  |  |  |      | 
|J.P. Morgan Partners, LLC (4) |  |                                     | 17.5  |                      |  |                      |      |  |  |  |      | 
|Other Holders                 |  |                                     | 24.4  |                      |  |                      |      |  |  |  | 100.0 | 
|Total                         |  |                                     | 100.0 |                      |  |                      | 100.0 |  |  |  | 100.0 | 



---

|(1) |  | Includes securities held by subsidiaries of Telesystem, ultimately
controlled by Charles Sirois.                                                                                                                                                            
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Caisse de dépôt et placement du Québec. Includes securities held by
Capital Communications CDPQ and other subsidiaries of the Caisse de dépôt
et placement du Québec.                                                                                       
|   
|(3) |  | U.F. Investments (Barbados) Ltd., an affiliate of Hutchison Whampoa Ltd.                                                                                                                                                                                    
|   
|(4) |  | Represents securities held by affiliates of J.P. Morgan Partners, LLC.                                                                                                                                                                                      
|   
|(5) |  | Based on a total of 467,171,850 common shares outstanding. The holdings
of subordinate voting shares for each named beneficial holders are
128,765,419 for Telesystem, 64,800,642 for CDPQ, 77,579,054 for UFI and
81,814,409 for J.P. Morgan Partners, LLC.
|   
|(6) |  | Based on a total of 35,000,000 Preferred Shares outstanding.                                                                                                                                                                                                
|   
|(7) |  | Based on a total of Cdn$1,236,500 in principal amount of 7.00% equity
subordinated debentures outstanding.                                                                                                                                                  

To our knowledge, Caisse de dépôt et placement du Québec and/or its
subsidiaries have held in the past and may still hold an interest in our 13
1/4% senior discount notes due 2007, 10 1/2% senior discount notes due 2007
or 14% senior guaranteed notes due December 30, 2003. To our knowledge, other
than as disclosed in this prospectus, Telesystem, Caisse de dépôt et placement
du Québec, U.F. Investments (Barbados) Ltd. and J.P. Morgan Partners, LLC did
not, as of March 31, 2003, own or exercise control over any of our other
securities.

Related Party Transactions

During the financial year ended December 31, 2002, neither we nor our
subsidiaries entered into any transaction with an insider or associate of ours,
with any proposed nominee as a director or any associate or affiliate of any
such insider or proposed nominee, that has or would materially affect us or any
of our subsidiaries, except for transactions entered into under the following
agreements:



|1. |  | An agreement entered into between Telesystem and us pursuant to which
Telesystem selects nominees for our president and chief executive officer
for recommendation to and approval by our board of directors.                                                                                     
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | An amended and restated credit agreement dated as of February 4, 2002, among
us, Telesystem (Antilles) Corporation N.V. and Telesystem International
Wireless Corporation N.V. as borrowers and Canadian Imperial Bank of Commerce,
Caisse de dépôt et placement du Québec, Chase Securities Inc.,





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##### Table of Contents





|   |  | (an affiliate of J.P. Morgan Partners, LLC), Deutsche Bank of Canada and
National Bank of Canada as lenders for our senior credit facility as
amended on August 15, 2002 and December 6, 2002. In March 2003, we repaid
in full the amount outstanding under the facility and the facility was
terminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|3. |  | The master and purchase agreement entered into among Telesystem, Capital
Communications CDPQ, an affiliate of J.P. Morgan Partners, LLC and an
affiliate of Hutchison Whampoa Limited, as purchasers, and certain other
affiliates of J.P. Morgan Partners, LLC and us, as issuer, dated November
28, 2001, pertaining among other things to the purchase of our special
warrants and purchase warrants, the conversion of all of our outstanding
7.75% convertible debentures and all of our outstanding multiple voting
shares into subordinate voting shares. The parties to the master and
purchase agreement have amended its terms three times by means of a first
amending agreement dated January 18, 2002, a second amending agreement
dated January 24, 2002 and a third amending agreement dated February 5,
2002.
|  
|4. |  | An amended and restated investors rights agreement dated January 24,
2002, among Telesystem, Capital Communications CDPQ, certain affiliates of
JP Morgan, certain affiliates of Hutchison Whampoa, whom we refer to
collectively as the major shareholders, and us providing for minority and
majority representation rights on our board of directors and setting out
certain principles of corporate governance. This agreement amended and
supplemented an investors rights agreement dated November 29, 2001.                                                                                                                                                                                                                                                                                                           
|  
|   |  | Pursuant to the amended and restated investors rights agreement, on March 5,
2002 we (1) reduced the size of our board of directors to eight members,
(2) caused the appointment to our board of directors the nominees of the
major shareholders, and the nominees provided by our board of directors,
as provided for under the investor rights agreement, who were not
already members of our board of directors, and (3) caused to be executed
such documentation as is legally or otherwise required to effect these
actions.                                                                                                                                                                                                                                                                                           
|  
|   |  | Also on March 5, 2002 (1) the affiliates of JP Morgan, collectively, and
(2) each of an affiliate of Hutchison Whampoa, Telesystem and Capital
Communications CDPQ, individually, nominated candidates for appointment
or election to our board of directors as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



| | (a) |  | Capital Communications CDPQ  1 board member;       
| | --- |  | ----------------------------------------------------
|
| | (b) |  | Telesystem  2 board members;                       
|
| | (c) |  | the affiliates of JP Morgan  2 board members;      
|
| | (d) |  | the affiliate of Hutchison Whampoa  1 board member.



|   |  | Subject to the requirements of the Canada Business Corporation Act and the
rules of the TSX, and The Nasdaq Stock Market or the NASD, as
applicable, and the additional requirements of the investors rights
agreement, our board of directors has the right to nominate for election
or appointment to the board of directors any other individual persons
required to bring the number of directors on the board of directors to
eight; provided, however, that such other individual persons so
nominated for election or appointment by the board of directors shall at
all times consist of, to the extent practicable, persons who are
independent of our management, the major shareholders and us, and
possess substantial industry or other experience relevant or applicable
to our strategic decision making.      
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Pursuant to the investors rights agreement, each major shareholder agreed
with the other major shareholders to vote all of its shares in favor of
the nominees put forward for election by each major shareholder and our
board of directors in accordance with the investors rights agreement at
each of our duly constituted shareholders meetings at which members of
our board of directors are to be elected, and each major shareholder and
we agreed to use our respective best efforts to cause any vacancy on our
board of directors to be filled by a nominee of the major shareholder,
or our board of directors, as the case may be, entitled to fill that
vacancy. Nothing in the investors rights agreement requires any party
thereto to grant a proxy in favor of another party thereto or to our
management.
|  
|5. |  | A use of premises and service agreement between us and Telesystem Ltd.
providing for the use and enjoyment by us of approximately 8,700 square
feet of the premises leased by Telesystem Ltd. at 1250                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         





---



##### Table of Contents





| |  | René-Lévesque West,
38th floor in Montreal, for annual rent of approximately Cdn$385,000
including furniture.
| |  | -------------------------------------------------------------------------------------------------------------




ITEM 8  FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Our consolidated financial statements for the fiscal years ended December
31, 2000, 2001 and 2002 and the auditors report signed by Ernst & Young LLP
are presented at Item 18 of this report.

LEGAL PROCEEDINGS

We are involved in litigation, along with our subsidiaries and operating
companies, from time to time in the ordinary course of our businesses. In
managements opinion, the litigation in which we or our subsidiaries or
operating companies are currently involved is not material to our financial
condition, results of operations or cash flow.

SIGNIFICANT CHANGES

Sale of Minority Interest in MobiFon and MobiFon Share Repurchase

In 2002, MobiFon has initiated a share repurchase of up to US$38.8 million
of which ClearWaves share is US$24.6 million. Shareholders of MobiFon have
until June 30, 2003, to tender their shares in order to realize their pro-rata
share of this distribution amount. To date, MobiFon has already repurchased
shares tendered by ClearWave for proceeds of US$24.6 million.

On March 19, 2003 we announced that we had closed the sale of 11,135,555
shares of MobiFon currently owned by ClearWave, representing 5.75% of the then
issued and outstanding share capital of MobiFon for a total cash consideration
of US$42.5 million.

ClearWave used substantially all of the proceeds from the sale and from
the previously mentioned share repurchase by MobiFon to repay intercompany
demand notes due to us and pay related interest. We used the proceeds from the
repayment of those notes by ClearWave to reduce indebtedness at the corporate
level. Depending on the timing and extent of each MobiFon shareholders
participation in the share repurchase, ClearWaves ultimate ownership of
MobiFon may vary between 56.58% and 58.90%.

Sale of Brazilian Operations

On March 26, 2003 we sold our indirect 49% interest in Telpart
Participações S.A (Telpart) to Highlake International Business Company Ltd., an
affiliate of Opportunity Fund. Telpart controls Telemig Celular Participações
S.A. and Tele Norte Celular Participações S.A., holding companies of two
cellular operators in Brazil. Outstanding litigation between us and the
Opportunity group of companies has also been settled as part of this
transaction. The total cash consideration received by us is US$70 million of
which US$5 million was paid by Telemig and Tele Norte for release of claims for
technical services.

Repayment of Senior Credit Facility and Partial Redemption of 14% Senior Guaranteed Notes

In March 2003, we repaid in full the amount outstanding under our senior
credit facility and the facility was terminated. On April 25, 2003, as required
by the indenture governing our 14% senior guaranteed notes, we used the net
cash proceeds from the sale of our Brazilian assets, after full repayment of
loans outstanding under our senior corporate credit facility, to redeem at par
US$48 million in principal amount plus accrued interest. After the redemption,
our corporate indebtedness consisted essentially of US$172 million in 14%
senior guaranteed notes due December 2003.

Share Consolidation

On May 2, 2003, our shareholders approved an amendment to our articles of
incorporation to consolidate all issued and outstanding common shares on the
basis of a ratio within the range of one post-





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##### Table of Contents



consolidation share for every five pre-consolidation shares to one
post-consolidation share for every 25 pre-consolidation shares, with the ratio
to be selected and implemented by our Board of Directors in its sole
discretion, if at all, at any time prior to April 30, 2004.




ITEM 9  THE OFFER AND LISTING

OFFER AND LISTING DETAILS

Not applicable.

PLAN OF DISTRIBUTION

Not applicable.

MARKETS

Common Shares

Our common shares are listed for trading on the TSX under the symbol TIW
and on the Nasdaq SmallCap Market under the symbol TIWI. Our subordinate
voting shares began trading on the TSX on May 9, 1997, prior to which there was
no public market for such shares and on the Nasdaq on June 8, 1998. On June
23, 2001, we consolidated the subordinate voting shares on a 5 for 1 basis. On
June 27, 2001, the subordinate voting shares started trading on the TSX and
Nasdaq on a consolidated basis. On May 17, 2002, contemporaneously with the
elimination of multiple voting shares from our share capital, we redesignated
the subordinate voting shares as common shares. The CUSIP for the common
shares is 879946-50-7. The following tables set forth, for the years, calendar
quarters and months indicated, the range of high and low closing sale prices
for the subordinate voting shares as reported on the TSX and the Nasdaq. All
data has been adjusted to give effect to the 5 for 1 consolidation:

|               |  |                        |       |             |  |        |       |      |  |     |        |        |  |  |       |  |  |  |       |  |  |  |        | 
|-------------- |  | ---------------------- | ----- | ----------- |  | ------ | ----- | ---- |  | --- | ------ | ------ |  |  | ----- |  |  |  | ----- |  |  |  | ------ | 
|               |  | Toronto Stock Exchange |       | Nasdaq     
|               |  | Price Range            |       | Price Range
|               |  |                        |       |            
|               |  | (Cdn$)                 |       | (Cdn$)      |  | (000s) |       | ($)  |  | ($) |        | (000s)
|               |  | High                   |       | Low         |  | Volume |       | High |  | Low |        | Volume
|               |  |                        |       |             |  |        |       |      |  |     |        |       
|2001           |  |                        |       |             |  |        |       |      |  |     |        |        |  |  |       |  |  |  |       |  |  |  |        | 
|First quarter  |  |                        | 43.25 |             |  |        | 11.40 |      |  |     | 4,366  |        |  |  | 29.40 |  |  |  | 7.35  |  |  |  | 188    | 
|Second quarter |  |                        | 18.35 |             |  |        | 5.80  |      |  |     | 8,407  |        |  |  | 11.85 |  |  |  | 3.95  |  |  |  | 435    | 
|Third quarter  |  |                        | 10.70 |             |  |        | 0.86  |      |  |     | 3,932  |        |  |  | 7.31  |  |  |  | 0.60  |  |  |  | 355    | 
|Fourth quarter |  |                        | 3.44  |             |  |        | 0.42  |      |  |     | 29,053 |        |  |  | 2.19  |  |  |  | 0.25  |  |  |  | 6,939  | 
|2002           |  |                        |       |             |  |        |       |      |  |     |        |        |  |  |       |  |  |  |       |  |  |  |        | 
|First quarter  |  |                        | 1.880 |             |  |        | 0.980 |      |  |     | 16,568 |        |  |  | 1.160 |  |  |  | 0.620 |  |  |  | 3,525  | 
|Second quarter |  |                        | 1.150 |             |  |        | 0.520 |      |  |     | 9,465  |        |  |  | 0.740 |  |  |  | 0.360 |  |  |  | 2,856  | 
|Third quarter  |  |                        | 0.720 |             |  |        | 0.230 |      |  |     | 28,633 |        |  |  | 0.510 |  |  |  | 0.160 |  |  |  | 7,929  | 
|Fourth quarter |  |                        | 0.780 |             |  |        | 0.265 |      |  |     | 44,844 |        |  |  | 0.510 |  |  |  | 0.160 |  |  |  | 53,154 | 

|     |  |                        |        |             |  |        |       |      |  |     |        |        |  |  |        |  |  |  |       |  |  |  |        | 
|---- |  | ---------------------- | ------ | ----------- |  | ------ | ----- | ---- |  | --- | ------ | ------ |  |  | ------ |  |  |  | ----- |  |  |  | ------ | 
|     |  | Toronto Stock Exchange |        | Nasdaq     
|     |  | Price Range            |        | Price Range
|     |  |                        |        |            
|     |  | (Cdn$)                 |        | (Cdn$)      |  | (000s) |       | ($)  |  | ($) |        | (000s)
|     |  | High                   |        | Low         |  | Volume |       | High |  | Low |        | Volume
|     |  |                        |        |             |  |        |       |      |  |     |        |       
|1997 |  |                        | 149.50 |             |  |        | 71.25 |      |  |     | 2,308  |        |  |  |       |  |  |  |      |  |  |  |       | 
|1998 |  |                        | 177.50 |             |  |        | 62.50 |      |  |     | 3,916  |        |  |  | 110.65 |  |  |  | 39.40 |  |  |  | 998    | 
|1999 |  |                        | 269.25 |             |  |        | 96.25 |      |  |     | 5,264  |        |  |  | 186.55 |  |  |  | 64.05 |  |  |  | 838    | 
|2000 |  |                        | 352.50 |             |  |        | 28.25 |      |  |     | 15,016 |        |  |  | 240.00 |  |  |  | 18.75 |  |  |  | 2,370  | 
|2001 |  |                        | 43.25  |             |  |        | 0.42  |      |  |     | 45,759 |        |  |  | 29.40  |  |  |  | 0.25  |  |  |  | 7,917  | 
|2002 |  |                        | 1.88   |             |  |        | 0.23  |      |  |     | 99,510 |        |  |  | 1.16   |  |  |  | 0.16  |  |  |  | 67,464 | 





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|              |  |                        |       |             |  |        |       |      |  |     |        |        |  |  |       |  |  |  |       |  |  |  |        | 
|------------- |  | ---------------------- | ----- | ----------- |  | ------ | ----- | ---- |  | --- | ------ | ------ |  |  | ----- |  |  |  | ----- |  |  |  | ------ | 
|              |  | Toronto Stock Exchange |       | Nasdaq     
|              |  | Price Range            |       | Price Range
|              |  |                        |       |            
|              |  | (Cdn$)                 |       | (Cdn$)      |  | (000s) |       | ($)  |  | ($) |        | (000s)
|              |  | High                   |       | Low         |  | Volume |       | High |  | Low |        | Volume
|              |  |                        |       |             |  |        |       |      |  |     |        |       
|October 2002  |  |                        | 0.450 |             |  |        | 0.265 |      |  |     | 6,122  |        |  |  | 0.280 |  |  |  | 0.160 |  |  |  | 1,353  | 
|November 2002 |  |                        | 0.770 |             |  |        | 0.395 |      |  |     | 26,868 |        |  |  | 0.510 |  |  |  | 0.250 |  |  |  | 35,752 | 
|December 2002 |  |                        | 0.780 |             |  |        | 0.460 |      |  |     | 11,854 |        |  |  | 0.499 |  |  |  | 0.300 |  |  |  | 16,049 | 
|January 2003  |  |                        | 0.620 |             |  |        | 0.500 |      |  |     | 6,570  |        |  |  | 0.410 |  |  |  | 0.321 |  |  |  | 5,777  | 
|February 2003 |  |                        | 0.600 |             |  |        | 0.470 |      |  |     | 6,113  |        |  |  | 0.390 |  |  |  | 0.319 |  |  |  | 3,202  | 
|March 2003    |  |                        | 0.425 |             |  |        | 0.240 |      |  |     | 28,089 |        |  |  | 0.280 |  |  |  | 0.160 |  |  |  | 20,319 | 
|April 2003    |  |                        | 0.520 |             |  |        | 0.355 |      |  |     | 6,392  |        |  |  | 0.360 |  |  |  | 0.240 |  |  |  | 7,240  | 

Senior Notes

In June 1997, we issued 13 1/4% senior discount notes with a nominal
value of $380 million. In October 1997, we issued 10 1/2% senior discount
notes with a nominal value of $167 million. Both the 13 1/4% notes and the 10
1/2% notes are unsecured and are due June 30, 2007, and November 1, 2007,
respectively, with cash interest payable semi-annually commencing December 31,
2002, and May 1, 2003, respectively. In March 1998, we exchanged the 13 1/4%
notes and the 10 1/2% notes for Series B 13 1/4% senior discount notes and
Series C 10 1/2% senior discount notes, respectively, pursuant to the
registration rights agreement relating to such notes. The Series B 13 1/4%
notes and the Series C 10 1/2% notes have been registered under the United
States Securities Act of 1933, as amended (the Securities Act). Pursuant to
an exchange offer completed on September 19, 2001, Series B 13 1/4% notes
representing a nominal value of $379,470,000 and Series C 10 1/2% notes
representing a nominal value of $166,980,000 were tendered and cancelled in
exchange for $50 million in cash and $195 million in 14% senior guaranteed
notes. The 14% notes are guaranteed by one of our subsidiaries and are secured
by a second ranking lien on certain of our assets. The 14% notes are due
December 30, 2003 with interest payable semi-annually on June 30 and December
30 of each year commencing on December 30, 2001. The first two interest
payments, payable in cash or kind, were paid through the issuance of additional
notes. Other interest payments are payable only in cash. In April, 2002 we
exchanged the 14% notes pursuant to the registration rights agreement relating
to such notes. The new 14% notes have been registered under the Securities
Exchange Act of 1933 on a registration statement on Form F-4, which was
declared effective March 29, 2002. The 13 1/4% notes, the 10 1/2% notes
and the 14% notes are referred to as the TIW Notes.

There is currently no established trading market for the TIW Notes. There
can be no assurance as to (1) the liquidity of any such market that may
develop, (2) the ability of the holders of such securities to sell them or (3)
the prices at which any such sales may be made. We do not presently intend to
apply for a listing of the TIW Notes on any national securities exchange or to
quote them on a quotation system. The record holder of the TIW Notes is a
nominee of The Depository Trust Company in New York, New York.

7.00% Equity Subordinated Debentures

In February 1999, we completed the issuance of Cdn$150.0 million (US $98.6
million, at the time of the issuance) of 7.00% equity subordinated debentures
due February 15, 2002, with cash interest payable semi-annually. On February 5,
2002, we repurchased Cdn$145,056,000 in pre-amendment principal amount at
maturity of 7.00% debentures in exchange for a combination of cash, subordinate
voting shares and warrants. On February 5, 2002, we also amended the terms of
the indenture to, among other things, postpone the maturity to December 30,
2006 and reduce the principal amount at maturity of each Cdn$1000 of 7.00%
debenture to Cdn$250. Following the amendments the 7.00% coupon is now payable
on the revised principal and is payable semi-annually beginning on June 30,
2002. There remains now outstanding Cdn$1,236,500 in post-amendment principal
amount at maturity of 7.00% debentures. Each 7.00% debenture will be
convertible on maturity, at the option of the holder, into our common shares.
The amended 7.00% debentures are listed on the TSX under the symbol TIW.db.a.
The pre-amendment 7.00% debentures were listed on the TSX under the symbol
TIW.db. The CUSIP for the 7.00% debenture is 879946-AJ-O. The following
tables set forth, for the years, calendar quarters and months indicated, the
range of high and low closing prices for the 7.00% debentures as reported on
the TSX prior
to December 31, 2001. Following the amendments there has been
substantially no trading activity on the 7.00% debentures. The few trades of
the amended debentures that occurred in the last 6 months were in a range of
10% to 25% of their principal amount.





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##### Table of Contents



PRE-AMENDMENT  TIW.DB

|     |  |                         |        |     |  |  |       | 
|---- |  | ----------------------- | ------ | --- |  |  | ----- | 
|     |  | Toronto Stock Exchange 
|     |  | Price Range            
|     |  | (% of principal amount)
|     |  |                        
|     |  | High                    |        | Low
|     |  |                         |        |    
|1999 |  |                         | 115.00 |     |  |  | 98.80 | 
|2000 |  |                         | 123.95 |     |  |  | 60.00 | 
|2001 |  |                         | 78.00  |     |  |  | 16.00 | 

|               |  |                         |        |     |  |  |        | 
|-------------- |  | ----------------------- | ------ | --- |  |  | ------ | 
|               |  | Toronto Stock Exchange 
|               |  | Price Range            
|               |  | (% of principal amount)
|               |  |                        
|               |  | High                    |        | Low
|               |  |                         |        |    
|2000           |  |                         |        |     |  |  |        | 
|First quarter  |  |                         | 123.95 |     |  |  | 110.50 | 
|Second quarter |  |                         | 115.00 |     |  |  | 101.00 | 
|Third quarter  |  |                         | 111.00 |     |  |  | 100.50 | 
|Fourth quarter |  |                         | 102.00 |     |  |  | 60.00  | 
|2001           |  |                         |        |     |  |  |        | 
|First quarter  |  |                         | 78.00  |     |  |  | 45.00  | 
|Second quarter |  |                         | 65.00  |     |  |  | 27.00  | 
|Third quarter  |  |                         | 59.00  |     |  |  | 30.00  | 
|Fourth quarter |  |                         | 40.00  |     |  |  | 15.00  | 

|               |  |                         |       |     |  |  |       | 
|-------------- |  | ----------------------- | ----- | --- |  |  | ----- | 
|               |  | Toronto Stock Exchange 
|               |  | Price Range            
|               |  | (% of principal amount)
|               |  |                        
|               |  | High                    |       | Low
|               |  |                         |       |    
|July 2001      |  |                         | 59.00 |     |  |  | 37.50 | 
|August 2001    |  |                         | 47.00 |     |  |  | 30.00 | 
|September 2001 |  |                         | 39.00 |     |  |  | 26.00 | 
|October 2001   |  |                         | 31.00 |     |  |  | 15.00 | 
|November 2001  |  |                         | 40.00 |     |  |  | 16.00 | 
|December 2001  |  |                         | 31.00 |     |  |  | 27.00 | 
|January 2002   |  |                         | 33.00 |     |  |  | 26.00 | 
|February 2002  |  |                         | 29.00 |     |  |  | 29.00 | 

Units and Rights

In February 2001, we completed a units offering of $260.4 million. Each
unit was comprised of (1) one class A subordinate voting share of ClearWave
N.V. and (2) an option to purchase one fifth of one of our subordinate voting
shares by surrendering the unit at any time from the issuance of the units
until June 30, 2002. The ClearWave shares were non-detachable from the unit
before June 30, 2002. On that date, the option to purchase our subordinate
voting shares not exercised expired and detached from the ClearWave share.

The units were offered for sale through a rights issue to holders of
multiple and subordinate voting shares of the Company. The rights traded on
the TSX under the symbol TIW.RT between January 23, 2001 and February 13,
2001. Each two rights entitled the holder thereof to purchase one unit at a
price of Cdn$9.05. At December 31, 2001, we had 45.9 million units
outstanding. Pursuant to a unit exchange offer, we repurchased in February
2002, 33.7 million units in exchange for a combination of subordinate voting
shares and warrants. On June 30, 2002, 12.1 million units expired and the 12.1
million ClearWave shares comprised in such units were distributed to holders of
units. The units were traded on the TSX under the symbol TIW.UN between
February 14, 2001 and June 30, 2002. The CUSIP for the
units was 879946-20-0.

The following table sets forth, for the months indicated, the range of
high and low closing prices for the units as reported on the TSX.





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##### Table of Contents



|               |  |                        |      |     |  |  |      | 
|-------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|               |  | Toronto Stock Exchange
|               |  | Price Range           
|               |  | (Cdn$)                
|               |  |                       
|               |  | High                   |      | Low
|               |  |                        |      |    
|2001           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 9.45 |     |  |  | 6.25 | 
|Second quarter |  |                        | 7.50 |     |  |  | 4.50 | 
|Third quarter  |  |                        | 6.00 |     |  |  | 4.00 | 
|Fourth quarter |  |                        | 7.30 |     |  |  | 4.00 | 
|2002           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 8.50 |     |  |  | 4.50 | 
|Second quarter |  |                        | 7.75 |     |  |  | 5.00 | 

|              |  |                        |      |     |  |  |      | 
|------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|              |  | Toronto Stock Exchange
|              |  | Price Range           
|              |  | (Cdn$)                
|              |  |                       
|              |  | High                   |      | Low
|              |  |                        |      |    
|January 2002  |  |                        | 6.05 |     |  |  | 4.50 | 
|February 2002 |  |                        | 7.00 |     |  |  | 5.25 | 
|March 2002    |  |                        | 8.50 |     |  |  | 5.50 | 
|April 2002    |  |                        | 7.75 |     |  |  | 6.75 | 
|May 2002      |  |                        | 7.00 |     |  |  | 6.00 | 
|June 2002     |  |                        | 6.00 |     |  |  | 5.00 | 

ESD Warrants 2003

On February 5, 2002, in partial payment for debentures tendered under our
offer to purchase the 7.00% equity subordinated debentures, we issued 2,470,267
ESD Warrants 2003. Each whole warrant entitled its holder to purchase one
common share at a price of Cdn$1.61 at any time until March 31, 2003. On that
date, all 2,470,267 ESD Warrants 2003 expired without being exercised. The ESD
Warrants 2003 were listed on the TSX under the symbol TIW.WT. The CUSIP
number for the ESD Warrants 2003 was 879946-13-5.

The following table sets forth, for the months indicated, the range of
high and low closing prices for the ESD Warrants 2003 as reported on the TSX.

|              |  |                        |      |     |  |  |      | 
|------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|              |  | Toronto Stock Exchange
|              |  | Price Range           
|              |  | (Cdn$)                
|              |  |                       
|              |  | High                   |      | Low
|              |  |                        |      |    
|November 2002 |  |                        | 0.09 |     |  |  | 0.03 | 
|December 2002 |  |                        | 0.08 |     |  |  | 0.03 | 
|January 2003  |  |                        | 0.10 |     |  |  | 0.03 | 
|February 2003 |  |                        | 0.07 |     |  |  | 0.03 | 
|March 2003    |  |                        | 0.03 |     |  |  | 0.01 | 

|               |  |                        |      |     |  |  |      | 
|-------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|               |  | Toronto Stock Exchange
|               |  | Price Range           
|               |  | (Cdn$)                
|               |  |                       
|               |  | High                   |      | Low
|               |  |                        |      |    
|2002           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 0.50 |     |  |  | 0.03 | 
|Second quarter |  |                        | 0.20 |     |  |  | 0.05 | 
|Third quarter  |  |                        | 0.10 |     |  |  | 0.02 | 
|Fourth quarter |  |                        | 0.09 |     |  |  | 0.01 | 
|2003           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 0.10 |     |  |  | 0.01 | 





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##### Table of Contents



|     |  |                         |      |     |  |  |      | 
|---- |  | ----------------------- | ---- | --- |  |  | ---- | 
|     |  | Toronto Stock Exchange 
|     |  | Price Range            
|     |  | (% of principal amount)
|     |  |                        
|     |  | High                    |      | Low
|     |  |                         |      |    
|2002 |  |                         | 0.50 |     |  |  | 0.01 | 
|2003 |  |                         | 0.10 |     |  |  | 0.01 | 

ESD Warrants 2002

On February 5, 2002, in partial payment for debentures tendered under our
offer to purchase 7.00% equity subordinated debentures, we issued 3,671,730 ESD
Warrants 2002. Each whole warrant entitled its holder to purchase one common
share at a price of Cdn$1.61 at any time until September 30, 2002. On that
date all 3,671,730 ESD Warrants 2002 expired without being exercised. A
trading market for the ESD Warrants 2002 was never established. The CUSIP
number for the ESD Warrants 2002 was 879946-14-3.

Unit Warrants

On February 28, 2002, in partial payment for units tendered under our unit
exchange offer we issued 8,531,540 Unit Warrants. Each whole Unit Warrant
entitles its holder to purchase one subordinate voting share at a price of
Cdn$1.59 at any time until March 31, 2003. On that date, all 8,531,540 Unit
Warrants expired without being exercised. A trading market for the Unit
Warrants was never developed. The CUSIP number for the Unit Warrant was 879946-40-8.





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##### Table of Contents






ITEM 10  ADDITIONAL INFORMATION

SHARE CAPITAL

Our authorized share capital consists of an unlimited number of common
shares without par value and an unlimited number of preferred shares without
par value, issuable in series. Our common shares are listed for trading on the
TSX under the symbol TIW and on the Nasdaq under the symbol TIWI. Our common
shares began trading on the TSX on May 9, 1997, prior to which there was no
public market for such shares and on the Nasdaq on June 8, 1998. On June 22,
2001, our shareholders approved a one-for-five (1:5) consolidation of our share
capital and the common shares started trading on a consolidated basis on June
27, 2001. On February 5, 2002, all multiple voting shares outstanding were
converted into subordinate voting shares now redesignated as a single class of
common shares since May 17, 2002.

The following is a brief description of the attributes of our relevant
convertible securities and share capital.

Common Shares

The common shares rank junior to the preferred shares with respect to the
payment of dividends, return of capital and distribution of assets in the event
of liquidation, dissolution or any distribution of our assets for the purpose
of winding up our affairs. The holders of common shares are entitled to
receive dividends on a share-for-share basis out of the assets legally
available therefore at such times and in such amounts as our board of directors
may determine.

The common shares carry one vote per share. The holders of common shares
are entitled to receive notice of any meeting of our shareholders and to attend
and vote thereat as a single class on all matters to be voted on by our
shareholders, except at meetings where the holders of shares of one class or of
a particular series of shares are entitled to vote separately pursuant to the
Canada Business Corporations Act or our articles.

The common shares are not redeemable nor retractable. Upon our
liquidation, dissolution or any distribution of our assets for the purpose of
winding up our affairs, the holders of common shares shall be entitled to
participate equally, on a share-for-share basis, in our remaining property and
assets available for distribution to such holders.

Preferred Shares

The preferred shares are issuable, from time to time, in one or more
series, as determined by our board of directors and carrying rights and
privileges fixed by our board of directors. Any series of preferred shares, if
issued, may rank prior to common shares with respect to the payment of
dividends and the distribution of assets. In such a case, in the event of our
dissolution, the distribution of our assets upon our liquidation or the
distribution of all or part of our assets among our shareholders, holders of
preferred shares would be entitled to receive, in cash or in property, an
amount equal to the value of the consideration paid in respect of such
outstanding shares, as credited to our issued and paid-up capital account, plus
such amount equal to accrued and unpaid dividends, or declared and unpaid
dividends and, if any, any amount specified in our articles.

Non-Voting Preferred Shares

On March 6, 2002, we created a first series of non-voting preferred
shares. This series of non-voting preferred shares ranks pari passu on a share
for share basis with the common shares but does not carry any voting rights.
55,000,000 non-voting preferred shares have been authorized for issuance.
Non-voting preferred shares may be issued pursuant to the exercise of special
warrants or purchase warrants under the master and purchase agreement if our
board of directors determines that the issuance of common shares upon exercise
thereof, when combined with the acquisition or continuing ownership or any
other of our securities by holders of such special warrants or purchase
warrants would likely result (i) in such holders being considered a group
within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act such that
certain provisions of our debt instruments pertaining to a change of control
may be triggered or (b) in





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##### Table of Contents



Capital Communications CDPQ increasing its voting position in us as of
November 28, 2001 by more than 10%. Subject to the same conditions giving rise
to their issuance the non-voting preferred shares are convertible into common
shares on a one-for-one basis subject to applicable adjustments. On March 13,
2002, we issued 35,000,000 non-voting preferred shares.

7.00% Equity Subordinated Debentures due 2002

We issued on February 15, 1999, Cdn$150,000,000 principal amount of 7.00%
equity subordinated debentures pursuant to an indenture entered into between
Montreal Trust Company of Canada, as trustee, and us. On November 29, 2001, we
launched the 7.00% equity subordinated debentures purchase offer with the
intent of repurchasing the 7.00% equity subordinated debentures and amending
the terms of the indenture governing them. On February 5, 2002, we repurchased
an aggregate of Cdn$145,054,000 in principal amount of 7.00% equity
subordinated debentures and executed a supplemental indenture pursuant to the
7.00% equity subordinated debentures purchase offer. The following is a
description of some of the terms of the indenture governing the 7.00% equity
subordinated debentures, as amended by the supplemental indenture we entered
into on February 5, 2002. We refer to the indenture, as amended, as the
amended 7.00% equity subordinated debenture indenture.

Pursuant to the amended 7.00% equity subordinated debenture indenture, the
7.00% equity subordinated debentures mature on December 31, 2006 and have a
principal amount at maturity of Cdn$250 each, rather than Cdn$1,000 as per the
original 7.00% equity subordinated debenture indenture. The 7.00% equity
subordinated debentures bear interest at the rate of 7.00% per annum,
calculated on the basis of a principal amount of Cdn$250, payable semi-annually
in arrears on June 30 and December 31 in each year commencing June 30, 2002,
with the first interest coupon under the amended 7.00% equity subordinated
debenture indenture being calculated from February 5, 2002. We have the
option, in lieu of paying the principal amount of the 7.00% equity subordinated
debentures in cash at maturity, to deliver that number of freely tradable
common shares obtained by dividing the principal amount of the 7.00% equity
subordinated debentures by the greater of Cdn$1.00 or 95% of the then current
market price of the common shares, provided no event of default, as defined in
the amended 7.00% equity subordinated debenture indenture, shall have occurred
and be continuing. Each 7.00% equity subordinated debenture is convertible at
maturity at the option of the holder into that number of common shares equal to
the conversion number, as defined in the amended 7.00% equity subordinated
debenture indenture. The conversion number will be calculated as of the date
of conversion as:



| | (a) |  | the conversion value, as defined in the supplemental
7.00% equity subordinated debenture indenture, as of such date,
being the subordinate voting share value, divided by
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | 95% of the then current market price of the common shares.                                                                                                               

The subordinate voting share value will be equal to 56.818182 (subject to
applicable adjustments)  the subordinate voting share rate  multiplied by the
current market price of the common shares on the date of conversion. We have
the option, in lieu of delivering common shares on conversion, to pay the
conversion value in cash for 7.00% equity subordinated debentures tendered for
conversion. The conversion number is subject to adjustment upon the occurrence
of certain events. The 7.00% equity subordinated debentures will be
convertible at the option of the holder prior to maturity upon the occurrence
of an offer, as defined in the amended 7.00% equity subordinated debenture
indenture, or an event of default.

MEMORANDUM AND ARTICLES OF ASSOCIATION

We were incorporated in Canada on September 9, 1996 under the name 3293505
Canada Inc. On March 11, 1997 we amended our articles of incorporation to,
among other things, change our name to Telesystem International Wireless Inc.
On May 1, 1997, we again amended our articles of incorporation to, among other
things, effect certain changes to our share capital. Our articles of
association were again amended on June 22, 2001 to effect a share consolidation
on a five-for-one basis and on March 6, 2002 to create a series of non-voting
preferred shares. A description of certain rights and limitations attached to
our shares and certain procedures applicable at our meetings of shareholders as
well as other pertinent information may be found under captions
ITEM 10 
Additional Information  Share Capital.





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##### Table of Contents



MATERIAL CONTRACTS

The following is a list of each material contract, other than contracts
entered into in the ordinary course of business, to which we or our
subsidiaries are a party, for the two years preceding publication of this
document:



| | 1.  |  | Amended and Restated Investors Rights Agreement dated January 24,
2002 among the Corporation, Telesystem, CDPQ, certain affiliates of JP
Morgan and certain affiliates of Hutchison providing for minority and
majority representation rights on the Board of Directors of the
Corporation and setting out certain principles of corporate governance
which amends and supplements a certain Investors Rights Agreement dated
November 29, 2001;       
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2.  |  | Mutual Release dated March 26, 2003 by and among TIW and certain of
its subsidiaries, Highlake International Business Company Ltd.,
Opportunity Fund and CVC/Opportunity Equity Partners L.P. providing for
the settlement of certain outstanding litigation and certain potential
claims between the parties.                                                                                                                                         
|
| | 3.  |  | Loan Agreements between ClearWave and us, and ClearWave and TIWC,
representing advances made by TIW and TIWC to finance ClearWaves
development costs. As at March 31, 2003, an aggregate amount of $54.1
million in advances were made to ClearWave, bearing an annual interest
rate of 14% and repayable on demand. These advances are convertible
into class A subordinate voting shares of ClearWave subject to
corporate and regulatory approvals;
|
| | 4.  |  | Exit Deed dated March 19, 2003 among EMP, TIW, TIWC and us
providing for certain exit rights granted to Emerging Market
Partnerships in connection with their investment in MobiFon;                                                                                                                                                                                                                                                                   
|
| | 5.  |  | License awarded to Ceský Mobil to establish and operate a public
mobile telecommunication network according to the GSM standard dated
June 17, 2002;                                                                                                                                                                                                                                                                                                   
|
| | 6.  |  | License awarded to Ceský Mobil to establish and operate a public
mobile telecommunication network according to the VmTS standard dated
June 20, 2002;                                                                                                                                                                                                                                                                                                  
|
| | 7.  |  | Loan Agreement between MobiFon S.A. and European Bank for
Reconstruction and Development dated August 27, 2002 (Incorporated by
reference to Form 6-K of ClearWave N.V., filed November 13, 2002);                                                                                                                                                                                                                                                     
|
| | 8.  |  | Loan Agreement between MobiFon S.A. and Nordic Investment Bank
dated August 27, 2002 (Incorporated by reference to Form 6-K of
ClearWave N.V., filed November 13, 2002);                                                                                                                                                                                                                                                                               
|
| | 9.  |  | Loan Agreement between MobiFon S.A. and Export Development Bank
Canada dated August 27, 2002 (Incorporated by reference to Form 6-K of
ClearWave N.V., filed November 13, 2002);                                                                                                                                                                                                                                                                       
|
| | 10. |  | Share Retention and Subordination Deed between MobiFon S.A.,
certain of its direct and indirect shareholders, Export Development
Canada, Nordic Investment Bank and European Bank for Reconstruction and
Development dated August 27, 2002.                                                                                                                                                                                                            

EXCHANGE CONTROLS

There are currently no laws, decrees, regulations or other legislation in
Canada that restricts the export or import of capital, or affects the
remittance of dividends, interest or other payments to non-resident holders of
the Companys securities, other than withholding tax requirements.

There is no limitation imposed by Canadian law or by the Articles of
Incorporation or other charter documents of the Company on the right of a
non-resident to hold voting shares of the Company, other than as provided by
the Investment Canada Act,as amended (the Act), as amended by the North
American Free Trade Agreement Implementation Act(Canada), and the World Trade
Organization (WTO) Agreement Implementation Act. The Act requires notification
and, in certain cases, advance review and approval by the Government of Canada
of the acquisition by a non-Canadian of control of a Canadian business, all
as defined in the Act. Generally, the threshold for review will be higher in
monetary terms for a member of the WTO or NAFTA.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS





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The following is a summary of certain Canadian federal income tax
considerations relating to an investment in either: (i) the common shares;
(ii) the ESD Warrants 2002, the ESD Warrants 2003 and the Unit Warrants
(collectively also referred to as the TIW Warrants); (iii) the 7.00% equity
subordinated debentures; or (iv) the 10 1/2% senior discount notes, the 13
1/4 % senior discount notes and the 14% senior guaranteed notes (collectively
also referred to as the TIW Notes). It also contains a summary of certain
Canadian and Dutch income tax considerations relating to an investment in the
units (collectively also referred to as the TIW Securities).

The summary is only applicable to a holder of TIW Securities who, for the
purposes of the Income Tax Act(Canada) (also referred to as the Income Tax
Act) and the Canada-United States Tax Convention(also referred to as the
Convention), is resident in the United States and not resident in Canada, deals
at arms length with TIW, holds TIW Securities as capital property and does not
use or hold and is not deemed to use or hold TIW Securities in carrying on
business in Canada (also referred to as the U.S. Holder).

The summary is for general information only and does not take into account
the individual circumstances of any particular investor. Therefore, investors
are urged to consult their own tax advisors with respect to the tax
consequences of an investment in the TIW Securities based on their specific
circumstances, including any consequences of an investment in the TIW
Securities arising under state, local or provincial tax laws of other
jurisdictions, including the United States.

This summary is based on the current provisions of the Convention and
accompanying protocols, the Income Tax Act, the regulations under the Income
Tax Act, specific proposals to amend the Income Tax Act or the regulations
thereunder announced by the Canadian Minister of Finance prior to the date of
this report and counsels understanding of the current administrative and
assessing practices of the Canada Customs and Revenue Agency (or CCRA). This
summary does not otherwise take into account or anticipate any changes in law,
whether by legislative, governmental or judicial action, nor does it take into
account income tax laws or considerations of any province or territory of
Canada or any jurisdiction other than Canada.

Special rules, which are not discussed in this summary, may apply to
financial institutions (as defined by the Income Tax Act) and to non-resident
insurers carrying on an insurance business in Canada and elsewhere.

The Common Shares

Assuming that the common shares will continue to be listed on the the TSX
and the NASDAQ, capital gains realized on the disposition of common shares by a
U.S. Holder will not be subject to tax under the Income Tax Act unless such
common shares constitute taxable Canadian property.

Common shares will generally not be taxable Canadian property of a U.S.
Holder unless, at any time during the five-year period immediately preceding a
disposition, the U.S. Holder, persons with whom the U.S. Holder did not deal at
arms length or the U.S. Holder and persons with whom the U.S. Holder did not
deal at arms length owned 25% or more of the issued shares of any class or
series of shares of the capital stock of the Company. Even if common shares
constitute taxable Canadian property to a particular U.S. Holder, an exemption
from tax under the Income Tax Act may be available under the provisions of the
Convention.

Dividends, including deemed dividends and stock dividends, paid or
credited to a U.S. Holder on common shares are subject to Canadian withholding
tax under the Income Tax Act. The Convention generally reduces the rate of
withholding tax to 15% of the gross amount of the dividend where the beneficial
owner is not a company that owns at least 10% of the voting stock of TIW.
Moreover, under the Convention, dividends paid to certain religious,
scientific, literary, educational or charitable organizations and certain
pension organizations that are resident in, and generally exempt from tax in,
the United States, are exempt from Canadian non-resident withholding tax.
Provided that certain administrative procedures are observed by such an
organization, the Company would not be required to withhold such tax from
dividends paid or credited to such organization. It should be noted that this
summary does not address the tax treatment of U.S. Holders that are
corporations owning 10% or more of the voting stock of the Company.





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The TIW Warrants

Capital gains realized on the disposition of the TIW Warrants by a U.S.
Holder will not be subject to tax under the Income Tax Act unless the
underlying common shares would be taxable Canadian property for the particular
U.S. Holder. For information concerning when the common shares will be taxable
Canadian property for a particular U.S. Holder, see the summary under the
heading The Common Shares. For the purposes of determining the number of
common shares held a particular person, the person will be considered to own
common shares for which such persons TIW Warrants may be exchanged. Even if
the TIW Warrants constitute taxable Canadian property to a particular U.S.
Holder, an exemption from tax under the Income Tax Act may be available under
the provisions of the Convention.

Where the TIW Warrants are exercised, the amount paid to acquire or to
exercise the TIW Warrants will be added to the adjusted cost base of shares
acquired pursuant to the exercise of the warrants. For the Canadian federal
income tax consequences of holding common shares, see the description under the
heading The Common Shares.

The 7.00% Equity Subordinated Debentures

Interest paid or credited, or that is deemed to be paid or credited for
the purposes of the Income Tax Act, to a U.S. Holder on a 7.00% equity
subordinated debenture will be subject to Canadian withholding tax. In
general, the rate of this withholding tax is reduced to 10% of the gross amount
of the interest pursuant to the Convention. Moreover, under the Convention,
interest paid to certain religious, scientific, literary, education or
charitable organizations and certain pension organizations that are resident
in, and generally exempt from tax in, the United States, are exempt from
Canadian non-resident withholding tax. Provided that certain administrative
procedures are observed by such an organization, the Company would not be
required to withhold such tax from interest paid or credited to such
organization.

A U.S. Holder will not be subject to tax under the Income Tax Act in
respect of any capital gain realized by such U.S. Holder on a disposition of a
7% equity subordinated debenture unless the debenture constitutes taxable
Canadian property of the U.S. Holder for purposes of the Income Tax Act and
the U.S. Holder is not entitled to relief under an applicable tax treaty or
convention.

As long as the common shares are listed on the the TSX and the Nasdaq, a
debenture generally will not constitute taxable Canadian property of a U.S.
Holder who is a non-resident of Canada unless, at any time during the five-year
period immediately preceding the disposition of the debentures, the U.S.
Holder, persons with whom the U.S. Holder did not deal at arms length or the
U.S. Holder together with persons with whom the U.S. Holder did not deal at
arms length owned 25% or more of the issued shares of any class or series of
shares of the capital stock of the Company. For the purposes of determining
the number of common shares held, a person will be considered to own common
shares for which such persons debentures may be exchanged. Even if the 7%
equity subordinated debentures constitute taxable Canadian property to a
particular U.S. Holder, an exemption from tax under the Income Tax Act may be
available under the provisions of the Convention.

TIW NOTES

10 1/2% Senior Discount Notes and the 13 1/4% Senior Discount Notes

The payment by the Company or the accrual of any accreted value, interest
and premium on the 10 1/2% Senior Discount Notes or the 13 1/4% Senior
Discount Notes should be exempt from Canadian withholding tax.

14% Senior Guaranteed Notes

The payment by the Company or the accrual of any accreted value, interest
and premium on the 14% Senior Guaranteed Notes, should be exempt from Canadian
withholding tax. The conclusion in the preceding sentence as to interest on
the 14% Senior Guaranteed Notes is based on the Companys receipt of a letter
from the Department of Finance of Canada, stating that it will recommend that
the rules governing Canadian withholding tax on interest be amended
retroactively so that the payment of interest on the old





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notes would be exempt from Canadian withholding tax.

Interest payable on additional exchange notes and on exchange notes issued
as interest in kind will be subject to Canadian withholding tax. If the
Company is required to withhold or deduct any amount for or on account of
taxes, the Company will pay such additional amounts as may be necessary so that
the net amount received by each U.S. Holder after such withholding or deduction
will not be less than the amount the U.S. Holder would have received if such
taxes had not been withheld or deducted.

The Units

Capital gains realized on the disposition of units by a U.S. Holder should
not be subject to tax under the Income Tax Act.

CERTAIN NETHERLANDS INCOME TAX CONSIDERATIONS

The following is a general description of Dutch tax law currently in
effect as applicable to ownership and disposition of the units and or class A
subordinated voting shares in ClearWave N.V. (hereinafter referred to as
ClearWave shares) held by residents of Canada and the United States as defined
below. These statements should not be construed by unitholders as advice on
their own tax position. As individual circumstances may affect the general tax
consequences as described in this section, unitholders are strongly recommended
to consult their professional adviser with regard to their own tax position and
tax consequences of owning and disposing of the units and or ClearWave shares.

Dutch Taxation of unitholders who are resident in Canada

This section Dutch Taxation of Unitholders who are Resident in Canada is
a general description of Dutch tax law currently in effect as applicable to
ownership and disposition of the units and or ClearWave shares held by
residents of Canada as defined below. This section describes Dutch tax
consequences for a unitholder who is neither a resident, nor deemed to be a
resident in The Netherlands for purposes of Dutch taxation but who is a
resident of Canada as defined in the double taxation convention in effect
between The Netherlands and Canada (also referred to as Canadian unitholder).
Furthermore, this section describes the Dutch tax consequences for a
shareholder after the delivery of ClearWave shares to unitholders under the
terms of the unit, who is neither a resident, nor deemed to be a resident in
The Netherlands for purposes of Dutch taxation but who is a resident of Canada
as defined in the double taxation convention in effect between The Netherlands
and Canada (also referred to as Canadian shareholder; where applicable Canadian
unitholder and Canadian shareholder are collectively referred to as Canadian
holder).

Withholding Tax

Dividends distributed by ClearWave N.V. (ClearWave) to Canadian holders
generally are subject to a withholding tax imposed by The Netherlands at a rate
of 25%.

The term dividends for this purpose includes, but is not limited to:



| |  |  | distributions in cash or in kind, deemed and constructive
distributions and repayments of paid-in capital not recognized as such
for Dutch dividend withholding tax purposes;                                                                                     
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | liquidation proceeds, proceeds of redemption of shares or, generally,
consideration for repurchase of shares in excess of the average paid-in
capital recognized for Dutch dividend withholding tax purposes;                                                     
|
| |  |  | the par value of shares issued or an increase of the par value of
existing shares, as the case may be, to the extent that it does not
appear that a contribution to capital, recognized for Dutch dividend
withholding tax purposes, was made or will be made; and
|
| |  |  | partial repayment of paid-in capital, recognized for Dutch dividend
withholding tax purposes, if                                                                                                                                                                  





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| |  |  | and to the extent that there are net profits, within the meaning of the
Dividend Withholding Tax Act, unless the general meeting of shareholders
of ClearWave has previously resolved to make such repayment and provided
that the par value of the shares concerned has been reduced by a
corresponding amount by changing the Articles of Association of
ClearWave.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As a result of contributions in shares to the paid-in capital of
ClearWave, a portion of such paid-in capital may not be recognized for Dutch
dividend withholding tax purposes.

Under the double taxation convention on income and capital gains in effect
between The Netherlands and Canada (also referred to as the
Canadian-Netherlands tax treaty), dividends as defined in the
Canadian-Netherlands tax treaty paid by ClearWave to a Canadian holder who is
the beneficial owner of the dividends are generally eligible for a reduction of
the 25% Dutch dividend withholding tax to 15%, or in the case of certain
Canadian corporate shareholders owning directly or indirectly at least 10% of
the voting power of ClearWave or owning at least 25% of the capital of
ClearWave, 5%, unless such resident carries on a business in The Netherlands
through a permanent establishment or performs independent personal services
from a fixed base situated in The Netherlands and the holding of units or
ClearWave Shares forms part of the business property of such permanent
establishment or pertains to such fixed base.

Taxes on Income and Capital Gains

Under the Canadian-Netherlands tax treaty, capital gains realized by a
Canadian holder upon the disposition of units or ClearWave shares, are, with
certain exceptions, generally exempt from Dutch tax on capital gains.

A Canadian holder will not be subject to any Dutch taxes on income or
capital gains in respect of dividends distributed by ClearWave or in respect of
capital gains realized on the disposition of units, including the delivery of
ClearWave shares or TIW shares or the redemption of units (other than the
dividend withholding tax described above), provided that:



| |  |  | such Canadian holder is neither resident nor deemed resident in The
Netherlands nor is an individual who has been resident nor is deemed to
have been resident in The Netherlands during a period of six years
preceding an alienation of the units or ClearWave shares;                                                   
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | such Canadian holder does not have a business or an interest in a
business that is, in whole or in part, carried on through a permanent
establishment or a permanent representative in The Netherlands and to
which business or part of a business, as the case may be, the units or
ClearWave shares are attributable; and
|
| |  |  | the units and ClearWave shares owned by such Canadian holder do not
form part of a substantial interest or a deemed substantial interest, as
defined, in the share capital of ClearWave or if such shares do form
part of such a substantial interest, they form part of the assets of a
business; and                     
|
| |  |  | such Canadian holder is not entitled to a share in the profits of a
business that is effectively managed in The Netherlands, other than by
way of securities or through an employment contract, the units or
ClearWave shares being attributable to such business.                                                         

Generally, a Canadian holder will not have a substantial interest in
ClearWave if he or she, his or her spouse, certain other relatives (including
foster children) or certain persons sharing his or her household, do not hold,
alone or together, whether directly or indirectly, the ownership of, or certain
other rights over, shares representing 5% or more of the total issued and
outstanding capital (or the issued and outstanding capital of any class of
shares) of ClearWave, or rights to acquire shares, whether or not already
issued, that represent at any time (and from time to time) 5% or more of the
total issued and outstanding capital (or the issued and outstanding capital of
any class of shares) of ClearWave or the ownership of certain profit
participating certificates that relate to 5% or more of the annual profit of
ClearWave and/or to 5% or more of the liquidation proceeds of ClearWave. A
deemed substantial interest generally exists if (part of) a substantial
interest has been disposed of or is deemed to have been disposed of without
recognition of gain.





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Under the Canadian-Netherlands tax treaty, dividends received from
ClearWave by a Canadian holder who has a substantial interest or a deemed
substantial interest, as defined, in the share capital of ClearWave and is the
beneficial owner of the dividends, are generally eligible for a reduction of
Netherlands income tax liability up to 15% or in the case of certain Canadian
corporate shareholders owning directly or indirectly at least 25% of the
capital of ClearWave or owning at least 10% of the voting power of ClearWave up
to 5%. Generally, a full credit for dividend withholding tax withheld on those
dividends is available against any Dutch income tax liability.

Dutch Taxation Of Unitholders Who Are Resident In The United States

This section Dutch Taxation of Unitholders who are Resident in the United
States is a general description of Dutch tax law currently in effect as
applicable to ownership and disposition of the units and ClearWave shares held
by residents of the United States as defined below. This section describes
Dutch tax consequences for a unitholder who is neither a resident, nor deemed
to be a resident in The Netherlands for purposes of Dutch taxation but who is a
resident of the United States as defined in the double taxation convention in
effect between The Netherlands and the United States (also referred to as U.S.
unitholder). Furthermore, this section describes the Dutch tax consequences for
a shareholder after the delivery of ClearWave shares to unitholders under the
terms of the unit, who is neither a resident, nor deemed to be a resident in
The Netherlands for purposes of Dutch taxation but who is a resident of the
United States as defined in the double taxation convention in effect between
The Netherlands and the United States (also referred to as U.S. shareholder;
where applicable U.S. unitholder and U.S. shareholder are collectively referred
to as U.S. holder). This section should not be construed by unitholders as
advice on their own tax position. As individual circumstances may affect the
general tax consequences as described in this section, unitholders are strongly
recommended to consult their professional adviser with regard to their own tax
position and tax consequences of owning and disposing of the units and or
ClearWave shares.

Withholding Tax

Dividends distributed by ClearWave to U.S. holders generally are subject
to a withholding tax imposed by The Netherlands at a rate of 25%.

The term dividends for this purpose includes, but is not limited to:



|(i)   |  | distributions in cash or in kind, deemed and constructive distributions
and repayments of paid-in capital not recognized as such for Dutch
dividend withholding tax purposes;                                                                                                                                                                                                                                                                                         
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  |  | liquidation proceeds, proceeds of redemption of shares or, generally,
consideration for a repurchase of shares in excess of the average paid-in
capital recognized for Dutch dividend withholding tax purposes;                                                                                                                                                                                                                                                       
|     
|(iii) |  | the par value of shares issued or an increase of the par value of
existing shares, as the case may be, to the extent that it does not appear
that a contribution to capital, recognized for Dutch dividend withholding
tax purposes, was made or will be made; and                                                                                                                                                                                                    
|     
|(iv)  |  | partial repayment of paid-in capital, recognized for Dutch dividend
withholding tax purposes, if and to the extent that there are net profits,
within the meaning of the Dividend Withholding Tax Act, unless the general
meeting of shareholders of ClearWave has previously resolved to make such
repayment and provided that the par value of the shares concerned has been
reduced by a corresponding amount by changing the Articles of Association
of ClearWave.

As a result of contributions in shares to the paid-in capital of
ClearWave, a portion of such paid-in capital may not be recognized for Dutch
dividend withholding tax purposes.

Under the double taxation convention on income and capital gains in effect
between The Netherlands and the United States (also referred to as the
U.S.-Netherlands tax treaty), dividends as defined in the U.S.-Netherlands tax
treaty paid by ClearWave to a U.S. holder (other than certain exempt
organizations or exempt pension trusts) who is the beneficial owner of the
dividends are generally eligible for a reduction of the 25% Dutch dividends
withholding tax to 15%, or in the case of certain U.S. corporate shareholders
owning at least 10% of the voting power of ClearWave, 5%, unless such resident
carries on a business in The Netherlands through a permanent establishment or
performs independent personal services from a





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fixed base situated in The Netherlands and the holding of units or
ClearWave shares forms part of the business property of such permanent
establishment or pertains to such fixed base. The U.S.-Netherlands tax treaty
provides for a complete exemption for dividends received by certain exempt
pension trusts and exempt organizations, as defined therein. A U.S. holder of
units or ClearWave shares will not be eligible for the benefits of the
U.S.-Netherlands tax treaty if such U.S. holder does not satisfy one or more of
the tests set forth in the limitation on benefits provision of Article 26 of
the U.S.-Netherlands tax treaty.

Taxes on Income and Capital Gains

Under the U.S.-Netherlands tax treaty, capital gains realized by a U.S.
holder upon the disposition of units or ClearWave shares, are, with certain
exceptions, generally exempt from Dutch tax on capital gains.

A U.S. holder will not be subject to any Dutch taxes on income or capital
gains in respect of dividends distributed by ClearWave or in respect of capital
gains realized on the disposition of units or ClearWave shares (other than the
dividend withholding tax described above), provided that:



| |  |  | such U.S. holder does not have a business or an interest in a
business that is, in whole or in part, carried on through a
permanent establishment or a permanent representative in The
Netherlands and to which business or part of a business, as the case
may be, the units or the ClearWave shares are attributable; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the units or ClearWave shares owned by such U.S. holder do
not form part of a substantial interest or a deemed substantial
interest, as defined, in the share capital of ClearWave or if such
units do form part of such a substantial interest, they form part of
the assets of a business enterprise of the U.S. holder. 

Furthermore, a U.S. unitholder will not be subject to any Dutch taxes on
income or capital gains in respect of capital gains realized on the disposition
of units, including the delivery of ClearWave shares or TIW shares or the
redemption of units, provided that such U.S. unitholder is not an individual
who has been resident or is deemed to have been resident in The Netherlands at
any time during a period of five years preceding an alienation of the units,
including the delivery of ClearWave shares or TIW shares or the redemption of
units, and at the time of the alienation owns, either alone or together with
certain related individuals, units representing at least 25 percent of any
class of shares of ClearWave.

Furthermore, a U.S. shareholder will not be subject to any Dutch taxes on
income or capital gains in respect of capital gains realized on the disposition
of ClearWave shares provided that such U.S. shareholder is not an individual
who has been resident or is deemed to have been resident in The Netherlands at
any time during a period of five years preceding an alienation of the ClearWave
shares and at the time of the alienation owns, either alone or together with
certain related individuals, ClearWave shares representing at least 25 percent
of any class of shares of ClearWave.

Generally, a U.S. holder will not have a substantial interest in ClearWave
if he or she, his or her spouse, certain other relatives (including foster
children) or certain persons sharing his or her household, do not hold, alone
or together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing 5% or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of
ClearWave, or rights to acquire shares, whether or not already issued, that
represent at any time (and from time to time) 5% or more of the total issued
and outstanding capital (or the issued and outstanding capital of any class of
shares) of ClearWave or the ownership of certain profit participating
certificates that relate to 5% or more of the annual profit of ClearWave and/or
to 5% or more of the liquidation proceeds of ClearWave. A deemed substantial
interest generally exists if (part of) a substantial interest has been disposed
of or is deemed to have been disposed of without recognition of gain.

Under the U.S.-Netherlands tax treaty, dividends received from ClearWave
by a U.S. holder who has a substantial interest or a deemed substantial
interest, as defined, in the share capital of ClearWave and is the beneficial
owner of the dividends (other than certain exempt organizations or exempt
pension trusts) are generally eligible for a reduction of Netherlands income
tax liability to 15% or in the case of certain U.S. corporate shareholders
owning at least 10% of the voting power of ClearWave to 5%. Generally, a full
credit for dividend withholding tax withheld on those dividends is available
against any Dutch income tax liability. The U.S.-Netherlands tax treaty
provides for a complete exemption of Netherlands income tax for





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dividends received by certain exempt pension trusts and exempt
organizations, as defined in the U.S.-Netherlands tax treaty.

As indicated above, a U.S. holder will not be eligible for the benefits of
the U.S.-Netherlands tax treaty if such U.S. holder does not satisfy one or
more of the tests set forth in the limitation on benefits provision of Article
26 of the U.S.-Netherlands tax treaty.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the principal U.S. federal income tax
considerations applicable to an investment in common shares, TIW Warrants, TIW
Notes and units by U.S. holders who hold such securities as capital assets
within the meaning of the U.S. Internal Revenue Code of 1986, as amended. For
purposes of this discussion, the term U.S. holder means a beneficial owner of
common shares, TIW Warrants, TIW Notes and units, as the case may be, that is,
for U.S. federal income tax purposes, (i) an individual who is a citizen or
resident of the United States, (ii) a corporation, or other entity treated as a
corporation for U.S. federal income tax purposes, created or organized in or
under the laws of the United States, any State or the District of Columbia,
(iii) an estate the income of which is includable in gross income for U.S.
federal income tax purposes regardless of its source, or (iv) a trust the
administration of which is subject to the primary supervision of a United
States court and for which one or more U.S. persons have the authority to
control all substantial decisions. If a partnership holds common shares, TIW
Warrants, TIW Notes or units, the U.S. federal income tax treatment of a
partner generally depends upon the status of the partner and the activities of
the partnership. We based this summary on the Internal Revenue Code, Treasury
Regulations promulgated thereunder, and judicial and administrative
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, which change may be retroactive and may affect the tax
consequences described herein.

This summary is for general information only and does not take into
account the individual circumstances of any particular investor. Therefore,
investors who are U.S. holders are strongly urged to consult their own tax
advisors with respect to the tax consequences of an investment in the common
shares, TIW Warrants, TIW Notes or units based on their particular
circumstances, including any consequences of an investment in the common
shares, TIW Warrants, TIW Notes or units arising under state or local tax law
or foreign tax laws of jurisdictions outside of the United States, including
Canada and The Netherlands.

The Common Shares

Dividends paid to U.S. holders of common shares, inclusive of any
withholding taxes paid by the Company, will be taxable as ordinary income to
the extent paid out of the Companys current or accumulated earnings and
profits as calculated for U.S. federal income tax purposes, and as tax-free
return of capital or capital gain to the extent of any excess. Dividends
received by a U.S. holder will be treated as foreign-source income for U.S.
federal income tax purposes and, subject to complex limitations, a U.S. holder
may be eligible for a foreign tax credit or deduction for withholding taxes
paid in respect of the dividends.

Distributions paid in Canadian dollars, inclusive of any Canadian
withholding taxes, will be included in gross income of a U.S. holder in a U.S.
dollar amount calculated by reference to the exchange rate in effect on the day
the distributions are received by a U.S. holder, regardless of whether the
Canadian dollars are converted into U.S. dollars at that time. If Canadian
dollars are converted into U.S. dollars on the day they are received, a U.S.
holder generally should not be required to recognize foreign currency exchange
gain or loss.

Upon the sale or other disposition of common shares to a person other than
the Company, a U.S. holder will recognize capital gain or loss equal to the
difference between the amount realized and the U.S. holders adjusted tax basis
in such common shares. For foreign tax credit purposes, such gain or loss will
generally be U.S.-source.

The TIW Warrants





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Upon the exercise of a TIW Warrant, a U.S. holder will not recognize any
gain or loss and will have a tax basis in a common share issued upon the
exercise of a TIW Warrant equal to the holders tax basis in the exercised TIW
Warrant plus the exercise price of such warrant. The holding period for a
common share issued upon the exercise of a TIW Warrant will begin on the date
the TIW Warrant is exercised. A U.S. holder generally will recognize gain or
loss on a sale or exchange of TIW Warrants equal to the difference between the
amount realized and the U.S. holders tax basis in the TIW Warrants. For
foreign tax credit purposes, such gain or loss will generally be U.S.-source.
If a TIW Warrant expires unexercised, a U.S. holder will recognize a loss equal
to the holders tax basis in the TIW Warrant. The adjustment, or failure to
make an adjustment, of the exercise price for a TIW Warrant or the number of
common shares issuable upon exercise of a TIW Warrant may be deemed to be a
payment of a taxable dividend to U.S. holders of TIW Warrants in certain
circumstances.

The TIW 14% Senior Guaranteed Notes

The 14% senior guaranteed notes bear OID for U.S. federal income tax
purposes. Accordingly, each U.S. holder of 14% senior guaranteed notes
generally will be required to include OID in income as it accrues under a
constant yield method in advance of cash payments attributable to such income,
regardless of whether the U.S. holder is a cash or accrual basis taxpayer.

The amount of OID with respect to each 14% senior guaranteed notes will be
the excess of the stated redemption price at maturity of such 14% senior
guaranteed note over its issue price. The stated redemption price at maturity
of the 14% senior guaranteed notes includes all cash payments, including stated
interest, due under the 14% senior guaranteed notes at or before their stated
maturity. At the time the 14% senior guaranteed notes were originally issued,
we took the position that the issue price of the 14% senior guaranteed notes
was their face amount. The adjusted issue price of the 14% senior guaranteed
notes is affected by the issuance of additional 14% senior guaranteed notes.
Generally, the issuance of additional 14% senior guaranteed notes is not
treated as a payment in respect of the 14% senior guaranteed notes; rather, on
the issue date of any additional notes, the aggregate adjusted issue price of
notes outstanding on that date is reallocated among the outstanding notes and
the newly issued additional notes. Consequently, the adjusted issue price of
newly issued additional 14% senior guaranteed notes is an allocable portion of
the adjusted issue price of the then outstanding 14% senior guaranteed notes.
The stated redemption price at maturity of the 14% senior guaranteed notes
include all cash payments, including stated interest, due under the notes at or
before their stated maturity.

The timing and amount of payments on the 14% senior guaranteed notes will
be subject to various contingencies that could affect the yield and maturity of
the 14% senior guaranteed notes for U.S. federal income tax purposes and the
resulting OID includible by a U.S. holder. At the time the 14% senior
guaranteed notes were originally issued, we took the position, based on
applicable Treasury regulations, that such contingencies should not be taken
into consideration in determining the amount of OID on the 14% senior
guaranteed notes as of their original issue date. This position was based on
the conclusions that:



|(i)  |  | the requirement to issue additional 14% senior guaranteed notes on
December 30, 2002 and June 30, 2003 did not have as a principal purpose
the avoidance of OID provisions of the Internal Revenue Code, and                                                                                                                   
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(ii) |  | in any other case, the likelihood, as of the date on which the 14% senior
guaranteed notes were issued, of the particular contingency occurring was
remote and that it was significantly more likely than not that we would
not be required to make the payments that would be required if the
contingencies did in fact occur.

However, it is possible that the Internal Revenue Service could
successfully assert that either or both of the foregoing conclusions is
incorrect, in which case, the treatment of a U.S. holder would differ from that
described above and, in particular, the amount of OID that a U.S. holder would
be required to include in income in respect of the 14% senior guaranteed notes
would be increased. In addition, if a contingency with respect to a 14% senior
guaranteed note actually occurs, contrary to the assumption made, then, solely
for purposes of computing the yield and maturity of the 14% senior guaranteed
notes, the 14% senior guaranteed notes would be treated as retired and then
reissued on the date of the change in circumstances for an amount equal to
their adjusted issue price on that date. U.S. holders should consult their own
tax





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advisors as to the consequences in the event that our conclusions on which
our position is based are incorrect or that any of the relevant contingencies
in fact occurs.

Notwithstanding our position described in the previous paragraph that
certain contingencies should not be taken into account in determining the
amount of original issue discount on the 14% senior guaranteed notes, certain
of those contingencies in fact have occurred. We paid interest on outstanding
notes due on the December 30, 2001 and June 30, 2002 interest payment dates in
additional notes in lieu of cash and we issued additional notes on December 30,
2002. Further, additional interest accrued on outstanding 14% senior
guaranteed notes during periods beginning on March 18, 2002, April 22, 2002 and
July 6, 2002 due to provisions of the registration rights agreement. As a
result, 14% senior guaranteed notes outstanding on each of those dates
generally will be treated, solely for purposes of determining the amount of
original issue discount on these 14% senior guaranteed notes, as having been
retired and reissued on each of those dates for an amount equal to their
adjusted issue prices on those dates, taking into account the changed
circumstances. U.S. holders should consult their own tax advisors as to the
consequences of the occurrences of those contingencies.

U.S. holders who acquire TIW Notes with acquisition premium, amortizable
bond premium or market discount should consult their tax advisors regarding
their TIW Notes, including the availability of certain elections.

A U.S. holders adjusted tax basis in a TIW Note will, in general, equal
the holders cost for the TIW Note, increased by any amounts included in income
as OID or market discount and reduced by any amortized bond premium and any
cash payments, regardless of whether such payments are denominated as interest
or principal. Upon the sale, exchange or retirement of a TIW Note, a U.S.
holder will generally recognize capital gain or loss (except to the extent of
accrued market discount that has not previously been included in income) equal
to the difference between the amount realized on the sale, exchange or
retirement and the U.S. holders adjusted tax basis in the TIW Note.

U.S. holders of TIW Notes will be treated as actually receiving any
Canadian withholding taxes paid by the Company with respect to a TIW Note (as
well as any additional amounts in respect of Canadian withholding taxes), and,
subject to complex limitations, a U.S. holder may be eligible for a foreign tax
credit or deduction for such withholding taxes.

The Units

Upon the sale or other disposition of units, a U.S. holder will generally
recognize capital gain or loss equal to the difference between the amount
realized and the U.S. holders adjusted basis in such units. For foreign tax
credit purposes, such gain or loss generally will be U.S.-source.

Upon exercise of the TIW exchange option, a U.S. holder should recognize
capital gain or loss to the extent of any appreciation or depreciation in the
ClearWave shares conveyed to TIW in exchange for common shares. For foreign
tax credit purposes, such gain or loss generally will be U.S.-source. A U.S.
holders adjusted tax basis in common shares acquired upon exercise of the TIW
exchange option will equal the fair market value of the ClearWave shares on the
exercise date plus the tax basis (if any) allocable to the TIW exchange option
at the time of issuance of the units and the holding period for such common
shares will begin on the exercise date.

A U.S. holder will not recognize any income, gain or loss upon receipt of
ClearWave shares on the unit termination date but will recognize long-term
capital loss equal to the tax basis (if any) allocable to the TIW exchange
option at the time of issuance of the units. A U.S. holders tax basis in
ClearWave shares received on the unit termination date will equal the portion
of the tax basis in the unit allocated to the ClearWave shares at the time of
issuance of the units, and the holding period for such ClearWave shares will
include the holding period for the units.

The U.S. federal income tax considerations applicable to a U.S. holder
regarding an investment in ClearWave shares are similar to those regarding an
investment in the common shares.

An adjustment to the number of common shares issuable upon exercise of the
TIW exchange option (or





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failure to make such adjustment) may under certain circumstances give rise
to deemed dividend income to U.S. holders. Further, payment of the purchase
price for the units at the time of issuance of the units in Canadian dollars
may give rise to foreign currency exchange gain or loss in certain
circumstances. Any such gain or loss will generally be treated as ordinary
income or loss.

There is no direct legal authority concerning the U.S. federal income tax
consequences relating to the units. Consequently, the Internal Revenue Service
may assert one or more alternative characterizations of the units (and related
transactions) that, if sustained, would cause the U.S. federal income tax
consequences to a U.S. holder of the receipt, ownership and disposition of
units to differ from the consequences discussed above and any such differences
could, in certain circumstances, be material to a U.S. holder. The discussion
above assumes that no such alternative characterization will apply to the
units.

Passive Foreign Investment Company Considerations

The Internal Revenue Code provides special anti-deferral rules regarding
certain distributions received by U.S. persons with respect to, and sales and
other dispositions (including pledges) of stock of, a passive foreign
investment company. A foreign corporation, such as the Company, will be
treated as a passive foreign investment company if 75% or more of its gross
income is passive income for a taxable year or if the average percentage of its
assets (by value) that produce, or are held for the production of, passive
income is at least 50% for a taxable year. The Company believes that it was
not a passive foreign investment company for the taxable year ended December
31, 2002 and, furthermore, expects to conduct its affairs in such a manner so
that it will not meet the criteria to be considered passive foreign investment
company in the foreseeable future.

Backup Withholding and Information Reporting

A U.S. holder generally is subject to information reporting requirements
with respect to payments on common shares, TIW Warrants, TIW Notes and units
made in the United States and to the proceeds from the sale or other
disposition of common shares, TIW Warrants, TIW Notes and units, unless such
holder is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact. In general, if a non-corporate U.S.
holder subject to information reporting fails to furnish a correct taxpayer
identification number or otherwise fails to comply with applicable backup
withholding requirements, a 30% federal backup withholding tax may apply to
amounts paid to such holder. The backup withholding tax is not an additional
tax and may be credited against a U.S. holders regular U.S. federal income tax
liability or refunded by the Internal Revenue Service, as applicable.

DIVIDENDS AND PAYING AGENTS

Not applicable.

STATEMENT BY EXPERTS

Not applicable.

DOCUMENTS ON DISPLAY

Any documents referred to in this Annual Report may be inspected at our
corporate offices which are located, until May 31, 2003, at 1000 de La
Gauchetière Street West, 16th floor, Montreal, Quebec, Canada, H3B 4W5 and,
after June 1, 2003, at 1250 René-Lévesque West, 38th floor, Montreal, Québec,
Canada, H3B 4W8. You may read and copy annual reports, current reports and
other information we file with the SEC at the SECs public reference room at
450 Fifth Street, NW, Washington, D.C., 20549. Please call the SEC at
1-800-SEC-0330 for further information concerning the public reference room.
We file our annual reports, current reports and other information
electronically with the SEC. You may access information about us on the SECs
website at www.sec.gov.




ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





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Quantitative and Qualitative
Disclosures about Market Risk

We have used shares and bank and vendor credit facilities to finance our
operations. These on-balance sheet financial instruments expose us to interest
rate risk, foreign currency exchange rate risk and market price risk.
Additionally, we have commitments under supply contracts, interest swaps,
interest caps and currency swaps. These off-balance sheet items also create
foreign currency exchange rate risk exposure.

The carrying amounts of cash and cash equivalents, trade debtors, trade
creditors, accrued liabilities, taxes recoverable and payable approximate their
fair values due to the short-term nature of these instruments. Cash
equivalents consist of term deposits and highly liquid debt instruments
purchased with maturity of three months or less. The fair value of
distribution payable to non-controlling interest is not determinable because of
the uncertainty as to the timing of payment and the extent of participation of
non-controlling parties in the MobiFon share repurchase The fair value of the
14% senior guaranteed notes were approximately $198.5 million. The fair value
of the portion of the MobiFons secured senior credit facility for which the
interest rate has been fixed approximates $94.8 million. The fair value of the
sale and lease back financing in MobiFon is not determinable because of the
rarity of similar transaction in Romania. The carrying amounts of other
long-term debt approximate their fair values because their interest rates
fluctuate with market interest rates or are similar to interest rates currently
available to the Company.

As at December 31, 2002, most of our outstanding financial obligations,
other than those referred to above, in monetary terms, were of a variable-rate
nature. However, MobiFon and Ceský Mobil use interest swap agreements to hedge
some interest rate exposure associated with variable-rate on-balance sheet
financial instruments. We have not entered into any such arrangements for the
purposes of trading or speculation. We have entered into hedging arrangements
in the Czech Republic to systematically hedge against foreign currency exchange
rate risks on portions of long-term debt denominated in Euro. In certain
circumstances, we may decide to accept the inherent currency risk, principally
because of the relatively high cost of buying, or the inability to buy, forward
cover in currencies of the countries in which we operate. We do not anticipate
any near-term changes in the nature of our market risk exposures or in
managements objectives and strategies with respect to managing such exposures.
Additionally, we believe that, to some extent, the mix of currencies in which
we conduct our businesses and the geographic spread of our operations reduce
the overall sensitivity of our results of operations to specific exchange rate
fluctuations.

Foreign currency translation adjustments for subsidiaries domiciled in
non-highly inflationary countries are recorded to consolidated shareholders
equity specifically. In Romania, a highly inflationary country, we record
re-measurement gains and losses to the consolidated statements of income
(loss). For the year ended December 31, 2002, our subsidiary in Romania
recorded net foreign exchange losses of $1.9 million.

The following table provides information about our market risk exposure
associated with fluctuations in interest rates and foreign currency exchange
rates. The information in the table pertains to corporate and all fully
consolidated subsidiaries. The table presents principal cash flows and related
interest rates by year of maturity for our bank and vendor credit facilities in
effect as at December 31, 2002. The table excludes amounts related to
facilities that had not been drawn upon as at December 31, 2002. For the
interest rate swap agreements, the table presents notional amounts and the
related reference interest rates by year of maturity. Fair values included
herein, as at December 31, 2002, have been determined based on:



| |  |  | quoted market prices for senior discount notes and senior guaranteed notes                
| | - |  | ------------------------------------------------------------------------------------------
|
| |  |  | the carrying value for bank and vendor credit facilities                                  
|
| |  |  | estimates obtained from dealers to settle interest rate and cross currency swap agreements





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Expected Maturities (in thousands of dollars)

|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |      |         |   | 
|------------------------------------------------ | ---------------------------------- | ---------------------------------- | ----------------------------------------------- | ------ | ------- | ---- | ------ | ------ | ------- | ---- | ------ | ------ | ------- | ---- | ------- | - | ----------- | - | --------------- | - | -------- | - | ------- | - | ------ | - | ------ | - | ------ | - | ------- | - | ------- | - | ------- | ---- | ------- | - | 
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   | Total   |   | Fair   
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   | Value  
|                                                 |                                    |                                    |                                                 |        | 2003    |      | 2004   |        | 2005    |      | 2006   |        | 2007    |      | 2008    |   | There-after |   | due at maturity |   | 12/31/02
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |         
|Interest Rate Exposure                           |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Long-Term Debt:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Fixed rate principal
repayment                   |                                    |                                    | 220,604                                         |        |         |      | 9,350  |        |         |      | 14,025 |        |         |      | 18,700  |   |             |   | 23,925          |   |          |   | 28,050  |   |        |   |       |   |        |   | 314,658 |   |         |   | 293,868 |     
|Average interest rate on
loans outstanding       |                                    |                                    | 11.95                                           | %      |         |      | 7.13   | %      |         |      | 7.13   | %      |         |      | 7.13    | % |             |   | 7.13            | % |          |   | 7.13    | % |        |   |       |   |        |   |        |   |         |   |        |     
|Variable rate principal
repayment                |                                    |                                    |                                                |        |         |      | 30,119 |        |         |      | 79,745 |        |         |      | 105,729 |   |             |   | 144,250         |   |          |   | 170,886 |   |        |   | 73,872 |   |        |   | 604,601 |   |         |   | 604,601 |     
|Average interest rate on loans outstanding       |                                    |                                    | 4.83                                            | %      |         |      | 4.83   | %      |         |      | 4.83   | %      |         |      | 4.84    | % |             |   | 4.85            | % |          |   | 4.88    | % |        |   | 5.33   | % |        |   |        |   |         |   |        |     
|Swaps and Options:                               |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Variable to Fixed Interest
Rate Swaps:           |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 228,603 |      |        |        | 215,603 |      |        |        | 196,103 |      |         |   | 71,500      |   |                 |   | 39,000   |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (15,784 | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 6.05    | %    |        |        | 6.19    | %    |        |        | 6.45    | %    |         |   | 3.62        | % |                 |   | 3.62     | % |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 2.81    | %    |        |        | 2.90    | %    |        |        | 3.05    | %    |         |   | 1.39        | % |                 |   | 1.39     | % |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|EURIBOR to PRIBOR
Cross-Currency Swap
and Caps:  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 | Notional principal amount          |                                    |                                                 | 75,287 |         |      |        | 75,287 |         |      |        | 75,287 |         |      |         |  |             |   |                 |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         | (385 | )      
|                                                 |                                    |                                    | Average pay rate (based
on current PRIBOR)      |        |         | 4.43 | %      |        |         | 4.43 | %      |        |         | 4.43 | %       |   |             |  |                 |   |          |  |         |   |        |  |        |   |        |  |         |   |         |  |         |      |         |  | 
|                                                 |                                    |                                    | Average receive rate
(based on current
EURIBOR) |        |         | 4.88 | %      |        |         | 4.88 | %      |        |         | 4.88 | %       |   |             |  |                 |   |          |  |         |   |        |  |        |   |        |  |         |   |         |  |         |      |         |  | 
|                                                 | Cap on pay rate                    |                                    |                                                 | 9.84   | %       |      |        | 9.84   | %       |      |        | 9.84   | %       |      |         |  |             |   |                 |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|                                                 | Fixed Euro to Koruna
Exchange Rate |                                    |                                                 | 33.95  |         |      |        | 33.95  |         |      |        | 33.95  |         |      |         |  |             |   |                 |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|Cross Currency and
Interest Rate Swaps:          |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 121,989 |      |        |        | 121,989 |      |        |        | 121,989 |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (30,427 | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 9.59    | %    |        |        | 9.59    | %    |        |        | 9.59    | %    |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 4.88    | %    |        |        | 4.88    | %    |        |        | 4.88    | %    |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Fixed Euro to Koruna
Exchange Rate |                                                 |        | 34.54   |      |        |        | 34.54   |      |        |        | 34.54   |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|Koruna-denominated
Interest Rate
Swaps and Caps: |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 23,280  |      |        |        | 23,280  |      |        |        | 23,280  |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (155    | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 4.76    | %    |        |        | 4.76    | %    |        |        | 4.76    | %    |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 4.52    | %    |        |        | 4.52    | %    |        |        | 4.52    | %    |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 | Cap on pay rate                    |                                    |                                                 | 9.99   | %       |      |        | 9.99   | %       |      |        | 9.99   | %       |      |         |  |             |   |                 |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|                                                 |                                    | Notional principal amount          |                                                 |        | 9,549   |      |        |        | 9,549   |      |        |        | 9,549   |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 | Interest rate cap                  |                                    |                                                 | 10.36  | %       |      |        | 10.36  | %       |      |        | 10.36  | %       |      |         |  |             |   |                 |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|Capital Leases:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Principal repayment                              |                                    |                                    |                                                |        |         |      | 12,700 |        |         |      |       |        |         |      |        |   |             |   |                |   |          |   |        |   |        |   |       |   |        |   | 12,700  |   |         |   |        |     
|Average
fixed rate of interest                   |                                    |                                    | 32.33                                           | %      |         |      | 32.33  | %      |         |      |       |        |         |      |        |   |             |   |                |   |          |   |        |   |        |   |       |   |        |   |        |   |         |   |        |     
|Foreign Currency Exchange
Rate Exposure          |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Long-Term Debt:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Euro                                             |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Variable rate                      |                                                 |        |        |      |        |        | 9,689   |      |        |        | 38,509  |      |         |   | 50,931      |   |                 |   | 72,049   |   |         |   | 80,891 |   |        |   | 24,255 |   |         |   | 276,324 |   |         |      | 276,324 |  
|                                                 |                                    | Average interest rate              |                                                 |        | 4.88    | %    |        |        | 4.88    | %    |        |        | 4.88    | %    |         |   | 4.89        | % |                 |   | 4.91     | % |         |   | 4.96   | % |        |   | 5.33   | % |         |   |        |   |         |      |        |  
|Czech Koruna                                     |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Variable rate                      |                                                 |        |        |      |        |        | 4.280   |      |        |        | 17,011  |      |         |   | 22,498      |   |                 |   | 31,827   |   |         |   | 41,545 |   |        |   | 49,617 |   |         |   | 166,778 |   |         |      | 166,778 |  
|                                                 |                                    | Average interest rate              |                                                 |        | 4.69    | %    |        |        | 4.69    | %    |        |        | 4.70    | %    |         |   | 4.72        | % |                 |   | 4.75     | % |         |   | 4.83   | % |        |   | 5.02   | % |         |   |        |   |         |      |        |  
|Forward Exchange Contract:                       |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Principal amount                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |                 |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Fixed Euro to Koruna               |                                                 |        | 62,948  |      |        |        |        |      |        |        |        |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | 1,541   |  
|                                                 |                                    | Exchange Rate                      |                                                 |        | 30.80   |      |        |        |        |      |        |        |        |      |         |   |            |   |                 |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  





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ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.





---



##### Table of Contents



PART II




ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.




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

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

Subordinate Voting Shares

On May 17, 2002 we amended to our Articles of Incorporation to
re-designate our subordinate voting shares as common shares.

Multiple Voting Shares

On February 5, 2002, Telesystem Ltd. converted all our outstanding
multiple voting shares into subordinate voting shares on a one-for-one basis.
On May 17, 2002, we amended our Articles of Incorporation to eliminate the
multiple voting shares from our authorized share capital.

Preferred Shares

On March 13, 2002, we issued 35,000,000 non-voting convertible preferred
shares carrying the terms and conditions described under the caption Share
Capital.

7.00% Equity Subordinate Debentures

On February 5, 2002, we completed the 7.00% equity subordinated debenture
purchase offer for Cdn$150 million of our 7.00% equity subordinated debentures.
In connection with this offer, the 7.00% equity subordinated debentures were
amended to, among other things, extend the maturity of the 7.00% equity
subordinated debentures to December 2006, reduce the principal amount of each
7.00% equity subordinated debenture to Cdn$250, delay the next interest payment
date to June 30, 2002, provide for our right to convert the 7.00% equity
subordinated debentures at maturity into common shares at a price equal to the
greater of Cdn$1.00 and the then current market price of the common shares and
provide for the optional conversion at maturity by holders of the 7.00% equity
subordinated debentures into common shares at a price of Cdn$4.40. We paid
approximately Cdn$0.1 million to the 7.00% equity subordinated debenture
holders who consented to the proposed amendments but did not tender in the
purchase offer. We also repurchased pursuant to the offer approximately Cdn$145
million in principal amount of our 7.00% equity subordinated debentures.
Following this repurchase and the amendments referred to above we have
outstanding an aggregate of approximately Cdn$1.25 million in principal amount
of 7.00% equity subordinated debentures.

7.75% Convertible Debentures

On February 5, 2002, we amended the terms governing our 7.75% convertible
debentures and converted, in accordance with these amendments, 100% of the $300
million in principal amount outstanding of 7.75% convertible debentures and the
accrued and unpaid interest of $11.6 million due September 2001 for 154.5
million subordinate voting shares.

Warrants

On September 30, 2002, all ESD Warrants 2002 and all Purchase Warrants
2002 expired out of the money without being exercised. On March 31, 2003 all
ESD Warrants 2003, all Unit Warrants and all Purchase Warrants 2003 expired out
of the money without being exercised.





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##### Table of Contents






ITEM 15  CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure
that the information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the SECs rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), as appropriate, to allow timely decisions
regarding required disclosure.

Within the 90-day period prior to the filing of this annual report on Form
20-F, an evaluation was carried out by our management, under the supervision,
and with the participation, of our CEO and CFO, of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14). Based on that evaluation, the CEO and CFO concluded that such
disclosure controls and procedures were adequate and effective and designed to
ensure that material information relating to us and our consolidated
subsidiaries would be made known to them by others within those entities.

There have been no significant changes in our internal controls or other
factors which could significantly affect internal controls subsequent to the
date of the evaluation, including any significant deficiencies or material
weaknesses of internal controls that would require corrective action.





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ITEM 16 [RESERVED]

Not applicable.





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PART III




ITEM 17  FINANCIAL STATEMENTS

Not applicable.





---



##### Table of Contents






ITEM 18  FINANCIAL STATEMENTS

Financial Statements

The audited Consolidated Financial Statements of TIW, including the notes
thereto, as of December 31, 2002 and 2001 and for the years ended December 31,
2002, 2001 and 2000, together with the auditors report thereon, contained in
the TIWs 2002 Annual Report to Shareholders filed with the United States
Securities and Exchange Commission on Form 6-K on April 10, 2003 and attached
hereto as Exhibit 11.1 and with the securities commissions and other similar
authorities in Canada, are incorporated herein by reference and are an integral
part of this Form 20-F.

|                                                    |     
|--------------------------------------------------- | ----
|                                                    | Page
|                                                    |     
|Schedules to Financial Statements                   | 100 
|                                                    |     
|Schedule I - Condensed Financial Information of TIW |     
|                                                    |     
|Schedule II - Valuation of Qualifying Accounts      |     





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##### Table of Contents






ITEM 19  EXHIBITS

EXHIBITS

The following documents are filed as exhibits to this Form 20-F:

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|1.1     |  | Certificate of Incorporation and
Restated Articles of Incorporation of
Telesystem International Wireless
Inc. (Incorporated by reference to
Exhibit 3.1 to Form F-4, filed on
March 4, 2002 and Exhibit to Form
8-A, filed on January 17, 2003).                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|1.2     |  | Code of General By-Laws of Telesystem
International Wireless Inc.
(Incorporated by reference to Exhibit
3.2 to Form F-4, dated February 5,
1998, File No. 333-8294).                                                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2.1     |  | Indenture dated September 18, 2001,
among Telesystem International
Wireless Inc., Telesystem
International Wireless Corporation
N.V. and The Bank of Nova Scotia
Trust Company of New York providing
for the issuance of 14% Senior
Guaranteed Notes due December 30,
2003. (Incorporated by reference to
Exhibit 4.1 to Form F-4, filed on
March 4, 2002).                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3.1     |  | An Amended and Restated Investors
Rights Agreement dated January 24,
2002, among Telesystem International
Wireless Inc., U.F. Investments
(Barbados) Ltd., J.P. Morgan Partners
(BHCA), L.P., Asia Opportunity Fund,
L.P., CAIP Co-Investment Fund
Parallel Fund (I), C.V. and CAIP
Co-Investment Fund Parallel Fund
(II), C.V., J.P. Morgan Asia
Investment Partners, L.P., Telesystem
Ltd., and Capital Communications CDPQ
Inc. (Incorporated by reference to
Exhibit 6 to Schedule 13D/A
(Amendment No. 2), filed January 28,
2002, File No. 005-50538).
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.1     |  | Mutual Release dated March 26, 2003
by and among Telesystem International
Wireless Inc. and certain of its
subsidiaries, Opportunity Fund,
CVC/Opportunity Equity Partners L.P.
and Highlake International Business
Company.                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.2     |  | Nomination Agreement dated April 30,
1997 between Telesystem International
Wireless Inc. and Telesystem Ltd.
(Incorporated by reference to Exhibit
10.4 to Form F-4, File No. 333-8294).                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.3     |  | Loan Agreements between ClearWave
N.V. and TIW, and ClearWave N.V. and
TIWC. (Incorporated by reference to
Exhibit 4.2 to Form 20-F of ClearWave
N.V. filed May 17, 2002).                                                                                                                                                                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.4     |  | Exit Deed dated March 19, 2003 among
an affiliate of Emerging Market
Partnership, ClearWave N.V.,
Telesystem International Wireless
Corporation N.V. and Telesystem
International Wireless Inc.
(Incorporated by reference to Exhibit
4.2 to Form 20-F of ClearWave N.V.
filed May 20, 2003).                                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.5     |  | English translation summary of
License awarded to Ceský Mobil to
establish and operate a public mobile
telecommunication network according
to the GSM standard dated June 17,
2002. (Incorporated by reference to
Exhibit 4.3 to Form 20-F of ClearWave
N.V. filed May 20, 2003).                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.6     |  | English translation summary of
License awarded to Ceský Mobil to
establish and operate a public mobile
telecommunication network according
to the VmTS standard dated June 20,
2002. (Incorporated by reference to
Exhibit 4.4 to Form 20-F of ClearWave
N.V. filed May 20, 2003).                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.7     |  | Loan Agreement between MobiFon S.A.
and European Bank for Reconstruction
and Development dated August 27, 2002
(Incorporated by reference to Form
6-K of ClearWave N.V., filed November
13, 2002).                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.8     |  | Loan Agreement between MobiFon S.A.
and Nordic Investment Bank dated
August 27, 2002 (Incorporated by
reference to Form 6-K of ClearWave
N.V., filed November 13, 2002).                                                                                                                                                                                                                                                                                                                                                                                    





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                          
|Number  |  | Description                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                          
|4.9     |  | Loan Agreement between MobiFon S.A.
and Export Development Bank Canada
dated August 27, 2002 (Incorporated
by reference to Form 6-K of ClearWave
N.V., filed November 13, 2002).                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                          
|4.10    |  | Share Retention and Subordination
Deed between MobiFon S.A., certain of
its direct and indirect shareholders,
Export Development Canada, Nordic
Investment Bank and European Bank for
Reconstruction and Development dated
August 27, 2002. (Incorporated by
reference to Exhibit 4.8 to Form 20-F
of ClearWave N.V. filed May 20,
2003).
|        |  |                                                                                                                                                                                                                                                                                                                                          
|4.11    |  | Use of Premises and Service Agreement
dated May 1, 2003 between Telesystem
Ltd. and Telesystem International
Wireless Inc.                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                          
|8       |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                          
|11.1    |  | Telesystem International Wireless
Inc.s 2002 Annual Report to
Shareholders. (Incorporated by
reference to Form 6-K, filed on April
10, 2003).                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                          
|11.2    |  | Notice of Annual Meeting of
Shareholders and Management Proxy
Circular of Telesystem International
Wireless Inc. dated March 20, 2002.
(Incorporated by reference to Form
6-K, filed on April 8, 2003).                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                          
|11.3    |  | Certification pursuant to 18 U.S.C.
section 1350 as adopted pursuant to
section 906 of the Sarbanes Oxley Act
of 2002.                                                                                                                                                                                                                   





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|            |  |                                              
|----------- |  | ---------------------------------------------
|SCHEDULE 1  |  | CONDENSED FINANCIAL
INFORMATION OF REGISTRANT
|            |  |                                              
|SCHEDULE II |  | VALUATION AND QUALIFYING ACCOUNTS            
|            |  |                                              
|            |  | TELESYSTEM INTERNATIONAL
WIRELESS INC.       
|            |  |                                              
|            |  | December 31, 2002 and 2001                   





---



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AUDITORS REPORT

To the Board of Directors ofTelesystem International Wireless Inc.

We have audited the consolidated financial statements of Telesystem
International Wireless Inc.as of December 31, 2002 and 2001 and for each of
the years in the three-year period ended December 31, 2002, and have issued our
report thereon dated February 28, 2003. Our audits also included Schedules I
and II of item 19 of the Companys Form 20-F to be filed with the Securities
and Exchange Commission for the year ended December 31, 2002. These schedules
are the responsibility of the Companys management. Our responsibility is to
express an opinion based on our audits.

In our opinion, these schedules referred to above, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.

Ernst & Young Signature

Chartered Accountants
Montréal, Canada
February 28, 2003

Comments by Auditors for U.S. Readers on Canada  U.S. Reporting Difference

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Companys ability to continue as a going concerns, such as those described
in Note 1 to the consolidated financial statements. Our report to the Board of
Directors dated February 28, 2003 is expressed in accordance with Canadian
reporting standards which do not permit a reference to such events when they
are adequately disclosed in the financial statements.

Ernst & Young Signature

Chartered Accountants
Montréal, Canada
February 28, 2003





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##### Table of Contents



TELESYSTEM INTERNATIONAL WIRELESS INC.

---

CONDENSED BALANCE SHEETS

(in thousands of U.S. dollars)

---

|                                                              |  |      |            |      |  |  |            |  
|------------------------------------------------------------- |  | ---- | ---------- | ---- |  |  | ---------- | -
|Years ended December 31,                                      |  | 2002 |            | 2001
|                                                              |  |      |            |     
|                                                              |  | $    |            | $   
|ASSETS                                                        |  |      |            |      |  |  |            |  
|Current assets                                                |  |      |            |      |  |  |            |  
|Cash and cash equivalents                                     |  |      | 2,093      |      |  |  | 27,123     |  
|Receivables from subsidiaries and investees                   |  |      | 19,976     |      |  |  | 18,256     |  
|Other current assets                                          |  |      | 1,239      |      |  |  | 831        |  
|                                                              |  |      |            |      |  |  |            |  
|Total current assets                                          |  |      | 23,308     |      |  |  | 46,210     |  
|                                                              |  |      |            |      |  |  |            |  
|Investments in subsidiaries at equity, loans and other assets |  |      | 304,768    |      |  |  | 423,385    |  
|Property, plant and equipment                                 |  |      | 453        |      |  |  | 836        |  
|Deferred financing costs                                      |  |      | 3,240      |      |  |  | 8,366      |  
|                                                              |  |      |            |      |  |  |            |  
|                                                              |  |      | 331,769    |      |  |  | 478,797    |  
|                                                              |  |      |            |      |  |  |            |  
|LIABILITIES AND SHAREHOLDERS EQUITY                          |  |      |            |      |  |  |            |  
|Short-term loan [Note 2]                                      |  |      | 47,407     |      |  |  | 83,500     |  
|Accounts payable and accrued liabilities                      |  |      | 7,372      |      |  |  | 11,373     |  
|Payable to subsidiaries                                       |  |      | 253        |      |  |  | 7,688      |  
|Current portion of long-term debt [Note 2]                    |  |      | 223,868    |      |  |  | 3,268      |  
|                                                              |  |      |            |      |  |  |            |  
|Total current liabilities                                     |  |      | 278,900    |      |  |  | 105,829    |  
|                                                              |  |      |            |      |  |  |            |  
|Long-term debt [Note 2]                                       |  |      | 1,332      |      |  |  | 203,911    |  
|Shareholders equity [Note 6]                                 |  |      |            |      |  |  |            |  
|Share capital                                                 |  |      | 1,056,595  |      |  |  | 696,954    |  
|Additional paid-in capital                                    |  |      | 244,875    |      |  |  |           |  
|Equity component of convertible debentures                    |  |      |           |      |  |  | 405,195    |  
|Units                                                         |  |      |           |      |  |  | 260,843    |  
|Warrants                                                      |  |      | 1,314      |      |  |  | 14,502     |  
|Deficit                                                       |  |      | (1,255,449 | )    |  |  | (1,126,015 | )
|Cumulative translation adjustment                             |  |      | 4,202      |      |  |  | (82,422    | )
|                                                              |  |      |            |      |  |  |            |  
|Total shareholders equity                                    |  |      | 51,537     |      |  |  | 169,057    |  
|                                                              |  |      |            |      |  |  |            |  
|                                                              |  |      | 331,769    |      |  |  | 478,797    |  
|                                                              |  |      |            |      |  |  |            |  

See accompanying notes





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##### Table of Contents



TELESYSTEM INTERNATIONAL WIRELESS INC.

---

CONDENSED STATEMENTS OF LOSS

(in thousands of U.S. dollars)

---

|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  
|---------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|Years ended December 31,                                                     |  | 2002 |          | 2001 |  | 2000
|                                                                             |  |      |          |      |  |     
|                                                                             |  | $    |          | $    |  | $   
|Revenues                                                                     |  |      |          |      |  |      |          |   |  |  |          |  
|Service and interest revenue from subsidiaries
and investees [Note 3]        |  |      | 22,393   |      |  |      | 14,120   |   |  |  | 12,907   |  
|Other interest revenue                                                       |  |      | 159      |      |  |      | 752      |   |  |  | 4,946    |  
|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  
|                                                                             |  |      | 22,552   |      |  |      | 14,872   |   |  |  | 17,853   |  
|Operating expenses                                                           |  |      | 13,184   |      |  |      | 29,936   |   |  |  | 62,766   |  
|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations before
undernoted items             |  |      | 9,368    |      |  |      | (15,064  | ) |  |  | (44,913  | )
|Depreciation and amortization                                                |  |      | (162     | )    |  |      | (173     | ) |  |  | (480     | )
|Earnings of subsidiaries from continuing operations                          |  |      | 10,512   |      |  |      | 1,505    |   |  |  | 88,126   |  
|Interest expense                                                             |  |      | (48,816  | )    |  |      | (63,909  | ) |  |  | (59,708  | )
|Foreign exchange gain (loss)                                                 |  |      | (70      | )    |  |      | 1,090    |   |  |  | (2,697   | )
|Gain on forgiveness of debt                                                  |  |      |         |      |  |      | 238,940  |   |  |  |         |  
|Gain on reorganization, Units exchange and expiry
and on sale of investments |  |      | 91,127   |      |  |      |         |   |  |  |         |  
|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations                                     |  |      | 61,959   |      |  |      | 162,389  |   |  |  | (19,672  | )
|Loss from discontinued operations                                            |  |      | (189,133 | )    |  |      | (416,103 | ) |  |  | (335,684 | )
|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss                                                                     |  |      | (127,174 | )    |  |      | (253,714 | ) |  |  | (355,356 | )
|                                                                             |  |      |          |      |  |      |          |   |  |  |          |  

See accompanying notes





---



##### Table of Contents



TELESYSTEM INTERNATIONAL WIRELESS INC.

---

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

---

|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |         |  
|------------------------------------------------------------------------------ | --------------------------------------------------- | ---- | ------- | ------- | - | ---- | ------- | -------- | - |  | -------- | ------- | -
|Years ended December 31,                                                       |                                                     | 2002 |         | 2001    |   | 2000
|                                                                               |                                                     |      |         |         |   |     
|                                                                               |                                                     |      | $       |         | $ |      | $      
|OPERATING ACTIVITIES                                                           |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Income (loss) from continuing operations                                       |                                                     |      | 61,959  |         |   |      | 162,389 |          |   |  | (19,672  | )      
|Reconciling items:                                                             |                                                     |      |         |         |   |      |         |          |   |  |          |        
|                                                                               | Depreciation and amortization                       |      |         | 162     |   |      |         | 173      |   |  |          | 480     |  
|                                                                               | Amortization of deferred financing costs            |      |         | 2,962   |   |      |         | 1,766    |   |  |          | 2,834   |  
|                                                                               | Non cash financial expenses                         |      |         | 20,481  |   |      |         | 48,184   |   |  |          | 51,215  |  
|                                                                               | Earnings of subsidiaries from continuing operations |      |         | (10,512 | ) |      |         | (1,505   | ) |  |          | (88,126 | )
|                                                                               | Gain on reorganization, Units exchange and expiry   |      |         | (91,127 | ) |      |         |         |   |  |          |        |  
|                                                                               | Gain on forgiveness of debt                         |      |         |        |   |      |         | (238,940 | ) |  |          |        |  
|Changes in operating assets and liabilities                                    |                                                     |      | (14,662 | )       |   |      | (7,293  | )        |   |  | 5,681    |        
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash used in operating activities                                              |                                                     |      | (30,737 | )       |   |      | (35,226 | )        |   |  | (47,588  | )      
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|INVESTING ACTIVITIES                                                           |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Investments in subsidiaries, loans and other assets, net                       |                                                     |      | 7,724   |         |   |      | (31,924 | )        |   |  | 41,085   |        
|Acquisitions of property, plant and equipment                                  |                                                     |      | (62     | )       |   |      | (88     | )        |   |  | (93      | )      
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash provided by (used in) investing activities                                |                                                     |      | 7,662   |         |   |      | (32,012 | )        |   |  | 40,992   |        
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|FINANCING ACTIVITIES                                                           |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Increase (decrease) in short-term loan                                         |                                                     |      | (36,093 | )       |   |      | (29,500 | )        |   |  | 113,000  |        
|Proceeds from units issued, net of issue cost                                  |                                                     |      |        |         |   |      | 248,591 |          |   |  |         |        
|Payments made in notes exchange, including fees and
costs                      |                                                     |      |        |         |   |      | (55,838 | )        |   |  |         |        
|Proceeds from Recapitalization, shares and warrants
issued, net of issue costs |                                                     |      | 41,202  |         |   |      | 15,191  |          |   |  | 107,895  |        
|Issuance of convertible debentures, net of issue costs                         |                                                     |      |        |         |   |      |        |          |   |  | 291,000  |        
|Repayment of long-term debt                                                    |                                                     |      |        |         |   |      | (7,774  | )        |   |  | (5,341   | )      
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash provided by financing activities                                          |                                                     |      | 5,109   |         |   |      | 170,670 |          |   |  | 506,554  |        
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash provided by (used in) continuing operations                               |                                                     |      | (17,967 | )       |   |      | 103,432 |          |   |  | 499,958  |        
|Cash used for discontinued operations                                          |                                                     |      | (7,063  | )       |   |      | (79,397 | )        |   |  | (504,148 | )      
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Increase (decrease) in cash and cash equivalents for
the year                  |                                                     |      | (25,030 | )       |   |      | 24,035  |          |   |  | (4,190   | )      
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash and cash equivalents, beginning of year                                   |                                                     |      | 27,123  |         |   |      | 3,088   |          |   |  | 7,278    |        
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        
|Cash and cash equivalents, end of year                                         |                                                     |      | 2,093   |         |   |      | 27,123  |          |   |  | 3,088    |        
|                                                                               |                                                     |      |         |         |   |      |         |          |   |  |          |        

See accompanying notes





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TELESYSTEM INTERNATIONAL WIRELESS INC.

NOTES TO CONDENSED FINANCIAL INFORMATION

December 31, 2002 and 2001
(All tabular amounts are in thousands of US dollars unless otherwise indicated)



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1.  BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY

This Condensed Financial Information has been prepared by management on the
basis of accounting principles generally accepted in Canada in connection with
the Companys Form 20-F to be filed with the Securities and Exchange
Commission. Investments over which the Company has control or joint control
are accounted for using the equity method. These condensed financial
statements should be read in conjunction with the Companys consolidated
financial statements.

As at December 31, 2002, due to the maturity of its corporate credit facility
on June 30, 2003 and the maturity of the 14% Senior Guaranteed Notes on
December 30, 2003, the committed cash obligations of the Company for the
upcoming twelve months exceed the committed sources of funds and the Companys
cash and cash equivalents on hand. In addition, it will be necessary for the
Company to comply with covenants to have access to its financing arrangements
according to the terms of the related agreements. As a result, there is
significant uncertainty as to whether the Company will have the ability to
continue as a going concern. In addition to the available sources of funds
from the MobiFon transactions described in Note 4 [b] to the Companys
consolidated financial statements, the Company continues to review
opportunities to refinance its corporate indebtedness, raise new financing and
sell assets.

Significant differences between Canadian and United States generally accepted
accounting principles affecting the determination of shareholders equity at
December 31, 2002 and 2001, and the determination of net loss and cash flows
for each of the years in the three-year period ended December 31, 2002 are
summarized in Note 17 of the consolidated financial statements of the Company.

2.  FINANCING ARRANGEMENTS

Corporate Credit Facility

The Companys corporate credit facilitys maturity was extended from December
15, 2002 to June 30, 2003. In connection with the extension, the Company
agreed to repay $5.0 million by March 31, 2003. The facility is collateralized
by substantially all assets of the Company and bears interest at U.S. base rate
plus a margin of 8.36% or LIBOR plus a margin of 9.36%. Under the terms of the
facility, any amount received by the Company and flowing from dividends paid by
its Central and Eastern European operations, other than amounts representing
operational and investment requirements of the Company and ClearWave to June
30, 2003, will be used to further reduce the amount outstanding on the
corporate facility. As at December 31, 2002, the amount drawn was $47.4
million [$83.5 million as at December 31, 2001]. The weighted average rate of
interest was 11.8% in 2002 [15.0%  2001]. The affiliates of two significant
shareholders of the Company have committed in aggregate 57% of the principal
amounts available under the corporate credit facility.

14% Senior Guaranteed Notes

On September 19, 2001, the Company completed the exchange of $379.5 million of
13 1/4% Senior Discount Notes due 2007 ($324.5 million of accreted value) and
$167.0 million of 10 1/2% Senior Discount Notes due 2007 ($148.5 million of
accreted value) for $50 million of cash and $194.8 million of 14% Senior
Guaranteed Notes (the 14% Notes) due December 30, 2003 resulting in the
realization of a gain on forgiveness of debt of $238.9 million. As a result of
this exchange, an aggregate of $0.6 million [$0.5 million as at December 31,
2001] of 13 1/4% and 10 1/2% Senior Discount Notes remain outstanding and are
included in other corporate debt.

The 14% Notes mature on December 30, 2003. Interest on the 14% Notes accrues
at a rate of 14% per annum and is payable semi-annually on June 30 and December
30. The interest payments on December 30, 2001 and June 30, 2002 were made by the issuance of $6.7 million and $14.1 million of additional
14% Notes. The Company has the option to redeem the 14% Notes, at any time, in
whole or in part, at a price equal to 100% of the principal amount plus accrued
and unpaid interest. The 14% Notes are guaranteed by the Companys
wholly-owned subsidiary Telesystem International Wireless Corporation N.V.,
[the Guarantor"]. The guarantee is secured by a lien on the capital stock of
Telesystem International Wireless (Latin America) Inc., [TIW Latin America"] a
holding company which holds the Companys investments in its cellular
operations in Brazil and by a lien on the capital stock of ClearWave held by
the Guarantor. The liens granted by the Guarantor in favor of the holders of
the 14% Notes rank second in priority to the lien it granted to the lenders
under the corporate credit facility.





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The 14% Notes contain mandatory redemption provisions, which will require their
repayment upon the sale of the Companys interests in either ClearWave or its
cellular operations in Brazil. Furthermore, distributions from Telpart or
ClearWave which aggregate to at least $10.0 million will trigger mandatory
repayments following the repayment of the corporate credit facility. The 14%
Notes have covenants which, among other things, limit the Companys ability to
incur indebtedness, create liens and require the Company to make an offer to
repurchase all or any part of the 14% Notes subsequent to a change in control.
In addition, the 14% Notes prohibit the Company to reduce, under certain
conditions, its ownership in ClearWave.

On December 30, 2002 $5.0 million of additional 14% Notes were issued to
holders and $10.0 million will be issued on June 30, 2003 unless, on or prior
to such date, at least $72.4 million in principal amount of 14% Notes have been
redeemed or repurchased. The Company and the Guarantor filed registration
statements with the United States Securities and Exchange Commission whereby
the 14% Notes and payments made in kind thereon were exchanged for identical
freely tradable notes.

The 14% Notes are accounted for using the effective interest rate method where
the contingent additional 14% Notes are considered as an additional interest
component in determining their effective interest rate. As a result, the
effective interest rate on the 14% Notes is 17.21%.

Long-term debt consists of the following:

|                                         |  |      |         |      |  |  |         | 
|---------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | 
|As at December 31,                       |  | 2002 |         | 2001
|                                         |  |      |         |     
|14% Senior Guaranteed Notes              |  |      | 223,868 |      |  |  | 203,140 | 
|Series B 131/4%  Senior Discount Notes  |  |      | 530     |      |  |  | 497     | 
|Series C 101/2%  Senior Discount Notes  |  |      | 20      |      |  |  | 18      | 
|Debt component of convertible debentures |  |      |        |      |  |  | 3,219   | 
|Amended ESDs 2006                       |  |      | 782     |      |  |  |        | 
|Other                                    |  |      |        |      |  |  | 305     | 
|                                         |  |      |         |      |  |  |         | 
|                                         |  |      | 225,200 |      |  |  | 207,179 | 
|Less current maturities                  |  |      | 223,868 |      |  |  | 3,268   | 
|                                         |  |      |         |      |  |  |         | 
|                                         |  |      | 1,332   |      |  |  | 203,911 | 
|                                         |  |      |         |      |  |  |         | 

3.  RELATED PARTY TRANSACTIONS

The Company entered into several transactions with its subsidiaries and
investees. These transactions were accounted for at their exchange value and
consisted of the following for the years ended December 31,

|                                                 |  |      |        |      |  |      |        |  |  |  |        | 
|------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                 |  | 2002 |        | 2001 |  | 2000
|                                                 |  | $    |        | $    |  | $   
|                                                 |  |      |        |      |  |     
|Service charges to subsidiaries and investees    |  |      | 22,335 |      |  |      | 13,403 |  |  |  | 12,626 | 
|Interest revenue from subsidiaries and investees |  |      | 58     |      |  |      | 717    |  |  |  | 281    | 
|                                                 |  |      |        |      |  |      |        |  |  |  |        | 
|                                                 |  |      | 22,393 |      |  |      | 14,120 |  |  |  | 12,907 | 
|                                                 |  |      |        |      |  |      |        |  |  |  |        | 

4.  CASH DIVIDENDS

During the three-year period ended December 31, 2002, the Company did not
receive any dividends from its subsidiaries. However, one of the Companys
subsidiaries received dividends totaling $17.4 million and other cash
distributions amounting to $24.6 million from MobiFon during 2002. Of this
amount of funds which this subsidiary received $32.7 million was paid to the
Company as a reimbursement of advances and related interest and are reflected
in the financial statements as a reduction in investment in subsidiaries.





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5.  COMMITMENTS

The future minimum lease payments for the next 5 years and thereafter of
operating leases are as follows:

|                    |  |   |     | 
|------------------- |  | - | --- | 
|                    |  | $
|                    |  |  
|2003                |  |   | 104 | 
|2004                |  |   | 57  | 
|2005                |  |   | 54  | 
|2006 and thereafter |  |   |    | 
|                    |  |   |     | 
|Total               |  |   | 215 | 
|                    |  |   |     | 

6.  RECAPITALIZATION ON CONVERTIBLE DEBENTURES AND UNITS

Between December 15, 2001 and March 13, 2002, the Companys completed several
transactions contemplated by an agreement between Telesystem Ltd., then the
Companys largest shareholder and certain of the Companys other stakeholders
(the Recapitalization).

Special Warrants

On December 14, 2001, the Company issued 24.5 million warrants at a negotiated
price of approximately $0.61 each, exercisable for one Common Share or one
non-voting preferred share convertible into common equity of the Company at no
additional cost (Special Warrants) for cash consideration of $14.5 million
net of issuance costs of $0.5 million.

7% Equity Subordinate Debentures

On February 5, 2002, the Company completed an issuer bid and amendment of
substantially all of the 7.00% Equity Subordinate Debentures [ESD].

A total of Cdn$150.0 million [$98.6 million] of ESD due February 15, 2002 were
originally issued on February 15, 1999 for net cash proceeds of $95.8 million.
The debentures bore interest at the rate of 7% per annum payable semi-annually,
in August and February. Each debenture was convertible on maturity into Common
Shares of the Company.

Pursuant to a purchase offer and consent request, the Company paid Cdn$6.8
million, issued 2.5 million warrants, each entitling the holder to purchase one
Common Share at a price of Cdn$1.61 at any time before March 31, 2003, issued
approximately 37.7 million Common Shares and approximately 3.7 million
warrants, each entitling the holder to purchase one Common Share at a price of
Cdn$1.61 at any time before September 30, 2002, which expired unexercised, in
exchange for substantially all of the EDSs. The difference in the carrying
value of the ESDs acquired of $97.8 million and the fair value of the Common
Shares [$30.2 million], Warrants [$0.4 million], and cash [$5.7 million] given
totaling $36.3 million including expenses of $1.4 million, has been
proportionately reflected as additional paid-in capital of $60.0 million and as
a $1.5 million gain on redemption.

The Company amended the ESDs to, among other things, extend the maturity of the
ESDs to December 2006, reduce the principal amount of each ESD to Cdn$250,
provide for the right of the Company to convert the ESDs at maturity into
Common Shares at a price equal to the greater of Cdn$1.00 and the then current
market price of the Common Shares and provide for the optional conversion at
maturity by holders of the ESDs into Common Shares at a price of Cdn$4.40.
Consequently, the Company has amended and reduced the remaining outstanding
principal of an aggregate of approximately Cdn$5.0 million in principal amount
of ESDs to an aggregate of approximately Cdn$1.25 million [$0.8 million] in
principal amount.





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7.75% Convertible Debentures

On March 8, 2000, the Company issued $300.0 million of 7.75% Convertible
Debentures (CDs) for net cash proceeds of $291.0 million. The debentures
bore interest at the rate of 7.75% per annum payable semi-annually, commencing
on September 9, 2000, at the option of the Company, in cash or securities
including the repayment of principal at maturity.

On February 5, 2002, the Company converted all of the CDs and the accrued and
unpaid interest of $11.6 million due September 2001, for 154.5 million Common
Shares. The Company has also issued warrants to certain holders to purchase up
to a total of 15 million Common Shares at $1.00 per share on or before
September 30, 2002 which expired unexercised. The difference in value assigned
to both the share issuance of $123.8 million and the fair value of warrants
issued of $0.7 million and the carrying value of the CDs as at February 5,
2002, of $309.9 million, was recognized as additional paid-in-capital of $183.9
million, net of expenses of $2.5 million.

On February 14, 2001, the Company issued 43.8 million Units, including 23.6
million to Telesystem Ltd, for proceeds of Cdn$396.5 million [$260.4 million]
before issue costs of Cdn$18.2 million [$11.9 million] pursuant to an offer for
sale under a rights issue to holders of the Companys Multiple Voting and
Common Shares. Each Unit consisted of one class A Subordinate Voting Share of
ClearWave, and five Units entitled the holder to acquire one Common Share of
the Company for no additional consideration by tendering five Units back to the
Company at anytime on or prior to June 30, 2002 [the exchange option]. Holders
of the Units were to be deemed to have exercised their exchange option if less
than $100 million of the Units, based on the issuance price, had not been
exercised. On February 15, 2001, the Company issued 2.1 million additional
Units in connection with the acquisition of shares of MobiFon, held by minority
shareholders as mentioned in Note 4 [b].

In connection with the Companys exchange offer to the holders of its
outstanding Units and the financing commitments under the Recapitalization, the
Company acquired 33.7 million Units and raised $51.7 million in gross proceeds.
This new financing is in addition to the December 14, 2001 issuance of 24.5
million Special Warrants. In consideration for this new financing and the
payments of Units tendered under the exchange offer, the Company has issued (a)
an additional 269.2 million in aggregate of Common Shares and Special Warrants
(b) 4.8 million warrants, each allowing the holder to purchase one Common Share
at a price $1.00 on or before March 31, 2003 and (c) 8.5 million warrants, each
allowing the holder to purchase one Common Share at a price Cdn$1.59 on or
before March 31, 2003.

Units and Equity Financing

On March 13, 2002, the Company converted all outstanding Special Warrants
issued in connection with the Recapitalization into 35 million Series 1
Preferred Shares for no additional consideration.

As a result of the above transactions, the Company realized a gain on exchange
of Units, having a carrying value of $191.8 million, of $46.1 million net of
expenses of $5.3 million and issued Common Shares, Preferred Shares and
Warrants having a carrying value of $184.3 million, $21.4 million and $1.1
million, respectively. This Unit exchange has resulted in an increase in the
Companys equity interest and voting rights in ClearWave from 45.5% and 80.7%
respectively, to 85.6% and 94.9% respectively.

In addition, since the Units are no longer subject to the deemed conversion
feature in accordance with a court judgment, rendered on February 4, 2002, the
remaining Units were presented within current liabilities for accounting
purposes until their expiry on June 30, 2002 at which date they were accounted
for as non-controlling interest and a gain on disposal of the ClearWave shares
contained in the expired Units of $44.0 million was recognized being the
difference between the carrying value of the Units and the related ClearWave
shares.





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##### Table of Contents





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TELESYSTEM INTERNATIONAL WIRELESS
INC.
Schedule II

VALUATION AND QUALIFYING ACCOUNTS



---

|                                                             |  |      |        |      |  |      |         |   |  |  |        |  
|------------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------- | - |  |  | ------ | -
|                                                             |  | 2002 |        | 2001 |  | 2000
|                                                             |  | $    |        | $    |  | $   
|                                                             |  |      |        |      |  |     
|Allowance for doubtful accounts:                             |  |      |        |      |  |      |         |   |  |  |        |  
|Balance, beginning of year                                   |  |      | 8,510  |      |  |      | 8,888   |   |  |  | 4,963  |  
|Addition: bad debt expenses                                  |  |      | 7,368  |      |  |      | 10,495  |   |  |  | 10,267 |  
|Deduction: uncollectible accounts
write-off, net of recovery |  |      | (8,375 | )    |  |      | (10,873 | ) |  |  | (6,342 | )
|                                                             |  |      |        |      |  |      |         |   |  |  |        |  
|Balance, end of year                                         |  |      | 7,503  |      |  |      | 8,510   |   |  |  | 8,888  |  
|                                                             |  |      |        |      |  |      |         |   |  |  |        |  





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SIGNATURE

Telesystem International Wireless Inc. hereby certifies that it meets all
of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.

|                    |  |                                        |  |                                                  
|------------------- |  | -------------------------------------- |  | -------------------------------------------------
|                    |  | TELESYSTEM INTERNATIONAL WIRELESS INC.
|                    |  |                                        |  |                                                  
|                    |  | By:                                    |  | /s/ André Gauthier                               
|                    |  |                                        |  |                                                  
|                    |  |                                        |  | Name: André Gauthier                             
|                    |  |                                        |  | Title: Vice-President and Chief Financial Officer
|Dated: May 20, 2003 |  |                                        |  |                                                  





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TELESYSTEM INTERNATIONAL WIRELESS INC.

CERTIFICATIONS

I, Bruno Ducharme, President and Chief Executive Officer of Telesystem
International Wireless Inc., certify that:

1.     I have reviewed this annual report on Form 20-F of Telesystem
International Wireless Inc.;

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 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 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.

May 20, 2003

/s/ Bruno Ducharme

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##### Table of Contents



I, Andre Gauthier, Vice-President and Chief Financial Officer of
Telesystem International Wireless Inc., certify that:

1.     I have reviewed this annual report on Form 20-F of Telesystem
International Wireless Inc.;

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 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 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.

May 20, 2003

/s/ André Gauthier

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* * *