##### 



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 number333-83764-01

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

(Exact name of Registrant as specified in its charter)

(Translation of Registrants name into English)

The Netherlands(Jurisdiction of incorporation or organization)

World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands(Address of principal executive offices)

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

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

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

None
(Title of Class)

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

TIWC Guarantee of 14% Senior Guaranteed Notes
(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.

10,000,000,000 common shares par value 0.0045378

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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TABLE OF CONTENTS

explanatory notes
exchange rate information

|                                                                                       |  |  |  | 
|-------------------------------------------------------------------------------------- |  |  |  | 
|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                                                                     |  |  |  | 





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EXPLANATORY NOTES

References herein to the Company, we, us or our are references to
Telesystem International Wireless Corporation N.V. (TIWC), a Netherlands
corporation, and, where the context requires, its subsidiaries and operating
companies. TIWC is a wholly owned subsidiary of Telesystem International
Wireless Inc (TIW), a Canadian corporation, and a guarantor of TIWs 14%
senior guaranteed notes.

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 the lawful single currency of the European
Monetary Union; 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 Dutch generally accepted
accounting principles (Dutch GAAP). For a discussion of the principal
differences between Dutch GAAP and U.S. generally accepted accounting
principles (U.S. GAAP), see Note 14 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 following independent publications: Global Mobile®,
published by Baskerville Communications Corporation and EMC World
Cellular Database. Industry and company data
are approximate and reflect rounding in certain cases.

Unless otherwise indicated, all operating data presented herein are as of
December 31, 2002. Our parent company TIW as well as our
subsidiary ClearWave N.V. (ClearWave)
are registrants with the Securities Exchange Commission of the United
States
and, as such, are subject to the continuous disclosure requirements of the
Securities Exchange Commission in the United States. TIW and ClearWave have
filed on May 20, 2003, annual reports on Form 20-F for their respective year
ended December 31, 2002. TIW, ClearWave and us provide certain operational
figures on a proportionate basis. Differences in the proportionate numbers
presented in the filings of TIW, TIWC and ClearWave are due to (i) the
ownership structure of ClearWave (TIWs total interest in ClearWave is in part
held directly by TIW and in part held through us) and (ii) the date as at which
the figures are reported given post year end changes in
ClearWaves
ownership of MobiFon.

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 June 16, 2003,
such exchange rates were Cdn$1.3397 = $1.00; Euro 0.8444 = $1.00; Leu 32,247.00 =
$1.00; Koruna 26.4350 = $1.00.



|                |  |      |           |         |  |      |           |         |  |     |           |         |  |  |           |  |  |  |           |  |  |  |           | 
|--------------- |  | ---- | --------- | ------- |  | ---- | --------- | ------- |  | --- | --------- | ------- |  |  | --------- |  |  |  | --------- |  |  |  | --------- | 
|                |  | 2002 |           | 2001    |  | 2000
|                |  |      |           |         |  |     
|                |  | End  |           | Average |  | End  |           | Average |  | End |           | Average
|                |  |      |           |         |  |      |           |         |  |     |           |        
|Canadian Dollar |  |      | 1.5718    |         |  |      | 1.5666    |         |  |     | 1.5956    |         |  |  | 1.5490    |  |  |  | 1.4995    |  |  |  | 1.4855    | 
|Euro            |  |      | 0.9537    |         |  |      | 1.0532    |         |  |     | 1.1235    |         |  |  | 1.1167    |  |  |  | 1.0652    |  |  |  | 1.1132    | 
|Romanian Leu    |  |      | 33,475.00 |         |  |      | 33,525.70 |         |  |     | 31,597.00 |         |  |  | 29,060.90 |  |  |  | 25,926.00 |  |  |  | 21,662.00 | 
|Czech Koruna    |  |      | 30.1410   |         |  |      | 30.5470   |         |  |     | 36.2590   |         |  |  | 38.0380   |  |  |  | 37.8130   |  |  |  | 38.5900   | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                |  |      |           |         |  |     |           |         |  |  |           |  |  |  |          | 
|--------------- |  | ---- | --------- | ------- |  | --- | --------- | ------- |  |  | --------- |  |  |  | -------- | 
|                |  | 1999 |           | 1998   
|                |  |      |           |        
|                |  | End  |           | Average |  | End |           | Average
|                |  |      |           |         |  |     |           |        
|Canadian Dollar |  |      | 1.4440    |         |  |     | 1.4852    |         |  |  | 1.5375    |  |  |  | 1.4874   | 
|Euro            |  |      | 0.9930    |         |  |     | 0.9891    |         |  |  | 0.8519    |  |  |  | 0.8508   | 
|Romanian Leu    |  |      | 18,250.00 |         |  |     | 15,621.00 |         |  |  | 11.000.00 |  |  |  | 9,009.00 | 
|Czech Koruna    |  |      | 36.0000   |         |  |     | 34.6000   |         |  |  | 29.9000   |  |  |  | 32.3000  | 





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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 below.
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 TIWCs consolidated financial statements for the fiscal years
ended December 31, 2002, 2001, 2000, 1999 and 1998, which have been audited by
Ernst & Young, Accountants. You should read the information set forth below in
conjunction with our Operating and Financial Review and Prospects and our
consolidated financial statements, and the notes thereto, included elsewhere in
this Form 20-F. Our consolidated financial statements have been prepared in
accordance with Dutch GAAP. For a discussion of the principal differences
between Dutch GAAP and U.S. GAAP, see Note 14 to our consolidated financial
statements.

|                                                     |  |                         |          |      |  |      |          |      |  |      |          |   |  |  |          |   |  |  |          |  
|---------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | - |  |  | -------- | -
|                                                     |  | Year Ended December 31,
|                                                     |  |                        
|(U.S.$)                                              |  | 2002                    |          | 2001 |  | 2000 |          | 1999 |  | 1998
|                                                     |  |                         |          |      |  |      |          |      |  |     
|                                                     |  | (in thousands)         
|Statement of Loss Data:                              |  |                         |          |      |  |      |          |      |  |      |          |   |  |  |          |   |  |  |          |  
|Revenues(1)                                          |  |                         | 839,107  |      |  |      | 844,757  |      |  |      | 715,185  |   |  |  | 498,093  |   |  |  | 320,272  |  
|Operating income (loss) (1)                          |  |                         | 112,671  |      |  |      | 65,369   |      |  |      | (53,205  | ) |  |  | (6,185   | ) |  |  | (30,972  | )
|Income (loss) from continuing operations(1)          |  |                         | (205,999 | )    |  |      | 208,666  |      |  |      | (4246    | ) |  |  | (100,927 | ) |  |  | (77,669  | )
|Net loss(1)                                          |  |                         | (205,999 | )    |  |      | (233,370 | )    |  |      | (273,838 | ) |  |  | (90,243  | ) |  |  | (131,423 | )
|Revenues (U.S. GAAP)                                 |  |                         | 694,453  |      |  |      | 526,225  |      |  |      | 342,271  |   |  |  | 239,522  |   |  |  | 166,729  |  
|Income (loss) from continuing operations (U.S. GAAP) |  |                         | 6,271    |      |  |      | 245,149  |      |  |      | (4,246   | ) |  |  | (100,927 | ) |  |  | (77,669  | )
|Net loss (U.S. GAAP)                                 |  |                         | (241,208 | )    |  |      | (402,059 | )    |  |      | (273,838 | ) |  |  | (90,243  | ) |  |  | (131,423 | )

|                                             |  |                           |           |      |  |      |           |      |  |      |           |   |  |  |           |   |  |  |           | 
|-------------------------------------------- |  | ------------------------- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- | - |  |  | --------- | - |  |  | --------- | 
|                                             |  | As of December 31,       
|                                             |  |                          
|Balance Sheet Data:                          |  | 2002                      |           | 2001 |  | 2000 |           | 1999 |  | 1998
|                                             |  |                           |           |      |  |      |           |      |  |     
|                                             |  | (in thousands of dollars)
|Total Assets                                 |  |                           | 1,412,440 |      |  |      | 1,845,584 |      |  |      | 3,285,574 |   |  |  | 2,465,656 |   |  |  | 2,108,342 | 
|Share Capital                                |  |                           | 47,611    |      |  |      | 40,364    |      |  |      | 41,316    |   |  |  | 6,157     |   |  |  | 7,186     | 
|Shareholders Equity (Deficiency)            |  |                           | (718,004  | )    |  |      | (597,650  | )    |  |      | (434,279  | ) |  |  | (108,129  | ) |  |  | 68,416    | 
|Total Assets (U.S. GAAP)                     |  |                           | 1,411,888 |      |  |      | 1,369,833 |      |  |      | 2,641,483 |   |  |  | 1,833,809 |   |  |  | 1,358,902 | 
|Share Capital (U.S. GAAP)                    |  |                           | 42,560    |      |  |      | 42,560    |      |  |      | 41,316    |   |  |  | 6,157     |   |  |  | 7,186     | 
|Shareholders Equity (Deficiency) (U.S
GAAP) |  |                           | (721,005  | )    |  |      | (591,393  | )    |  |      | (434,279  | ) |  |  | (108,129  | ) |  |  | 68,416    | 



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|(1) |  | On March 5, 2002, we adopted a formal plan to dispose of our remaining
Brazilian cellular joint venture operations by way of a sale of our equity
interest within the next twelve months. The financial position and results
of operations of the Brazilian cellular joint venture operations were
proportionately consolidated for the first six months ended June 30, 2002.
Starting July 1, 2002, they were accounted for using the equity method.
Under U.S. GAAP, the equity method was used throughout the year. See our
Operating and Financial Review and Prospects included at Item 5 of this
form 20-F.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CAPITALIZATION AND INDEBTEDNESS

Not applicable.





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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. As at December 31, 2002, due to the short-term maturity of TIWs
corporate credit facility and the maturity of TIWs 14% senior guaranteed notes
on December 30, 2003, the committed cash obligations of TIW for the upcoming
twelve months exceed the committed sources of funds and TIWs cash and cash
equivalents on hand. In addition, it will be necessary for TIW to comply with
the 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 TIW will have the ability to continue as a going concern.
Subsequent to year end, the corporate credit facility, under which we were a
co-borrower was fully repaid. However, we depend on continued support from TIW
and we act as a guarantor of the 14% senior guaranteed notes issued by TIW.
Consequently, there is significant uncertainty as to whether we will have the
ability to continue as a going concern. There can be no assurance that we or
TIW will be able to secure the funds required to meet our cash needs, either
through refinancing, cash flow from our operations, disposition of certain of
our assets, 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 depend on TIW for financial support. TIW continues to have
a substantial amount of indebtedness outstanding, including as at December 31,
2002, $272.6 million in secured indebtedness at the TIW level consisting mainly
of $47.4 million drawn on its corporate 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). We are a co-borrower on the
corporate credit facility and we are a guarantor of the 14% senior guaranteed
notes. As at June 1, 2003, the corporate credit facility had been repaid in
full, $48.2 million in 14% senior guaranteed notes had been redeemed and TIW
had informed the trustee of the 14% senior guaranteed notes that it will redeem
an additional $24.2 million of notes on June 30, 2003, leaving approximately
$148.2 million in senior indebtedness as at that date. Also, as at December
31, 2002, our consolidated debt, excluding intercompany indebtedness, was
$738.0 million. The terms of certain of these 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 TIWs and our subsidiaries indebtedness could
have important consequences, including that:





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| |  | the debt service requirements may become so high that TIW or our subsidiaries have difficulty making debt service payments
on outstanding indebtedness or satisfying our obligations with respect to such indebtedness;                                                                                                                              
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | 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;                                                                                                                                                                                                                                                                                      
| 
| |  | the ability of our parent company to pay interest on its debt and finance its and our activities at the corporate level may
be limited by cash sweep provisions requiring it to repay the principal outstanding on its 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, TIW must maintain certain
financial ratios, satisfy financial conditions and comply with other covenants
pursuant to the terms of their indebtedness. If TIW is 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 Český Mobil has generated substantial operating losses
since inception. In addition, while Český 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 enough 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
$461.7 million. We generated a loss from continuing operations before minority
interests and income taxes of $191.1 million in 2002 and although we generated
income from continuing operations before minority interest and income taxes of
$202.8 million in 2001, these results include non recurring gains on
investments of $299.8 million. Our net losses were $206.0, million $233.4
million and $273.8 million for the years ended December 31, 2002, 2001 and
2000. 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 Český Mobil a.s., MobiFon S.A. and Hexacom India Limited,
our indirectly held operating companies. TIWs cash flow and, consequently,
its ability to service the debt we guarantee depends 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





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##### 



entities and, except for 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 the
14% senior guaranteed notes or to make funds available for such payments.
Because the subsidiaries will not 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 Český 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 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 the Netherlands and our subsidiaries
are incorporated under the laws of various jurisdictions and conduct operations
in different countries. Consequently, the laws and regulations of 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 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 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, our supervisory
board, our board of management or our officers, that are predicated on the
civil liability provisions of the federal securities laws of the United States
are not directly enforceable in 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 The Netherlands and might have to relitigate the merits
of the matter before the competent court in 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 boards or the board of
directors of our subsidiaries, their officers and others connected to them.





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##### 



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





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##### 



shares of MobiFon at that date, 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.

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.





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##### 



Given that we have pledged the shares we hold in ClearWave as collateral
to our guarantee of the 14% senior guaranteed notes, a realization on our
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 us or, at our 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
TIWs option, in cash or in its 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.

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 of the 14% senior guaranteed notes on the capital stock of
ClearWave subject to the lien securing our guarantee of the notes 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 the 14% senior guaranteed notes requires TIW, 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, TIW or 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 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.

Český Mobil has decided not to participate in the auction for licenses
giving the right to operate networks using universal





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##### 



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 Český 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 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. 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.

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.





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##### 



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 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 quarterly revenues and operating results are volatile.

Our quarterly revenues and operating results are volatile and difficult to
predict. It is possible that our future quarterly operating results will be
below the expectations of public market analysts or investors. Our quarterly
operating results have varied in the past and are likely to vary significantly
from quarter to quarter in the future. As a result, we believe that
period-to-period comparisons of our results of operations may not be a good
indication of our future performance. Our quarterly results may fluctuate as a
result of a variety of factors, including:



| |  |  | the size of our subscriber base;                                                                                                      
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | changes in pricing by us or our competitors;                                                                                          
|
| |  |  | increased competition;                                                                                                                
|
| |  |  | the nature and effectiveness of investments made by us;                                                                               
|
| |  |  | growth or cancellations of service contracts;                                                                                         
|
| |  |  | developments relating to our existing licenses and frequency
allocations or the issuance of new licenses or frequency allocations; and
|
| |  |  | general economic conditions.                                                                                                          





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##### 



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 Český 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, Český 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 Euros. 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. As of March 31, 2003, Romania was
defined for accounting purposes as a highly inflationary economy, and the
dollar, our functional currency, was used as MobiFons measurement currency.
Each fiscal quarter, we make an assessment as to whether Romania is still
defined as a highly inflationary economy, in order to determine whether a
further assessment is needed as to which currency should be MobiFons
functional currency for subsequent fiscal quarters. 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 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.





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##### 



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.





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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 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.

Because we are unable to thoroughly screen the creditworthiness of potential
customers, we may incur fraud and bad debt expenses and recognize less
revenues.

The fraud and bad debt we experience in a given period will directly
reduce our net income and cash flow. Our ability to screen applicants for
creditworthiness is limited due to the lack of credit reporting agencies or
data in the countries where we operate. Our screening processes and gradual
restrictions on access to our services in the event of non-payment may not be
effective in limiting our fraud and bad debt exposure. Consequently, we may
have a significant number of customers that are unable to pay their bills on
time, if at all.

Our revenues are unpredictable, and our revenue sources are short-term in
nature.

Future revenues from our prepaid and postpaid subscribers, our two primary
sources of revenues, are unpredictable. We do not require our prepaid
subscribers to enter into service contracts and cannot be certain that they
will continue to use our services in the future. Although we require our
postpaid subscribers to enter into service contracts, many of our service
contracts can be cancelled by the subscriber with limited advance notice and
without significant penalty. Because we incur costs based on our expectations
of future revenues, our failure to accurately predict revenues could have an
adverse effect on our results of operations or financial condition.

We are subject to anti-monopoly regulation, which could restrict our business.

MobiFon is subject to oversight and regulation by Romanias Competition
Council, which is authorized to regulate Romanian companies deemed to be a
dominant force in, or a monopolist of, a market. Regulatory measures may
include the imposition of tariffs or restrictions on acquisitions or on other
activities, such as contractual obligations. Because Romanian law does not
clearly define market in terms of either services provided or geographic area
of activity, it is difficult to determine under what circumstances we could be

subject to these or similar measures. We cannot exclude the possibility,
however, that our current subscriber market share in our license area in
Romania could trigger close scrutiny by the Competition Council of the pricing
and other terms of our services. MobiFon could be subject to anti-monopoly
regulation in the future, which could adversely affect our business.





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##### 



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 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 823,000 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 total
cash consideration of US$70 million.

Telesystem Ltd. founded Telesystem International Wireless Corporation N.V.
under Dutch law on May 21, 1992 to pursue international opportunities in the
wireless telecommunications services market. On September 9, 1996, TIW was
incorporated under the Canada Business Corporations Act to acquire directly and
indirectly all our issued capital stock. In September 2001, TIW issued its 14%
senior guaranteed notes of which we are a guarantor.

Our head office and principal place of business is World Trade Center,
Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands, and our telephone
number is 011 31 (20) 305.09.80. CT Corporation System, 111 Eighth Avenue, New
York, NY 10011, (212) 894-8500, acts as our agent for service of process in the
United States.

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) |  |                         | 684,640   | (3)  |  |      | 580,000   | (2)  |  |      | 690,200   |  |  |  | 384,000 |  |  |  | 201,700 | 
|Czech Republic |                       |  |                         |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|               | Subscribers           |  |                         | 1,179,800 |      |  |      | 858,400   |      |  |      | 301,700   |  |  |  |         |  |  |  |         | 
|               | Equity
Subscribers(1) |  |                         | 124,060   |      |  |      | 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) |  |                         | 823,000   |      |  |      | 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%.





---



##### 





|(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 $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 25.75% and
26.25% and, as a result, our equity subscribers on a pro forma basis as at
December 31, 2002 for Romania may vary between 678,640 and 691,830.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 and our position
within the ownership structure of the TIW Group 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 assets held for sale 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 STRUCTURE GRAPH





---



##### 





|(1) |  | This chart is a simplification of the corporate structure as at
December 31 and omits certain companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(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 Český
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 assets held for sale and which we sold subsequent to year end.

|                   |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|------------------ |  | ---------- | ------- | ---------- |  | -------------- | ---- | ------------ |  | ------- | --------------- | ------ | ------------- |  | ----- | --- |  |  | ---- |  |  |  | ------- | 
|                   |  | Start-up   |         | Licensed   |  |                |      |              |  |         |                 |        |               |  |       |     |  | 
|                   |  | date of    |         | Population |  | Total          |      | Equity       |  | Equity  |                 | Equity
|                   |  | operations |         | Coverage   |  | Subscribers(1) |      | Ownership(2) |  | persons | Subscribers (5)
|                   |  |            |         |            |  |                |      |              |  |         |                
|                   |  |            |         |            |  | (in millions)  |      |              |  |         |                 | (%)    | (in millions) | 
|                   |  |            |         |            |  |                |      |              |  |         |                 |        |               | 
|Central/Eastern    |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|Europe             |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|Romania            |  |            | Q2 1997 |            |  |                | 22.4 |              |  |         | 2,635,208       |        |               |  | 25.98 | (3) |  |  | 5.82 |  |  |  | 684,640 | 
|Czech Republic (4) |  |            | Q1 2000 |            |  |                | 10.3 |              |  |         | 1,179,752       |        |               |  | 10.52 |     |  |  | 1.08 |  |  |  | 124,062 | 
|                   |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|                   |  |            |         |            |  |                | 32.7 |              |  |         | 3,814,960       |        |               |  |       |     |  |  | 6.9  |  |  |  | 808,700 | 
|Other              |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|India (Rajasthan)  |  |            | Q2 1997 |            |  |                | 56.5 |              |  |         | 112,393         |        |               |  | 12.7  |     |  |  | 7.2  |  |  |  | 14,300  | 
|                   |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 
|Total              |  |            |         |            |  |                | 89.2 |              |  |         | 3,927,353       |        |               |  |       |     |  |  | 14.1 |  |  |  | 823,000 | 
|                   |  |            |         |            |  |                |      |              |  |         |                 |        |               |  |       |     |  |  |      |  |  |  |         | 





---



##### 





---

|(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) |  | As at May 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. For the same reasons, our ultimate equity interest in
MobiFon is expected to be between 25.75% and 26.25% and, as a result, our
equity subscribers on a pro forma basis as at December 31, 2002 for
Romania is expected t be between 678,640 and 691,830.
|   
|(4) |  | Through an intermediate holding
company, we have voting control of Český
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             





---



##### 



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 Český 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. Český 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 Český 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 and
Exchange Commission in 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 and 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
Český Mobil as of that date represents approximately 808,700 equity
subscribers. ClearWave added an additional 128,300 net subscribers during the
first quarter of 2003, bringing ClearWaves total subscribers as of March 31,
2003 to approximately 3,943,300 subscribers which based on our ultimate
percentage of ownership of MobiFon and Český Mobil as of that date represents
approximately 821,800 equity 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. During
the first quarter of 2003, MobiFon added and additional 37,500 net subscribers.
Our reports indicate MobiFon had a 51% market share as at March 31, 2003.
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, and
of $65.8 million in the first quarter of 2003.

Czech Republic.Český Mobil received the third national GSM license in
the Czech Republic in October 1999. Český Mobil is committed to compete not
only in traditional voice services, but also in new technologies such as (1)
general packet radio service or GPRS, an evolved technology that permits
increased high-speed wireless Internet access and data transmissions, and (2)
wireless application protocol or WAP, a technology that allows direct Internet
access through cellular devices. When Český Mobil launched commercial service
in March 2000, its network covered 50% of the Czech Republic#s population,
including all major Czech cities. Český 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, Český 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.
During the first quarter of 2003, Český Mobil added an additional 90,800 net
subscribers and recorded an operating income before depreciation and
amortization of $17.3 million.





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##### 



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.

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.

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 us 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 Český 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 addressing 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, Český Mobil launched GPRS services also for
prepaid subscribers.





---



##### 



Český Mobil currently has over 40,000 activated GPRS subscribers. In
February 2003, Český 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 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 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 acquisitions 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. Český 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.





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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.

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





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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 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 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 constant 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.





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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.





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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 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 Český, 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.

Český 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.





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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. 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 Český 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 Český 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.                                                                                       





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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, Český 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
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/Twis |   | GSM 900/1800  |  | March 1996    |  | September 1996      |  |              | 40.9 | %
|                     |  |                      |   |               |  | UMTS          |  | December 2001       |  |              |      |   |  |  |  | 
|                     |  |                      |  |               |  |               |  |                     |  |              |      |   |  |  |  |  |  |  |  | 
|Český 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.





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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
| | - |  | --------------------------------------------------------------------------
|
| |  |  | 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s 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 Český Telecoms 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;                                                                                                                                                             
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| |  | provides for a certain level of state regulation and control over the telecommunications sector; and                                                                                                   
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| |  | 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.





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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

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.

Český 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, Český 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).

Český 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 Český 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





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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 Český 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, Český 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. Český 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

Some of our licenses place restrictions on our ability to dispose of our
interests in our operating companies. For example, Český Mobils initial
Authorization requires us to notify the Czech Telecommunication Office in
writing at least 45 days before Český 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 Český 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 Český 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 Český Mobil and its co-shareholders in Český Mobil, Český
konsolidacni agentura and United Pan-Europe Communications N.V., hold the
remaining 3.7% interest. Through this shareholding structure, we currently
control 96.3% of Český 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





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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
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| |  | 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 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 Český Mobil, a minority shareholder was granted
by TIWC a put option on all common shares in the capital of Český 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s
shares of Český 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 Český 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. Český Mobil was
using Ericsson and Siemens exclusively to construct its network, but now
tenders the construction work to the most competitive contractors. While Český
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, Český Mobils network covered 99% of the population. As of that date,
Český Mobils 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 Český
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.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 MaintenanceWe 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 AgreementsRomania.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 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 Phase 1 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 2004. 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.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 AustriaCzech Republic.Český 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 Český Mobil had launched commercial
roaming service with 137 operators in 71 countries including all of the
operators in its neighboring countries.Český Mobil is directly or indirectly interconnected with all major
players in the Czech telecommunications market. This list of directly
interconnected parties includes: Český 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, Český Mobil will have to interconnect directly
with others licensed alternative operators that request change from indirect to
direct interconnection.Over the past years, Český 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 Český Mobil and its two competitors (Eurotel and
T-Mobile) has not been balanced and works to Český
Mobils disadvantage, such
rate reduction has a significant positive impact on Český
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.
Český 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 FinancingRomania. 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.Český 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.Český 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, Český Mobil had drawn approximately $443.1 million under this facility.
Český 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.Český
Mobils capital requirements will include expanding its cellular
network and financing its working capital requirements. Český 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 Český Mobil as at December 31, 2002.EnvironmentalWe 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, Český Mobil had a total of 1,350
employees.HEXACOM: INDIA CELLULARWe 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 EnvironmentIn 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-InvestorsTIW 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 OperationsIn 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 DistributionHexacom 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.CompetitionIncluding 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 limited mobility services via
its basic license. As at December 31, 2002, we estimate that Hexacom had a
market share of 60%.EmployeesAs at December 31, 2002, Hexacom had a total of 201 employees.BRAZILIAN ASSETS HELD FOR SALEAs at December 31, 2002, we also held, through a wholly-owned 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.COMPETITIONThe 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.PROPERTY, PLANTS AND EQUIPMENTWe lease approximately 100 square meters of office space in Amsterdam from
Maatschap World Trade Center, for our corporate headquarters. The lease
provides for annual rent of approximately 40,000 Euros.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 Český 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. Český 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. Český 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 4,500 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 $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 PROSPECTSOUR OPERATING AND FINANCIAL REVIEW AND PROSPECTSOur 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 Corporate N.V. 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.OVERVIEWWe develop, acquire and operate wireless telecommunications networks. As at
December 31, 2002, our operations, excluding operations to be disposed of in
Brazil, had 3,927,000 subscribers, which, based on our ultimate percentage
ownership in our operations, represent 823,000 equity subscribers. Our
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 ultimate percentage
equity ownership in our operations, represent approximately 14.3 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 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. On March 26, 2003, we disposed of our interest in
Brazil. The proceeds from the sale was mainly used to reimburse parent
corporate debt. The financial position and results of operations of Dolphin
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. Effective July 1, 2002, the Company ceased to proportionately
accounts for the Brazilian activities held for sale and begun to be account for
its investment using the equity method starting July 1st, 2002.OPERATIONSOur 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, TIW, the parent company, 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 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, TIW issued an additional 2.1 million Units. As
a result of these transactions, the TIW equity interest and voting rights in
ClearWave then decreased to 45.5% and 80.7%, respectively. TIWs interest in
ClearWave was held through us and consequently, on February 14, 2001, the
Company sold the shares included in the Units to TIW at their fair value for a
total proceed of $272.5 million. This transaction resulted in a gain on
disposal of $205.2 million and a reduction of our equity interest and voting
rights of ClearWave to 45.5% and 80.7%, respectively. (See Sources of
financing). In February 2002, TIW purchased back 33.7 million Units
outstanding pursuant to an exchange offer. As a result, TIW equity interest
and voting rights in ClearWave are now 85.6% and 94.9%, respectively. However,
the shares TIW repurchased in February 2002 were not sold back to us and
consequently our equity and voting interest remained at 45.5% and 80.7%
respectively.Romania  CellularCellular 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 28.9% to 28.4%. 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 24.3%
and 24.8%, 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, closed on March 19, 2003 and consequently,
ClearWave will record a gain on disposal of such shares in the first quarter of
2003. As a result of the above transactions, our ultimate ownership in MobiFon
may be reduced from the pre share repurchase level of 24.8% down to between
22.0% and 22.5% depending on the outcome of the share repurchase.Czech Republic  CellularČeský Mobil holds a license to provide GSM-based cellular services in the Czech
Republic and launched commercial services in March 2000.
ClearWaves indirect
ownership in Český Mobil increased from 22.3% to 23.3% following the January
20, 2003 negotiation of capital contributions in 2001 and 2002.ClearWaves equity interest in Český 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 Český Mobil, a minority shareholder was given a put
option and, as a result, TIW Czech may be required to purchase the Český 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 Český 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 Český
Mobil increasing from 23.3% to 24.2%.Corporate and OtherWe 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
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 POLICIESUnless otherwise indicated, all financial data and discussion herein is based
upon financial statements prepared in accordance with Dutch GAAP. For a
discussion of the principal differences between Dutch GAAP and U.S. GAAP, see
Note 14 to our consolidated financial statements.InvestmentsIn accordance with Dutch 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 Český 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 consolidated the results of Telpart until June
30th 2002. 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 operations
and account for our 48.9% investment in Telpart using the equity method
starting July 2002. 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 RecognitionRevenues 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 who use is restricted to the
Companys networks, which together with the related cost of equipment 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 EstimatesThe 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 $1.2 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, 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 OperationsThe 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 the year ended December 31, 2001, these results include the loss from
ESMR/SMR operations to July 27, 2001, the date Dolphin voluntary 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.Brazilian Activities Held for SaleFor the year ended December 31, 2002, the Company recorded an impairment of
investment of $211.0 million in relation with its investment in Brazil. The
Telpart results are accounted using the equity method, starting July 2002 as
apposed to being proportionately accounted for the first six months of 2002 and
in 2001.U.S. GAAP Accounting TreatmentU.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 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 Dutch GAAP these operations continued to be reported as
continuing operations and proportionately consolidated until the loss of joint
control which happened in the third quarter 2002 and accounted for as an equity
investment for subsequent periods.Basis of PresentationThe 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.)COMPOSITION OF OPERATING REVENUES AND EXPENSESCellular 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.RESULT OF OPERATION
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                       |  |      | 839,107  |      |  |      | 844,757  |   |  |  | 715,185  |  
|Total operating expenses                 |  |      | 726,436  |      |  |      | 779,388  |   |  |  | 768,390  |  
|                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Operating income (loss)                  |  |      | 112,671  |      |  |      | 65,369   |   |  |  | (53,205  | )
|Interest expense                         |  |      | (88,986  | )    |  |      | (128,151 | ) |  |  | (86,646  | )
|Interest income                          |  |      | 10,781   |      |  |      | 23,753   |   |  |  | 15,194   |  
|Foreign exchange loss                    |  |      | (4,435   | )    |  |      | (21,493  | ) |  |  | (16,882  | )
|Impairment of investment                 |  |      | (210,996 | )    |  |      | (36,483  | ) |  |  |         |  
|Gain (loss) on investments               |  |      |         |      |  |      | 299,842  |   |  |  | 87,510   |  
|Loss on extinguishment of debt           |  |      | (10,100  | )    |  |      |         |   |  |  |         |  
|Income taxes recovery (expenses)         |  |      | (32,543  | )    |  |      | (7,433   | ) |  |  | 1,727    |  
|Minority interests                       |  |      | 17,609   |      |  |      | 13,262   |   |  |  | 48,056   |  
|                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations |  |      | (205,999 | )    |  |      | 208,666  |   |  |  | (4,246   | )
|Loss from discontinued operations        |  |      |         |      |  |      | (442,036 | ) |  |  | (269,592 | )
|                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss                                 |  |      | (205,999 | )    |  |      | (233,370 | ) |  |  | (273,838 | )
|                                         |  |      |          |      |  |      |          |   |  |  |          |  

All subscriber numbers in the operating and financial review have been adjusted
to reflect the discontinuation of Dolphin on July 27, 2001 and the loss of
joint control of our Brazilian joint venture operations on July 2002. The year
ended December 31, 2002, includes 6 months of operations of our Brazilian joint
venture compared with 12 months the previous year.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

Revenues decreased to $839.1 million in 2002 from $844.8 million in 2001. The
consolidation of Brazil for the six months in 2002 versus twelve months in 2001
accounted for $173.9 million of the decrease. This decrease was offset by
MobiFons and Český Mobils continued growth which contributed $74.4 million
and $103.7 million of the increase, respectively. During 2001, Enlaces
contributed $9.9 million in revenues.

Total operating expenses decreased to $726.4 million in 2002 from $779.4
million in 2001. Included in total operating expenses are cost of revenues,
which decreased to $321.8 million from $338.9 million. The part year
consolidation of our Brazilian activities accounted for $64.6 million of the
decrease and this was offset by a $28.7 million and a $23.7 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 decreased from $254.8 to $214.4
million mainly due to the part year consolidation of our Brazilian activities,
which accounted for $47.2 million of the decrease. MobiFons and Český Mobils
cost remained stable in 2002 compared to 2001, as a result of cost control
initiatives at both corporate and the operating subsidiaries.

Depreciation and amortization increased to $190.2 million in 2002 from $185.7
million in 2001, an increase of $4.5 million. A higher tangible asset base in
Romania and in the Czech Republic contributed $11.5 million and $25.2 million
to such increase, respectively, combined with a reduction of $30.7 million in
our Brazilian activities resulting from the partial consolidation in 2002.





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##### 



Interest expense decreased by $39.2 million to $89.0 million in 2002 mainly
reflecting lower interest expense at the corporate level in 2002 as a result of
the termination of interest charges in July 2001 on loans made to the Company
in relation with the Dolphin discontinued operations. These loans contributed
$32.2 million of interest in 2001. The variation also reflects the drawing by
Český Mobil on their syndicated credit facility partially offset by a reduction
of $7.6 million due to the part year consolidation of our Brazilian activities.
The foreign exchange loss was $4.4 million in 2002, compared to $21.5 million
in 2001. The 2002 loss is represented by losses in our Brazilian activities of
$6.7 million combined with gains in Český 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 the previously described impairment charge of $211.0
million related to Brazil compared with a gain of $263.4 million in 2001 where
$205.2 million of such gain related to the ClearWave shares sold to TIW for
inclusion in their Unit, $106.1 million gain for the disposition of the 16.3%
equity interest in two Brazilian B-Band joint venture, $36.5 million loss
related to the A-Band Brazilian activities, a loss of $9.3 million from the
sale of W-Aura, a $5.6 million loss on our investment in Mexico and $4.1
million gain on other dispositions.

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 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 Český 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 minority interests amounted to $17.6
million in 2002, compared to $13.3 million in 2001. The 2002 minority interests
is composed of our share of losses of subsidiaries attributed to minority
interests in TIW Czech, partly offset by our share of earnings attributed to
minority interests in MobiFon and ClearWave.

As a result of the foregoing, loss from continuing operations for the year
ended December 31, 2002 was $206.0 million compared to and income of $208.7
million in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31, 2000

Revenues increased to $844.8 million in 2001 from $715.2 million in 2000.
Brazilian activities contributed for a $42.9 million decrease. MobiFons
continued growth contributed $64.7 million and Český Mobil, which had its first
full year of operations in 2001, contributed $109.9 million of the increase.

Total operating expenses increased to $779.4 million in 2001 from $768.4
million in 2000. Included in total operating expenses are cost of revenues,
which increased to $338.9 million from $300.4 million due to the decrease of
$44.5 million in our Brazilian activities and 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 $47.7
million to $254.8 million from $302.5 million in 2000. Brazilian activities,
Corporate and MobiFon contributed $37.6 million, $4.7 million and $7.9 million
to such decrease, respectively, combined with an increase of $2.5 million from
Český Mobil.

Depreciation and amortization increased to $185.7 million in 2001 from $165.6
million in 2000, an increase of $20.1 million. The disposal of our B-Band
operations accounted for $12.2 million of reduction combined with a higher
tangible asset base in Romania and in the Czech Republic which contributed
$11.8 million and $20.5 million to such increase, respectively.

Interest expense increased by $41.5 million to $128.2 million in 2001. Český
Mobil accounted for almost all of the increase due to increased borrowings
under its syndicated senior credit facility. Interest income
increased to $23.8 million in 2001 from $15.2 million in 2000,
primarily from our Brazilian activities.
The foreign exchange loss was $21.5 million in 2001, compared to a loss of
$16.9 million in 2000. The 2001 loss is a result of our Brazilian activities
for $24.5 million attributable to the devaluation of the Brazilian currency
over the U.S. dollar and 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 gain on investments is a gain of $205.2 million resulting of
the disposition of ClearWave shares sold for the TIW Units, $106.1 million gain
on the disposition of the Brazilian B-Band operations, $36.5 million loss
related to the A-Band Brazilian activities and a loss of $9.3 million from the
sale of W-Aura, a $5.6 million loss on our investment in Mexico and $4.1
million gain on other dispositions. The 2000 results included gains on investments of $87.5 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.





---



##### 



Our share of losses allocated to minority interests amounted to $13.3 million
in 2001, compared to $48.1 million in 2000. The 2001 minority interests is
composed of our share of losses of subsidiaries attributed to minority
interests in TIW Czech, partly offset by our share of earnings
attributed to minority interests in MobiFon.

As a result of the foregoing, income from continuing operations for the year
ended December 31, 2001 was $208.7 million compared to a
loss of $4.2 million
in 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
$442.0 million related to SMR/ESMR operations.

Net loss for the year ended December 31, 2001 was $233.4 million compared to
$273.8 million in 2000.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Revenues increased to $715.2 million in 2000 from $498.2 million in 1999. The
increase in the subscriber base of the Brazilian A-Band accounted for $102.1
million. MobiFons continued growth contributed $73.6 million and Český Mobil,
which was launched in early 2000, contributed $34.0 million of the increase.

Total operating expenses increased to $768.4 million in 2000 from $504.3
million in 1999. Included in total operating expenses are cost of revenues,
which increased to $300.4 million from $188.1 million due in part to the
commercial launch of Český Mobil in March 2000. Selling, general and
administrative expenses increased by $101.2 million to $302.5 million in 2000.
Brazilian activities accounted for $36.1 million and Český Mobils launch in
early 2000 accounted for $58.7 million of the increase.

Depreciation and amortization increased to $165.6 million in 2000 from $114.9
million in 1999, an increase of $50.7 million. The Brazilian activities
accounted for $22.9 million combined with a higher tangible asset base in
Romania which 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
$5.0 million to $86.6 million in 2000. MobiFons
higher level of borrowings under their credit facilities accounted for this
increase. Interest income increased to $15.2 million in 2000 from $12.5 million
in 1999, primarily due to the temporary cash surplus during the year at the
corporate level, as well as the proceeds from the waiver of our rights in the
U.K. UMTS operations. The foreign exchange loss was $16.9 million in 2000,
compared to $42.4 million in 1999. The 2000 loss is a result of the
devaluation of the Lei in Romania, which accounted for $6.5 million combined
with a devaluation of the Brazilian currency.

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 minority interests amounted to $48.1 million in
2000, compared to share of earnings to minority interests of $10.0 million in
1999. The 2000 minority interests are composed of the share of losses of
subsidiaries attributed to minority interests in TIW Czech, partly offset by
the share of earnings attributed to minority interests in MobiFon.

As a result of the foregoing, loss from continuing operations for the year
ended December 31, 2000 was $4.3 million compared to $100.9 million in 1999,

Loss from discontinued operations increased to $269.6 million for the year
ended December 31, 2000 compared to an income of $10.7 million for the prior
year period.

Net loss for the year ended December 31, 2000 was $273.8 million compared to
$90.2 million in 1999.





---



##### 



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                |      |         | 89,439  |  |      |         | 77,791  |  |  |         | 65,965  | 
|                                                          |                                              |      |         |         |  |      |         |         |  |  |         |        
|Operating income                                          |                                              |      | 142,107 |         |  |      | 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 $89.4 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 $142.1 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.





---



##### 



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.

Český 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                |      |         | 67,647  |  |      |         | 42,562  |  |  |          | 22,056 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |       
|Operating loss                                               |                                              |      | (47,452 | )       |  |      | (84,116 | )       |  |  | (104,060 | )     
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Český 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. Český 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.

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. Český 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 $67.7 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

Český 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.
Český 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. Český 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

Český Mobils service revenues were $21.5 million in 2000, reflecting the
launch of commercial operations in March 2000. Český 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. Český
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.

Brazil

|                                                      |  |      |         |      |  |      |         |  |  |  |         |  
|----------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | -
|For the years ended December 31,                      |  | 2002 |         | 2001 |  | 2000
|(in thousands of dollars)                             |  | $    |         | $    |  | $   
|                                                      |  |      |         |      |  |     
|Revenues                                              |  |      |         |      |  |      |         |  |  |  |         |  
|Services                                              |  |      | 134,737 |      |  |      | 287,272 |  |  |  | 296,152 |  
|Equipment                                             |  |      | 9,916   |      |  |      | 31,260  |  |  |  | 65,245  |  
|                                                      |  |      |         |      |  |      |         |  |  |  |         |  
|                                                      |  |      | 144,653 |      |  |      | 318,532 |  |  |  | 361,397 |  
|Cost of services                                      |  |      | 39,119  |      |  |      | 80,880  |  |  |  | 89,281  |  
|Cost of equipment                                     |  |      | 13,712  |      |  |      | 36,519  |  |  |  | 72,567  |  
|Selling, general and administrative expenses          |  |      | 39,910  |      |  |      | 87,087  |  |  |  | 124,726 |  
|                                                      |  |      |         |      |  |      |         |  |  |  |         |  
|                                                      |  |      | 92,741  |      |  |      | 204,486 |  |  |  | 286,574 |  
|Operating income before depreciation and amortization |  |      | 51,912  |      |  |      | 114,046 |  |  |  | 74,823  |  
|Depreciation and amortization                         |  |      | 33,084  |      |  |      | 63,742  |  |  |  | 75,949  |  
|                                                      |  |      |         |      |  |      |         |  |  |  |         |  
|Operating income (loss)                               |  |      | 18,828  |      |  |      | 50,304  |  |  |  | (1,126  | )
|                                                      |  |      |         |      |  |      |         |  |  |  |         |  





---



##### 



On March 5, 2002, the Company approved a formal plan to dispose of its
Brazilian cellular operations by way of a sale of its equity interest in the
next twelve months. On March 26, 2003, the Company completed the sale for $70
million and no longer operates in the Brazilian telecommunications market.

The 2002 results include the results of our Brazilian cellular operations until
July 1, 2002, at which time we ceased to proportionately consolidate the
results of operations as we ceased to have board representation at Telparts
subsidiaries although we maintained one of three seats on Telparts Board of
Directors.

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

Cash Flow Data

|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|For the years ended December 31,                                                                                                                         |  | 2002 |          | 2001 |  | 2000
|(in thousands of dollars)                                                                                                                                |  | $    |          | $    |  | $   
|                                                                                                                                                         |  |      |          |      |  |     
|Cash provided by operating activities                                                                                                                    |  |      | 156,459  |      |  |      | 245,241  |   |  |  | 82,288   |  
|Cash used in investing activities                                                                                                                        |  |      | (250,861 | )    |  |      | (239,767 | ) |  |  | (418,252 | )
|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  
|                                                                                                                                                         |  |      | (94,402  | )    |  |      | 5,474    |   |  |  | (335,964 | )
|Cash provided by financing activities                                                                                                                    |  |      | 76,836   |      |  |      | 154,395  |   |  |  | 813,736  |  
|Net effect of exchange rate translation on cash
and cash equivalent                                                                                      |  |      | 721      |      |  |      | (18,150  | ) |  |  | (5,591   | )
|Net effect on cash and cash equivalents of the
change in accounting from proportionate
consolidation to equity of the Brazilian
activities held for sale |  |      | (103,576 | )    |  |      |         |   |  |  |         |  
|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Cash provided by (used in) continuing operations                                                                                                         |  |      | (120,421 | )    |  |      | 141,719  |   |  |  | 472,181  |  
|Cash used in discontinued operations                                                                                                                     |  |      |         |      |  |      | (216,751 | ) |  |  | (328,443 | )
|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Increase (decrease) in cash and cash equivalents                                                                                                         |  |      | (120,421 | )    |  |      | (75,032  | ) |  |  | 143,738  |  
|Cash and cash equivalents, beginning of period                                                                                                           |  |      | 167,052  |      |  |      | 242,084  |   |  |  | 98,346   |  
|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  
|Cash and cash equivalents, end of period                                                                                                                 |  |      | 46,631   |      |  |      | 167,052  |   |  |  | 242,084  |  
|                                                                                                                                                         |  |      |          |      |  |      |          |   |  |  |          |  





---



##### 

\

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

For the year ended December 31, 2002, operating activities provided cash of
$156.5 million compared to $245.2 million for the same period last year. The
decrease year over year is mainly expected by the inclusion of the Brazilian
activities operating cash flows in 2001 whereas they are excluded in 2002 as
the investment is accounted for using the equity method in 2002. This was
partially offset by the $51.9 million increase in operating income before
depreciation and amortization. Furthermore, results for 2001 include a
significant increase in working capital mainly related to Český Mobil.

Investing activities used cash of $250.9 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
$239.8 million for the year ended December 31, 2001. MobiFons and Český
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
$76.8 million mainly explained by subsidiarys shares issued to minority
interests and net borrowings of debt of $29.9 million and $66.4 million,
respectively, offset by subsidiarys distributions paid to minority interests
of $10.8 million and financing costs of $8.6 million. For the year ended 2001,
cash provided by financing activities was $154.4 million mainly explained by
proceeds from subsidiarys shares issued to minority interests of $65.8, by
borrowings of debt net of repayments of $125.6 million and by a repayment of
short-term loan of $37.0 million.

Cash and cash equivalents as of December 31, 2002 totaled $46.6 million,
including $0.2 million at the corporate level. As of December 31, 2002, total
consolidated indebtedness, excluding intercompany indebtedness, was $0.8 billion, of which $267.7 million at MobiFon
and $470.2 million at Český Mobil.

For 2001, cash used in discontinued operations was to $216.8 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.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Cash provided by operating activities was $245.2 million for the year ended
December 31, 2001, compared to $82.3 million for 2000. The year-over-year
increase is mainly attributable to increased operating income before
depreciation and amortization at MobiFon and a reduction in Český Mobils
operating loss before depreciation and amortization.

Investing activities used cash of $239.7 million during the year ended December
31, 2001, reflecting $369.8 million of cash used for acquisitions of property,
plant and equipment and $23.2 million for the acquisition of additional shares
of MobiFon. MobiFon, Český Mobil and the Brazilian activities operations
accounted for $125.4 million, $161.1 million and $83.3 million of the capital
spending, respectively. The proceeds of sale of Brazilian B-Band
accounted for $153.3 million.

Financing activities generated cash of $154.4 million for the year ended
December 31, 2001, reflecting $125.6 million, $65.8 million and $37.0 million
by borrowing under our subsidiaries long-term debt facilities, from proceeds from investees
shares issued to minority shareholders and the repayment of the
short-term loans, respectively.

Cash used in discontinued operations increased to $216.8 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.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Cash provided by operating activities in 2000 was $82.3 million compared to
cash used in operating activities of $45.2 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 $418.3 million. This
amount mainly relates to the acquisition and build-out of property, plant and
equipment in Brazil, MobiFon and Český Mobil for $143.1 million and $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.





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Cash provided by financing activities in 2000 was $813.7 million compared to
$303.1 million in 1999. Of the 2000 amount, $121.3 million related to proceeds
of shares issued to minority interests, $528.6 million relates to increase in
short-term loans, $163.8 million relates to increase of long-term debt, net of
repayments, of which $187.2 million is attributable to Český Mobil.

Cash used in discontinued operations was $328.4 million for the year ended
December 31, 2000 compared to $9.7 million for the corresponding prior period.
The increase is mainly due to the build-out of the ESMR network in the U.K.

SOURCES OF FINANCING

At the corporate level, as at December 31, 2002, we had cash and cash
equivalents of $0.2 million and we had amounts due to related parties of
$942.0 million, consisting mainly of an intercompany loan to our parent company.
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. Subsequent to that date, we were financed
primarily by the parent company through intercompany loans.

On September 19, 2001, TIW issued $194.8 million of 14% Notes due December 30,
2003 as partial consideration for their senior discount notes. The 14% Notes
are guaranteed by us.

TIWs 14% Notes mature on December 30, 2003. Interest on the 14% Notes accrued
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.
TIW 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. Our guarantee is secured by a lien on the capital stock of TIW Latin
America, a holding company which held our investments in cellular operations in
Brazil and by a lien on capital stock of ClearWave held by us. The liens
granted by us 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.

The 14% Notes contain mandatory redemption provisions, which will require their
repayment upon the sale of our interests in either ClearWave as did our sale in
March 2003 of our interest in Telpart. Furthermore, distributions from
ClearWave will trigger mandatory repayments. The 14% Notes have covenants
which, among others things, limit our ability to incur indebtedness, create
liens and require TIW 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
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. On May 30, 2003, TIW announced that it notified the
trustee of the 14% Notes that it intends to redeem an additional $24.4 million
in principal amount plus accrued interest on June 30, 2003 and accordingly will
not proceed with the issuance of $10.0 million in additional 14% Notes.

In July 1999, we entered into a corporate credit facility, as a co-borrower
with TIW, with certain financial institutions, providing for aggregate
borrowing capacity of $140.0 million. Our corporate credit facility was amended
on July 3, 2001 and subsequently on February 4, 2002, August 8, 2002 and
December 6, 2002 resulting in the extension of the maturity to June 30, 2003.
TIW made loan repayments during 2002 of $36.1 million bringing the amount
available and fully drawn by TIW 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. As a result of the sale of our
Brazilian investments and the MobiFon transactions described below, the
facility was repaid in full in April 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
24.8% to 24.3%. 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.





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##### 



Accordingly, our ultimate ownership of MobiFon may vary between 24.3% and
24.8%, 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 dividends
declared by a subsidiary and the amount that MobiFon is committed to distribute
to non-controlling interests is presented within current liabilities.

On March 19, 2003, we closed 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. As a result of the above transactions, our ultimate ownership
in MobiFon may be reduced from the pre share repurchase level of 24.8% down to
between 22.0% and 22.5% depending on the outcome of the share repurchase.

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
$158.8 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 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.





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Český Mobil

The cash requirements of Český 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, Český 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.

Český 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].

Český 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 Český Mobil
and of substantially all of the assets of Český Mobil. Under this facility,
Český Mobil must respect certain financial covenants and coverage tests.
Furthermore, prior to each draw down, the ratio of senior debt to invested
capital in Český Mobil must not exceed 60:40 or the total invested capital in
Český 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 Český 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.

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, the addition to capacity to our existing networks and the acquisition,
if an option is exercised, of certain shares of Český 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. Český 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.





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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 parents 14%
Notes, which we guarantee, 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. 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 repay intercompany indebtedness in order
for TIW to refinance their corporate debt by way of raising new financing and
selling 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
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.





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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. Český Mobil has hedged a portion of its variable rate debt, by
entering into interest rate and cross currency swaps in which Český 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. Český 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, Český Mobil
entered into a similar swap arrangement for a further 6 months.
On May 12, 2003, this swap expired and a similar new
12 month swap was arranged. In January
2003, a further 40.0 million of Český Mobils Euro based borrowing exposure
was hedged in this manner and Český 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.

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 Český 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

Directors

The following table and notes thereto set out:





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| | (1) |  | the name of each director appointed by unanimous written
consent of the shareholders of TIWC to serve for an indefinite term;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | the principal occupation or employment of each director; and                                                                 
|
| | (3) |  | their respective periods of service as a director.                                                                           

No terms of service contracts exist with the directors.

|                                      |  |                                                                                    |  |               
|------------------------------------- |  | ---------------------------------------------------------------------------------- |  | --------------
|Name and Position or Office with TIWC |  | Principal Occupation or Employment                                                 |  | Director Since
|                                      |  |                                                                                    |  |               
|MARIO BERTRAND
Supervisory Director   |  | President and Director of Telesystem
(Antilles) Corporation N.V.                   |  | June 2002     
|ANDRÉ GAUTHIER
Supervisory Director   |  | Vice-President and Chief Financial Officer,
Telesystem International Wireless Inc. |  | June 1999     
|JAMES J. JACKSON
Supervisory Director |  | Chief Financial Officer, ClearWave and MobiFon                                     |  | August 2001   
|MARGRIET ZWARTS
Supervisory Director  |  | General Counsel and Secretary, Telesystem
International Wireless Inc.              |  | January 1999  

Mario Bertrandis President and Director of Telesystem (Antilles) Corporation
N.V. since January 2003. Prior to January 2003, Mr. Bertrand was President of
New Ventures of TIW since May 19999 and prior to that and prior to May 1999,
Mr. Bertrand was President, Europe of TIW, and, prior to May 1997, held the
position of Managing Director, Europe with Telesystem International Wireless
Services since 1995. Mr. Bertrand was a guest lecturer at the École nationale
dadministration publique and the Sorbonne, both in Paris, in 1994, President
and Chief Executive Officer of Télé-Métropole Inc. from 1991 to 1993, President
and Chief Executive Officer of M. Stores Inc., in 1990 and served as Chief of
Staff to the Premier of Quebec from 1986 to 1990. Mr. Bertrand holds a
Bachelor of Arts degree from the University of Montreal.

André Gauthieris
Vice-President and Chief Financial Officer of TIW. Prior to
June 2001, Mr. Gauthier was TIWs Vice-President, Finance, and Treasurer. Prior
to May 1999, Mr. Gauthier was TIWs 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.

James J. Jacksonwas appointed as ClearWaves Chief Financial Officer in
September 1999, Český Mobils Chief Financial Officer in April 2000 and
MobiFons Senior Vice President and Chief Financial Officer in 1997. From 1995
to 1997 Mr. Jackson was Vice Chairman, Finance, for Quadrant Amroq Bottling Co.
Ltd., a venture capital firm holding the franchise for Pepsi Cola in Romania.
Prior to that, he worked for fifteen years at Alcan Aluminium Ltd., including
as President of one of its venture capital groups. Mr. Jackson is a member of
the Institute of Chartered Accountants of Canada and is a registered Certified
Public Accountant in the United States. Mr. Jackson left ClearWave, Český
Mobil and MobiFon in February 2001 and returned to ClearWave as Chief Financial
Officer in July 2001. Mr. Jackson now also holds the position of
Chief Financial Officer at MobiFon.

Margriet Zwartsis General
Counsel and Secretary of TIW. 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.





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Executive Officers

The following table sets out information concerning TIWCs corporate
officers, including name and position with TIWC.

|                        |  |                   |  | 
|----------------------- |  | ----------------- |  | 
|Name                    |  | Position         
|                        |  |                  
|Cornelis van Ravenhorst |  | Managing Director
|Yves Normand            |  | Managing Director

Cornelis van Ravenhorsthas been an officer and acting corporate secretary
of TIWC since November 1997 and was appointed a managing director of TIWC in
January 1998. Prior to joining TIW in December 1996, Mr. Van Ravenhorst was a
legal and financial consultant for BCE Inc. and Bell Canada International Inc.
between 1993 and 1995. Mr. Van Ravenhorst was a practicing lawyer in Amsterdam
since 1981 and was first admitted to the Quebec Bar in 1993 and The Netherlands
Bar in 1981. Mr. Van Ravenhorst holds a masters degree of comparative law from
the Southern Methodist University, Dallas, Texas and a doctorate from the
University of Brabant at Tilburg, The Netherlands.

Yves Normandhas been a financial officer of TIWC since October 2000 and
was appointed a managing director of TIWC in April 2001. Mr. Normand joined
TIW in July 1996 as a controller and also held other financial positions at
TIW. Prior to July 1996, Mr. Normand was a controller at Biochem Immunosystems
Inc. in Montreal and was a senior manager at Deloitte & Touche from 1988 to
1993. Mr. Normand holds a bachelors degree in Business Administration from the
École des Hautes Études Commerciales in Montreal and is a member of the
Canadian Institute of Chartered Accountants.

Board Practices

Directors.The Company is managed by a Board of Management, all members of
which are employees of the Company. The activities of the Board of Management
are generally supervised by the Board of Supervisory Directors, none of whom
are employees of the Company. No Managing Director may be resident of Canada,
whereas not more than half of the members of the Board of Supervisory Directors
may be residents of Canada. In the event that a Managing Director has a
conflicting interest with the Company, the Articles of Association require that
the Company is to be represented by such member of the Board of Management or
the Board of Supervisory Directors as the Board of Supervisory Directors shall
designate for this purpose. The number of Supervisory Directors and Managing
Directors is determined from time to time by the shareholders. Every
Supervisory Director shall retire no later than on the day on which the annual
general meeting of shareholders is held in the financial year in which he
reaches the age of seventy-two. Managing Directors and Supervisory Directors
may at any time be suspended or dismissed. Managing Directors may also at any
time be suspended by the Board of Supervisory Directors. The remuneration for
the Supervisory Directors and the remuneration and further conditions of
employment for the Managing Directors is determined by the annual general
meeting of shareholders.

The audit committee. The audit committee is responsible for making
recommendations to the board of management regarding the selection of
independent auditors, reviewing the results and scope of the audit and other
services provided by our independent accountants and reviewing and evaluating
our audit and control functions. The supervisory board is currently exercising
the functions of the audit committee.

The compensation committee.The compensation committee is responsible for
reviewing and, as it deems appropriate, recommending to the supervisory board
with respect to members of the board of management, and to the board of
management with respect to other managerial employees, policies, practices and
procedures relating to compensation and the establishment and administration of
employee benefit plans. The compensation committee is responsible for making
recommendations to the board of management in relation to any employee stock
option, stock purchase or other rights plans, and advises and consults with our
officers as may be requested regarding managerial personnel policies. The
Supervisory Board is currently exercising the functions of the compensation
committee.





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##### 



COMPENSATION OF DIRECTORS AND OFFICERS

For the
year ended December 31, 2002, an aggregate amount of $843,458
including salary, bonuses and benefits, was paid by us and our subsidiaries to
members of our Management Board and members of our Supervisory Board
including salary, bonuses and benefits paid to such members in the
capacity of director or executive officer of our subsidiaries. Certain
of the members of our Supervisory Board act in their capacity of Supervisory
Board members as part their employment by our parent companies, as such, they
receive no compensation from us or our subsidiaries for acting in such
capacity.

In addition, members of our Management Board and of our Supervisory Board
are participants in TIWs employee stock option plan. During the year ended
December 31, 2002, Members of our Management Board and of our Supervisory Board
who are not employees of our parent companies received an aggregate of
2,960,603 options to acquire common shares of TIW exercisable at prices ranging
from US$0.43 to Cdn$1.90 and expiring in 2007. These numbers include
options conditionally granted in November 2001 and in November 2002
and confirmed in May 2002 and May 2003 respectively. In May, 2003, TIW announced a
consolidation of its common shares on the basis of one post-consolidation share
for every five pre-consolidation shares. The number of options and the exercise
prices of options under the TIW employee stock option plan will be adjusted to
reflect the effect of the consolidation.

ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

TIW

Major Shareholders

The following table and notes thereto set forth certain information regarding
ownership of our common shares, being our only class of voting securities.

|                                       |  |                           |       | 
|-------------------------------------- |  | ------------------------- | ----- | 
|                                       |  | Expressed as a % of all  
|Name of Beneficial Owner               |  | Outstanding Common Shares
|                                       |  |                          
|Telesystem International Wireless Inc. |  |                           | 19.7  | 
|Telesystem (Antilles) Corporation N.V  |  |                           | 80.3  | 
|Total                                  |  |                           | 100.0 | 

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 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., (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.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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##### 



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 and Young
Accountants 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 involved at the date hereof 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 is expected to be between 56.58% and 58.90%.

Sale of Brazilian Operations and Repayment of Credit Facility

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 was US$ 70 million of
which US$ 5 million was paid by Telemig and Tele Norte for release of claims
for technical services. Part of the net proceeds from the sale were used to
repay in full the TIW senior corporate credit facility under which we are a
co-borrower.

Partial Redemption of 14% Senior Guaranteed Notes of TIW

In April and June 2003, the amount of 14% senior guaranteed notes of TIW
outstanding was reduced from 220.6 to $148.2 following certain redemption at
par by TIW. We are a guarantor of the 14% senior guaranteed notes.

Refinancing of 14% Senior Guaranteed Notes

On June 25, 2003, TIW announced that its indirect subsidiary, MobiFon Holdings
B.V., had priced a new US$ 225,000,000 issue of senior notes due 2010. The
notes bear interest of 12.5% and are being offered at 97.686% of par for a
yield to maturity of 13%. The closing of the offering is expected on or around
June 27, 2003.





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##### 



MobiFon Holdings, incorporated in the Netherlands, holds TIWs 57.1% indirect
equity interest in MobiFon, a major provider of GSM wireless telecommunications
services in Romania. Substantially all of the net proceeds from the offering,
after establishment of a debt service reserve account of US$ 28.1 million, will
be used to repay intercompany loans made to MobiFon Holdings by ClearWave,
MobiFon Holdings direct parent company. ClearWave will use the funds it
receives from MobiFon Holdings to repay outstanding indebtedness to TIW and to
make distributions to its shareholders. TIW will apply the funds it receives
from ClearWave and its available cash resources to repay in full its
outstanding 14% senior guaranteed notes of which we are a guarantor. The
MobiFon Holdings notes have not been registered under the U.S. Securities Act
of 1933 and may not be offered or sold in the U.S. absent an applicable
exemption from the registration requirements of the Act. The MobiFon Holdings
notes will be offered in other jurisdictions in accordance with rules
permitting offerings to professional investors or on a restricted basis.

ITEM 9  THE OFFER AND LISTING

OFFER AND LISTING DETAILS

Not applicable.

PLAN OF DISTRIBUTION

Not applicable.

MARKETS

Guarantee of 14% Senior Notes

On September 19, 2001, TIW issued $195 million in 14% senior guaranteed
notes. We are a guarantor of the these 14% notes and our guarantee is secured
by liens 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 by TIW through the issuance of additional notes. Other
interest payments are payable only in cash. In April, 2002 TIW 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.

There is currently no established trading market for the 14% 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. TIW does not presently intend
to apply for a listing of the 14% notes on any national securities exchange or
to quote them on a quotation system. The record holder of the 14% notes is a
nominee of The Depository Trust Company in New York, New York.

ITEM 10  ADDITIONAL INFORMATION

SHARE CAPITAL

Not applicable.

MEMORANDUM AND ARTICLES OF ASSOCIATION

The Company is a public company with limited liability (naamloze
vennootschap) organized under the laws of the Netherlands. Our objects and
purposes as set forth in article 3 of our Articles of Association are, (i) to
organize, to assist and to participate in the formation and organization of
enterprises, companies, partnerships, associations, and other feasible and
suitable





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legal entities (ii) to finance enterprises and companies, and
furnish guarantees and other financing facilities, and to provide
indemnification, for the benefit of enterprises and corporations in which the
Company has, directly or indirectly, an investment and for third parties, (iii)
to obtain financing for the Company and for enterprises and corporations in
which the Company has, directly or indirectly, an investment and for third
parties, (iv) to redeem, to pay off, to fulfill and to repurchase, as
appropriate, notes, bonds, debentures, stock or other securities, (v) to
manage, operate and supervise enterprises and corporations, (vi) to obtain, to
own, to alienate, to manage and to exploit immovable property and assets in
general, (vii) to acquire, to own, to transfer, to exploit and to license in
and to license out intellectual property rights and (viii) to do anything in
connection with and conducive to the above. The Company is registered under
number 33238401 with the Trade Register of Amsterdam and our Articles of
Association are publicly available there. The Articles of Association may only
be amended at any general meeting of shareholders by a majority of the votes
cast.

Directors.The Company is managed by a Board of Management, all members of
which are employees of the Company. The activities of the Board of Management
are generally supervised by the Board of Supervisory Directors, none of whom
are employees of the Company. No Managing Director may be resident of Canada,
whereas not more than half of the members of the Board of Supervisory Directors
may be residents of Canada. In the event that a Managing Director has a
conflicting interest with the Company, the Articles of Association require that
the Company is to be represented by such member of the Board of Management or
the Board of Supervisory Directors as the Board of Supervisory Directors shall
designate for this purpose. The number of Supervisory Directors and Managing
Directors is determined from time to time by the shareholders. Every
Supervisory Director shall retire no later than on the day on which the annual
general meeting of shareholders is held in the financial year in which he
reaches the age of seventy-two. Managing Directors and Supervisory Directors
may at any time be suspended or dismissed. Managing Directors may also at any
time be suspended by the Board of Supervisory Directors. The remuneration for
the Supervisory Directors and the remuneration and further conditions of
employment for the Managing Directors is determined by the annual general
meeting of shareholders.

Shares.The Company has one class of stock, being registered ordinary
shares. Each share confers the right to cast one vote. All outstanding shares
are, when issued and paid for, fully paid and non-assessable. General meetings
will be convened by the Board of Management or the Board of Supervisory
Directors. The convocation shall be given not later than on the 15th day prior
to the meeting. The Company is required to hold an annual general meeting of
shareholders within 6 months after the end of each financial year of the
Company. There are no limitations under Dutch law or in the Companys Articles
of Association on the right of persons who are not citizens or residents in the
Netherlands to hold or vote shares in the Company.

Subject to certain restrictions contained in Dutch law and the Companys
Articles of Association, the Board of Management may cause the Company to
purchase its own fully-paid shares up to 10% of the outstanding shares of
capital stock, based upon nominal value, at the time of purchase. Such
purchases may be made only upon authorization of shareholders, which
authorization is valid for a maximum period of eighteen months and must include
the number of shares to be acquired, the way in which they may be acquired and
the limits within which the purchase price may be determined.

Shares of the Companys authorized but not-issued capital stock may be
issued at such times and on such conditions as may be authorized by the
shareholders at a general meeting or by another body of the Company if
authorized by the shareholders. Such authorization may be given for a maximum
period of five years. The shareholders have preemptive rights with regard to
new shares to be issued, pro rata based on the number of their shares.
Preemptive rights may be limited or precluded by resolution of a general
meeting of shareholders or by another body of the Company designated in this
respect by resolution of the general meeting for a fixed period of time not
exceeding five years.

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:





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##### 





| | 1. |  | 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.                                                                                                                                         
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | 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;
|
| | 3. |  | 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;                                                                                                                                                                                                                                                                   
|
| | 4. |  | License awarded to Český Mobil to establish and operate a public
mobile telecommunication network according to the GSM standard dated
June 17, 2002;                                                                                                                                                                                                                                                                                                   
|
| | 5. |  | License awarded to Český Mobil to establish and operate a public
mobile telecommunication network according to the VmTS standard dated
June 20, 2002;                                                                                                                                                                                                                                                                                                  
|
| | 6. |  | Loan Agreement between MobiFon S.A. and European Bank for
Reconstruction and Development dated August 27, 2002;                                                                                                                                                                                                                                                                                                                                        
|
| | 7. |  | Loan Agreement between MobiFon S.A. and Nordic Investment Bank dated
August 27, 2002;                                                                                                                                                                                                                                                                                                                                                                  
|
| | 8. |  | Loan Agreement between MobiFon S.A. and Export Development Bank
Canada dated August 27, 2002;                                                                                                                                                                                                                                                                                                                                                          
|
| | 9. |  | 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 limitations, either under the laws of the
Netherlands or in our Articles of Association, on the rights of non-residents
of the Netherlands to hold or vote our shares other than those that apply to
holders that are resident in the Netherlands. Cash distributions, if any,
payable in Euros on our shares may be officially transferred from the
Netherlands and converted into any other currency without Dutch legal
restrictions, except that, for statistical purposes, any payments in excess of
50,000 must be reported by us to the Dutch Central Bank. Cash
distributions, if any, on our shares will be paid in U.S. dollars converted at
the rate of exchange at the close of business on the date fixed for that
purpose by the board of management in accordance with our Articles of
Association.

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 TIW Notes 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 TIW Notes 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 TIW Notes, 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.





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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 TIW Notes
based on their particular circumstances, including any consequences of an
investment in TIW Notes arising under state or local tax law or foreign tax
laws of jurisdictions outside of the United States, including Canada and The
Netherlands.

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 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





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##### 



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.

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 TIW Notes made in the United States and to the
proceeds from the sale or other disposition of TIW, 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,
federal backup withholding tax at the applicable statutory rate 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.





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##### 



DOCUMENTS ON DISPLAY

Any documents referred to in this Annual Report may be inspected at our
corporate offices which are located at World Trade Center, Strawinskylaan 707,
1077 XX Amsterdam, The Netherlands. 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.





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##### 



ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

We have used voting 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 and accruals, income value added taxes 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
minority interests 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 amount due to parent and
affiliated companies is not determinable because it cannot be determined when
it will be reimbursed. 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 in monetary terms,
other than related party indebtedness, were of a variable-rate nature.
However, MobiFon and Český 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 and amounts due
to parent and affiliated companies which have no redemption scheme. 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:



| |  |  | 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   
|                                                 |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |        
|                                                 |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   | due at  |   | Value  
|                                                 |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |        
|                                                 |                                         |                                    |                                                 |        | 2003    |      | 2004   |        | 2005    |      | 2006   |        | 2007    |      | 2008    |   | There-after |   | maturity |   | 12/31/02
|                                                 |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |         
|Interest Rate Exposure                           |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Long-Term Debt:                                  |                                         |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Fixed rate principal
repayment                   |                                         |                                    |                                                |        |         |      | 9,350  |        |         |      | 14,025 |        |         |      | 18,700  |   |             |   | 23,375   |   |          |   | 28,050  |   |        |   |       |   |        |   | 93,500  |   |         |   | 94,818  |     
|Average interest rate on
loans outstanding       |                                         |                                    | 7.13                                            | %      |         |      | 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   | % |         |   |        |   |         |      |        |  





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##### 



|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  |        |  |       |  |       |  | 
|-------------------------- |  | -------------------- |  |  | ------ |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -------- |  | -------- |  |  |  | - |  |  |  | - |  |  |  | ------ |  | ----- |  | ----- |  | 
|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  | Total  |  | Fair 
|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  |        |  |      
|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  | due at |  | Value
|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  |        |  |      
|                           |  |                      |  |  | 2003   |  | 2004 |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | There-after |  | maturity |  | 12/31/02
|                           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |         
|Forward Exchange Contract: |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  |        |  |       | 
|Principal amount           |  |                      |  |  |        |  |      |  |      |  |      |  |      |  |      |  |             |  |          |  |          |  |  |  |   |  |  |  |   |  |  |  |        |  |       | 
|                           |  | Fixed Euro to Koruna |  |  | 62,948 |  |      |  |     |  |      |  |     |  |      |  |            |  |          |  |         |  |  |  |  |  |  |  |  |  |  |  |       |  |       |  | 1,541 | 
|                           |  | Exchange Rate        |  |  | 30.80  |  |      |  |     |  |      |  |     |  |      |  |            |  |          |  |         |  |  |  |  |  |  |  |  |  |  |  |       |  |       |  |      | 

ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.





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##### 



PART II

ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.

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

None.

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 principal executive officer and
principal financial officer, 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 principal executive officer and principal
financial officer, 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 principal executive officer and principal financial officer
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.





---



##### 



ITEM 16 [RESERVED]

Not applicable.





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##### 



PART III

ITEM 17  FINANCIAL STATEMENTS

Not applicable.





---



##### 



ITEM 18  FINANCIAL STATEMENTS

Financial Statements of TIWC

Presented below are the Consolidated Financial Statements of TIWC,
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.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED BALANCE SHEETS
After Appropriation of Net Result

|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|------------------------------------------------- | ------------------------------------------------------------------------------- |  | --------- | ---------- | ---- |  | --------- | --------- | -
|                                                  |                                                                                 |  | 2002      |            | 2001
|                                                  |                                                                                 |  | $         |            | $   
|                                                  |                                                                                 |  |           |            |     
|As at December 31,                                |                                                                                 |  |           |            |      |  |           |          
|[In thousands of U.S. dollars]                    |                                                                                 |  |           |            |      |  |           |          
|ASSETS[Note 1]                                    |                                                                                 |  |           |            |      |  |           |          
|Fixed assets                                      |                                                                                 |  |           |            |      |  |           |          
|                                                  | Goodwill and Licenses [Note3]                                                   |  |           | 144,406    |      |  |           | 311,216   |  
|                                                  | Tangible assets [Note 4]                                                        |  |           | 1,021,840  |      |  |           | 1,160,640 |  
|                                                  | Investments [Note 5]                                                            |  |           | 79,990     |      |  |           | 9,067     |  
|                                                  | Deferred income tax assets [Note 9]                                             |  |           |           |      |  |           | 18,029    |  
|                                                  | Deferred financing cost                                                         |  |           | 18,989     |      |  |           | 18,344    |  
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total fixed assets                                |                                                                                 |  | 1,265,225 |            |      |  | 1,517,296 |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Current assets                                    |                                                                                 |  |           |            |      |  |           |          
|                                                  | Cash and cash equivalents                                                       |  |           | 46,631     |      |  |           | 167,052   |  
|                                                  | Trade
debtors [Net of Allowance for Doubtful Accounts of $7,503, 2001
- $8,510] |  |           | 53,865     |      |  |           | 90,106    |  
|                                                  | Inventories                                                                     |  |           | 10,248     |      |  |           | 26,032    |  
|                                                  | Prepaid expenses                                                                |  |           | 21,115     |      |  |           | 22,668    |  
|                                                  | Deferred income tax assets [Note 9]                                             |  |           | 1,010      |      |  |           | 3,548     |  
|                                                  | Other current assets                                                            |  |           | 14,346     |      |  |           | 18,882    |  
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total current assets                              |                                                                                 |  | 147,215   |            |      |  | 328,288   |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total assets                                      |                                                                                 |  | 1,412,440 |            |      |  | 1,845,584 |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIENCY) |                                                                                 |  |           |            |      |  |           |          
|Current liabilities                               |                                                                                 |  |           |            |      |  |           |          
|                                                  | Trade creditors and accruals                                                    |  |           | 114,966    |      |  |           | 166,352   |  
|                                                  | Income and value added taxes payable                                            |  |           | 5,459      |      |  |           | 1,465     |  
|                                                  | Deferred revenues                                                               |  |           | 38,468     |      |  |           | 34,002    |  
|                                                  | Distribution payable to minority interests [Note 5]                             |  |           | 13,400     |      |  |           |          |  
|                                                  | Amounts due to related parties [Note 6]                                         |  |           | 943,182    |      |  |           | 954,598   |  
|                                                  | Current portion of long-term debt [Note 6]                                      |  |           |           |      |  |           | 77,297    |  
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total current liabilities                         |                                                                                 |  | 1,115,475 |            |      |  | 1,233,714 |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Non-current liabilities                           |                                                                                 |  |           |            |      |  |           |          
|                                                  | Long-term debt [Note 6]                                                         |  |           | 737,981    |      |  |           | 773,405   |  
|                                                  | Share of liabilities of certain investees                                       |  |           | 4,096      |      |  |           | 5,317     |  
|                                                  | Deferred income tax liabilities [Note 9]                                        |  |           | 5,211      |      |  |           | 3,548     |  
|                                                  | Other non-current liabilities                                                   |  |           | 11,349     |      |  |           | 3,822     |  
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total non-current liabilities                     |                                                                                 |  | 758,637   |            |      |  | 786,092   |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total liabilities                                 |                                                                                 |  | 1,874,112 |            |      |  | 2,019,806 |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Shareholders deficiency[Note 7]                  |                                                                                 |  |           |            |      |  |           |          
|                                                  | Share capital                                                                   |  |           | 47,611     |      |  |           | 40,364    |  
|                                                  | Share premium                                                                   |  |           | 281,397    |      |  |           | 281,397   |  
|                                                  | Deficit                                                                         |  |           | (1,044,443 | )    |  |           | (838,444  | )
|                                                  | Cumulative translation adjustment                                               |  |           | (2,569     | )    |  |           | (80,967   | )
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total shareholders deficiency                    |                                                                                 |  | (718,004  | )          |      |  | (597,650  | )        
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|                                                  | Minority interests                                                              |  |           | 256,332    |      |  |           | 423,428   |  
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total group deficiency                            |                                                                                 |  | (461,672  | )          |      |  | (174,222  | )        
|                                                  |                                                                                 |  |           |            |      |  |           |           |  
|Total liabilities and shareholders deficiency    |                                                                                 |  | 1,412,440 |            |      |  | 1,845,584 |          
|                                                  |                                                                                 |  |           |            |      |  |           |           |  

Commitments and contingencies
[Notes 1, 11 and 13]

Subsequent events [Note 16]

See accompanying notes





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED STATEMENT OF LOSS
After Appropriation of Net Result

|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|----------------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                                                                    |  | 2002 |          | 2001 |  | 2000
|                                                                                    |  | $    |          | $    |  | $   
|                                                                                    |  |      |          |      |  |     
|For the years ended December 31,                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|[In thousands of U.S. dollars]                                                      |  |      |          |      |  |      |          |   |  |  |          |  
|Revenues                                                                            |  |      | 839,107  |      |  |      | 844,757  |   |  |  | 715,185  |  
|Cost of revenues                                                                    |  |      | 321,788  |      |  |      | 338,944  |   |  |  | 300,140  |  
|Selling, general and administrative expenses [Note 10]                              |  |      | 214,478  |      |  |      | 254,867  |   |  |  | 302,568  |  
|Depreciation and amortization [Note 10]                                             |  |      | 190,170  |      |  |      | 185,577  |   |  |  | 165,682  |  
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Operating income (loss)                                                             |  |      | 112,671  |      |  |      | 65,369   |   |  |  | (53,205  | )
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Interest expense [Note 10]                                                          |  |      | (75,801  | )    |  |      | (82,028  | ) |  |  | (81,613  | )
|Interest expense to affiliated companies [Note 6]                                   |  |      | (13,185  | )    |  |      | (46,123  | ) |  |  | (5,033   | )
|Interest income                                                                     |  |      | 10,781   |      |  |      | 23,753   |   |  |  | 15,194   |  
|Foreign exchange loss                                                               |  |      | (4,435   | )    |  |      | (21,493  | ) |  |  | (16,882  | )
|Impairment of investment [Note 13 and 16]                                           |  |      | (210,996 | )    |  |      | (36,483  | ) |  |  |         |  
|Gain (loss) on investments [Note 5]                                                 |  |      |         |      |  |      | 299,842  |   |  |  | 87,510   |  
|Loss on extinguishment of debt [Note 6]                                             |  |      | (10,100  | )    |  |      |         |   |  |  |         |  
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations before
income taxes and minority interests |  |      | (191,065 | )    |  |      | 202,837  |   |  |  | (54,029  | )
|Income tax recovery (expense) [Note 9]                                              |  |      | (32,543  | )    |  |      | (7,433   | ) |  |  | 1,727    |  
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) before minority interest                                              |  |      | (223,608 | )    |  |      | 195,404  |   |  |  | (52,302  | )
|Minority interests                                                                  |  |      | 17,609   |      |  |      | 13,262   |   |  |  | 48,056   |  
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations                                            |  |      | (205,999 | )    |  |      | 208,666  |   |  |  | (4,246   | )
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Loss from discontinued operations [Note 13]                                         |  |      |         |      |  |      | (442,036 | ) |  |  | (269,592 | )
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss                                                                            |  |      | (205,999 | )    |  |      | (233,370 | ) |  |  | (273,838 | )
|                                                                                    |  |      |          |      |  |      |          |   |  |  |          |  

See accompanying notes





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED STATEMENT OF CASH FLOWS
After Appropriation of Net Result

|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |         |  
|------------------------------------------------------------------------------------ | ----------------------------------------- |  | -------- | ------- | ---- |  | -------- | ------- | - |  | -------- | ------- | -
|                                                                                     |                                           |  | 2002     |         | 2001 |  | 2000    
|                                                                                     |                                           |  | $        |         | $    |  | $       
|                                                                                     |                                           |  |          |         |      |  |         
|For the years ended December 31,                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|(in thousands of U.S. dollars)                                                       |                                           |  |          |         |      |  |          |         |   |  |          |        
|OPERATING ACTIVITIES                                                                 |                                           |  |          |         |      |  |          |         |   |  |          |        
|Income (loss) from operations                                                        |                                           |  | (205,999 | )       |      |  | 208,666  |         |   |  | (4,246   | )      
|Depreciation and amortization                                                        |                                           |  | 190,170  |         |      |  | 185,577  |         |   |  | 165,682  |        
|Accreted interest on long-term debt                                                  |                                           |  | 1,984    |         |      |  | 2,394    |         |   |  | 550      |        
|Impairment of investment                                                             |                                           |  | 210,996  |         |      |  | 36,483   |         |   |  |         |        
|Minority interests                                                                   |                                           |  | (17,609  | )       |      |  | (13,262  | )       |   |  | (48,056  | )      
|Gains (loss) on investments                                                          |                                           |  |         |         |      |  | (299,842 | )       |   |  | (87,510  | )      
|Other non cash items                                                                 |                                           |  |         |         |      |  |         |         |   |  | 15,061   |        
|Changes in operating assets and liabilities:                                         |                                           |  |          |         |      |  |          |         |   |  |          |        
|                                                                                     | Trade debtors                             |  |          | (9,811  | )    |  |          | (8,841  | ) |  |          | (34,532 | )
|                                                                                     | Inventories                               |  |          | (647    | )    |  |          | (3,809  | ) |  |          | (9,709  | )
|                                                                                     | Prepaid expenses and other current assets |  |          | 2,029   |      |  |          | 2,265   |   |  |          | (26,954 | )
|                                                                                     | Trade creditors and accruals              |  |          | (20,752 | )    |  |          | 122,069 |   |  |          | 95,713  |  
|                                                                                     | Deferred revenues                         |  |          | 6,098   |      |  |          | 13,541  |   |  |          | 16,289  |  
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Cash provided by operating activities                                                |                                           |  | 156,459  |         |      |  | 245,241  |         |   |  | 82,288   |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|INVESTING ACTIVITIES                                                                 |                                           |  |          |         |      |  |          |         |   |  |          |        
|Acquisition of tangible assets                                                       |                                           |  | (250,861 | )       |      |  | (369,839 | )       |   |  | (467,550 | )      
|Increase of ownership in subsidiaries [Note 5]                                       |                                           |  |         |         |      |  | (23,239  | )       |   |  | (17,519  | )      
|Proceeds from sales of investments [Note 5]                                          |                                           |  |         |         |      |  | 153,311  |         |   |  | 75,366   |        
|Increase in other non-current assets                                                 |                                           |  |         |         |      |  |         |         |   |  | (8,549   | )      
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Cash used in investing activities                                                    |                                           |  | (250,861 | )       |      |  | (239,767 | )       |   |  | (418,252 | )      
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|FINANCING ACTIVITIES                                                                 |                                           |  |          |         |      |  |          |         |   |  |          |        
|Increase in (repayment of) short-term loans                                          |                                           |  |         |         |      |  | (36,987  | )       |   |  | 528,586  |        
|Proceeds from subsidiarys shares issued to minority
interests, net of issue costs   |                                           |  | 29,930   |         |      |  | 65,799   |         |   |  | 121,321  |        
|Subsidiarys distributions paid to minority interests [Note 5]                       |                                           |  | (10,798  | )       |      |  |         |         |   |  |         |        
|Proceed from long-term debt                                                          |                                           |  | 333,557  |         |      |  | 168,805  |         |   |  | 280,352  |        
|Repayment of long-term debt                                                          |                                           |  | (267,207 | )       |      |  | (43,222  | )       |   |  | (116,523 | )      
|Deferred financing cost                                                              |                                           |  | (8,646   | )       |      |  |         |         |   |  |         |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Cash provided by financing activities                                                |                                           |  | 76,836   |         |      |  | 154,395  |         |   |  | 813,736  |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Net effect of exchange rate translation on cash and cash
equivalent                  |                                           |  | 721      |         |      |  | (18,150  | )       |   |  | (5,591   | )      
|Net effect on cash and cash equivalent of the Brazilian
activities to be disposed of |                                           |  | (103,576 | )       |      |  |         |         |   |  |         |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Cash provided by (used in) continuing operations                                     |                                           |  | (120,421 | )       |      |  | 141,719  |         |   |  | 472,181  |        
|Cash used in discontinued operations                                                 |                                           |  |         |         |      |  | (216,751 | )       |   |  | (328,443 | )      
|Increase (decrease) in cash and cash equivalent                                      |                                           |  | (120,421 | )       |      |  | (75,032  | )       |   |  | 143,738  |        
|Cash and cash equivalents, beginning of period                                       |                                           |  | 167,052  |         |      |  | 242,084  |         |   |  | 98,346   |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        
|Cash and cash equivalents, end of period                                             |                                           |  | 46,631   |         |      |  | 167,052  |         |   |  | 242,084  |        
|                                                                                     |                                           |  |          |         |      |  |          |         |   |  |          |        

See accompanying notes





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 1
Description of Business and Going Concern Uncertainty

The Company, either directly or indirectly, develops, acquires and operates
wireless telecommunications networks. The Company currently has cellular
operations in Romania, the Czech Republic and India. During 2001, the Company
discontinued its ESMR/SMR services in Western Europe. The Company also sold
its B-Band cellular joint venture operations in Brazil on March 30, 2001 and on
March 5, 2002, adopted a formal plan to dispose of its A-Band cellular
operations in Brazil. [See Notes 13 and 16].

The Company expects to have significant future capital requirements,
particularly in relation to the expansion of the Czech Republic cellular
network, the servicing of its debt, the addition of capacity to its existing
networks and to acquire, if options are exercised, a certain number of shares
of its operating subsidiaries owned by non-controlling interests. The Company
intends to finance such future capital requirements from cash flow from
operating activities, borrowings under its existing credit facilities,
non-controlling interests funding under shareholders subscription and through
other externally generated funds such as the disposition of assets and the sale
of equity securities. 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 the Company conducts its
principal operations and financial market conditions.

As at December 31, 2002, due to the maturity of the Corporate Credit Facility
on June 30, 2003 of Telesystem International Wireless Inc., [TIW] the parent
Company of TIWC, and the maturity of the TIWs 14% Senior Guaranteed Notes on
December 30, 2003, the committed cash obligations of TIW for the upcoming
twelve months exceed the committed sources of funds and TIWs cash and cash
equivalents on hand. In addition, it will be necessary for TIW to comply with
the 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 TIW will have the ability to continue as a going concern.
Subsequent to year end, the Corporate Credit Facility, to which the Company was
a co-borrower was fully repaid. (See Note 16) However, the Company depends on
continued support from TIW, and acts as Guarantor of 14% Senior Guaranteed
Notes (the 14% Notes) issued by TIW and consequently, 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 5b and the proceeds from the sale of investments
and the planned issuance of Senior Notes by MobiFon Holdings B.V. described in Note 16, TIW continues to review opportunities to refinance its
corporate indebtedness, raise new financing and sell assets.

The consolidated financial statements have been prepared on a going concern
basis, which assumes the Company will continue in operation for the foreseeable
future and will be able to realize its assets and discharge its 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 including investment held for sale that may be necessary should the
Company not be successful in its efforts to refinance its corporate
indebtedness, raise new financing and sell assets.

The Companys future performance may also be affected by other factors such as
political changes including government actions relating to its licenses and
local taxes, changes in technology, competition, inflation and foreign exchange
fluctuations.

Note 2
Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with accounting
principles generally accepted in the Netherlands [Dutch GAAP]. To improve
presentation, certain modifications have been made to the prescribed legal
format of the consolidated balance sheets and statements of loss. As further
described in Note 14, these accounting principles differ in certain respects
from those that would have been followed had these financial statements been
prepared in conformity with accounting principles generally accepted in the
United States and related rules and regulations adopted by the United States
Securities and Exchange Commission. The preparation of financial statements by
management in accordance with generally accepted accounting principles requires
the selection of accounting policies from existing acceptable alternatives, the
summary of significant accounting policies is as follow:





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (CONTD)

INVESTMENTS

Investments over which the Company exercises control are consolidated.
Investments, which are jointly controlled, are included using the proportionate
consolidation method. Under this method, the Companys proportionate share of
the assets, liabilities, income, expenses and cash flows of its joint ventures
are consolidated in the Companys financial statements. Investments over which
the Company has significant influence are accounted for using the equity
method. Other long-term investments are stated at cost, less provisions for
losses in value that are other than temporary. Investments held for sale are
accounted for at the lower of their carrying value and estimated net realizable
value.

The effect of the change in the Companys equity interest as a result of the
shares issued by subsidiaries to minority interests enters into the
determination of consolidated net income (loss).

The following table summarizes, as at December 31, 2002 and 2001 the Companys
principal subsidiaries and investees, grouped by business segments, along with
the accounting treatment for these operations:

|                                                     |                                        |                                                   |                     |                   |               |                  |                  |                   |               |                 |  |  |               |   |  |  |  | 
|---------------------------------------------------- | -------------------------------------- | ------------------------------------------------- | ------------------- | ----------------- | ------------- | ---------------- | ---------------- | ----------------- | ------------- | --------------- |  |  | ------------- | - |  |  |  | 
|                                                     |                                        |                                                   |                     | 2002              |               | 2001            
|                                                     |                                        |                                                   |                     |                   |               |                 
|                                                     |                                        |                                                   |                     | Ultimate          |               |                  |                  |                   |               | Ultimate        |  |  |               |  
|                                                     |                                        |                                                   |                     | Equity Interest / |               | Accounting       |                  | Equity Interest / |               | Accounting     
|Company                                              |                                        | Voting Rights                                     |                     | Treatment         |               | Voting Rights    |                  | Treatment        
|                                                     |                                        |                                                   |                     |                   |               |                  |                  |                  
|Central / Eastern Europe                             |                                        |                                                   |                     |                   |               |                  |                  |                   |               |                 |  |  |               |   |  | 
|ClearWave N.V. (Holding) (ClearWave)
[Notes 5 [b]] |                                        | 45.5% / majority                                  |                     | Consolidation     |               | 45.5% / majority |                  | Consolidation    
|                                                     | MobiFon S.A. (Romania) (MobiFon)     |                                                   | 53.4% / majority    |                   | Consolidation |                  | 28.9% / majority |                   | Consolidation
|                                                     | TIW Czech N.V. (Holding) (TIW Czech) |                                                   | 20.7% / majority    |                   | Consolidation |                  | 10.4% / majority |                   | Consolidation
|                                                     |                                        | Český Mobil a.s. (Czech Republic)
(Český Mobil) |                     | 19.8% / majority  |               | Consolidation    |                  | 10.1% / majority  |               | Consolidation  
|Brazil (held for sale) [Notes 13 and 16]             |                                        |                                                   |                     |                   |               |                  |                  |                   |               |                 |  |  |               |   |  | 
|                                                     | Telpart Participações S.A. (Holding)   |                                                   | 48.9% / significant |                   |               |                  |                  |                   |               |                 |  |  | Proportionate
|                                                     | (Telpart) (A-Band) (1)               |                                                   | Influence           |                   | Equity        |                  | 48.9% / joint    |                   | consolidation
|                                                     |                                        | Telemig Celular Participações S.A.                |                     | 9.7% / majority   |               |                  | (1               | )                 |               | 9.5% / majority |  |  | (1            | )
|                                                     |                                        | Tele Norte Celular Participações S.A.             |                     | 9.5% / majority   |               |                  | (1               | )                 |               | 9.5% / majority |  |  | (1            | )



|(1) |  | Telpart has majority voting rights in these investees and they are
consolidated at the Telpart level; Telparts results are accounted for
using the equity method, starting July 2002, in the Company accounts as
opposed to being proportionately accounted for the first six months of
2002 and in 2001.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

USE OF ESTIMATES

The preparation of the Companys consolidated financial statements in
accordance with Dutch GAAP requires management 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 the Companys
assessment of the net realizable value of its investment held for resale.
Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of term deposits and highly liquid debt instruments
purchased with a maturity of three months or less, and are considered to be
cash equivalents for cash flow reporting purposes.

INVENTORIES

Inventories consist of telecommunications equipment held for resale and are
stated at the lower of cost, determined on a first-in first-out basis, and net
realizable value.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (Contd)

TANGIBLE ASSETS

Tangible assets are recorded at cost and are amortized over their estimated
useful lives using the straight-line method over the following periods:

|                                     |  |                  
|------------------------------------ |  | -----------------
|Buildings                            |  | 20 years         
|Network equipment and infrastructure |  | 10 years         
|Computer equipment and software      |  | 3 to 5 years     
|Other equipment                      |  | 3 to 5 years     
|Leasehold improvements               |  | Term of the lease

The Company undertook a review of the remaining useful lives of certain of its
assets based on the current and expected future technical condition and utility
of these assets. As a result effective October 1, 2002, the Company changed
the estimated useful lives of certain of these assets reported with network
equipment and with computer equipment and software, which resulted in an
increase in depreciation expense in 2002 of approximately $3.0 million
including $1.6 million of assets write-down.

The costs of maintenance and replacement of minor items of property is charged
to maintenance expense. Renewal and improvements are capitalized.

Tangible assets acquired through business acquisitions are recorded at the fair
value at the date of acquisition. Interest is capitalized during the
construction of the Companys network by allocating a portion of borrowing cost
to the expenditures incurred on assets under construction.

GOODWILL AND LICENCES

Licenses are stated at cost. Licenses and subscribers acquired through business
combinations are recorded at the fair value at the date of acquisition.
Licenses are amortized using the straight-line method over periods of up to 20
years.

Goodwill, representing the excess of the cost of business acquisitions over the
fair value of the identifiable net assets acquired, is amortized over a period
of up to 20 years. On an ongoing basis, management evaluates the carrying
value of goodwill for possible impairment. Such evaluation compares current
and anticipated non-discounted cash flows before interest charges from related
operations to the unamortized goodwill balance, over its remaining life, and
considers operating trends and other relevant factors.

AMOUNTS DUE FROM AND TO RELATED PARTIES

Amounts due from and to related parties are stated at face value.

FINANCING COSTS

Share and equity instrument issue costs are recorded as a reduction of the
related accounts. Debt issue costs are deferred and are amortized over the
life of the debt to which they relate using the effective interest rate method.

INCOME TAXES

The Company follows the liability method in accounting for income taxes.
Future tax balances reflect the tax consequences on future years of differences
between the tax bases of assets and liabilities and their financial reporting
amounts. Valuation allowances are established when it is more likely than not
future tax assets will not be realized.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (Contd)

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the Companys functional currency. Transactions arising in
foreign currencies are translated into U.S. dollars at the exchange rate at the
transaction dates. At the balance sheet date, monetary assets and liabilities
denominated in foreign currencies are translated at the year-end rates of
exchange. The resulting translation gains or losses are recognized in the
consolidated statements of loss.

Results of operations from self-sustaining subsidiaries and joint ventures
which report in currencies other than U.S. dollars are translated using the
monthly average exchange rates, while assets and liabilities are translated
using the current rates at each balance sheet date. The resulting exchange
gains or losses are accumulated in the cumulative translation adjustment
account included as a component of shareholders equity.

The financial statements of foreign entities in highly inflationary economies
are re-measured using the U.S. dollar as the functional currency. U.S. dollar
transactions are shown at their historical value. Monetary assets and
liabilities denominated in local currencies are translated into U.S. dollars at
the prevailing year-end exchange rate. All other assets and liabilities are
translated at historical exchange rates. Results of operations have been
translated using historical rates. Translation differences resulting from the
use of these different rates are charged to income.

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 whose use is restricted to the
Companys networks which together with related cost of equipment 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.

SUBSCRIBER ACQUISITION COSTS

The excess between the cost of handsets to the Company over the amount
recovered from sales to subscribers is recognized upon the sale of the handsets
and is recorded in cost of equipment.

OTHER INCOME AND EXPENSES

Other income and expenses are allocated to the year they related to.

DERIVATIVE FINANCIAL INSTRUMENTS

Interest rate option and swap agreements and cross currency swap agreements are
used by the Company to hedge cash flow risk on certain of its variable rate
long-term debt. The gains (losses) on these instruments are recognized in the
statement of loss when the hedged item affects earnings.

DISCONTINUED OPERATIONS

The results of discontinued operations are included in net loss but reported
separately.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 3
Goodwill and Licenses

|                                                                    |  |      |         |              |  |             |        |          |  |  |         | 
|------------------------------------------------------------------- |  | ---- | ------- | ------------ |  | ----------- | ------ | -------- |  |  | ------- | 
|                                                                    |  |      |         |              |  | Accumulated |        | Net Book
|                                                                    |  | Cost |         | Depreciation |  | Value      
|                                                                    |  | $    |         | $            |  | $          
|                                                                    |  |      |         |              |  |            
|December 31, 2002                                                   |  |      |         |              |  |             |        |          |  |  |         | 
|Goodwill                                                            |  |      | 56,024  |              |  |             | 6,218  |          |  |  | 49,806  | 
|Licenses                                                            |  |      | 140,588 |              |  |             | 45,988 |          |  |  | 94,600  | 
|                                                                    |  |      |         |              |  |             |        |          |  |  |         | 
|                                                                    |  |      | 196,612 |              |  |             | 52,206 |          |  |  | 144,406 | 
|                                                                    |  |      |         |              |  |             |        |          |  |  |         | 
|December 31, 2001                                                   |  |      |         |              |  |             |        |          |  |  |         | 
|Goodwill                                                            |  |      | 56,024  |              |  |             | 3,418  |          |  |  | 52,606  | 
|Licenses                                                            |  |      | 134,800 |              |  |             | 37,133 |          |  |  | 97,667  | 
|Brazilian goodwill and licenses to
be disposed of [Notes 13 and 16] |  |      | 194,068 |              |  |             | 33,125 |          |  |  | 160,943 | 
|                                                                    |  |      |         |              |  |             |        |          |  |  |         | 
|                                                                    |  |      | 384,892 |              |  |             | 73,676 |          |  |  | 311,216 | 
|                                                                    |  |      |         |              |  |             |        |          |  |  |         | 

|                                                                                            |  |       |          |  
|------------------------------------------------------------------------------------------- |  | ----- | -------- | -
|                                                                                            |  | TOTAL
|                                                                                            |  |      
|Net book value                                                                              |  |       | 144,406  |  
|                                                                                            |  |       |          |  
|Cost                                                                                        |  |       |          |  
|Net book value December 31, 2002                                                            |  |       | 196,612  |  
|                                                                                            |  |       |          |  
|Additions                                                                                   |  |       | 5,788    |  
|Change in accounting from proportionate consolidation
to equity of the Brazilian activities |  |       | (194,068 | )
|Exchange rate movements                                                                     |  |       |         |  
|                                                                                            |  |       |          |  
|Net book value December 31, 2001                                                            |  |       | 384,892  |  
|                                                                                            |  |       |          |  
|Accumulated Depreciation                                                                    |  |       |          |  
|Net book value December 31, 2002                                                            |  |       | 52,206   |  
|                                                                                            |  |       |          |  
|Charges                                                                                     |  |       | 15,555   |  
|Change in accounting from proportionate consolidation                                       |  |       |          |  
|to equity of the Brazilian activities                                                       |  |       | (43,243  | )
|Exchange rate movements                                                                     |  |       | 6,218    |  
|                                                                                            |  |       |          |  
|Net book value December 31, 2001                                                            |  |       | 73,676   |  
|                                                                                            |  |       |          |  

Note 4
Tangible Assets

|                                                              |  |      |           |              |  |             |         |              |  |  |           | 
|------------------------------------------------------------- |  | ---- | --------- | ------------ |  | ----------- | ------- | ------------ |  |  | --------- | 
|                                                              |  |      |           |              |  | Accumulated |         | Net Carrying
|                                                              |  | Cost |           | Depreciation |  | Value      
|                                                              |  | $    |           | $            |  | $          
|                                                              |  |      |           |              |  |            
|December 31, 2002                                             |  |      |           |              |  |             |         |              |  |  |           | 
|Network equipment and infrastructure                          |  |      | 1,153,466 |              |  |             | 298,721 |              |  |  | 854,745   | 
|Buildings and leasehold improvements                          |  |      | 34,267    |              |  |             | 8,716   |              |  |  | 25,551    | 
|Computer equipment and software                               |  |      | 193,596   |              |  |             | 105,844 |              |  |  | 87,752    | 
|Other equipment                                               |  |      | 26,426    |              |  |             | 15,454  |              |  |  | 10,972    | 
|Construction in progress                                      |  |      | 42,820    |              |  |             |        |              |  |  | 42,820    | 
|                                                              |  |      |           |              |  |             |         |              |  |  |           | 
|                                                              |  |      | 1,450,575 |              |  |             | 428,735 |              |  |  | 1,021,840 | 
|                                                              |  |      |           |              |  |             |         |              |  |  |           | 
|December 31, 2001                                             |  |      |           |              |  |             |         |              |  |  |           | 
|Network equipment and infrastructure                          |  |      | 846,474   |              |  |             | 183,663 |              |  |  | 662,812   | 
|Buildings and leasehold improvements                          |  |      | 29,767    |              |  |             | 6,573   |              |  |  | 23,194    | 
|Computer equipment and software                               |  |      | 149,179   |              |  |             | 67,405  |              |  |  | 81,774    | 
|Other equipment                                               |  |      | 17,570    |              |  |             | 11,275  |              |  |  | 6,295     | 
|Construction in progress                                      |  |      | 97,006    |              |  |             |        |              |  |  | 97,006    | 
|Brazilian tangible assets to be
disposed of [Notes 13 and 16] |  |      | 454,129   |              |  |             | 164,570 |              |  |  | 289,559   | 
|                                                              |  |      |           |              |  |             |         |              |  |  |           | 
|                                                              |  |      | 1,594,126 |              |  |             | 433,486 |              |  |  | 1,160,640 | 
|                                                              |  |      |           |              |  |             |         |              |  |  |           | 

Included in building and leasehold improvements are assets with a net carrying
value of $11.2 million as at December 31, 2002 [$12.2 million  2001] that are
financed through an obligation under a capital lease.

|                                                      |                                       |  |           |          |  
|----------------------------------------------------- | ------------------------------------- |  | --------- | -------- | -
|                                                      |                                       |  | TOTAL    
|                                                      |                                       |  |          
|Net book value                                        |                                       |  | 1,021,840 |         
|                                                      |                                       |  |           |         
|Cost                                                  |                                       |  |           |         
|Net book value December 31, 2002                      |                                       |  | 1,450,575 |         
|                                                      |                                       |  |           |         
|Additions                                             |                                       |  | 250,861   |         
|Change in accounting from proportionate consolidation |                                       |  |           |         
|to equity of the Brazilian activities                 |                                       |  | (456,389  | )       
|Exchange rate movements                               |                                       |  | 61,977    |         
|                                                      |                                       |  |           |         
|Net book value December 31, 2001                      |                                       |  | 1,594,126 |         
|                                                      |                                       |  |           |         
|Accumulated Depreciation                              |                                       |  |           |         
|Net book value December 31, 2002                      |                                       |  | 428,735   |         
|                                                      |                                       |  |           |         
|Charges                                               |                                       |  | 174,615   |         
|Change in accounting from proportionate consolidation |                                       |  |           |         
|                                                      | to equity of the Brazilian activities |  |           | (193,821 | )
|Exchange rate movements                               |                                       |  | 14,455    |         
|                                                      |                                       |  |           |         
|Net book value December 31, 2001                      |                                       |  | 433,486   |         
|                                                      |                                       |  |           |         





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 5
Investments

Investments consist of the following:

|                         |  |      |        |      |  |  |       | 
|------------------------ |  | ---- | ------ | ---- |  |  | ----- | 
|                         |  | 2002 |        | 2001
|                         |  | $    |        | $   
|                         |  |      |        |     
|As at December 31,       |  |      |        |      |  |  |       | 
|Brazil [Notes 13 and 16] |  |      | 70,000 |      |  |  | --    | 
|Share of assets of India |  |      | 9,990  |      |  |  | 9,067 | 
|                         |  |      | 79,990 |      |  |  | 9,067 | 

[a] Investments

Investments consist primarily of investments held for sale including the
Companys share in the assets of Hexacom India Limited [Hexacom"] and in
Brazil [see Notes 13 and 16]. The Companys contribution in the capital of TIW
Asia N.V., [TIW ASIA] was satisfied by the transfer of its equity interest in
Hexacom India Limited [Hexacom"] an Indian cellular operator. Since the
Company retains the risks and rewards of ownership of Hexacom, the Companys
share of Hexacoms assets and liabilities continue to be presented separately.
The Companys share in the liabilities of Hexacom totaled $4.1 million and $5.3
million as at December 31, 2002 and 2001, respectively and are included with
other non-current liabilities. As at December 31, 2002, cash contributions
that would otherwise have been made by the Company to the capital of TIW Asia
net of the amount owed to the Company by TIW Asia and the Companys
proportionate share of such amount is recorded as an accrued liability and
amounts to $5.0 million [$4.8 million in 2001].

[b] Business acquisitions and divestitures

Central/Eastern Europe  Cellular

CLEARWAVE

On February 14, 2001, TIW issued 43,809,335 units. Each Unit consisted of one
class A Subordinate Voting Share of ClearWave and five Units entitled the
holder to acquire one Subordinate Voting Share of TIW at anytime prior to June
30, 2002. TIWs interest in ClearWave was held through the Company and
consequently, on February 14, 2001 the Company sold the shares included in the
Units to TIW at their fair value for total proceeds for $272.5 million. This
transaction resulted in a gain on disposal of $205.2 million.

MOBIFON

In June 2000, ClearWave acquired 4.23% of MobiFons outstanding shares from a
minority shareholder for an aggregate purchase price of $32.2 million. Of this
amount, $17.0 million was paid in cash and $6.1 million through a forgiveness
of debt. The remaining $9.1 million of the balance payable was paid through an
issue of TIWs shares. Subsequently in 2001, ClearWave sold 25.0% of the
acquisition for proceeds equal on a pro rata basis to the consideration paid by
ClearWave. The acquisition was accounted for using the purchase method, net of
shares subsequently sold. As a result of the acquisition, $19.5 million of
goodwill has been recorded and ClearWaves equity interest increased from 54.7%
to 58.9%.

On February 15, 2001, ClearWave acquired 5.7% of MobiFons outstanding shares
from certain minority shareholders for an aggregate purchase price of $40.5
million. Of this amount, $23.2 million was paid cash, $12.3 million through
the issuance by TIW of Units and $5.0 million through a forgiveness of debt.
They were accounted for using the purchase method and goodwill amounting to
$31.0 million was recorded on this transaction and ClearWaves equity interest
in MobiFon increased from 58.9% to 63.5%.

During 2002, as a result of dividends declared and paid by MobiFon, $10.1
million was paid to minority interests. 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 the Companys ultimate equity interest in MobiFon from 28.9% to 28.4%. MobiFons
shareholders are not required to participate pro-rata in the share repurchase.

Assuming that TIW Czech NV will have
15 million shares outstanding when the Events will occur,
450,000 shares were reserved to be issued under the plan. During
2002, 123,593 options were granted and each option, following a
vesting period of up to 4 years and the occurrence of the Events,
will allow its holder to acquire one share of TIW Czech NV at a price
of $20.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 5
Investments (Contd)

MOBIFON

Accordingly, ClearWave ownership of MobiFon may vary between 62.4% and 63.5%,
respectively, 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
dividends declared by a subsidiary and the amount of $13.4 million that MobiFon
is committed to distribute to minority interests is presented within current
liabilities.

On December 18, 2002 the Company 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 closed on March 19, 2003 and
consequently, Clearwave will record a gain on disposal of such shares in the
first quarter of 2003. As a result of the above transactions, ClearWave
ownership in MobiFon will reduced from the pre share repurchase level of 63.5%
down to between 56.6% and 57.7% depending on the outcome of the share
repurchase.

In the event there has not been an initial public offering of the shares of
MobiFon by October 1, 2004, certain minority shareholders of MobiFon, having a
15.9% interest in Mobifon, may require TIW or ClearWave, at TIWs option, to
make an offer to acquire the minority shareholders shares. The purchase price
of such shares would be the then fair market value as determined by an
independent evaluator and shall then be payable in cash or, at TIWs option, in
shares of TIW. The share ownership sold on March 19, 2003 is subject of a
similar arrangement.

ČESKÝ MOBIL

In January 2000, TIW Czech, exercised its right to acquire an additional 34.5%
interest in Český Mobil for $3.0 million pursuant to call option agreements
with a minority shareholder of Český Mobil. As a result of this transaction
TIW Czechs equity interest in Český Mobil increased from 51.0% to 85.5%. This
acquisition was accounted for using the purchase method, and the excess of the
purchase price over the fair value of the identifiable net assets acquired
resulted in the creation of goodwill in an amount of $5.6 million.

Following the capital calls of Český Mobil, in 2000, 2001 and 2002 in which the
shareholders other than the Companys subsidiary did not participate, the
equity interest of TIW Czech in Český Mobil, increased from 85.5% to 94.1% and
95.5% at December 31, 2001 and 2002, respectively and further increased to
96.3% on January 17, 2003 as a result of the registration of the shares issued
pursuant to the December 2001 and March and June 2002 calls. No goodwill
resulted from these transactions.

As part of the creation of Český Mobil, a minority shareholder was given a put
option and, as a result, TIW Czech, may be required to purchase the Český 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 Český Mobil and this
amount is included with minority interests on the balance sheet. ClearWaves
share of this commitment, if exercised, is $4.6 million as at December 31,
2002.

On December 11, 2002, the Supervisory Board of TIW Czech, approved a stock
option and stock appreciation rights plan for employees of Český Mobil and the
grant of options thereunder. After a vesting period, options issued in
connection with this plan will allow, subject to an Initial Public Offering or
a change of control of TIW Czech (the Events) or Český Mobil, holders to
acquire in aggregate approximately 0.8% of the shares of TIW Czech or the cash
equivalent thereof at a price which is not lower than the fair value as of
December 31, 2002. The Company will record an expense, if any, in the period
in which the Events become probable.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

NOTE 5
Investments (Contd)

OTHER

On April 7, 2000, the Company sold its shares in CallMax B.V., its paging
operations in The Netherlands, for a nominal amount. A loss of $6.6 million
was recognized.

On April 14, 2000, the Companys Chinese investee sold all its assets for 209.1
million Chinese Renminbi [$23.4 million]. This transaction resulted in a gain
of $8.3 million, of which $4.4 million and $3.9 million were recognized in 2001
and 2000, respectively.

On June 29, 2000, the Company sold its wholly-owned subsidiary, TIW UMTS UK
Ltd., to Hutchison 3G UK Holdings Ltd. [3G UK Holdings], for a nominal amount
and no gain or loss resulted from this transaction. On July 12, 2000, the
Company waived its right to acquire 3.5% of the outstanding shares of 3G UK
Holdings, for a net cash consideration of £51.1 million [$75.4 million] and
recognized a corresponding gain.

On September 27, 2001, the Company sold its interest in W-Aura, a wireless
internet joint venture in Brazil and realized a loss on sale of investment of
$9.3 million.

On December 24, 2001, the Company decided to dispose of its paging in Mexico
and has relinquished its joint control of the investment. A loss of $5.6
million has been recognized as a result of these actions.

The gain on disposal of investments in 2001 includes the Brazilian joint
ventures cellular operations net gain of $106.1 million from the sale on March
31, 2001 of the Companys 16.3% equity interest in its two Brazilian B-Band
joint ventures, for cash proceeds of $153.3 million.

[c] Cumulative Translation Adjustment

The increase in the cumulative
translation adjustment amount of $78.4 million,
reported as a component of shareholders deficiency, resulted mainly from the
appreciation of the Czech Koruna of $3.3 million, less $34.7 million related to
the devaluation of the Brazilian real during the year and the realization of
the cumulative translation losses related to Brazil of $118.5 million. The
exchange rate was 35.587 Czech Koruna for one U.S. dollar and 30.120 Czech
Koruna for one U.S. dollar as at December 31, 2001 and December 31, 2002,
respectively. The exchange for the Brazilian real was 2,310 for one U.S.
dollar and 3.540 for one U.S. dollar as at December 31, 2001 and December 31,
2002, respectively.

Note 6
Financing Arrangements

The Companys short-term credit facilities consist of the following:

CORPORATE CREDIT FACILITY

The Companys is a co-borrower with TIW in the Corporate Credit Facility. The
Corporate Credit Facilitys maturity was extended from December 15, 2002 to
June 30, 2003. In connection with the extension, TIW 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
9.36% or LIBOR plus a margin of 10.0%. Under the terms of the facility, any
amount received by TIW 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 by TIW and available 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 TIW have committed an aggregate 57% of the principle amounts
available under the corporate credit facility. (See Note 16).





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Contd)

OPERATING CREDIT FACILITY OF OPERATING SUBSIDIARIES

As at December 31, 2002, MobiFon and Český Mobil have available uncommitted
operating credit facilities totaling $20 million and10.0 million [$10.5
million] respectively, none of which were drawn as at December 31, 2002 and
December 31, 2001. The10.0 million facilities consist of a7.0 million and
a3.0 million
facility. The7.0 million facility bears interest when drawn
as a term loan, at a rate of EURIBOR, PRIBOR or LIBOR plus 0.6% per annum for
EURO, Koruna and U.S. dollar drawings, respectively and the3.0 million
facility bears interest at a rate of EURIBOR or PRIBOR, plus 0.7% to 0.8% per
annum for EURO and Koruna drawings respectively. The $20 million facilities
consist of a $9.0 million overdraft facility and $1.0 million for issuance of
letters of guarantee to third parties and a second $10 million facility. The
$9.0 million overdraft facility can be drawn in U.S. dollars bearing interest
of LIBOR plus 1.5% per annum or in Romanian Lei bearing interest at the rate of
the banks cost of funds plus 5% per annum. The second $10 million facility is
repayable on demand and bears interest at the rate of the lenders U.S. dollar
prime rate plus 3.05% per annum.

The amounts due to related parties have no redemption scheme and consist of the
following loans:

|                                                          |  |      |         |      |  |  |         | 
|--------------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | 
|                                                          |  | 2002 |         | 2001
|                                                          |  | $    |         | $   
|                                                          |  |      |         |     
|Balance as at December 31,                                |  |      |         |      |  |  |         | 
|TIW (interest free)                                       |  |      | 8,342   |      |  |  | 181,968 | 
|Telesystem (Antilles) Corporation N.V. (interest 13.875%) |  |      | 81,588  |      |  |  | 83,302  | 
|Telesystem (Antilles) Corporation N.V. (interest free)    |  |      | 853,225 |      |  |  | 679,531 | 
|Telesystem (Antilles) Corporation N.V. (Other)            |  |      | 27      |      |  |  | 9,797   | 
|                                                          |  |      |         |      |  |  |         | 
|                                                          |  |      | 943,182 |      |  |  | 954,598 | 
|                                                          |  |      |         |      |  |  |         | 

Long-term debt consists of the following:

|                                                                                 |  |      |         |      |  |  |         | 
|-------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | 
|                                                                                 |  | 2002 |         | 2001
|                                                                                 |  | $    |         | $   
|                                                                                 |  |      |         |     
|As at December 31,                                                               |  |      |         |      |  |  |         | 
|MobiFon  Syndicated senior credit facility                                      |  |      |         |      |  |  |         | 
|Original facility                                                                |  |      |        |      |  |  | 158,825 | 
|Expansion facility                                                               |  |      |        |      |  |  | 71,963  | 
|2002 Facility                                                                    |  |      | 255,000 |      |  |  |        | 
|                                                                                 |  |      |         |      |  |  |         | 
|                                                                                 |  |      | 255,000 |      |  |  | 230,788 | 
|Subordinated loans, including accrued interest of
$7,726 as at December 31, 2001 |  |      |        |      |  |  | 17,726  | 
|Sale and lease back financing, option expected to be
exercised in July 2004      |  |      | 12,700  |      |  |  | 12,700  | 
|                                                                                 |  |      |         |      |  |  |         | 
|                                                                                 |  |      | 267,700 |      |  |  | 261,214 | 
|                                                                                 |  |      |         |      |  |  |         | 





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Contd)

|                                                                                                                                          |                                            |  |         |   |      |  |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ |  | ------- | - | ---- |  | ------- | ------- | 
|                                                                                                                                          |                                            |  | 2002    |   | 2001
|                                                                                                                                          |                                            |  | $       |   | $   
|                                                                                                                                          |                                            |  |         |   |     
|As at December 31,                                                                                                                        |                                            |  |         |   |      |  |         |        
|Český Mobil  Syndicated senior credit facility                                                                                           |                                            |  |         |   |      |  |         |        
|Tranche A [236.8 million and Koruna 3.3 billion - 2002, 179.4
million and Koruna 2.5 billion - 2001]                                  |                                            |  | 358,191 |   |      |  | 229,902 |        
|Tranche B [26.6 million and Koruna 1.7 billion - 2002 and 2001]                                                                        |                                            |  | 84,910  |   |      |  | 71,902  |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|                                                                                                                                          |                                            |  | 443,101 |   |      |  | 301,804 |        
|Financing under supply contracts to be refinanced by the
syndicated senior credit facilities [25.6 million - 2002, 65,8
million - 2001] |                                            |  | 27,180  |   |      |  | 58,505  |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|                                                                                                                                          |                                            |  | 470,281 |   |      |  | 360,309 |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|Brazilian activities held for sale [Notes 13 and 16]                                                                                      |                                            |  |         |   |      |  |         |        
|Term loans of investees and others
Denominated in U.S.$                                                                                   |                                            |  |        |   |      |  | 126,178 |        
|                                                                                                                                          | Denominated in R$ [R$485.7 million - 2001] |  |         |  |      |  |         | 103,001 | 
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|                                                                                                                                          |                                            |  |        |   |      |  | 229,179 |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|                                                                                                                                          |                                            |  | 737,981 |   |      |  | 850,702 |        
|Less current portion                                                                                                                      |                                            |  |        |   |      |  | 77,297  |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        
|                                                                                                                                          |                                            |  | 737,981 |   |      |  | 773,405 |        
|                                                                                                                                          |                                            |  |         |   |      |  |         |        

MOBIFON

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.

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 the Companys and of the minority interests
shares in MobiFon and by substantially all of the assets of MobiFon. A
commitment fee of 1% per annum 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%.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Contd)

ČESKÝ MOBIL

The amounts due under supply contracts with two telecommunication network
equipment suppliers have been classified as long-term debt as they will be
financed by the senior credit facility. These amounts are not subject to
interest.

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, [totaling $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, [totaling $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. A significant shareholder of
the Company and TIW Czech has committed 12.1% of the syndicated credit
facility.

The facility is collateralized by a pledge of TIW Czechs shares in Český Mobil
and of substantially all of the assets of Český Mobil. As a result, the
majority of the net assets of Český Mobil are restricted from distribution to
the Company, unless waivers are obtained. Drawings under this credit facility
are subject to certain financial tests and ratios.

Český 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]. Český 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. Upon expiration, the Company entered
into a similar swap arrangement for a further 6 months.

The risk of non-performance by counter-parties to the swap and option
agreements in MobiFon and Český Mobil is low, as the agreements have been
concluded with large, credit worthy financial institutions. Derivative
financial instruments position amount to $11.3 million and $9.5 million as at
December 31, 2002 and 2001, respectively, and is included with other non
current liabilities.

Minimum annual principal repayments of long-term debt during the next five
years as at December 31, 2002 are as follows:

|     |  |   |         | 
|---- |  | - | ------- | 
|     |  | $
|     |  |  
|2003 |  |   |        | 
|2004 |  |   | 52,169  | 
|2005 |  |   | 93,770  | 
|2006 |  |   | 124,429 | 
|2007 |  |   | 167,625 | 
|     |  |   |         | 





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Contd)

COVENANTS

Under the debt agreements and credit facilities described above, the Company is
committed to respect certain financial covenants including debt to operating
cash flows and certain negative covenants including limitations on the ability
to incur indebtedness, pay dividends, use proceeds from sale of assets, make
certain other payments, create liens, sell assets and engage in mergers.

Limitations also exist with respect to the ability of certain subsidiaries or
investees to transfer funds in the form of dividends, loans or otherwise to the
Company. The corporate credit facility and the 14% Notes, to which the Company
is the guarantor, have cross default provisions which, under certain
circumstances, could accelerate their reimbursement if the reimbursement of
other loans of the Company is accelerated as a result of default.

Note 7
Shareholders Deficiency

AUTHORIZED

The total authorized share capital of the Company amounts to Euro 158,8 million
divided into 35 billion shares of Euro 0.00454 each.

ISSUED AND OUTSTANDING

As per December 31, 2002 and 2001 the total issued and paid-up capital is Euro
43,855,615.

CHANGES IN SHAREHOLDERS DEFICIENCY

|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  
|--------------------------------------------------------------------------------- |  | ------- | ------ | ------- |  | ------- | ------- | ------- |  | ----------- | ---------- | - |  | -------- | -------- | -
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  | Foreign 
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  | currency
|                                                                                  |  | Share   |        | Share   |  |         |         |         |  | translation
|                                                                                  |  | capital |        | premium |  | Deficit |         | reserve
|                                                                                  |  |         |        |         |  |         |         |        
|Balance as at December 31, 2002                                                   |  |         | 47,611 |         |  |         | 281,397 |         |  |             | (1,044,443 | ) |  |          | (2,569   | )
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  
|Loss for the year                                                                 |  |         |       |         |  |         |        |         |  |             | (205,999   | ) |  |          |         |  
|Exchange difference on
conversion of par value of
share capital and share
premium |  |         | 7,247  |         |  |         |        |         |  |             |           |   |  |          | (7,247   | )
|Changes in foreign currency
translation reserve [Notes 13
and 16]                 |  |         |       |         |  |         |        |         |  |             |           |   |  |          | 85,645   |  
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  
|Balance as at December 31, 2001                                                   |  |         | 40,364 |         |  |         | 281,397 |         |  |             | (838,444   | ) |  |          | (80,967  | )
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  
|Loss for the year                                                                 |  |         |       |         |  |         |        |         |  |             | (233,370   | ) |  |          |         |  
|Exchange difference on
conversion of par value of
share capital and share
premium |  |         | (2,386 | )       |  |         |        |         |  |             |           |   |  |          | 2,386    |  
|Changes in foreign currency
translation reserve [Notes 13
and 16]                 |  |         |       |         |  |         |        |         |  |             |           |   |  |          | 69,999   |  
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  
|Balance as at December 31, 2000                                                   |  |         | 42,750 |         |  |         | 281,397 |         |  |             | (605,074   | ) |  |          | (153,352 | )
|                                                                                  |  |         |        |         |  |         |         |         |  |             |            |   |  |          |          |  





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 8Segmented Information

The Company has three reportable segments: cellular operations in Brazil, in
Romania and in the Czech Republic. The Companys reportable segments are
strategic business units that operate in different countries. They are managed
separately because each business requires different marketing strategies. As
discussed in Note 13 and 16, the Company has ceased to proportionately account
for the cellular Brazilian operations and accounts for its investment using the
equity method starting July 1, 2002.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company evaluates performance
based on service revenues, operating income (loss) and operating income (loss)
before depreciation and amortization.

Information about the reportable segments, which is reconciled to consolidated
operating income (loss), acquisitions of and carrying value of tangible assets,
goodwill, licenses and total assets, is summarized as follows:

|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|--------------------------------------------------------------------- |  | --------- | ------- | -------- |  | -------- | ------- | --------- |  | ----- | ------- | - |  |  | ------ | - |  |  | --------- | 
|                                                                      |  | Brazilian |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  | 
|                                                                      |  | Cellular  |         |          |  |          |         | Czech     |  |       |         |   |  |  |        |  
|                                                                      |  | [Notes 13 |         | Romania  |  | Republic |         | Corporate |  |       |         |  
|For the year ended December 31, 2002, 6                               |  | and 16]   |         | Cellular |  | Cellular |         | and other |  | Total
|months ended June 30, 2002 for Brazilian Cellular                     |  | $         |         | $        |  | $        |         | $         |  | $    
|                                                                      |  |           |         |          |  |          |         |           |  |      
|Revenues                                                              |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Services                                                              |  |           | 134,737 |          |  |          | 425,567 |           |  |       | 227,342 |   |  |  |       |   |  |  | 787,646   | 
|Equipment                                                             |  |           | 9,916   |          |  |          | 21,214  |           |  |       | 20,331  |   |  |  |       |   |  |  | 51,461    | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|                                                                      |  |           | 144,653 |          |  |          | 446,781 |           |  |       | 247,673 |   |  |  |       |   |  |  | 839,107   | 
|Cost of services                                                      |  |           | 39,119  |          |  |          | 81,462  |           |  |       | 122,741 |   |  |  |       |   |  |  | 243,322   | 
|Cost of equipment                                                     |  |           | 13,712  |          |  |          | 39,160  |           |  |       | 25,594  |   |  |  |       |   |  |  | 78,466    | 
|Selling, general and administrative expenses                          |  |           | 39,910  |          |  |          | 94,613  |           |  |       | 79,143  |   |  |  | 812    |   |  |  | 214,478   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Operating income (loss) before depreciation
and amortization          |  |           | 51,912  |          |  |          | 231,546 |           |  |       | 20,195  |   |  |  | (812   | ) |  |  | 302,841   | 
|Depreciation and amortization                                         |  |           | 33,084  |          |  |          | 89,439  |           |  |       | 67,647  |   |  |  |       |   |  |  | 190,170   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Operating income (loss)                                               |  |           | 18,828  |          |  |          | 142,107 |           |  |       | (47,452 | ) |  |  | (812   | ) |  |  | 112,671   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Acquisition of tangible assets and licenses
including non-cash items  |  |           | 7,968   |          |  |          | 100,336 |           |  |       | 106,560 |   |  |  |       |   |  |  | 214,864   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Tangible assets, goodwill and licenses as at
December 31, 2002        |  |           |        |          |  |          | 553,222 |           |  |       | 613,018 |   |  |  | 6      |   |  |  | 1,166,246 | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Total assets as at December 31, 2002                                  |  |           |        |          |  |          | 667,806 |           |  |       | 663,984 |   |  |  | 80,650 |   |  |  | 1,412,440 | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|For the year ended December 31, 2001                                  |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Revenues                                                              |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Services                                                              |  |           | 287,272 |          |  |          | 359,868 |           |  |       | 125,928 |   |  |  | 9,434  |   |  |  | 782,502   | 
|Equipment                                                             |  |           | 31,260  |          |  |          | 12,475  |           |  |       | 18,037  |   |  |  | 483    |   |  |  | 62,255    | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|                                                                      |  |           | 318,532 |          |  |          | 372,343 |           |  |       | 143,965 |   |  |  | 9,917  |   |  |  | 844,757   | 
|Cost of services                                                      |  |           | 80,880  |          |  |          | 69,835  |           |  |       | 97,275  |   |  |  | 4,129  |   |  |  | 252,119   | 
|Cost of equipment                                                     |  |           | 36,519  |          |  |          | 27,236  |           |  |       | 22,323  |   |  |  | 747    |   |  |  | 86,825    | 
|Selling, general and administrative expenses                          |  |           | 87,087  |          |  |          | 88,836  |           |  |       | 65,921  |   |  |  | 13,023 |   |  |  | 254,867   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Operating income (loss) before depreciation
and amortization          |  |           | 114,046 |          |  |          | 186,436 |           |  |       | (41,554 | ) |  |  | (7,982 | ) |  |  | 250,946   | 
|Depreciation and amortization                                         |  |           | 63,742  |          |  |          | 77,791  |           |  |       | 42,562  |   |  |  | 1,482  |   |  |  | 185,577   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Operating income (loss)                                               |  |           | 50,304  |          |  |          | 108,645 |           |  |       | (84,116 | ) |  |  | (9,464 | ) |  |  | 65,369    | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Acquisitions of tangible assets and
licenses including non-cash items |  |           | 86,406  |          |  |          | 122,360 |           |  |       | 109,211 |   |  |  |       |   |  |  | 317,977   | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Tangible assets, goodwill and licenses as at
December 31, 2001        |  |           | 450,496 |          |  |          | 537,739 |           |  |       | 483,604 |   |  |  | 17     |   |  |  | 1,471,856 | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 
|Total assets of continuing operations as at
December 31, 2001         |  |           | 652,482 |          |  |          | 648,946 |           |  |       | 542,159 |   |  |  | 1,997  |   |  |  | 1,845,584 | 
|                                                                      |  |           |         |          |  |          |         |           |  |       |         |   |  |  |        |   |  |  |           | 





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 8Segmented Information (Contd)

|                                                                      |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|--------------------------------------------------------------------- |  | ---------- | ------- | -------- |  | -------- | ------- | --------- |  | ----- | -------- | - |  |  | ------- | - |  |  | ------- | -
|                                                                      |  | Brazilian  |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  | 
|                                                                      |  | Cellular   |         |          |  |          |         | Czech     |  |       |          |   |  |  |         |  
|                                                                      |  | [ Notes 13 |         | Romania  |  | Republic |         | Corporate |  |       |          |  
|                                                                      |  | and 16]    |         | Cellular |  | Cellular |         | and other |  | Total
|                                                                      |  | $          |         | $        |  | $        |         | $         |  | $    
|                                                                      |  |            |         |          |  |          |         |           |  |      
|For the year ended December 31, 2000                                  |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|Revenues                                                              |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|Services                                                              |  |            | 296,152 |          |  |          | 299,470 |           |  |       | 21,508   |   |  |  | 11,229  |   |  |  | 628,359 |  
|Equipment                                                             |  |            | 65,245  |          |  |          | 8,097   |           |  |       | 12,529   |   |  |  | 955     |   |  |  | 86,826  |  
|                                                                      |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|                                                                      |  |            | 361,397 |          |  |          | 307,567 |           |  |       | 34,037   |   |  |  | 12,184  |   |  |  | 715,185 |  
|Cost of services                                                      |  |            | 89,281  |          |  |          | 62,366  |           |  |       | 36,654   |   |  |  | 3,705   |   |  |  | 192,006 |  
|Cost of equipment                                                     |  |            | 72,567  |          |  |          | 18,347  |           |  |       | 15,969   |   |  |  | 1,251   |   |  |  | 108,134 |  
|Selling, general and administrative expenses                          |  |            | 124,726 |          |  |          | 96,735  |           |  |       | 63,418   |   |  |  | 17,689  |   |  |  | 302,568 |  
|                                                                      |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|Operating income (loss) before depreciation
and amortization          |  |            | 74,823  |          |  |          | 130,119 |           |  |       | (82,004  | ) |  |  | (10,461 | ) |  |  | 112,477 |  
|Depreciation and amortization                                         |  |            | 75,949  |          |  |          | 65,965  |           |  |       | 22,056   |   |  |  | 1,712   |   |  |  | 165,682 |  
|                                                                      |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  
|Operating income (loss)                                               |  |            | (1,126  | )        |  |          | 64,154  |           |  |       | (104,060 | ) |  |  | (12,173 | ) |  |  | (53,205 | )
|Acquisitions of tangible assets and
licenses including non-cash items |  |            | 142,330 |          |  |          | 92,510  |           |  |       | 345,962  |   |  |  | 719     |   |  |  | 581,521 |  
|                                                                      |  |            |         |          |  |          |         |           |  |       |          |   |  |  |         |   |  |  |         |  

Note 9
Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Companys deferred tax assets and liabilities are as follows:

|                                                                               |                                                            |  |         |         |      |  |        |         |  
|------------------------------------------------------------------------------ | ---------------------------------------------------------- |  | ------- | ------- | ---- |  | ------ | ------- | -
|                                                                               |                                                            |  | 2002    |         | 2001
|                                                                               |                                                            |  | $       |         | $   
|                                                                               |                                                            |  |         |         |     
|Deferred tax assets                                                            |                                                            |  |         |         |      |  |        |        
|                                                                               | Loss carryforwards  ClearWave and its subsidiaries        |  |         | 53,460  |      |  |        | 53,945  |  
|                                                                               | Carrying value of liabilities in excess of their tax value |  |         | 3,506   |      |  |        | 9,063   |  
|                                                                               | Tax value of assets in excess of their carrying value      |  |         | 45,920  |      |  |        | 8,410   |  
|                                                                               | Net deferred tax asset related to assets to be disposed of |  |         |        |      |  |        | 18,029  |  
|                                                                               |                                                            |  |         |         |      |  |        |         |  
|Total deferred tax assets before valuation allowance                           |                                                            |  | 102,886 |         |      |  | 89,447 |        
|                                                                               | Valuation allowance                                        |  |         | (99,380 | )    |  |        | (67,870 | )
|                                                                               |                                                            |  |         |         |      |  |        |         |  
|Deferred tax assets                                                            |                                                            |  | 3,506   |         |      |  | 21,577 |        
|Deferred tax liabilities
Carrying value of assets in excess of their tax value |                                                            |  | (7,707  | )       |      |  | (3,548 | )      
|                                                                               |                                                            |  |         |         |      |  |        |         |  
|Net deferred tax assets (liabilities)                                          |                                                            |  | (4,201  | )       |      |  | 18,029 |        
|                                                                               |                                                            |  |         |         |      |  |        |         |  





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 9
Income Taxes (Contd)

As at December 31, 2002, Český Mobil had net operating loss carryforwards which
are available to reduce taxable income in future years, as follows:

|                |  |   |         | 
|--------------- |  | - | ------- | 
|                |  | $
|                |  |  
|Losses expiring |  |   |         | 
|2006            |  |   | 6,400   | 
|2007            |  |   | 90,700  | 
|2008            |  |   | 65,200  | 
|2009            |  |   | 10,100  | 
|                |  |   |         | 
|Total           |  |   | 172,400 | 
|                |  |   |         | 

The net deferred tax assets related to Český Mobil have been fully offset by a
valuation allowance, due to the limited operating history of Český Mobil a.s.
The components of consolidated net income (loss) before income taxes and
minority interest were as follows:

|                                       |  |      |          |      |  |      |         |   |  |  |         |  
|-------------------------------------- |  | ---- | -------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                       |  | 2002 |          | 2001 |  | 2000
|                                       |  | $    |          | $    |  | $   
|                                       |  |      |          |      |  |     
|Corporate and other                    |  |      | (13,004  | )    |  |      | 133,389 |   |  |  | 60,944  |  
|Romania                                |  |      | 106,908  |      |  |      | 75,027  |   |  |  | 25,654  |  
|Czech Republic                         |  |      | (73,973  | )    |  |      | (95,224 | ) |  |  | (96,566 | )
|Brazilian activities to be disposed of |  |      | (210,996 | )    |  |      | 89,645  |   |  |  | (44,061 | )
|                                       |  |      |          |      |  |      |         |   |  |  |         |  
|                                       |  |      | (191,065 | )    |  |      | 202,837 |   |  |  | (54,029 | )
|                                       |  |      |          |      |  |      |         |   |  |  |         |  

The reconciliation of income tax computed at the statutory tax rates in the
Netherlands with income tax expense is as follows:

|                                                                                                                                           |  |      |         |      |  |      |         |   |  |  |         |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                                                                           |  | 2002 |         | 2001 |  | 2000
|                                                                                                                                           |  | $    |         | $    |  | $   
|                                                                                                                                           |  |      |         |      |  |     
|Tax statutory rate of 35%                                                                                                                  |  |      | 66,872  |      |  |      | (70,993 | ) |  |  | 18,910  |  
|Differences in effective rate attributable to income
taxes of other countries                                                              |  |      | 7,995   |      |  |      | 3,694   |   |  |  | (1,306  | )
|Differences related to assets and liabilities
re-measured from local currency into the functional
currency and other permanent differences |  |      | (13,173 | )    |  |      | (7,177  | ) |  |  | (16,941 | )
|Net differences related to Brazilian activities to be
disposed of                                                                          |  |      |        |      |  |      | (13,686 | ) |  |  | (12,905 | )
|Non taxable gain on investment                                                                                                             |  |      |        |      |  |      | 92,176  |   |  |  | 30,629  |  
|Valuation allowance                                                                                                                        |  |      | (94,237 | )    |  |      | (11,447 | ) |  |  | (16,660 | )
|                                                                                                                                           |  |      |         |      |  |      |         |   |  |  |         |  
|Income tax recovery (expense)                                                                                                              |  |      | (32,543 | )    |  |      | (7,433  | ) |  |  | 1,727   |  
|                                                                                                                                           |  |      |         |      |  |      |         |   |  |  |         |  





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 10
Supplementary Information



|1) |  | Consolidated Statements of loss
|-- |  | -------------------------------

|                                    |  |      |         |      |  |      |         |  |  |  |         | 
|----------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                    |  | 2002 |         | 2001 |  | 2000
|                                    |  | $    |         | $    |  | $   
|                                    |  |      |         |      |  |     
|For the years ended December 31,    |  |      |         |      |  |      |         |  |  |  |         | 
|Depreciation and amortization       |  |      |         |      |  |      |         |  |  |  |         | 
|Tangible assets                     |  |      | 146,111 |      |  |      | 110,988 |  |  |  | 80,820  | 
|Goodwill and licenses               |  |      | 10,975  |      |  |      | 10,847  |  |  |  | 9,083   | 
|Brazilian activities to be disposed |  |      | 33,084  |      |  |      | 63,742  |  |  |  | 75,779  | 
|                                    |  |      |         |      |  |      |         |  |  |  |         | 
|                                    |  |      | 190,170 |      |  |      | 185,577 |  |  |  | 165,682 | 
|                                    |  |      |         |      |  |      |         |  |  |  |         | 
|Interest expense                    |  |      |         |      |  |      |         |  |  |  |         | 
|Interest on long-term debt          |  |      | 52,800  |      |  |      | 51,246  |  |  |  | 31,076  | 
|Interest and financial charges      |  |      | 4,591   |      |  |      | 6,130   |  |  |  |        | 
|Brazilian activities to be disposed |  |      | 18,410  |      |  |      | 24,652  |  |  |  | 50,537  | 
|                                    |  |      |         |      |  |      |         |  |  |  |         | 
|                                    |  |      | 75,801  |      |  |      | 82,028  |  |  |  | 81,613  | 
|                                    |  |      |         |      |  |      |         |  |  |  |         | 
|Other information                   |  |      |         |      |  |      |         |  |  |  |         | 
|Bad debt expense                    |  |      | 7,368   |      |  |      | 25,292  |  |  |  | 10,267  | 
|Advertising costs                   |  |      | 29,390  |      |  |      | 34,619  |  |  |  | 28,873  | 
|                                    |  |      |         |      |  |      |         |  |  |  |         | 

License amortization for the next five years is expected to be $8.0 million per
year.

The change in allowance for bad debt accounts, excluding discontinued
operations and those to be disposed of are as follows.

|                                                             |  |  |        |   |      |  |         |   |  |  |        |   | 
|------------------------------------------------------------ |  |  | ------ | - | ---- |  | ------- | - |  |  | ------ | - | 
|                                                             |  |  | 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  |  
|                                                             |  |  |        |   |      |  |         |   |  |  |        |  



|2) |  | Consolidated Statements of Cash Flows
|-- |  | -------------------------------------

|                                                                                                                       |                 |  |        |        |  |  |        |        |  |  |         |        | 
|---------------------------------------------------------------------------------------------------------------------- | --------------- |  | ------ | ------ |  |  | ------ | ------ |  |  | ------- | ------ | 
|Significant non-cash investing and financing activities
Acquisition of tangible assets financed under supply contracts |                 |  | 27,180 |        |  |  | 58,505 |        |  |  | 106,472 |       
|                                                                                                                       |                 |  |        |        |  |  |        |        |  |  |         |       
|Other cash flow information, excluding Brazilian activities
to be disposed of:                                         |                 |  |        |        |  |  |        |        |  |  |         |       
|                                                                                                                       | Interest paid   |  |        | 65,132 |  |  |        | 52,345 |  |  |         | 30,857 | 
|                                                                                                                       | Income tax paid |  |        | 24,431 |  |  |        |       |  |  |         |       | 
|                                                                                                                       |                 |  |        |        |  |  |        |        |  |  |         |       

Note 11
Other Commitments and Contingencies

CORPORATE GUARANTEE

On September 19, 2001, TIW 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. 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.

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. TIW
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, [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.  The 14% Notes have negative covenants, which, among other things, limit the companys ability to incur indebtedness and create liens. In
addition, the 14% Notes prohibit the Company to reduce, under certain
conditions, its ownership in ClearWave N.V. (See Note 16).





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 11
Other Commitments and Contingencies [Contd]

COMMITMENTS UNDER LONG-TERM OPERATING LEASES

The future minimum lease payments for the next 5 years under operating leases
substantially all of which are denominated in currencies other than the U.S.
dollar and relate primarily to properties and sites are as follows:

|      |  |   |        | 
|----- |  | - | ------ | 
|      |  | $
|      |  |  
|2003  |  |   | 16,600 | 
|2004  |  |   | 14,000 | 
|2005  |  |   | 13,000 | 
|2006  |  |   | 12,600 | 
|2007  |  |   | 12,000 | 
|      |  |   |        | 
|Total |  |   | 68,200 | 
|      |  |   |        | 

Not included in the above are annual line lease payments and annual microwave
lease payments of approximately $5.9 million and $2.6 million, respectively,
the contracts for which can be terminated, subject to a 6 month lease payment
penalty. Rental expenses amounted to $14.1 million, $12.4 and $13.4 million
for the years ended December 31, 2002, 2001 and 2000, respectively.

In addition, according to the lease agreements with certain lessors, MobiFon is
committed to issue bank guarantees in aggregate value of $1.8 million in 2003,
to cover the lessor against any proven claims for the Companys non-performance
of its contractual obligations during the building construction period and
lease term.

The Companys operating subsidiaries have 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 which ever 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 the Company, and the Company 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.

LICENSE AGREEMENTS

The Companys 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 basis that have yet to be determined. The conditions to the
various license agreements require the Companys operational subsidiaries to
substantially meet the deployment plans set out in their license agreements
and, in certain instances, to provide a specified level of services in their
respective coverage areas.

REGULATORY CLAIMS

In the normal course of business, the Companys operational subsidiaries
actions are subjected to scrutiny by various regulatory agencies, which, from
time to time, will initiate administrative proceedings against the Company for
alleged breaches to different regulations including arrangements for
interconnection fees. The Company believes that the ultimate outcome of any of
such proceedings currently in progress will not be materially adverse to the
Company.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 12
FINANCIAL INSTRUMENTS

FAIR VALUE

The carrying amounts of cash and cash equivalents, trade debtors, trade
creditors and accruals, income and value added taxes payable approximate their
fair values due to the short-term maturity of these instruments. The fair
value of distribution payable to minority interests 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 amount due to parent and affiliated companies is not determinable because
it cannot be determined when it will be reimbursed.

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.

CREDIT RISK

The concentration of credit risk with respect to trade debtors is limited due
to the composition of the customer base, which includes a large number of
individuals and businesses. Cash and cash equivalents are contracted with a
limited number of financial institutions. However, risk of losses is managed
by the Company through a policy of dealing only with large, creditworthy
financial institutions.

CURRENCY RISK

MobiFon operates in a developing economy with high rates of inflation and
significant currency devaluation. There is a consequent risk of loss in value
in respect to net monetary assets held in Romanian Lei. As at December 31,
2002, the net monetary position held in Romanian Lei and expressed in U.S.
dollars was $13.3 million [$7.8 million as at December 31, 2001].

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations

1) Brazilian activities to be disposed of (see Note 16)

On March 5, 2002 TIW adopted a formal plan to dispose of its Brazilian cellular
operations by way of a sale of its equity interest within the next twelve
months. However, in light of 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 the TIWs corporate debt. The
Company recorded an impairment of investment of $36.5 million in 2001 related
to its Brazilian activities to be disposed of. This impairment includes
partial realization of the cumulative translation accounts of $27.2 million as
the Company estimates that such amount will not be recovered from the sale of
the Companys A-Band joint venture operations in Brazil. Subsequent to March
31, 2002, 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 the Companys Brazilian cellular operations and those of other wireless
telecommunications companies in Brazil. In light of these sustained declines
up to December 31, 2002 and the subsequent disposal of its investment for $70
million as described in Note 16 the Company recorded an additional impairment
of investment of $211.0 million in 2002. Of this amount, $ 155.3 million
consists 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.

Several legal proceedings related to the Companys Brazilian activities has
been ongoing since July 2000 when the Company and other partners initiated
legal proceedings in order to invalidate certain changes to the ownership
structure of Telpart effected by one of the partners which, according to the
Company and other partners, contravened the general telecommunications law and
breached certain agreements. Although, the Company occupies one of three seats
on Telparts Board of Directors, the Company ceased to have board
representation at Telparts subsidiaries as a result of legal proceedings which
the Company is vigorously contesting. The Company maintains that is has the
legal right to joint control over these investments and is still pursuing legal
proceedings to enforce this right but for which final judgments have not yet
been issued. In light of these changes, the Company has ceased to
proportionately account for these operations and accounts for its investment
using the equity method starting July 1, 2002.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations (Contd)

The consolidated balance sheets as of December 31, 2001 include the following
amounts related to the Companys proportionately consolidated Brazilian joint
ventures to be disposed of:

|                                        |  |      |         | 
|--------------------------------------- |  | ---- | ------- | 
|                                        |  | 2001
|As at December 31,                      |  | $   
|                                        |  |     
|Current Assets                          |  |      |         | 
|Cash and cash equivalents               |  |      | 110,168 | 
|Trade debtors                           |  |      | 43,349  | 
|Prepaid and other current assets        |  |      | 28,530  | 
|                                        |  |      | 182,047 | 
|                                        |  |      |         | 
|Non-current Assets                      |  |      |         | 
|Tangible assets, licenses and goodwill  |  |      | 450,502 | 
|Other non-current assets                |  |      | 19,541  | 
|                                        |  |      | 470,043 | 
|                                        |  |      |         | 
|Current Liabilities                     |  |      |         | 
|Trade creditors and accrued liabilities |  |      | 54,880  | 
|Other current liabilities               |  |      | 10,724  | 
|Current portion of long-term debt       |  |      | 36,045  | 
|                                        |  |      | 101,649 | 
|                                        |  |      |         | 
|Non-current Liabilities                 |  |      |         | 
|Long-term debt                          |  |      | 193,134 | 
|Minority interest                       |  |      | 173,598 | 
|Other non-current liabilities           |  |      | 14,700  | 
|                                        |  |      | 381,432 | 
|                                        |  |      |         | 

The revenues, operating income (loss) and cash flow captions from
proportionately consolidated Brazilian joint venture are as follows:

|                                                      |  |            |         |      |  |      |         |   |  |  |          |  
|----------------------------------------------------- |  | ---------- | ------- | ---- |  | ---- | ------- | - |  |  | -------- | -
|                                                      |  | 2002       |         |      |  |      |         |   |  | 
|Proportionately consolidated Brazilian joint ventures |  | [6 months] |         | 2001 |  | 2000
|                                                      |  |            |         |      |  |     
|Revenues                                              |  |            | 144,563 |      |  |      | 318,532 |   |  |  | 361,133  |  
|Operating income (loss)                               |  |            | 18,829  |      |  |      | (50,304 | ) |  |  | (1,277   | )
|Operating activities                                  |  |            | 24,677  |      |  |      | 46,960  |   |  |  | 165,473  |  
|Investing activities                                  |  |            | (7,968  | )    |  |      | (83,515 | ) |  |  | (139,506 | )
|Financing activities                                  |  |            | (16,709 | )    |  |      | 37,182  |   |  |  | 19,503   |  
|                                                      |  |            |         |      |  |      |         |   |  |  |          |  

2) DISCONTINUED OPERATIONS

ESMR/SMR OPERATIONS

On July 27, 2001, Dolphin and certain of its subsidiaries initiated legal
proceedings to reach compromises with its creditors with the intent to utilize
this process to restructure its balance sheet and to propose company voluntary
arrangements to creditors. An administration order was made by the court and
representatives from the firm Kroll Phillips have been appointed administrators
of Dolphin. The financial position and results of operations of Dolphin up to
July 27, 2001 have been reported in these financial statements as discontinued
operations.

The proceedings had no legal implications on the Company or its continuing
cellular operations, which are conducted by separate subsidiaries. The Company
has taken the necessary steps and obtained the necessary amendments to avoid
cross defaults under its own financing arrangements from any defaults by
Dolphin or any of its subsidiaries.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations (Contd)

The revenues and operating loss from discontinued operations are as follows:

|                                 |  |      |   |      |  |      |          |   |  |  |          |  
|-------------------------------- |  | ---- | - | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                 |  | 2002 |   | 2001 |  | 2000
|For the years ended December 31, |  | $    |   | $    |  | $   
|                                 |  |      |   |      |  |     
|ESMR/SMR Operations              |  |      |   |      |  |      |          |   |  |  |          |  
|Revenues                         |  |      |  |      |  |      | 45,834   |   |  |  | 90,694   |  
|Operating loss                   |  |      |  |      |  |      | (425,377 | ) |  |  | (284,092 | )
|                                 |  |      |   |      |  |      |          |   |  |  |          |  

Note 14
U.S. GAAP

These financial statements were prepared in accordance with Dutch GAAP. The
following material adjustments to these Consolidated Financial Statements would
be required to conform with U.S. GAAP.

1) RECONCILIATION OF NET LOSS

|                                            |  |      |          |      |  |      |          |   |  |  |          |  
|------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                            |  | 2002 |          | 2001 |  | 2000
|For the years ended December 31,            |  | $    |          | $    |  | $   
|                                            |  |      |          |      |  |     
|Net loss under Dutch GAAP                   |  |      | (205,999 | )    |  |      | (233,370 | ) |  |  | (273,838 | )
|Gain on disposition of ClearWave shares [d] |  |      |         |      |  |      | (205,172 | ) |  |  |         |  
|Amortization of goodwill [f]                |  |      | 2,800    |      |  |      |         |   |  |  |         |  
|Minority interest [f]                       |  |      | (1,526   | )    |  |      |         |   |  |  |         |  
|Discontinued operations  Brazil [e]        |  |      | (36,483  | )    |  |      | 36,483   |   |  |  |         |  
|                                            |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss under U.S. GAAP                    |  |      | (241,208 | )    |  |      | (402,059 | ) |  |  | (273,838 | )
|                                            |  |      |          |      |  |      |          |   |  |  |          |  

2) RECONCILIATION OF CONSOLIDATED CASH FLOWS CAPTIONS

|                                                     |                      |   |          |          |            |   |           |         |           |   |           |          |   |  |          |          |   |  |          |          |   |  |  |  | 
|---------------------------------------------------- | -------------------- | - | -------- | -------- | ---------- | - | --------- | ------- | --------- | - | --------- | -------- | - |  | -------- | -------- | - |  | -------- | -------- | - |  |  |  | 
|                                                     |                      |   | 2002     |          | 2002       |   | 2002      |         | 2001      |   | 2000      |          |   |  |         
|                                                     |                      |   |          |          |            |   |           |         |           |   |           |          |   |  |         
|                                                     |                      |   | Dutch    |          |            |   |           |         |           |   |           |          |   |  |          |          |   |  |          |          |   |  | 
|                                                     |                      |   | GAAP     |          | Adjustment |   | U.S. GAAP |         | U.S. GAAP |   | U.S. GAAP |          |   |  |         
|For the years ended December 31,                     |                      | $ |          | $        |            | $ |           | $       |           | $ |           |          |   | 
|                                                     |                      |   |          |          |            |   |           |         |           |   |           |          |   | 
|Cash provided by (used
in):                          |                      |   |          |          |            |   |           |         |           |   |           |          |   |  |          |          |   |  |          |         
|                                                     | Operating activities |   |          | 156,459  |            |   |           | (24,677 | )         |   |           | 131,782  |   |  |          | 187,384  |   |  |          | 62,455   |  
|                                                     | Investing activities |   |          | (250,861 | )          |   |           | 7,968   |           |   |           | (242,893 | ) |  |          | (151,635 | ) |  |          | (434,300 | )
|                                                     | Financing activities |   |          | 76,836   |            |   |           | 16,709  |           |   |           | 93,545   |   |  |          | 117,213  |   |  |          | 794,233  |  
|Discontinued operations                              |                      |   |         |          |            |   |          |         |           |   |          |          |   |  | (216,751 | )        |   |  | (328,443 | )       
|Net effect of exchange
rate translation              |                      |   | 721      |          |            |   |          |         |           |   | 721       |          |   |  | (2,666   | )        |   |  | 2,695    |         
|Net effect of
Brazilian activities
to be disposed of |                      |   | (103,576 | )        |            |   | 103,576   |         |           |   |          |          |   |  |         |          |   |  |         |         
|                                                     |                      |   |          |          |            |   |           |         |           |   |           |          |   |  |          |          |   |  |          |          |  
|Increase (decrease) in
cash and cash
equivalents     |                      |   | (120,421 | )        |            |   | 103,576   |         |           |   | (16,845   | )        |   |  | (66,455  | )        |   |  | 96,640   |         
|                                                     |                      |   |          |          |            |   |           |         |           |   |           |          |   |  |          |          |   |  |          |          |  

Except for the method of accounting for the Companys investments in joint
venture as explained in (a), there are no significant differences between Dutch GAAP and
U.S. GAAP which affect the cash flow captions indicated above.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 14
U.S. GAAP (Contd)

3) RECONCILIATION OF CONSOLIDATED BALANCE SHEETS

|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |   |          |  
|---------------------------------------------- | ------------------------------------------ | -------------------------- | ----------------------------------- | ---------- | ---------- | ------ | --------- | ---------- | - | ------ | --- | --------- | ---------- | --- | --------- | --------- | ------ | - | --------- | ---------- | - | -------- | -
|                                               |                                            |                            |                                     |            | 2002       |        | 2002      |            |   |        |     |           | 2001       |     | 2001     
|                                               |                                            |                            |                                     |            | Dutch GAAP |        | U.S. GAAP |            |   |        |     |           | Dutch GAAP |     | U.S. GAAP
|As at December 31,                             |                                            | $                          |                                     | $          |            |        |           |            |   | $      |     | $        
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |          
|Assets                                         |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |           
|Current assets                                 |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |           
|                                               | Cash and cash
equivalents                  |                            |                                     | 46,631     |            |        |           | 46,629     |   |        |     | [a]       |            |     |           | 167,052   |        |   |           | 56,884     |  
|                                               | Trade debtors                              |                            |                                     | 53,865     |            |        |           | 54,074     |   |        |     | [a]       |            |     |           | 90,106    |        |   |           | 46,757     |  
|                                               | Inventories                                |                            |                                     | 10,248     |            |        |           | 10,248     |   |        |     |           |            |     |           | 26,032    |        |   |           | 15,385     |  
|                                               | Prepaid expenses                           |                            |                                     | 21,115     |            |        |           | 21,108     |   |        |     | [a]       |            |     |           | 22,668    |        |   |           | 22,668     |  
|                                               | Deferred income tax                        |                            |                                     | 1,010      |            |        |           | 1,930      |   |        |     | [c]       |            |     |           | 3,548     |        |   |           | 3,548      |  
|                                               | Other current assets                       |                            |                                     | 14,346     |            |        |           | 14,348     |   |        |     | [a]       |            |     |           | 18,882    |        |   |           | 9,740      |  
|Total current assets                           |                                            |                            | 147,215                             |            |            |        | 148,337   |            |   |        |     |           |            |     | 328,288   |           |        |   | 154,982   |           
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|                                               | Goodwill                                   |                            |                                     | 49,806     |            |        |           | 52,606     |   |        |     | [f]       |            |     |           | 189,658   |        |   |           | 52,606     |  
|                                               | Tangible assets and
licenses               |                            |                                     | 1,116,440  |            |        |           | 1,116,440  |   |        |     |           |            |     |           | 1,282,198 |        |   |           | 968,753    |  
|                                               | Investments and other
assets               |                            |                                     | 79,990     |            |        |           | 75,516     |   |        |     | [a]       |            |     |           | 9,067     |        |   |           | 176,641    |  
|                                               |                                            | Deferred income tax
assets |                                     |            |           |        |           |            |  |        |     |           |            |     |           |           | 18,029 |   |           |            |  |         
|                                               | Deferred financing costs                   |                            |                                     | 18,989     |            |        |           | 18,989     |   |        |     |           |            |     |           | 18,344    |        |   |           | 16,851     |  
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Total assets                                   |                                            |                            | 1,412,440                           |            |            |        | 1,411,888 |            |   |        |     |           |            |     | 1,845,584 |           |        |   | 1,369,833 |           
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|LIABILITIES AND
SHAREHOLDERS EQUITY           |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |           
|Current liabilities                            |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |           
|                                               | Trade creditors and
accruals               |                            |                                     | 114,966    |            |        |           | 114,786    |   |        |     | [a]       |            |     |           | 166,352   |        |   |           | 95,835     |  
|                                               | Income and value added
taxes payable       |                            |                                     | 5,459      |            |        |           | 5,459      |   |        |     |           |            |     |           | 1,465     |        |   |           | 1,465      |  
|                                               | Deferred revenue                           |                            |                                     | 38,468     |            |        |           | 38,468     |   |        |     |           |            |     |           | 34,002    |        |   |           | 32,370     |  
|                                               | Distribution payable to
minority interests |                            |                                     | 13,400     |            |        |           | 13,400     |   |        |     |           |            |     |           |          |        |   |           |           |  
|                                               | Amounts due to related
parties             |                            |                                     | 943,182    |            |        |           | 943,182    |   |        |     |           |            |     |           | 954,598   |        |   |           | 954,598    |  
|                                               | Current portion of
long-term debt          |                            |                                     |           |            |        |           |           |   |        |     |           |            |     |           | 77,297    |        |   |           | 41,252     |  
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Total current liabilities                      |                                            |                            | 1,115,475                           |            |            |        | 1,115,295 |            |   |        |     |           |            |     | 1,233,714 |           |        |   | 1,125,520 |           
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|                                               | Long-term debt                             |                            |                                     | 737,981    |            |        |           | 737,981    |   |        |     |           |            |     |           | 773,405   |        |   |           | 580,271    |  
|                                               | Share of liabilities of
certain investees  |                            |                                     | 4,096      |            |        |           |           |   |        |     | [a]       |            |     |           | 5,317     |        |   |           | 5,317      |  
|                                               | Deferred income taxes
liabilities          |                            |                                     | 5,211      |            |        |           | 5,211      |   |        |     |           |            |     |           |          |        |   |           |           |  
|                                               | Other non-current
liabilities              |                            |                                     | 11,349     |            |        |           | 46,751     |   |        |     | [a][c]    |            |     |           | 7,370     |        |   |           | 20,625     |  
|                                               | Minority interests                         |                            |                                     |           |            |        |           | 227,655    |   |        |     | [c]       |            |     |           |          |        |   |           | 229,493    |  
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Shareholders deficiency
Share capital         |                                            |                            | 47,611                              |            |            |        | 42,560    |            |   |        |     |           |            |     | 40,364    |           |        |   | 42,560    |           
|                                               | Share premium                              |                            |                                     | 281,397    |            |        |           | 281,587    |   |        |     |           |            |     |           | 281,397   |        |   |           | 281,587    |  
|                                               | Contributed surplus                        |                            |                                     |           |            |        |           | 205,172    |   |        |     | [d]       |            |     |           |          |        |   |           | 205,172    |  
|                                               | Deficit                                    |                            |                                     | (1,044,443 | )          |        |           | (1,248,341 | ) |        |     | [b][f][d] |            |     |           | (838,444  | )      |   |           | (1,007,133 | )
|                                               | Foreign currency
translation reserve       |                            |                                     |           |            |        |           |           |   |        |     |           |            |     |           | (80,967   | )      |   |           |           |  
|                                               | Other comprehensive
income (loss):         |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|                                               |                                            |                            | Cumulative
translation
adjustment   |            |            | (2,569 | )         |            |   | 2,292  |     |           |            | [b] |           |           |        |  |           |            |   | (110,503 | )
|                                               |                                            |                            | Fair value of
derivative instrument |            |            |       |           |            |   | (4,275 | )   |           |            | [c] |           |           |        |  |           |            |   | (3,076   | )
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Total Shareholders
deficiency                 |                                            |                            | (718,004                            | )          |            |        | (721,005  | )          |   |        |     |           |            |     | (597,650  | )         |        |   | (591,393  | )         
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Minority interests                             |                                            |                            | 256,332                             |            |            |        |          |            |   |        | [c] |           |            |     | 423,428   |           |        |   |          |           
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Total group deficiency                         |                                            |                            | (461,672                            | )          |            |        | (721,005  | )          |   |        |     |           |            |     | (174,222  | )         |        |   | (591,393  | )         
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  
|Total liabilities and
shareholders deficiency |                                            |                            | 1,412,440                           |            |            |        | 1,411,888 |            |   |        |     |           |            |     | 1,845,584 |           |        |   | 1,369,833 |           
|                                               |                                            |                            |                                     |            |            |        |           |            |   |        |     |           |            |     |           |           |        |   |           |            |  





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 14
U.S. GAAP (Contd)

[a] Investment in joint ventures

The Company accounts for investments in joint ventures using the proportionate
consolidation method. Under U.S. GAAP, such investments are accounted for
using the equity method. This results in reclassifications of balance sheet
captions, which are illustrated in the balance sheet reconciliation as
presented above. Such reclassification has no impact on net loss and
shareholders deficiency. The Company has ceased to proportionately account
for the Brazilian activities as at June 30, 2002, and accounts for its
investment using the equity method starting July 1, 2002. Whereas under U.S.
GAAP, the equity method was used throughout the entire year.

[b] FAS 130 Comprehensive income

U.S. GAAP establishes standards for reporting and display of comprehensive
income (loss) and its components. Comprehensive income is defined as the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources. It includes all changes
in equity during a period except those resulting from investments by owners and
distributions to owners. Under U.S. GAAP, all components of comprehensive
income must be reported in the financial statements in the period in which they
are recognized. A total amount for comprehensive income shall be displayed in
the financial statements where the components of other comprehensive income are
reported.

|                                                                                           |  |      |          |      |  |      |          |   |  |  |          |  
|------------------------------------------------------------------------------------------ |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                                                                           |  | 2002 |          | 2001 |  | 2000
|For the years ended December 31,                                                           |  | $    |          | $    |  | $   
|                                                                                           |  |      |          |      |  |     
|Net loss under U.S. GAAP                                                                   |  |      | (241,208 | )    |  |      | (402,059 | ) |  |  | (273,838 | )
|Foreign currency translation adjustment                                                    |  |      | 112,795  |      |  |      | 42,849   |   |  |  | (53,854  | )
|Cumulative effect of change in accounting principle for
derivatives and hedging activities |  |      |         |      |  |      | (1,318   | ) |  |  |         |  
|Change in fair value of derivative financial instruments                                   |  |      | (1,199   | )    |  |      | (1,758   | ) |  |  |         |  
|                                                                                           |  |      |          |      |  |      |          |   |  |  |          |  
|Comprehensive loss under U.S. GAAP                                                         |  |      | (129,612 | )    |  |      | (362,286 | ) |  |  | (327,692 | )
|                                                                                           |  |      |          |      |  |      |          |   |  |  |          |  

[c] Accounting for derivative instruments and hedging activities

Effective January 1, 2001, the Company adopted FAS 133, which established
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. In accordance with SFAS 133, hedges related to anticipated
transactions are designated and documented at the inception of the respective
hedge as cash flow hedges and evaluated for effectiveness quarterly. All
derivatives, whether designated in hedging relationships or not, are required
to be recorded on the balance sheet at fair value. If the derivative is
designated as a fair value hedge, the changes in the fair value of the
derivative and of the hedged item attributable to the hedged risk are
recognized in earnings. If the derivative is designated as a cash flow hedge,
the effective portions of changes in the fair value of the derivative are
recorded in other comprehensive income net of tax and minority interest and are
recognized in the income statement when the hedged item affects earnings.
Ineffective portions of changes in the fair value of cash flow hedges are
recognized in earnings. All of the Companys derivatives, which are described
in Note 6, that are designated as hedges at December 31, 2002 are designated as
cash flow hedges.

For the years ended December 31, 2002 and 2001, respectively, the change in the
fair value of the Companys cash flow hedges totaled $13.9 million and $30.8
million, of which $1.9 million and $9.5 million was reflected under Dutch and
U.S. GAAP in income against the change in carrying value of the related hedged
foreign currency debt. The remaining change in fair value, under U.S. GAAP was
reflected in Other Comprehensive Income since the Companys assessment of the
hedging relationship revealed no ineffectiveness. This remaining change, net
of taxes and minority interest in 2002 and 2001 was $1.2 million and $3.1
million, including, for 2001, a cumulative effect adjustment of approximately
$1.3 million as of January 1, 2001.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS
OTHERWISE INDICATED]

Note 14
U.S. GAAP (Contd)

[d] Related party transaction

Under U.S. GAAP, the transfers of non-monetary assets between parent and
subsidiaries should be valued at historical cost or market if lower.
Consequently, the gain recognized under Dutch GAAP on the sale of the
ClearWave shares to TIW, should be precluded. The gain of $205.2 million has
been treated as contributed surplus to the Company.

[e] Discontinued operations

Commencing January 1, 2002, the Company was required to adopt FASB Statement
No. 144, Accounting for the impairment or disposal of Long Lived Assets (FAS
144). Under FAS 144, the discontinued operations of Brazilian joint ventures
were continued to be reported as continuing operations until the financial
statements encompassing the date the decision to dispose of the operations
were issued whereas under Dutch GAAP these operations are reported as
continuing operations until the date of disposal. Additionally, under U.S.
GAAP future operations losses are not to be recognized on these discontinued
operations until they occur, and the investment will be measured at the lower
of its carrying amount or fair value less costs to sell. The decision to
dispose of the remaining Brazilian joint ventures occurred on March 5, 2002,
the estimated loss of operations from the measurement date to the date of
disposal of $36.5 million including the loss resulting from the realization of
$27.2 million on the cumulative translation adjustment were reversed under
U.S. GAAP in the year ended December 31, 2001 and recognized in the year ended
December 31, 2002.

[f] Amortization of goodwill

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Tangible
Assets. Under the new standard, goodwill is no longer amortized. Effective
January 1, 2002, the Company has adopted Statement 142 and applied its
recommendations prospectively, whereas under Dutch GAAP, the goodwill is still
amortized.

Note 15
Related Party Transaction and Employee Information

The consolidated financial statements include fees and costs charged to the
Company for technical service provided by companies within the TIW group of
related companies [the TIW Group"]. These fees and costs represented
principally compensation of the TIW Groups employees involved directly in the
Companys operations in areas such as engineering, information technology,
marketing, human resource, finance and administration and other costs incurred
by the TIW Group on behalf of the operational subsidiaries. These fees and
costs included with selling, general and administrative expenses amount to $3.7
million, $10.5 million and $22.5 million in 2002, 2001 and 2000 respectively.

Advances from parent company are describe in note 6 and are repayable on
demand. In 2002, interest expense of $13.2 million [$46.1 million and $5.0
million in 2001 and 2000, respectively] was charged on advances from the parent
company. These interest expenses have been accreted to the amount of the
related advances except for $12.9 million, which was paid in 2002.

A significant shareholder of TIW Czech N.V. and of TIW has committed 12.1% of
Český Mobils syndicated senior credit facility which has been described in
note 6.

The number of personnel employed during the year was 3,250, (5,880 in 2001).





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 16

Subsequent Events

On March 26, 2003, Highlake International Business Company Ltd., an affiliate
of Opportunity Fund, indirectly acquired the Companys 48.9% interest in
Telpart. Outstanding litigation between the Company and the Opportunity group
of companies has also been settled as part of this transaction. The total cash
consideration received by the Company was $70 million of which $5 million was
paid by Telemig and Tele Norte for release of claims for technical services.
The proceeds were returned to the parent company as a repayment of intercompany
indebtedness. In accordance with the terms of TIWs corporate credit facility
for which the Company acts as co-borrower and the indenture governing its
Senior Guaranteed Notes, TIW applied a portion of the net proceeds from the
transaction to repay the indebtedness outstanding under the corporate credit
facility and the remainder to redeem outstanding Senior Guaranteed Notes
bringing the principal outstanding on such notes to $172.6 million.

On June 25, 2003, the
Companys indirect subsidiary MobiFon Holdings B.V., (Holdings)
which holds the Companys equity interest in MobiFon entered into an agreement whereby it agreed to issue $225 million aggregate
principal amount of 12.50% senior notes due July 31, 2010 at 97.686% of face
value for gross proceeds of $219.8 million. Interest on the notes will accrue
from the date of their issuance and will be payable in cash semi-annually in
arrears on each January 31, and July 31 beginning January 2004. The notes will
be unsecured obligations except to the extent of a security interest in a debt
service reserve account which will initially be funded with $28.1 million for
the benefit of the noteholders. The notes will contain customary restrictive
covenants and will rank senior in right of payment to Holdings future
subordinated indebtedness and pari passu in right of payment with all of
Holdings existing and future unsecured senior indebtedness.

The net proceeds after funding the debt service reserve account will be
primarily used to repay intercompany indebtedness to ClearWave. ClearWave
intends to use the money received from MobiFon Holdings B.V., to make a
distribution to its shareholders and to repay its indebtedness to the Company.
The Company intends to use the proceeds to repay a portion of its intercompany
indebtedness with TIW which will use the proceeds received by it and other
available cash resources to repay its 14% senior guaranteed notes.

Note 17

Comparative Figures

Certain comparative figures were reclassified to conform to the presentation
adopted in 2002.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED BALANCE SHEETS
AFTER APPROPRIATION OF NET RESULT

December 31, 2001 and 2000
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

|                                                  |                                           |      |          |            |   |  |          |          |  
|------------------------------------------------- | ----------------------------------------- | ---- | -------- | ---------- | - |  | -------- | -------- | -
|As at December 31,                                |                                           | 2002 |          | 2001      
|[in thousands of U.S. dollars]                    |                                           | $    |          | $         
|                                                  |                                           |      |          |           
|ASSETS                                            |                                           |      |          |            |   |  |          |         
|Non-current assets                                |                                           |      |          |            |   |  |          |         
|                                                  | Financial fixed assets [Note 2]           |      |          | 232,421    |   |  |          | 339,459  |  
|                                                  | Tangible fixed assets [Note 3]            |      |          |           |   |  |          | 10       |  
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total non-current assets                          |                                           |      | 232,421  |            |   |  | 339,469  |         
|Current assets                                    |                                           |      |          |            |   |  |          |         
|                                                  | Cash and cash equivalents                 |      |          | 219        |   |  |          | 1,172    |  
|                                                  | Amounts due from related parties [Note 9] |      |          | 1,728      |   |  |          | 13,656   |  
|                                                  | Prepaid expenses and other current assets |      |          | 30         |   |  |          | 2,811    |  
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total current assets                              |                                           |      | 1,977    |            |   |  | 17,639   |         
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total assets                                      |                                           |      | 234,398  |            |   |  | 357,108  |         
|                                                  |                                           |      |          |            |   |  |          |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIENCY) |                                           |      |          |            |   |  |          |         
|Liabilities                                       |                                           |      |          |            |   |  |          |         
|                                                  | Trade creditors and accruals              |      |          | 10,398     |   |  |          | 160      |  
|                                                  | Amounts due to related parties [Note 9]   |      |          | 942,004    |   |  |          | 954,598  |  
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total liabilities                                 |                                           |      | 952,402  |            |   |  | 954,758  |         
|                                                  |                                           |      |          |            |   |  |          |          |  
|Shareholders equity (deficiency)[Note 4]         |                                           |      |          |            |   |  |          |         
|                                                  | Share capital                             |      |          | 47,611     |   |  |          | 40,364   |  
|                                                  | Share premium                             |      |          | 281,397    |   |  |          | 281,397  |  
|                                                  | Deficit                                   |      |          | (1,044,443 | ) |  |          | (838,444 | )
|                                                  | Cumulative translation adjustment         |      |          | (2,569     | ) |  |          | (80,967  | )
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total shareholders deficiency                    |                                           |      | (718,004 | )          |   |  | (597,650 | )       
|                                                  |                                           |      |          |            |   |  |          |          |  
|Total liabilities and shareholders deficiency    |                                           |      | 234,398  |            |   |  | 357,108  |         
|                                                  |                                           |      |          |            |   |  |          |          |  

See accompanying notes





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED STATEMENT OF LOSS
AFTER APPROPRIATION OF NET RESULT

|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|For the years ended December 31,                                                                                                       |  | 2002 |          | 2001 |  | 2000
|[in thousands of U.S. dollars]                                                                                                         |  | $    |          | $    |  | $   
|                                                                                                                                       |  |      |          |      |  |     
|Operating expenses                                                                                                                     |  |      | 855      |      |  |      | 638      |   |  |  | 627      |  
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Operating loss                                                                                                                         |  |      | (855     | )    |  |      | (638     | ) |  |  | (627     | )
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Interest revenue from affiliated companies [Note 9]                                                                                    |  |      | 14,330   |      |  |      | 8,964    |   |  |  | 13,788   |  
|Interest expense to affiliated companies [Note 9]                                                                                      |  |      | (13,126  | )    |  |      | (45,406  | ) |  |  | (5,033   | )
|Other Interest revenue                                                                                                                 |  |      | 6        |      |  |      | 158      |   |  |  | 426      |  
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) from continuing operations before
the under noted items                                                                  |  |      | 355      |      |  |      | (36,922  | ) |  |  | 8,554    |  
|Shares of income (loss) of affiliated companies
[Note 2]                                                                               |  |      | 6,338    |      |  |      | (17,775  | ) |  |  | (28,060  | )
|Gain on disposals of investments [Note 5]                                                                                              |  |      | (1,700   | )    |  |      | 299,842  |   |  |  | 15,805   |  
|Impairment of investment [Note 6]                                                                                                      |  |      | (210,996 | )    |  |      | (36,483  | ) |  |  |         |  
|Exchange gain (loss)                                                                                                                   |  |      | 4        |      |  |      | 4        |   |  |  | (546     | )
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Income (loss) before income taxes                                                                                                      |  |      | (205,999 | )    |  |      | 208,666  |   |  |  | (4,247   | )
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Income taxes expense (recovery) [Note 7]                                                                                               |  |      |         |      |  |      |         |   |  |  | (1       | )
|Income (loss) from continuing operations                                                                                               |  |      | (205,999 | )    |  |      | 208,666  |   |  |  | (4,246   | )
|Income (loss) from discontinued operations net
of applicable income tax expense (recovery) of
($23,264) and ($11,356) in 2001 and 2000 |  |      |         |      |  |      | (442,036 | ) |  |  | (269,592 | )
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  
|Net loss                                                                                                                               |  |      | (205,999 | )    |  |      | (233,370 | ) |  |  | (273,838 | )
|                                                                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  

See accompanying notes





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED STATEMENTS OF CASH FLOWS
AFTER APPROPRIATION OF NET RESULT

|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |         |  
|-------------------------------------------------- | -------------------------------- | ---- | -------- | ---- | - | ---- | -------- | ------- | - |  | -------- | ------- | -
|Year ended December 31,                            |                                  | 2002 |          | 2001 |   | 2000
|(in thousands of U.S. dollars)                     |                                  | $    |          | $    |   | $   
|                                                   |                                  |      |          |      |   |     
|OPERATING ACTIVITIES                               |                                  |      |          |      |   |      |          |         |   |  |          |        
|Income (loss) from continuing operations           |                                  |      | (205,999 | )    |   |      | 208,666  |         |   |  | (4,246   | )      
|Depreciation and amortization                      |                                  |      | 10       |      |   |      | 9        |         |   |  | 15       |        
|Share of losses income of affiliated companies     |                                  |      | (6,338   | )    |   |      | 17,775   |         |   |  | 28,060   |        
|Gain on disposal of investments                    |                                  |      | 1,700    |      |   |      | (299,842 | )       |   |  | (15,805  | )      
|Impairments of investment                          |                                  |      | 210,996  |      |   |      | 36,483   |         |   |  |         |        
|Changes in operating assets and liabilities        |                                  |      |          |      |   |      |          |         |   |  |          |        
|                                                   | Amounts due from related parties |      |          | (676 | ) |      |          | (11,345 | ) |  |          | (14,378 | )
|                                                   | Prepaid and other current assets |      |          | (27  | ) |      |          | 14,671  |   |  |          | (17,474 | )
|                                                   | Trade creditors and accruals     |      |          | (70  | ) |      |          | 1       |   |  |          | 5,051   |  
|                                                   | Deferred income                  |      |          |     |   |      |          | (2,836  | ) |  |          | 2,836   |  
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Cash provided by (used in) operating activities    |                                  |      | (404     | )    |   |      | (36,418  | )       |   |  | (15,941  | )      
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|INVESTING ACTIVITIES                               |                                  |      |          |      |   |      |          |         |   |  |          |        
|Proceeds from sales of investments                 |                                  |      |         |      |   |      | 153,311  |         |   |  |         |        
|Investments and advances to affiliated companies   |                                  |      | 25,588   |      |   |      | (55,163  | )       |   |  | (185,857 | )      
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Cash provided by (used in) investing activities    |                                  |      | 25,588   |      |   |      | 98,148   |         |   |  | (185,857 | )      
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|FINANCING ACTIVITIES                               |                                  |      |          |      |   |      |          |         |   |  |          |        
|Net advance from parent companies                  |                                  |      | (26,137  | )    |   |      | 154,452  |         |   |  | 529,263  |        
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Cash provided by financing activities              |                                  |      | (26,137  | )    |   |      | 154,452  |         |   |  | 529,263  |        
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Cash provided by continuing operations             |                                  |      | (953     | )    |   |      | 216,182  |         |   |  | 327,465  |        
|Cash used in discontinued operations               |                                  |      |         |      |   |      | (216,751 | )       |   |  | (328,443 | )      
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Decrease in cash and cash equivalents for the
year |                                  |      | (953     | )    |   |      | (569     | )       |   |  | (978     | )      
|Cash and cash equivalents, beginning of year       |                                  |      | 1,172    |      |   |      | 1,741    |         |   |  | 2,719    |        
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        
|Cash and cash equivalents, end of period           |                                  |      | 219      |      |   |      | 1,172    |         |   |  | 1,741    |        
|                                                   |                                  |      |          |      |   |      |          |         |   |  |          |        





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

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

Note 1

Significant Accounting Policies

This Condensed Unconsolidated Financial Information has been prepared by
management on the basis of accounting principles generally accepted in the
Netherlands. Investments over which the Company has control are accounted for
using the equity method. This Condensed Unconsolidated Financial Information
should be read in conjunction with the Companys consolidated financial
statements.

Significant differences between Dutch 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 for each of the
years in the three-year period ended December 31, 2002 are summarized in Note
14 of the consolidated financial statements of the Company.

As disclosed in Note 1 to the Consolidated Financial Statements, as at December
31, 2002, due to the short-term maturity of its corporate credit facility, the
committed cash obligations of TIW, the parent Company of TIWC, for the upcoming
twelve months exceed the committed sources of funds and TIWs cash and cash
equivalents on hand. In addition, it will be necessary for TIW to comply with
the 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 TIW will have the ability to continue as a going concern. Since
the Company depends on continued support from TIW, acts as co-borrower in the
corporate credit facility and as Guarantor of 14% Senior Guaranteed notes
issued by TIW, there is significant uncertainty as to whether the Company will
have the ability to continue as a going concern. TIW continues to review
opportunities to refinance debt, amend the terms of its corporate credit
facility, raise new financing and sell assets.

The consolidated financial statements have been prepared on a going concern
basis, which assumes the Company will continue in operation for the foreseeable
future and will be able to realize its assets and discharge its 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 the Company not be successful in its
efforts to refinance or amend the terms of its corporate credit facility.

Note 2

Financial Fixed Assets

Investments and loans made to the Companys investees are as follows and are
described in the Note 5 in the consolidated financial statements:

|                                |  |        |          |       |  |       |         |   |  |  |          |  
|------------------------------- |  | ------ | -------- | ----- |  | ----- | ------- | - |  |  | -------- | -
|                                |  | Shares |          | Loans |  | Total
|                                |  |        |          |       |  |      
|Balance as at December 31, 2002 |  |        | 124,010  |       |  |       | 108,411 |   |  |  | 232,421  |  
|                                |  |        |          |       |  |       |         |   |  |  |          |  
|Additions (Reductions)          |  |        | (193,769 | )     |  |       | (5,252  | ) |  |  | (199,021 | )
|Share of income                 |  |        | 6,338    |       |  |       |        |   |  |  | 6,338    |  
|Exchange rate movements         |  |        | 85,645   |       |  |       |        |   |  |  | 85,645   |  
|                                |  |        |          |       |  |       |         |   |  |  |          |  
|Balance as at December 31, 2001 |  |        | 225,796  |       |  |       | 113,663 |   |  |  | 339,459  |  
|                                |  |        |          |       |  |       |         |   |  |  |          |  
|Additions (Reductions)          |  |        | (184,450 | )     |  |       | 51,297  |   |  |  | (133,153 | )
|Share of losses                 |  |        | (17,775  | )     |  |       |        |   |  |  | (17,775  | )
|Exchange rate movements         |  |        | 69,999   |       |  |       |        |   |  |  | 69,999   |  
|                                |  |        |          |       |  |       |         |   |  |  |          |  
|Balance as at December 31, 2000 |  |        | 358,022  |       |  |       | 62,366  |   |  |  | 420,388  |  
|                                |  |        |          |       |  |       |         |   |  |  |          |  

The intercompany loans include $88.1 million demand loan bearing interest at
14%. The remaining portion is interest fee.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

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

Note 3

Tangible Fixed Assets (Contd)

An analysis of activity in the Companys tangible fixed assets was as follows
for the period ending December 31, 2002:

|                                      |  |      |     |              |  |             |     |          |  |  |     |  
|------------------------------------- |  | ---- | --- | ------------ |  | ----------- | --- | -------- |  |  | --- | -
|                                      |  |      |     |              |  | Accumulated |     | Net Book
|                                      |  | Cost |     | Depreciation |  | Value      
|                                      |  |      |     |              |  |            
|Balance as at December 31, 2002       |  |      | 76  |              |  |             | (76 | )        |  |  |    |  
|                                      |  |      |     |              |  |             |     |          |  |  |     |  
|Depreciation                          |  |      |    |              |  |             | (10 | )        |  |  | (10 | )
|Addition during the year              |  |      |    |              |  |             |    |          |  |  |    |  
|                                      |  |      |     |              |  |             |     |          |  |  |     |  
|Balance as at December 31, 2001       |  |      | 76  |              |  |             | (66 | )        |  |  | 10  |  
|                                      |  |      |     |              |  |             |     |          |  |  |     |  
|Depreciation                          |  |      |    |              |  |             | (7  | )        |  |  | (7  | )
|Addition (reduction) during the years |  |      | (50 | )            |  |             |    |          |  |  | (50 | )
|                                      |  |      |     |              |  |             |     |          |  |  |     |  
|Balance as at December 2000           |  |      | 126 |              |  |             | (59 | )        |  |  | 67  |  
|                                      |  |      |     |              |  |             |     |          |  |  |     |  

Note 4

Shareholders Equity

The share capital of the Company, together with the changes in shareholders
equity for 2002 and 2001 are described in the Notes to Consolidated Financial
Statements.

Note 5

Gain on Disposal of Investments

During 2002, the Company took an allowance for bad debt of $1.7 million on a
loan in relation with the ESMR/SMR operations.

On February 14, 2001, TIW issued 43,809,335 units. Each Unit consists of one
class A Subordinate Voting Share of ClearWave and five Units entitle the holder
to acquire one Subordinate Voting Share of TIW at anytime prior to June 30,
2002. TIWs interest in ClearWave was held through the Company and
consequently, on February 14, 2001, the Company sold the shares included in the
Units to TIW at their fair value for total proceeds for $272.5 million. This
transaction resulted in a gain on disposal of $205.2 million. [See Note 10].

The gain on disposal of investments includes the Brazilian joint ventures
cellular operations net gain of $106.1 million from the sale on March 31, 2001
of the Companys 16.3% equity interest in its two Brazilian B-Band joint
ventures, for cash proceeds of $153.3 million.

On December 24, 2001, the Company decided to dispose of its paging operation in
Mexico and has relinquished its joint control of the investment. A loss of
$5.6 million has been recognized as a result of these actions.

During 2001, the Company disposed others small investments resulting in a loss
of $5.8 million.

Note 6

Impairment of Investment

As described in Note 13 and 16 of the consolidated financial statements, the
Company recorded impairments of investment of $211.0 million and $36.5 million
in 2002 and 2001 respectively related to its Brazilian activities to be
disposed of. These impairments include realization on the cumulative
translation accounts of $155.3 million and $27.2 million in 2002 and 2001
respectively, as the Company estimates that such amount will not be recovered
from the sale of the Companys A-Band joint venture operation in Brazil.

Note 7

Income Taxes

Deferred tax was not accounted for in the balance sheet as at December 31,
2002. As it is uncertain that the tax losses can be utilized reasonably in the
near future. Therefore, the deferred tax asset due to the loss carry forward has been fully offset by a valuation allowance and no taxable income was
recorded in the profit and loss account.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

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

Note 8
Commitments

The Company has certain commitments with regard to its investing activities and
they described in the Notes 11 of the Consolidated Financial Statements.

Note 9
Related Party Transaction and Employee Information

Amount due from related party consist mainly ($1.4 million) of interest on
demand loan. The amount payable to related party consist of $81.6 million
demand loan bearing interest at 13.875% and $860.4 million interest fee loan.
In 2002, interest revenues of $14.3 million [$9.0 million and $13.8 million in
2001 and 2002, respectively] was charged on advances to subsidiaries and the
interest expense of $13.1 million [$45.4 million and $5.0 million in 2001 and
2000, respectively] was charged on advances from the parent company.

Besides its two managing directors, the Company had no employee in 2002.
Remuneration of the managing directors amounted to $186,000  ($200,000 in
2001).

Note 10
Subsequent Events

Significant events subsequent to December 31, 2002 are described in the Notes
16 of the Consolidated Financial Statements.

Note 11
Comparative Figures

Certain comparative figures were reclassified to conform to the presentation
adopted in 2001.





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

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



|                                |  |                                
|------------------------------- |  | -------------------------------
|Managing Directors
 (signed)    |  | Supervisory Directors
 (signed)
|Yves Normand                    |  | André Gauthier                 
|                               
|(signed)Cornelis van Ravenhorst |  | (signed)Margriet Zwarts        
|                               
|                                |  | (signed)Mario Bertrand         
|                               
|                                |  | (signed)James J. Jackson       





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##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

AUDITORS REPORT

Introduction

We have audited the financial statements of Telesystem International Wireless
Corporation N.V., Rotterdam, for the year 2002. These financial statements are
the responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.

scope

We conducted our audit in accordance with auditing standards generally accepted
in the Netherlands. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audit provides a reasonable basis
for our opinion.

opinion

In our opinion, the financial statements give a true and fair view of the
financial position of the Company as at December 31, 2002 and of the results
for the year then ended in accordance with accounting principles generally
accepted in the Netherlands and comply with the financial reporting
requirements included in Part 9 of Book 2 of the Netherlands Civil Code.

emphasis of matter

Without qualifying our opinion above, we draw attention to Note 1 to the
financial statements which refer to the uncertainty as to the Companys ability
to continue as a going concern. However, the explanation provided shows that
it is not impossible that the business operations will be maintained in the
longer term. As a consequence, the accounting principles applied are based on
the assumption that the Company will be able to continue as a going concern.

Rotterdam, June 26, 2003

(signed)

Ernst & Young Accountants





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

Appropriation of Net Profit

According to Article 31 of the Companys Articles of Association, the following
appropriation (abbreviated) of the Companys net profit is applicable:



| |  | If and insofar as the net profits shown in the income statement so allow, dividends will be distributed to the common shares.                                                                       
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The Supervisory Board may authorize distributions out of non-distributed profits and other freely distributable reserves and
the distribution of interim dividends.                                 
| 
| |  | Profit distribution and distribution of the reserves may only be done up to the amount of the distributable reserves and
after adoption of the balance sheet and income statement                   
| 
| |  | If there is a loss, which cannot be covered by the reserves or compensated for in another manner, no profit shall be
distributed in any subsequent year, as long as the loss has not been recovered.

The Managing Directors propose that the result for the year be added to the
deficit. This proposal has been included in the financial statements.





---



##### 



Financial Statements of Telesystem International Wireless (Latin America) Inc.

Presented below are the Consolidated Financial Statements of Telesystem
International Wireless (Latin America) Inc., 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.





---



##### 



REPORT OF INDEPENDENT AUDITORS

To the shareholder and board of directors of
Telesystem International Wireless (Latin America) Inc.

We have audited the accompanying consolidated balance sheets of Telesystem
International Wireless (Latin America) Inc. as of December 31, 2002 and 2001,
and the related consolidated statements of loss and comprehensive loss, cash
flows and shareholders equity for the years then ended. These financial
statements are the responsibility of Telesystem International Wireless (Latin
America) Inc.s management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Telesystem
International Wireless (Latin America) Inc., as at December 31, 2002 and 2001
and the consolidated results of its operations and its cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States.

|                  |  |                 
|----------------- |  | ----------------
|Barbados          |  | /s/Ernst & Young
|February 28, 2003 |  |                 

(except for Note 5 as to which the date is March 26, 2003)





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED BALANCE SHEETS

As at December 31,(in thousands of U.S. dollars)

|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- |  | -------- | --- | ---- |  | -------- | ----- | 
|                                                                                                                                                                 |                                          |  | 2002     |     | 2001
|                                                                                                                                                                 |                                          |  | $        |     | $   
|                                                                                                                                                                 |                                          |  |          |     |     
|ASSETS                                                                                                                                                           |                                          |  |          |     |      |  |          |      
|Current assets                                                                                                                                                   |                                          |  |          |     |      |  |          |      
|                                                                                                                                                                 | Cash                                     |  |          | 66  |      |  |          | 81    | 
|                                                                                                                                                                 | Other assets                             |  |          | 16  |      |  |          |      | 
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|Total current assets                                                                                                                                             |                                          |  | 82       |     |      |  | 81       |      
|Investment held for sale [Notes 3 and 5]                                                                                                                         |                                          |  | 70,000   |     |      |  | 185,468  |      
|Capital assets                                                                                                                                                   |                                          |  | 50       |     |      |  | 52       |      
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|                                                                                                                                                                 |                                          |  | 70,132   |     |      |  | 185,601  |      
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                             |                                          |  |          |     |      |  |          |      
|Current liabilities                                                                                                                                              |                                          |  |          |     |      |  |          |      
|                                                                                                                                                                 | Accounts payable and accrued liabilities |  |          | 8   |      |  |          | 31    | 
|                                                                                                                                                                 | Accounts payable to TIW group            |  |          | 150 |      |  |          | 1,050 | 
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|Total current liabilities                                                                                                                                        |                                          |  | 158      |     |      |  | 1,081    |      
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|SHAREHOLDERS EQUITY                                                                                                                                             |                                          |  |          |     |      |  |          |      
|Common shares, without par value, unlimited
number authorized, 388,552,049 and 386,827,049
issued and outstanding as at December 31, 2002
and 2001, respectively |                                          |  | 388,552  |     |      |  | 386,827  |      
|Deficit                                                                                                                                                          |                                          |  | (318,578 | )   |      |  | (90,324  | )    
|Accumulated other comprehensive loss:                                                                                                                            |                                          |  |          |     |      |  |          |      
|Cumulative translation adjustment                                                                                                                                |                                          |  |         |     |      |  | (111,983 | )    
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |      
|Total shareholders equity                                                                                                                                       |                                          |  | 69,974   |     |      |  | 184,520  |      
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 
|                                                                                                                                                                 |                                          |  | 70,132   |     |      |  | 185,601  |      
|                                                                                                                                                                 |                                          |  |          |     |      |  |          |       | 

Subsequent Events [Note 5]



See accompanying notes

On February 28, 2003, the Board of
Directors authorized these financial statements for issue.

(Signed)

---





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Years ended December 31,(in thousands of U.S. dollars)

|                                                                         |  |      |          |      |  |  |         |  
|------------------------------------------------------------------------ |  | ---- | -------- | ---- |  |  | ------- | -
|                                                                         |  | 2002 |          | 2001
|                                                                         |  | $    |          | $   
|                                                                         |  |      |          |     
|Costs                                                                    |  |      |          |      |  |  |         |  
|General and administrative expenses                                      |  |      | 803      |      |  |  | 1,079   |  
|                                                                         |  |      |          |      |  |  |         |  
|Operating loss                                                           |  |      | (803     | )    |  |  | (1,079  | )
|                                                                         |  |      |          |      |  |  |         |  
|Loss
on investment held for sale, including impairment and share of loss |  |      | (227,451 | )    |  |  | (5,275  | )
|                                                                         |  |      |          |      |  |  |         |  
|Net loss                                                                 |  |      | (228,254 | )    |  |  | (6,354  | )
|Translation adjustment                                                   |  |      | 111,983  |      |  |  | (33,881 | )
|                                                                         |  |      |          |      |  |  |         |  
|Comprehensive loss                                                       |  |      | (116,271 | )    |  |  | (40,235 | )
|                                                                         |  |      |          |      |  |  |         |  

SEE ACCOMPANYING NOTES





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31,(in thousands of U.S. dollars)

|                                                                        |                                          |  |          |         |      |  |        |       |  
|----------------------------------------------------------------------- | ---------------------------------------- |  | -------- | ------- | ---- |  | ------ | ----- | -
|                                                                        |                                          |  | 2002     |         | 2001
|                                                                        |                                          |  | $        |         | $   
|                                                                        |                                          |  |          |         |     
|OPERATING ACTIVITIES                                                    |                                          |  |          |         |      |  |        |      
|Net loss                                                                |                                          |  | (228,254 | )       |      |  | (6,354 | )    
|Adjustments to reconcile net loss to cash used in operating activities: |                                          |  |          |         |      |  |        |      
|                                                                        | Loss on investment held for sale         |  |          | 227,451 |      |  |        | 5,275 |  
|                                                                        | Other assets                             |  |          | (20     | )    |  |        | 94    |  
|                                                                        | Accounts payable and accrued liabilities |  |          | (17     | )    |  |        | (27   | )
|                                                                        |                                          |  |          |         |      |  |        |      
|Cash used in operating activities                                       |                                          |  | (840     | )       |      |  | (1,012 | )    
|                                                                        |                                          |  |          |         |      |  |        |      
|FINANCING ACTIVITIES                                                    |                                          |  |          |         |      |  |        |      
|                                                                        | Issuance of shares                       |  |          | 1,725   |      |  |        |      |  
|                                                                        | Accounts payable to TIW group            |  |          | (900    | )    |  |        | 985   |  
|                                                                        |                                          |  |          |         |      |  |        |      
|Cash provided by financing activities                                   |                                          |  | 825      |         |      |  | 985    |      
|                                                                        |                                          |  |          |         |      |  |        |      
|Decrease in cash and cash equivalents                                   |                                          |  | (15      | )       |      |  | (27    | )    
|Cash and cash equivalents, beginning of year                            |                                          |  | 81       |         |      |  | 108    |      
|                                                                        |                                          |  |          |         |      |  |        |      
|Cash and cash equivalents, end of year                                  |                                          |  | 66       |         |      |  | 81     |      
|                                                                        |                                          |  |          |         |      |  |        |      

SEE ACCOMPANYING NOTES





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  
|------------------------------- |  | ------ | ----------- | ------ |  | ------- | ------- | ---- |  | ------------- | -------- | ------------- |  | ----------- | -------- | ----- |  |  | -------- | -
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  | Accumulated |          |       |  | 
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  | Other       |          | Total
|                                |  | Common |             | Common |  |         |         |      |  | Comprehensive |          | Shareholder's
|For the years ended
December 31 |  | Shares |             | Shares |  | Deficit |         | Loss |  | Equity       
|(in thousands of U.S. dollars)  |  | #      |             | $      |  | $       |         | $    |  | $            
|                                |  |        |             |        |  |         |         |      |  |              
|Balance as at December 31, 2000 |  |        | 386,827,049 |        |  |         | 386,827 |      |  |               | (83,970  | )             |  |             | (78,102  | )     |  |  | 224,755  |  
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  
|Net loss                        |  |        |            |        |  |         |        |      |  |               | (6,354   | )             |  |             |         |       |  |  | (6,354   | )
|Translation adjustment          |  |        |            |        |  |         |        |      |  |               |         |               |  |             | (33,881  | )     |  |  | (33,881  | )
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  
|Balance as at December 31, 2001 |  |        | 386,827,049 |        |  |         | 386,827 |      |  |               | (90,324  | )             |  |             | (111,983 | )     |  |  | 184,520  |  
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  
|Issuance of shares for cash     |  |        | 1,725,000   |        |  |         | 1,725   |      |  |               |         |               |  |             |         |       |  |  | 1,725    |  
|Net loss                        |  |        |            |        |  |         |        |      |  |               | (228,254 | )             |  |             |         |       |  |  | (228,254 | )
|Translation adjustment          |  |        |            |        |  |         |        |      |  |               |         |               |  |             | 111,983  |       |  |  | 111,983  |  
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  
|Balance as at December 31, 2002 |  |        | 388,552,049 |        |  |         | 388,552 |      |  |               | (318,578 | )             |  |             |         |       |  |  | 69,974   |  
|                                |  |        |             |        |  |         |         |      |  |               |          |               |  |             |          |       |  |  |          |  

See accompanying notes





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS
(LATIN AMERICA) INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1
DESCRIPTION OF BUSINESS

The Companys 48.9% equity investment in Telpart Celular Participações S.A.
(Telpart) was made to acquire interests in cellular operations in Brazil. On
July 29, 1998, Telpart acquired a 51.9% voting interest and a 19.3% equity
interest in each of Telemig Celular Participações S.A., (Telemig) and Tele
Norte Participações S.A., (Tele Norte). Telemig and Tele Norte operate,
through their subsidiaries, A-Band cellular telecommunications networks in the
States of Minas Gerais and in five northern states of Brazil.

The Company is incorporated under the Laws of Barbados and licensed under the
International Business Companies Act. It is a wholly-owned subsidiary of
Telesystem International Wireless Corporation N.V. (TIWC), a company
incorporated in the Netherlands. The Companys ultimate parent is Telesystem
International Wireless Inc. (TIW), a company incorporated in Canada. The
Company acts as a holding Company that indirectly holds TIWs participation in
A-Band cellular operations in Brazil.

The Companys investment in Telpart is owned through TIW do Brasil Ltda, the
shares of which have been pledged to lenders of TIW. On March 5, 2002 the
Company adopted a formal plan to dispose of its Brazilian cellular operations
by way of a sale of its equity interest which has been completed on March 26,
2003 for a total cash consideration of $70 million (See Note 5).

NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States [U.S. GAAP]. The
preparation of financial statements by management in accordance with generally
accepted accounting principles requires the selection of accounting policies
from existing acceptable alternatives. The summary of significant accounting
policies is as follows:

INVESTMENTS

The Company consolidates TIW do Brasil Ltda., a wholly-owned
holding Company.

The Company accounts for its
investment held for sale in Telpart, in which TIW do Brazil has
a 48.9% interest, at the lower of equity value and net realizable value.

USE OF ESTIMATES

The preparation of the Companys consolidated financial statements in
accordance with generally accepted accounting principles in the United States
requires management 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. Actual results could differ from these estimates.

INCOME TAXES

The Company follows the liability method in accounting for income taxes.
Future tax balances reflect the tax consequences on future years of differences
between the tax bases of assets and liabilities and their financial reporting
amounts. Valuation allowances are established when it is more likely than not
that future tax assets will not be realized.

The Company is licensed under the International Business Companies Act. The
Company is not subject to tax liability for gains, which could result from the
sale of certain assets, including its investment in Telpart. As a result, no
deferred tax asset was recorded.





---



##### 



TELESYSTEM INTERNATIONAL WIRELESS
(LATIN AMERICA) INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTD]

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the Companys functional currency. Transactions arising in
foreign currencies are translated into U.S. dollars at the exchange rate at the
transaction dates. At the balance sheet date, monetary assets and liabilities
denominated in foreign currencies are translated at the year-end rates of
exchange. The resulting translation gains or losses are recognized in the
consolidated statements of loss.

Results of operations from subsidiaries and joint ventures, which report in
currencies other than U.S. dollars, are translated using the monthly average
exchange rates, while assets and liabilities are translated using the current
rates at each balance sheet date. The resulting exchange gains or losses are
accumulated in the cumulative translation adjustment account included as a
component of shareholders equity.

NOTE 3
INVESTMENT HELD FOR SALE

Continuity of investment in Telpart

|                                                                    |  |      |          |      |  |  |         |  
|------------------------------------------------------------------- |  | ---- | -------- | ---- |  |  | ------- | -
|                                                                    |  | 2002 |          | 2001
|                                                                    |  | $    |          | $   
|                                                                    |  |      |          |     
|Investment at equity, beginning of year                             |  |      | 185,468  |      |  |  | 224,624 |  
|Funds invested and related costs                                    |  |      |         |      |  |  | -       |  
|Loss on investment including impairment and share of loss           |  |      | (227,451 | )    |  |  | (5,275  | )
|Translation adjustment                                              |  |      | 111,983  |      |  |  | (33,881 | )
|                                                                    |  |      |          |      |  |  |         |  
|Investment at lower of equity and net realizable value; end of year |  |      | 70,000   |      |  |  | 185,468 |  
|                                                                    |  |      |          |      |  |  |         |  





---



##### 



NOTE 4
FINANCIAL INSTRUMENTS

FAIR VALUE

The carrying amounts of cash and accounts payable and accrued liabilities
approximate their fair values due to the short-term maturity of these
instruments.





---



##### 



NOTE 5
SUBSEQUENT EVENTS



|On January 20, 2003, the Company transferred its shares of TIW Do Brazil
to TPSA Investment Corporation, a newly formed wholly-owned subsidiary
incorporated in Barbados on August 23, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|On March 26, 2003, Highlake International Business Company Ltd., an
affiliate of Opportunity Fund, indirectly acquired the Companys 48.9%
interest in Telpart through the 100% acquisition of TPSA Investment
Corporation. Outstanding litigation between the Company and the
Opportunity group of companies has also been settled as part of this
transaction. The total cash consideration received by the Company is $70
million of which $5 million was paid by Telemig and Tele Norte for release
of claims for technical services. The proceeds were returned to TIW
through a capital reduction and were applied against TIWs senior
indebtedness for which the shares of the Company were collateral for the senior
guaranteed notes. The expenses incurred in connection with the sale were
not reflected in the Companys financial statements as they were paid by
TIW and would not be recharged to the Company.

NOTE 6
COMPARATIVE FIGURES

Certain comparative figures were reclassified to conform to the presentation
adopted in 2002.





---



##### 



Financial Statements of ClearWave N.V.

The audited Consolidated Financial Statements of ClearWave N.V., 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 ClearWaves 2002 Annual Report to Shareholders filed with the
United States Securities and Exchange Commission on Form 6-K and attached
hereto as Exhibit 11.1, are incorporated herein by reference and are an
integral part of this Form 20-F.





---



##### 



ITEM 19  EXHIBITS

EXHIBITS

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

|        |  |                                                                                                                                                                                                                                                                                                                                                            
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                            
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|1.1     |  | Articles of Incorporation of Telesystem
International Wireless Corporation N.V.
(Incorporated by reference to Exhibit 3.3 to
Form F-4, filed on March 4, 2002).                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|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).
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|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.
(Incorporated by reference to Exhibit 4.1 to
Form 20-F of Telesystem International
Wireless Inc. filed May 20, 2003).         
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.2     |  | 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).                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.3     |  | 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).                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.4     |  | English translation summary of License
awarded to Český 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).                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.5     |  | English translation summary of License
awarded to Český 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).                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.6     |  | 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).                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.7     |  | 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).                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.8     |  | 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).                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|4.9     |  | 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).                  
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|8       |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|11.1    |  | ClearWave N.V.s 2002 Annual Report to
Shareholders. (Incorporated by reference to
ClearWave N.V.s Form 6-K, filed May 20,
2003).                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                            
|11.2    |  | Certification pursuant to 18 U.S.C. section
1350 as adopted pursuant to section 906 of
the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                                     





---



##### 



SIGNATURE

Telesystem International Wireless Corporation N.V. 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 CORPORATION N.V.

| |  |                                                                    
| |  | -------------------------------------------------------------------
| |  | By: (signed)
Name: Cornelis van Ravenhorst
Title: Managing Director

Dated: June 27, 2003





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TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CERTIFICATION

I, Cornelis van Ravenhorst, Managing Director of Telesystem International
Wireless Corporation N.V., certify that:

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

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.

June 27, 2003

(signed)

Cornelis van Ravenhorst
Managing Director
(Principal Executive Officer and Principal Financial Officer)
Telesystem International Wireless Corporation N.V.

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