<PAGE>

------------------------------------------------------------------------------
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                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549


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

                                  FORM 10-Q

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended SEPTEMBER 30, 1997     

                                     OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
    
    For the transition period from ______________ to ___________________

                      Commission file number 0-______
    
                            INTERNATIONAL WIRELESS 
                          COMMUNICATIONS HOLDINGS, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



         DELAWARE                                       94-3248701
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(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                   Identification Number)

                     400 SOUTH EL CAMINO REAL, SUITE 1275
                        SAN MATEO, CALIFORNIA  94402
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                   (Address of principal executive offices)

                               (650) 548-0808
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             (Registrant's telephone number, including area code)


    Indicate by check X  whether the registrant (1) has filed all reports 
required to be filed by Sections 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

         (1) Yes  ___X____  No   
         (2) Yes  ___X____  No   


    As of September 30, 1997, there were 1,310,230 shares of the Registrant's 
common stock, par value $0.01 per share ("Common Stock") outstanding and 
16,915,076 shares of the Registrant's preferred stock, par value $0.01 per 
share ("Preferred Stock") outstanding. Each such share of Preferred Stock is 
currently convertible into one share of Common Stock.
    
              This document (excluding Exhibits) contains 45 pages.
    
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<PAGE>

            INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
    
                                  FORM 10-Q
    
                                    INDEX
    
    
                                                                          PAGE
    
    PART I.  FINANCIAL INFORMATION
    
    Item 1.   Financial Statements.......................................  3
    
              Consolidated Balance Sheets as of December 31, 1996 
              (audited) and September 30, 1997 (unaudited)...............  4
    
              Consolidated Statements of Operations for the three and 
              nine month periods ended September 30, 1996 and 
              1997 (unaudited)...........................................  5
    
              Consolidated Statements of Cash Flows for the nine months 
              ended September 30, 1996 and 1997 (unaudited)..............  6
    
              Notes to Consolidated Financial Statements.................  7
    
    Item 2.   Management's Discussion and Analysis of Financial 
              Condition and Results of Operations........................ 19
    
    PART II.  OTHER INFORMATION 
    
    Item 2.   Changes in Securities...................................... 39
    
    Item 4.   Submission of Matters to a Vote of Security Holders........ 39
    
    Item 6.   Exhibits and Reports on Form 8-K........................... 41
    
    SIGNATURES........................................................... 43
    
    EXHIBIT INDEX........................................................ 44



                                        2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS     



                                        3

<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT SHARE AND SHARE DATA)
    
                                      ASSETS
<TABLE>
<CAPTION>

                                                                                DECEMBER 31,      SEPTEMBER 30,
                                                                                   1996                1997
                                                                                ------------      -------------
                                                                                  (AUDITED)        (UNAUDITED)
<S>                                                                             <C>               <C>    
Current assets:
   Cash and cash equivalents.................................................    $  41,657            6,512
   Notes receivable from affiliates..........................................          813            4,769
   Notes receivable..........................................................        1,431              730
   License deposit...........................................................        5,255               --
   Investments in affiliates held for sale...................................        2,062            3,402
   Other current assets......................................................        3,190            9,961
                                                                                -----------        ---------
   Total current assets......................................................       54,408           25,374
Property and equipment, net..................................................       18,426           21,801
Investments in affiliates....................................................       68,394           84,961
Telecommunication licenses and other intangibles, net........................       18,484           17,558
License deposit..............................................................        3,042               --
Debt issuance costs, net.....................................................        6,431           10,427
Other assets.................................................................          173              419
                                                                                -----------        ---------
Total assets.................................................................    $ 169,358          160,540
                                                                                -----------        ---------
                                                                                -----------        ---------

     LIABILITIES, MINORITY INTERESTS, REDEEMABLE CONVERTIBLE
             PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
    
    
Current liabilities:
   Accounts payable and accrued expenses.....................................    $   7,313            9,553
                                                                                -----------        ---------
     Total current liabilities...............................................        7,313            9,553
Long-term debt, net..........................................................       75,466          110,429
                                                                                -----------        ---------
   Total liabilities.........................................................       82,779          119,982
Minority interests in consolidated subsidiaries..............................        5,685            9,009
Redeemable convertible Preferred Stock, $.01 par value per share;
  21,541,480 shares designated; 15,973,200 and 15,981,876 shares
  issued and outstanding in 1996 and 1997, respectively; net of 
  note receivable from stockholder of $26 in 1996 and 1997;
  liquidation and minimum redemption value of $107,459.......................      103,021          104,718
Commitments and contingencies (Note 12)
Stockholders' deficit:
  Preferred Stock, $.01 par value per share;
    1,538,520 shares designated; 933,200 shares issued and
    outstanding in 1996 and 1997; liquidation value of $793..................            9                9
  Common Stock, $.01 par value per share; 26,000,000
    shares authorized; 636,720 and 1,310,230 shares
    issued and outstanding in 1996 and 1997, respectively....................            6               13
  Additional paid-in capital.................................................       31,060           48,311
  Note receivable from stockholder...........................................         (152)            (152)
  Deferred compensation......................................................           --           (1,299)
  Unrealized gain on investments.............................................           68               --
  Cumulative translation adjustment..........................................          271             (744)
  Accumulated deficit........................................................      (53,389)        (119,307)
                                                                                -----------        ---------
    Total stockholders' deficit..............................................      (22,127)         (73,169)
                                                                                -----------        ---------
Total liabilities, minority interests, redeemable 
  convertible Preferred Stock and stockholders' deficit......................    $ 169,358          160,540
                                                                                -----------        ---------
                                                                                -----------        ---------
</TABLE>

    See accompanying notes to Consolidated Financial Statements.

                                    4

<PAGE>


                     CONSOLIDATED STATEMENTS OF OPERATIONS
                              (IN THOUSANDS)
    
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED      NINE MONTHS ENDED 
                                                                          SEPTEMBER 30,            SEPTEMBER 30,
                                                                      ----------------------   ---------------------
                                                                         1996        1997        1996        1997
                                                                      ---------   ----------   ---------   ---------
                                                                            (UNAUDITED)              (UNAUDITED)
<S>                                                                   <C>         <C>          <C>         <C>
Operating revenues................................................    $    349       2,275         532        3,292
Cost of revenues..................................................         361       1,821         541        3,069
                                                                      ---------   ---------    --------     --------
                                                                           (12)        454          (9)         223

Operating expenses: 
   Selling, general and administrative expenses...................       4,257       7,889      10,610       23,623
   Equity in losses of affiliates.................................       2,521      17,417       5,507       27,282
   Minority interests in losses of consolidated subsidiaries......          --        (199)         --         (662)
                                                                      ---------   ---------    --------     --------
      Loss from operations........................................      (6,790)    (24,653)    (16,126)     (50,020)

Other income (expense):
   Interest income................................................         513         398         937        1,499
   Interest expense...............................................      (2,462)     (6,975)     (2,663)     (15,726)
   Other..........................................................          14      (1,105)          1           35
                                                                      ---------   ---------    --------     --------
      Net loss....................................................    $ (8,725)    (32,335)    (17,851)     (64,212)
                                                                      ---------   ---------    --------     --------
                                                                      ---------   ---------    --------     --------
</TABLE>
    
    

    
        See accompanying notes to Consolidated Financial Statements.

                                      5

<PAGE>

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                     NINE MONTHS ENDED 
                                                                                        SEPTEMBER 30, 
                                                                                 -----------------------------
                                                                                    1996             1997
                                                                                 ------------     ------------
                                                                                          (UNAUDITED)
<S>                                                                              <C>              <C>     
Cash flows from operating activities:
   Net loss..................................................................    $  (17,851)         (64,212)
   Adjustments to reconcile net loss to net cash used in operating 
    activities:
      Depreciation...........................................................           460              974
      Amortization of telecommunication licenses and other intangibles.......           529              926
      Amortization of debt issuance costs....................................           109            2,681
      Amortization of long-term debt discount................................         1,921           12,591
      Amortization of deferred compensation..................................            --              145
      Equity in losses of affiliates.........................................         5,507           27,282
      Gain on sale of affiliate..............................................            --           (1,156)
      Accrual of interest on long-term debt..................................            --              372
      Minority interests in losses of consolidated subsidiaries..............         5,400            3,324
      Issuance of Common Stock Warrants......................................            --            9,601
      Issuance of Common Stock...............................................            --            6,159
      Unrealized gain (loss) on investments..................................           112              (68)
      Changes in operating assets and liabilities:
         Other current assets................................................        (1,051)          (6,771)
         Accounts payable and accrued expenses...............................        (2,571)           2,240
                                                                                 ------------     ------------
             Net cash used in operating activities...........................        (7,435)          (5,912)
                                                                                 ------------     ------------

Cash flows from investing activities:
   Issuance of notes receivable from affiliates..............................        (1,098)          (4,591)
   Repayment of notes receivable from affiliates.............................           583              635
   Issuance of notes receivable..............................................        (3,185)            (795)
   Repayment of notes receivable.............................................         1,800            1,496
   Advances to affiliate.....................................................        (1,924)              --
   Investments in affiliates held for sale...................................            --             (240)
   Proceeds from sale of affiliate...........................................            --            3,218
   Purchases of property and equipment.......................................        (1,657)          (4,349)
   Purchase of subsidiary....................................................        (3,198)              --
   Investments in affiliates.................................................        (2,167)         (47,011)
   Telecommunications licenses and other intangibles.........................        (3,971)              --
   License deposits..........................................................       (14,300)           8,297
   Other assets..............................................................          (345)            (246)
                                                                                 ------------     ------------
             Net cash used in investing activities...........................       (29,462)         (43,586)

Cash flows from financing activities:
   Proceeds from credit facility.............................................         7,000               --
   Repayment of credit facility..............................................        (7,000)              --
   Exercise of stock options.................................................             6               45
   Debt issuance costs.......................................................        (6,000)          (6,677)
   Proceeds from issuance of long-term debt..................................        69,702           22,000
   Proceeds from issuance of warrants........................................        30,300               --
                                                                                 ------------     ------------
             Net cash provided by financing activities.......................        94,008           15,368
                                                                                 ------------     ------------

Effect of foreign currency exchange rates on cash and cash equivalents.......           257           (1,015)
                                                                                 ------------     ------------
Net increase (decrease)  in cash and cash equivalents........................        57,368          (35,145)
Cash and cash equivalents at beginning of period.............................        25,398           41,657
                                                                                 ------------     ------------
Cash and cash equivalents at end of period...................................     $  82,766            6,512
                                                                                 ------------     ------------
                                                                                 ------------     ------------
Supplemental cash flow information
   Cash paid for interest....................................................     $     363               --
                                                                                 ------------     ------------
                                                                                 ------------     ------------
Non-cash financing and investing activities:
   Conversion of notes payable to related party and interest
     to redeemable convertible Preferred Stock...............................     $   2,052               --
                                                                                 ------------     ------------
                                                                                 ------------     ------------
   Net warrant exercises of redeemable convertible Preferred Stock...........     $      --               81
                                                                                 ------------     ------------
                                                                                 ------------     ------------
   Effect of net assets of subsidiary previously accounted for by 
     the equity method.......................................................     $   4,395               --
                                                                                 ------------     ------------
                                                                                 ------------     ------------
   Issuance of Common Stock Warrants.........................................     $      --            7,254
                                                                                 ------------     ------------
                                                                                 ------------     ------------
   Issuance of Common Stock..................................................     $      --            6,159
                                                                                 ------------     ------------
                                                                                 ------------     ------------
</TABLE>
            See accompanying notes to Consolidated Financial Statements.


                                        6

<PAGE>



(1) NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
    

    NATURE OF BUSINESS 
    
    International Wireless Communications Holdings, Inc. ("IWC Holdings") was
    incorporated in Delaware in July 1996 as a holding company whose primary
    assets are all of the issued and outstanding capital stock of International
    Wireless Communications, Inc. ("IWC") and a note receivable from IWC in a
    principal amount equal to the net proceeds from the Unit Offering (as
    defined below).  (IWC Holdings and IWC are collectively referred to herein
    as the "Company.")  IWC was incorporated in Delaware in January 1992 and is
    a leading operator, owner and developer of wireless communications networks
    in major emerging markets in Asia and Latin America.  These local wireless
    businesses ("LWBs") provide a variety of communication services, including
    cellular, wireless local loop ("WLL"), specialized mobile radio ("SMR") and
    paging.  Together with its strategic partners, the Company has interests in
    12 separate countries.
    
    
    To date, the Company has invested principally in LWBs that are in their 
    early stages of development, have a limited number of subscribers and are 
    expected to incur losses for a substantial period of time.  In addition, 
    the Company intends to pursue additional investment opportunities.  The 
    Company believes that its existing cash balance is sufficient to meet its 
    operating and contractual obligations through fiscal 1997.  It is not 
    sufficient, however, to meet the Company's business objective of 
    participating in additional capital calls or funding commitments to 
    finance the infrastructure buildout of its operating and non-operating 
    LWBs.  The ability of the Company to make additional investments is 
    dependent on the availability of additional external financing.  In the 
    event the Company is unable to obtain external financing it may 
    ultimately be unable to either maintain its existing ownership interests 
    or fully realize the underlying potential value of the LWBs.
    
    In August 1996, IWC Holdings issued and sold 196,720 units, each consisting
    of a $1,000 principal amount 14% Senior Discount Note due 2001 (an
    "Original Note," and, collectively, the "Original Notes") and one nominally
    priced warrant now exercisable for 14.283 shares of Common Stock (a "Unit
    Warrant," and, collectively, the "Unit Warrants"), for total gross proceeds
    of approximately $100 million (the "Unit Offering").  In November 1996,
    pursuant to the indenture agreement that governs the Original Notes (the
    "Indenture"), IWC Holdings exchanged new 14% Senior Secured Discount Notes
    due 2001 (the "Exchange Notes") which were registered under the Securities
    Act of 1933, as amended (the "1933 Act"), for the Original Notes.  The
    terms of the Exchange Notes are substantially identical (including
    principal amount, interest rate, maturity, security and ranking) to the
    terms of the Original Notes.  (The Exchange Notes and the Original Notes
    are referred to collectively herein as the "Notes.")
    
    In connection with the Unit Offering, IWC Holdings and IWC completed a
    reorganization in which IWC became a wholly owned subsidiary of IWC
    Holdings through the conversion of each share of the then-outstanding
    capital stock of IWC into 40 shares of the corresponding class and series
    of stock of IWC Holdings (the "Stock Conversion"). All data related to
    shares and per share amounts for all periods presented have been adjusted
    to reflect the effect of the reorganization and the Stock Conversion.

    In the opinion of management, the accompanying unaudited financial
    statements of IWC Holdings and its subsidiary, IWC, reflect all adjustments
    (consisting only of normal recurring adjustments) considered necessary for
    a fair presentation of the Company's financial condition, results of
    operation and cash flows for the periods presented.  These financial
    statements should be read in conjunction with the Company's audited
    consolidated financial statements as of December 31, 1995 and 1996, and for
    each of the years in the three-year period ended December 31, 1996,
    including the notes thereto, as filed with the Securities and Exchange 
    Commission on Form 10-K.  The results of operations for the three and
    the nine months ended September 30, 1997 are not necessarily indicative of
    results that may be expected for the year ended December 31, 1997.  


                                        7
<PAGE>

    
    BASIS OF CONSOLIDATION

    The accompanying consolidated financial statements of the Company include
    the accounts of IWC, its wholly owned subsidiaries, SRC Servicos de Radio
    Comunicacoes Ltda. and subsidiary ("SRC"), TeamTalk Limited and subsidiary
    ("TeamTalk"), together with various offshore holding companies, and its
    four majority-owned subsidiaries, M/S Mobilcom (Pte) Ltd. ("Mobilcom
    Pakistan"), PeruTel S.A. ("PeruTel"), Star Telecom Overseas (Cayman
    Islands) Limited ("STOL"), and Promociones Telefonicas S.A. ("Protelsa"). 
    Wireless Data Services, Ltd. ("WDS"), although 50% owned by the Company,
    has also been consolidated in the accompanying consolidated financial
    statements as the Company has the ability to exercise control over WDS. 
    All significant intercompany accounts and transactions have been eliminated
    in consolidation.
    
(2) CASH AND CASH EQUIVALENTS

    The Company has invested in a variety of short-term, highly liquid
    investments all with original maturities of 90 days or less. As of
    September 30, 1997, the Company had cash of $1,302,000, and cash
    equivalents consisting of money market mutual funds and seven-day fixed
    term deposits totaling $2,360,000 and $2,850,000 respectively.   The fair
    value of the corporate debt securities approximated cost as of September
    30, 1997.
    
    On June 27, 1997, the Company sold its 1.56% equity interest in Corporacion
    Mobilcom S.A. de C.V. ("Mobilcom Mexico") for $3,218,000 (see Note 4). In
    compliance with the Indenture, all the proceeds from the disposition of the
    Company's interest in Mobilcom Mexico were used for Permitted Investments
    (as defined) within 270 days after the date of disposition.  For a more
    detailed description of the restrictions set forth in the Indenture on the
    use of proceeds from the Company's sale of its interest in Mobilcom Mexico,
    see "Description of Exchange Notes" in the Company's Registration Statement
    on Form S-1, declared effective by the Securities and Exchange Commission
    on November 21, 1996 (Reg. No. 333-11987).


                                        8
<PAGE>

(3) BALANCE SHEET COMPONENTS
   
    Balance sheet components are as follows (in thousands):

<TABLE>
<CAPTION>

                                                         DECEMBER 31,   SEPTEMBER 30,
                                                            1996           1997
                                                         ------------   -------------
                                                                         (unaudited)
<S>                                                      <C>            <C>
    Other current assets
       Other receivables...............................   $  1,373          4,209
       Accounts receivable.............................        348          1,398
       Prepaid expenses and other......................      1,469          4,354
                                                          ---------     ----------
                                                          $  3,190          9,961
                                                          ---------     ----------
                                                          ---------     ----------
    Property and equipment
       Telecommunication equipment.....................   $  9,930          9,930
       Computer and office equipment...................        935          1,811
       Furniture and fixtures..........................        320            444
       Leasehold improvements..........................        276            618
       Automobiles.....................................        197            271
       Construction in process.........................      7,620         10,553
                                                          ---------     ----------
                                                            19,278         23,627
       Less accumulated depreciation...................        852          1,826
                                                          ---------     ----------
           Property and equipment, net.................   $ 18,426         21,801
                                                          ---------     ----------
                                                          ---------     ----------
    
    Telecommunication licenses and other intangibles
       SRC/Via 1.......................................   $  6,680          6,680
       Mobilcom Pakistan...............................      5,439          5,439
       TeamTalk........................................      1,760          1,760
       STOL............................................      3,965          3,965
       Protelsa........................................      1,557          1,557
       WDS.............................................        221            221
       Other...........................................        200            200
                                                          ---------     ----------
                                                            19,822         19,822
       Less accumulated amortization...................      1,338          2,264
                                                          ---------     ----------
           Telecommunication licenses and other 
              intangibles, net.........................   $ 18,484         17,558
                                                          ---------     ----------
                                                          ---------     ----------
         
    Accounts payable and accrued expenses
       Accounts payable................................   $  5,163          2,307
       Professional services...........................        718          1,576
       Employee compensation and benefits..............        619            702
       Equipment purchases.............................         27          3,882
       Other...........................................        786          1,086
                                                          ---------     ----------
                                                          $  7,313          9,553
                                                          ---------     ----------
                                                          ---------     ----------
 
</TABLE>

(4) INVESTMENTS IN AFFILIATES HELD FOR SALE
    
    In June 1997, the Company sold its entire 1.56% equity interest in Mobilcom
    Mexico for $3,218,000 to a third party affiliated with an existing
    shareholder in Mobilcom Mexico.  The Company carried this investment in
    Mobilcom Mexico at its historical cost basis of $2,062,000.  As a result,
    the Company reported a gain of $1,156,000 (pre-tax and after-tax) in other
    income for the nine months ended September 30, 1997. 
    
    In addition to the above, the Company has recently reviewed its 
    investment and operating strategy to focus the Company's resources on its 
    larger wireless operations. As part of this realignment, the Company 
    proposes to sell all or a portion of its interests in TeamTalk, Mobilkom 
    and UTS.  The Company anticipates that the sale or partial sale of these 
    three investments will occur within the next 12 months.  These 
    investments are carried at their historical cost and the Company 
    anticipates that the 

                                         9
<PAGE>

    proceeds from disposition of the three investments will equal or 
    exceed the Company's historical cost basis in their investments.  
    Investments in affiliates held for sale are as follows (in thousands):
    
    
                                                DECEMBER 31,   SEPTEMBER 30,
                                                   1996            1997
                                                ------------   -------------
                                                                (unaudited)
            Mobilcom Mexico.................     $  2,062              --
            UTS.............................           --           1,902
            Mobilkom........................           --           1,500
                                                 ---------      ----------
                                                 $  2,062           3,402
                                                 ---------      ----------
                                                 ---------      ----------

    In July 1997, the Company changed its method of accounting for its 
    investment in UTS from the equity method to the cost method of accounting 
    since its ownership interest was reduced from 19.04% to 15.41% as the 
    Company elected not to participate in a recent capital call.  The Company 
    has not changed its basis of accounting for the other remaining investments 
    held for sale.  The Company continues to consolidate TeamTalk and has not 
    reclassified this investment as an asset held for sale. The Company's 
    investment in, and advances to, TeamTalk amounted to $16,336,000 as of 
    September 30, 1997.  Selected unaudited financial information for TeamTalk 
    is as follows as of and for the nine months ended September 30, 1997 (in 
    thousands):
   
            Current assets.........................   $   899
            Non current assets.....................    12,534
            Current liabilities....................     3,813
            Non current liabilities................     7,130
            Net revenues...........................     1,403
            Net loss...............................    (2,240)



(5) INVESTMENTS IN AFFILIATES

    The Company's investments in affiliates represent interests in various LWBs
    in several developing countries. These investments are accounted for under
    the equity or cost methods of accounting.
     
    EQUITY INVESTMENTS
     
    For those investments in companies in which the Company's voting interest
    is 20% to 50%, or for investments in companies in which the Company exerts
    significant influence through board representation and management authority
    even if its ownership is less than 20%, the equity method of accounting is
    used.  Under this method, the investment, originally recorded at cost, is
    adjusted to recognize the Company's share in losses of affiliates, limited
    to the extent of the Company's investment in and advances to affiliates,
    including any debt guarantees or other contractual funding commitments. All
    affiliated companies have fiscal years ended December 31.  Investments in
    affiliated companies are as follows as of December 31, 1996 and September
    30, 1997 (in thousands):



                                      10

<PAGE>

<TABLE>
<CAPTION>
                                                        AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1996
                                             -------------------------------------------------------------------------
                                               MALAYSIA      INDONESIA    CHINA    PHILIPPINES  NEW ZEALAND    VARIOUS
                                             -------------   ---------   -------   -----------  -----------   --------

                                              PRISMANET        PT
                                             (M) SDN. BHD.    RAJASA      STAR
                                               (FORMERLY      HAZANAH    DIGITEL
                                                 STW)         PERKASA    LIMITED                               OTHER
Affiliated company........................   ("PRISMANET")    ("RHP")    ("SDL")       UTS        TEAMTALK    COMPANIES    TOTALS
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
<S>                                          <C>             <C>         <C>       <C>          <C>           <C>         <C>
Percentage of ownership...................          30%         28%          40%          19%         100%    Various
                    
Investments in affiliated companies as of 
December 31, 1995.........................    $  20,241      24,220          --           --        2,338         447       47,246
                    
Additional investment (reclassification)..        1,201       8,556      20,000        1,906       (1,736)         78       30,005

Amortization..............................          969       1,278         347           51           --         525        3,170
Losses (gains)............................        3,563       3,468       1,000          (20)         602          --        8,613
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
Equity in losses of affiliates............        4,532       4,746       1,347           31          602         525       11,783
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
                    
Investments in affiliated companies 
as of December 31, 1996...................    $  16,910      28,030      18,653        1,875           --          --       65,468
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
                         
Portion of investment exceeding the 
Company's share of the underlying 
historical net assets as of 
December 31, 1996.........................    $  15,852      28,030      10,653          882           --          --       55,417
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
                                             -------------   ---------   -------   -----------  -----------   ---------   --------
                        
</TABLE>


                                         11

<PAGE>

<TABLE>
<CAPTION>
                                                AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
                                           ---------------------------------------------------------------------------
                                             MALAYSIA     INDONESIA   CHINA   PHILIPPINES     PAKISTAN       THAILAND
                                           -------------  ---------  -------  -----------  --------------  ------------
                                                                                           INTERNATIONAL
                                                                                              WIRELESS
                                                                                           COMMUNICATIONS   WORLDPAGE
                                                                                              PAKISTAN       COMPANY
                                                                                               LIMITED       LIMITED
Affiliated company......................     PRISMANET       RHP       SDL      UTS(1)        ("IWCPL")    ("WORLDPAGE")   TOTALS
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
<S>                                        <C>            <C>        <C>      <C>          <C>             <C>            <C>
Percentage of ownership.................          30%          28%       40%         15%           34%              11%
                    
Investments in affiliated companies 
as of December 31, 1995.................    $  16,910      28,030    18,653       1,875            --               --      65,468
                        
Additional investment 
(reclassification)......................           --          --     9,000      (1,662)       25,568            4,500      37,406
                        
Amortization............................          664       1,257       489          23            --               --       2,433
Losses..................................       10,246       9,488     4,500         190           425               --      24,849
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
Equity in losses of affiliates..........       10,910      10,745     4,989         213           425               --      27,282
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
                        
Investments in affiliated companies 
as of September 30, 1997................     $  6,000      17,285    22,664          --        25,143            4,500      75,592
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
                        
Portion of investment exceeding the 
Company's share of the underlying
historical net assets as of 
September 30, 1997......................     $  6,000      17,285    19,164          --            --            2,801      45,250
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
                                           -------------  ---------  -------  -----------  --------------  -------------  --------
</TABLE>
----------------------
(1)  During 1997, the Company has initiated the disposition of its interest
in UTS and has reclassified this investment as a current asset (see Note 4).


                                       12

<PAGE>

    In June 1997, after the transfer of its interest in SDL to IWC China 
    Limited ("IWC China"), a wholly owned indirect subsidiary of the Company, 
    IWC, IWC China, SDL and the other shareholders of SDL entered into an 
    Amendment to Subscription Agreement and Waiver (the "SDL Amendment and 
    Waiver"), pursuant to which the SDL Subscription Agreement was amended to 
    provide, among other things, for (a) the immediate payment to Star 
    Telecom Holdings Limited, the Company's partner in SDL ("STHL") of a 
    $9,000,000 premium, (b) the waiver by IWC and IWC China of all conditions 
    precedent to IWC China's obligation to enter into and complete a second 
    subscription of SDL shares for an aggregate subscription price of 
    $19,000,000 on or before June 17, 1998.  In connection with the execution 
    of the SDL Amendment and Waiver, the Company funded the $9,000,000 
    premium in June 1997.  The Company assigned the entire amount of the 
    premium to participation rights in SDL's underlying projects.
    
    In August 1997, the Company acquired a 43.48% indirect equity interest in 
    IWCPL for an aggregate purchase price of US$22,000,000, $15,841,000 of 
    which was paid in cash and $6,159,000 of which was paid with 493,510 
    shares of IWCH's Common Stock.  IWCPL used these funds and the 
    proceeds from the sale of its remaining equity to an unrelated party and 
    to Vanguard Pakistan, Inc., a wholly owned indirect subsidiary of 
    Vanguard Cellular Systems, Inc., a significant stockholder of the Company 
    ("Vanguard"), to acquire a 46% equity interest in Pakistan Mobile 
    Communications (Pvt) Limited ("Mobilink"), a cellular telephone service 
    provider in Pakistan, for an aggregate purchase price of $50,600,000.  In 
    September 1997, IWCPL consummated the sale of newly issued shares in 
    IWCPL to an unrelated third party for $13,959,000 and used the proceeds 
    to purchase an additional 12.69% equity interest in Mobilink, thereby 
    increasing its equity interest in Mobilink to 58.69%. The Company's 
    indirect equity interest in Mobilink and IWCPL was 20% and 34.08%, 
    respectively, after the consummation of the foregoing transactions. In 
    September 1997, the Company also funded an aggregate of $3,568,000 to 
    IWCPL, which amount represents the Company's pro rata share of various 
    capital calls declared by IWCPL. This additional funding brought the 
    Company's investment in IWCPL to $25,568,000 as of September 30, 1997. 
    The Company accounted for its investment in IWCPL using the purchase 
    method of accounting and subsequently has reported this investment under 
    the equity method of accounting.
    
    In September 1997, STOL, a company that holds interests in various paging
    projects in Asia and in which the Company holds a 56% indirect equity
    interest, invested $4,500,000 for a 20% equity interest in WorldPage Co.
    Ltd. ("WorldPage"), a Thai paging operator.  The Company's corresponding
    indirect equity interest in WorldPage is 11.2%.  STOL recorded its
    investment in WorldPage using the purchase method of accounting and
    assigned $2,801,000 of its investment to telecommunication licenses,
    representing the amount of the purchase price that exceeded the fair value
    of STOL's percentage ownership of WorldPage's tangible net assets.

    In September 1997, the Company recorded a write-down of $7,683,000 in the 
    Company's equity investment in Prismanet to the Company's estimate of the 
    net realizable value of this investment.  The Company believes that a 
    significant impairment in the value has occurred due to its recent 
    determination that there are diminished prospects for the allocation of 
    additional spectrum at a different frequency band to Prismanet by the 
    government of Malaysia in the foreseeable future.  This allocation of 
    additional spectrum is believed by the Company to be critical to support 
    the value of Prismanet's business as proposed to be conducted. The 
    management of Prismanet has since undertaken an extensive review of 
    Prismanet's business plan, the results of which are yet to be determined.


                                        13


<PAGE>

    COST INVESTMENTS

    The Company uses the cost method of accounting for three other 
    investments     as of September 30, 1997. These are RPG Paging Services 
    Limited ("RPSL"), First International Telecommunication Co. Ltd. ("FIT") 
    and Telecomunicaciones Globales S.A. de C.V. ("Global Telecom"). The 
    Company holds its interests in RPSL and  FIT indirectly through STOL.  In 
    January 1997, STOL purchased an additional 9% of RPSL for $2,100,000, 
    thereby increasing its equity interest in RPSL from 10% to 19%, and 
    correspondingly increasing the Company's indirect interest in RPSL to 
    10.64% as of September 30, 1997.  In September 1997, STOL invested 
    $5,781,000 for a 12% equity interest in FIT, a Taiwanese paging operator, 
    which corresponds to a 6.72% indirect equity interest in FIT held by the 
    Company as of September 30, 1997. In January 1997, the Company acquired a 
    1.56% equity interest in Global Telecom, a Mexican long distance company, 
    for $62,000.  The Company considers its investments in RPSL, FIT and 
    Global Telecom as long-term in nature and does not hold them for trading 
    purposes.
    
    The following represents the Company's carrying value of these cost
    investments (in thousands):

         
                                              DECEMBER 31,     SEPTEMBER 30,
                                                   1996             1997
                                              ------------     -------------
                                                                (unaudited)
          Mobilkom..........................    $  1,500             --




                                        14

<PAGE>

          RPSL..............................       1,426           3,526
          FIT...............................          --           5,781
          GLOBAL TELECOM....................          --              62
                                              ------------     -------------
                                                $  2,926           9,369
                                              ------------     -------------
                                              ------------     -------------
    
    During 1997, the Company reclassified Mobilkom to an investment in 
    affiliates held for sale (see Note 4).
    
    
(6) NOTES RECEIVABLE FROM AFFILIATES
    
    In March 1997, the Company loaned $3,500,000 to SDL.  This loan, which is
    evidenced by a promissory note, accrues interest at 9% per annum and is due
    upon written demand by the Company.  The Company anticipates repayment
    within the next 12 months.
    
    In June 1997, STOL loaned $1,500,000 to SDL.  This loan accrues interest at
    8.75% per annum and is due upon written demand by STOL.  This loan, plus
    accrued interest, was repaid by SDL in August 1997.  
    
    In September 1997, the Company, through its wholly owned subsidiary, IWC
    China, loaned $800,000 to SDL. This loan accrues interest at 9% per annum
    and is due upon written demand by the Company.   The Company anticipates
    repayment within the next 12 months.
     

(7) NOTES RECEIVABLE
    
    In March 1997, the Company loaned $500,000 to an unrelated third party. 
    This loan, which is evidenced by a secured, convertible promissory note,
    has a one year term, accrues interest at the rate of 15% per annum and is
    guaranteed by another unrelated third party.  At the sole discretion of the
    Company, the loan may be converted at any time during its one year term
    into 51% of the outstanding capital stock of Nexbeep S.A., formerly named
    Clasbeep S.A., an Ecuadorian paging corporation that is wholly owned by the
    borrower. 
    
    In April 1997, the Company collected $900,000 on a loan the Company had
    extended to a co-shareholder of Mobilcom Mexico.  The remaining unpaid
    balance of the loan of $608,000, including accrued interest, was collected
    in July 1997.
    


                                       15

<PAGE>

    
(8) LICENSE DEPOSITS

    In August 1996, STOL and the Company deposited $3,005,000 and $2,250,000, 
    respectively, for their respective 20% and 10% interests in a Taiwanese 
    company in organization that had submitted an application for a national 
    paging license for Taiwan.  In early February 1997, it was announced that 
    such company's application was unsuccessful, and the Company reclassified 
    the deposits as a current asset.  In June 1997, STOL received a refund of 
    $1,669,000 of its deposit, net of its pro rata share of application 
    expenses of $347,000.  In July 1997, STOL received a further refund of 
    $212,000.  In order to mitigate its transactional foreign currency 
    exposure, the remaining balance of $777,000, which is denominated in New 
    Taiwanese dollars, was used to pay fees associated with STOL's investment 
    in FIT.  In June 1997, the Company received a refund of $1,029,000, net 
    of its pro rata share of application expenses of $220,000.  The remaining 
    balance of $1,001,000 was received by the Company in August 1997. 

    In June 1996, the Company deposited $3,042,000 for a 20% interest in a 
    consortium pursuing SMR licenses in Taiwan. The consortium was successful 
    in winning four of twelve license applications. In August 1997, the 
    Company received a refund of $1,933,000, which represents its pro rata 
    portion of the deposit applied to the eight unsuccessful applications, 
    net of the Company's pro rata share of application expenses of $105,000.  
    In September 1997, the Company sold its entire interest in the consortium 
    for $1,153,000.
    
    
(9) LONG-TERM DEBT AND DEBT ISSUANCE COSTS
    
    In August 1997, the Company closed a bridge financing facility (the 
    "Pakistan Bridge Facility"), with Toronto Dominion Investments, Inc. 
    ("TDI"), Vanguard Cellular Financial Corp.("VCFC") and others, whereby 
    the Company received written commitments for an aggregate amount of 
    $29,000,000 in exchangeable bridge loans.  The Pakistan Bridge Facility 
    is structured as a two-tier facility, with $7,000,000 available to IWCH 
    for general corporate and other purposes (the "IWCH Pakistan Facility") 
    and $22,000,000 loaned to Pakistan Wireless Holdings Limited ("PWH"), an 
    indirect wholly owned subsidiary of the Company, for the specific purpose 
    of financing the cash portion of the purchase price of the Company's 
    indirect investment in Mobilink and the Company's pro rata share of the 
    shareholder capital calls and shareholder loans required to finance the 
    operations of Mobilink (the "PWH Pakistan Facility").  The Pakistan 
    Bridge Facility contains significant restrictions on the Company's 
    ability to use additional debt or equity financing until all amounts 
    outstanding under the Pakistan Bridge Facility are repaid in full.  The 
    Pakistan Bridge Facility bears interest payable in-kind on a quarterly 
    basis beginning at 14% and increases over time to 25%.  There are no 
    scheduled cash interest payments on the Pakistan Bridge Facility. 
    Principal plus accrued but unpaid interest on the Pakistan Bridge 
    Facility matures in August 2002. Warrants to purchase shares of the 
    Company's Common Stock, at an exercise price of $0.01 per share, were 
    also issued in connection with the IWCH Pakistan facility (the "Initial 
    Pakistan Warrants").  The number of shares issuable of the Company's 
    Common Stock at the closing of the Pakistan Bridge Facility upon exercise 
    of the Initial Pakistan Warrants was initially set at 247,756 and 
    increases upon the occurrence of certain events.  The number of shares of 
    the Company's Common Stock issuable upon exercise of the Initial Pakistan 
    Warrants subsequently increased (see Note 13).  The Company also agreed 
    to grant to the lenders under the Pakistan Bridge Facility, upon the 
    occurrence of a specified liquidity event, additional warrants (the 
    "Pakistan Liquidity Warrants"; together with the Initial Pakistan 
    Warrants, the "Pakistan Warrants") to purchase a number of shares of the 
    Company's Common Stock equal to the quotient of (i) 35% of the greater of 
    (A) $2.0 million and (B) the unpaid principal amount of and unpaid 
    accrued interest in the IWCH Pakistan Facility and (ii) the value of the 
    Company's Common Stock with respect to such liquidity event.  As of 
    September 30, 1997, the $7,000,000 IWCH Pakistan Facility had not yet 
    been drawn down (see Note 13).
    
    The costs related to the issuance of the Pakistan Bridge Facility, 
    which include all warrants expected to be earned through December 1997 in 
    accordance with the terms of the IWCH Pakistan Facility were capitalized and
    are being amortized to interest expense using the effective interest method 
    over the estimated term of the debt.  Debt issuance costs related to the 
    Pakistan Bridge Facility are presented, net of amortization, of 
    $4,784,000 on the accompanying consolidated balance sheet as of September 
    30, 1997.
    
(10) MINORITY INTEREST

    In July 1997, the Company, STHL, the Company's then-sole partner of STOL,
    and STOL entered into an agreement with a third party providing for the
    issuance and sale to such third party of new shares equivalent to up to a
    20% interest in STOL, subject to STOL entering into valid and binding
    agreements to invest in certain specified paging companies.  As of
    September 30, 1997, STOL had entered into such agreements with these
    specified paging companies and, as a result, the third party paid STOL
    $4,160,000 for a 20% interest in STOL, thereby diluting the Company's
    interest in STOL from 70% to 56%.
    


                                       16
<PAGE>

(11) REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDER'S DEFICIT

    In August 1997, pursuant to the terms of the Unit Warrants, the number of 
    shares of the Company's Common Stock issuable upon exercise of the Unit 
    Warrants increased by an aggregate of 28,414 shares to an aggregate of 
    2,838,166 shares as a result of the issuance by the Company of warrants 
    to purchase the Company's Common Stock in connection with the Pakistan 
    Bridge Facility.
    
    In September 1997, at the request of IWC China, VCFC guaranteed 
    $8,000,000 of indebtedness to be incurred by SDL (the "Vanguard SDL 
    Guarantee").  Pursuant to a reimbursement agreement (the "Reimbursement 
    Agreement"), IWC China agreed to pay VCFC (i) an up-front guarantee fee 
    of $240,000 in cash, (ii) a quarterly in-kind guarantee fee at an initial 
    rate of 6.75% that increases over time to 17.75% and (iii) an additional 
    guarantee fee payable in shares of SDL owned by IWC China if VCFC is 
    required to make any payments under the guarantee.  In addition, the 
    Company granted VCFC a ten-year warrant to purchase shares of its Common 
    Stock at an exercise price of $0.01 per share.  The number of shares 
    issuable upon exercise of the warrant is initially set at 68,819 and 
    increases in quarterly increments thereafter until VCFC's obligations 
    under the guarantee have been permanently released and discharged.  The 
    Company recognized an expense of $1.1 million related to the Vanguard SDL 
    Guarantee. The Company has recorded this expense in other expense in the 
    accompanying consolidated statement of operations. The Company plans to 
    recognize additional expense related to incremental quarterly warrant grants
    associated with this Vanguard SDL Guarantee when the quantity or terms of 
    such warrants are no longer contingent.
    
    In September 1997, pursuant to the terms of the Unit Warrants, the number 
    of additional shares of the Company's Common Stock issuable upon exercise 
    of the Unit Warrants increased by an aggregate of 7,851 shares to an 
    aggregate of 2,846,017 shares as a result of the issuance by the Company 
    of warrants to purchase the Company's Common Stock in connection with the 
    Vanguard SDL Guarantee.
    
    In September 1997, the Company paid its pro rata share of a finder's fee 
    to an unrelated third party in connection with its indirect investment in 
    Mobilink primarily through the issuance of a warrant to purchase 81,982 
    shares of the Company's Common Stock at an exercise price of $0.01 per 
    share (the "Mobilink Finder's Fee").  The Company recognized a total fee 
    of $1.0 million related to the Mobilink Finder's Fee which is included 
    as a component of the cost basis of the Company's investment in IWCPL.

(12) COMMITMENTS AND CONTINGENCIES
    
    CAPITAL CONTRIBUTIONS
     
    In order to protect IWC's investments in subsidiaries and affiliates from 
    ownership dilution, IWC anticipates making additional capital 
    contributions to the LWBs as approved, and dependent upon the Company's 
    available financial resources.
    
    GUARANTEE OF DEBT OF EQUITY INVESTEE
    
    In connection with a Malaysian Ringgit 91,000,000 (approximately $28.0
    million as translated using effective exchange rates at September 30, 1997)
    senior credit facility through a syndicate of Malaysian banks obtained by
    the Company's 30% equity investee, the Company and the other shareholders
    of Prismanet executed a financial "keep well" covenant pursuant to which
    they have agreed (i) to ensure that Prismanet will remain solvent and be
    able to meet its financial liabilities when due and (ii) to ensure that the
    project is completed in a timely manner and to make additional debt and
    equity as and investments in Prismanet, as necessary to meet cost overruns.
    The loan is repayable by Prismanet in eleven semi-annual installments
    beginning October 8, 1997.  The Company and other Prismanet shareholders
    have separately executed an agreement, whereby each shareholder has agreed
    to share in the liability on a pro rata basis in relation to their interest
    in Prismanet. In the event that the bank were to seek repayment from the
    Prismanet shareholders and the other shareholders were unable to honor
    their pro rata share in the liability, the Company might be liable for the
    full amount of the outstanding amount of the loan. As of September 30,
    1997, this credit facility was fully drawn down and the Company has been 
    advised that, subsequent to September 30, 1997, Prismanet obtained a six 
    month extension on the repayment of the first installment due, as provided 
    by the lead bank of the syndicate. 
    
    The Company does not believe it is practicable to estimate the fair value 
    of the "keep well" covenant and does not believe exposure to loss is 
    likely. Accordingly, no provision has been made in the accompanying 
    consolidated financial statements. 
    
    The Company, indirectly through its wholly owned subsidiary, New Zealand 
    Wireless Limited, owns 15% of Mobilkom.  Mobilkom expects to fund the 
    continued buildout of its network and the acquisition of subscriber 
    terminals

                                         17

<PAGE>

    primarily through a seven-year $50,000,000 revolving/reducing credit
    facility which it has obtained from a syndicate of Thai banks. Borrowings
    under the credit facility bear interest at a floating rate based on LIBOR
    and are secured by substantially all of Mobilkom's assets and a pledge of
    all the capital stock held by the Company and Mobilkom's other
    shareholders. Another Mobilkom shareholder has guaranteed borrowings of up
    to $25,000,000 under the credit facility. As of September 30, 1997,
    borrowings of approximately $22,637,000 were outstanding under this
    facility. 
    
    The Company indirectly owns a 19.8% equity interest in PT Mobile Selular 
    Indonesia ("Mobisel"), a provider of cellular services in Indonesia 
    through its 28.3% ownership in RHP. Mobisel has obtained a six-year 
    $60,000,000 credit facility from Nissho Iwai International (Singapore) 
    Pte. Ltd. ("Nissho Iwai") to finance the construction of its network. 
    Borrowings under the credit facility bear interest at a floating rate 
    based on LIBOR and are secured by all of Mobisel's assets and a pledge of 
    all the capital stock held by RHP and Mobisel's other shareholders. RHP 
    has also guaranteed the credit facility. As of September 30, 1997, this 
    credit facility was fully drawn down.
    
    The Company, indirectly through its wholly owned subsidiary IWC China, 
    entered into an agreement to subscribe for additional SDL shares for an 
    aggregate subscription price of $19,000,000.  Pursuant to the Amendment 
    and Waiver, IWC China is required to fund the second subscription of SDL 
    shares no later than June 17, 1998.  If IWC China does not meet its 
    funding commitment, this will likely result in the Company's 40% equity 
    interest in SDL being diluted to a level which may have a material 
    adverse effect on the Company's ability to realize the full potential of 
    its investment.
    

(13) SUBSEQUENT EVENTS

    In October 1997, STOL made a $2,000,000 loan to Shenzhen Wanlitong
    Industrial Development Company ("Wanlitong") in connection with STOL's 
    proposed investment in a nationwide paging project in China through the 
    formation of a co-operative joint venture ("STOL Paging CJV") with 
    Wanlitong.  The loan is for a term of one year and carries interest at 
    the rate of 10% per annum.  When the STOL Paging CJV is formed, the 
    loan will be converted into an ownership interest in the STOL Paging CJV.
   
    In October 1997, the Option Committee of the Board of Directors of the
    Company granted options to purchase an aggregate of 187,684 shares of 
    Common Stock at an exercise price of $12.48 per share to certain service 
    providers of the Company under the 1996 Amended and Restated Stock 
    Option/Stock Issuance Plan.  
   
    In October 1997, the Company drew down $3,500,000 of the $7,000,000 
    available under the IWCH Pakistan Facility. As a result, the number of 
    shares of the Company's Common Stock issuable upon exercise of the 
    Pakistan Liquidity Warrants increased.
    
    In November 1997, pursuant to the terms of the IWCH Pakistan Facility, 
    the number of shares of the Company's Common Stock issuable upon exercise 
    of the Initial Pakistan Warrants increased from 253,406 shares to 
    501,162 shares because the Company failed to file a registration 
    statement for a proposed public offering of shares of its Common Stock 
    with the Securities and Exchange Commission on or before October 31, 
    1997.  As a result, pursuant to the terms of the Unit Warrants, the 
    number of shares of the Company's Common Stock issuable upon exercise of 
    the Unit Warrants increased by an aggregate of 29,062 shares to an 
    aggregate of 2,875,079 shares.

                                         18
<PAGE>

    INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
    
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

   THE DISCUSSION IN THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT 
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER 
MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT COULD CAUSE OR 
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE 
DISCUSSED IN THIS SECTION AND DISCUSSED IN THE "RISK FACTORS" SECTION 
INCLUDED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED 
DECEMBER 31, 1996, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 
15, 1997.
   
INTRODUCTION

    The principal operating companies in which the Company holds an interest 
provide cellular services in China, Pakistan and Indonesia and SMR services 
in Brazil.  As of September 30, 1997, these operating companies had licenses 
or cooperative arrangements with licensees covering an estimated 863 million 
POPs which, based on the Company's equity interests in such operating 
companies, represented an estimated 240 million equity POPs.  As of September 
30, 1997, these operating companies, which are generally in the early stages 
of operating and expanding their networks, served an aggregate of 
approximately 201,000 subscribers.

    In August 1997, the Company acquired a 20% indirect interest in Mobilink. 
Such acquisition together with the acquisition of SDL in November 1996 has 
provided growth in the subscribers of the Company's principal operating 
companies subscribers from 17,000 as of September 30, 1996 to 112,000 as of 
September 30, 1997.

    The Company has reported net losses for each fiscal year since the date 
of its organization.  As the Company continues to make investments accounted 
for under the equity method or on a consolidated basis and given that the 
Company may exercise an existing option to increase its equity interest in 
Mobilink and is negotiating an option to increase its interest in Mobisel, 
the Company anticipates that its net losses will increase significantly for 
the foreseeable future.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 
30, 1997

    The Company recognized $532,000 of operating revenues and $541,000 of 
cost of revenues for the nine month period ended September 30, 1996 as 
compared to $3.3 million in operating revenues, offset by cost of revenues of 
$3.1 million, for the corresponding period in 1997, represented by the 
consolidated commercial operations of TeamTalk, the Company's wholly owned 
SMR operating company in New Zealand.  There are no other significant 
revenues or costs of revenues recognized by the Company.  The Company 
anticipates that the operating revenues and costs of revenues will continue 
to increase as the Company continues to expand and develop its consolidated 
commercial network operations.

    The Company's selling, general and administrative expenses increased from 
$10.6 million for the nine month period ended September 30, 1996 to $23.6 
million for the corresponding period in 1997, an increase of 122.7%.  This 
increase was primarily due to an increase in selling, general and 
administrative expenses associated with the Company's consolidated SMR 
operations, consisting principally of TeamTalk and SRC and an increase in 
corporate overhead.  The Company's own general and administrative expenses 
increased from $7.4 million for the nine months ended September 30, 1996 to 
$12.0 million for the corresponding period in 1997, an increase of 60.8%.  
The Company experienced continued growth in its own general and 
administrative expenses as the Company expanded its corporate and regional 
operations to manage the growth in the local wireless businesses and 
recognized 


                                     19

<PAGE>
a management advisory expense of $2.3 million in connection with the Vanguard 
Warrant/Option Exchange.  The selling, general and administrative expenses of 
the consolidated SMR operations increased from $3.2 million for the nine 
month period ended September 30, 1996 to $11.6 million for the corresponding 
period in 1997, an increase of 268.6%.  These entities continued to develop 
their SMR operations and expand their services resulting in the increase in 
selling, general and administrative expenses.

    The Company's equity in losses of affiliates increased from $5.5 million 
for the nine month period ended September 30, 1996 to $27.3 million for the 
corresponding period in 1997, an increase of 395.4%. The Company recorded an 
equity loss of $10,909,000, which includes a write-down of $7,683,000, in the 
Company's equity investment in Prismanet to the Company's estimate of the net 
realizable value of this investment. The Company believes that a significant 
impairment in value has occurred due to its recent determination that there 
are diminished prospects for the allocation of additional spectrum at a 
different frequency band to Prismanet by the government of Malaysia in the 
foreseeable future. This allocation of additional spectrum is believed by the 
Company to be critical to support the value of Prismanet's business as 
proposed to be conducted. The management of Prismanet has since undertaken an 
extensive review of Prismanet's business plan, the results of which are yet 
to be determined. Also, the Company has recognized the increase in the 
underlying operating losses of Mobisel and SDL.

    The Company's equity in losses of affiliates attributable to its 19.8% 
indirect interest in Mobisel increased from $1.8 million for the nine month 
period ended September 30, 1996 to $10.7 million for the corresponding period 
in 1997 as Mobisel continued to expand its operations and build-out its 
nationwide cellular network.  As part of its expansion effort, Mobisel 
experienced significant growth in its promotional selling expenses and its 
general and administrative expense base increased in order to meet the 
anticipated growth in its operations.  In addition, Mobisel's interest 
expense increased for the nine month period ended September 30, 1997 as 
Mobisel had fully drawn down the $60.0 million credit facility arranged in 
October 1996 to finance the construction of its nationwide network.  Also, in 
order to finance this expansion effort, Mobisel entered into, and utilized 
the majority of, a syndicated short-term notes facility arranged in January 
1997. These funds enabled Mobisel to continue to build-out its nationwide 
cellular network and were also utilized for general corporate purposes.  
Lastly, Mobisel recognized significant foreign exchange translation losses 
associated with the remeasurement of its U.S. dollar-denominated credit 
facility due to the devaluation of the Indonesian Rupiah during the nine 
month period ended September 30, 1997.

    The Company's equity in losses of affiliates attributable to its 40% 
indirect interest in SDL, which the Company acquired in November 1996, was 
$4.5 million for the nine month period ended September 30, 1997.  SDL's 
operating losses are anticipated to increase for the foreseeable future as 
SDL continues to expand its operations in China.

    The Company's interest expense increased from $2.7 million for the nine 
month period ended September 30, 1996 to $13.9 million for the corresponding 
period in 1997.  The increase in interest expense was primarily due to 
interest expense associated with the Unit Offering, which occurred in August 
1996.

    The Company's interest income increased from $937,000 for the nine month 
period ended September 30, 1996 to $1.5 million for the corresponding period 
in 1997.  The increase in interest income was primarily due to the higher 
cash and cash equivalents balances of the Company as derived from the 
proceeds of the Unit Offering.

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED 
SEPTEMBER 30, 1997

    The Company recognized $349,000 of operating revenues and $361,000 of 
cost of revenues for the three month period ended September 30, 1996 as 
compared to $2.3 million in operating revenues, offset by cost of revenues of 
$1.8 million, for the corresponding period in 1997, represented by the 
consolidated commercial operations of TeamTalk.  There are no other 
significant revenues or costs of revenues recognized by the Company.  The 
Company anticipates that operating revenues and costs of revenues will 
continue to increase as the Company continues to expand and develop its 
consolidated network operations that are, or will become, commercial.

    The Company's selling, general and administrative expenses increased from
$4.3 million for the three month period ended September 30, 1996 to $7.9 million
for the corresponding period in 1997, an increase of 85.4%.  This increase was
primarily due to an increase in selling, general and administrative expenses
associated with the 

                                     20
<PAGE>

Company's consolidated SMR operations, consisting principally of TeamTalk and 
SRC and an increase in corporate overhead.  The Company's own general and 
administrative expenses increased from $2.4 million for the three months 
ended September 30, 1996 to $3.4 million for the corresponding period in 
1997, an increase of 40.5%.  The Company experienced continued growth in its 
own general and administrative expenses as the Company increased its 
corporate and regional operations to manage the growth in its local wireless 
businesses.  The selling, general and administrative expenses of the 
consolidated SMR operations increased from $1.9 million for the three month 
period ended September 30, 1996 to $4.5 million for the corresponding period 
in 1997, an increase of 142.4%.  These consolidated entities continued to 
develop their SMR operations and expand their services resulting in the 
increase in selling and administrative expenses.

    The Company's equity in losses of affiliates increased from $2.5 million 
for the three month period ended September 30, 1996 to $17.4 million for the 
corresponding period in 1997, an increase of 590.9%. The Company recorded an 
equity loss of $8,885,000, which includes a write-down of $7,683,000, in the 
Company's equity investment in Prismanet to the Company's estimate of the net 
realizable value of this investment.  The Company believes that a significant 
impairment in value has occurred due to its recent determination that there 
are diminished prospects for the allocation of additional spectrum at a 
different frequency band to Prismanet by the government of Malaysia in the 
foreseeable future.  This allocation of additional spectrum is believed by 
the Company to be critical to support the value of Prismanet's business as 
proposed to be conducted.  The management of Prismanet has since undertaken 
an extensive review of Prismanet's business plan, the results of which are 
yet to be determined.

    The Company's equity in losses of affiliates attributable to its indirect 
19.8% interest in Mobisel increased from $1.1 million for the three month 
period ended September 30, 1996 to $6.1 million for the corresponding period 
in 1997 as Mobisel continued to expand its operations and build-out its 
nationwide cellular network.  As part of its expansion effort, Mobisel 
experienced growth in its promotional selling expenses and furthermore its 
general and administrative expense base increased in order to meet the 
anticipated growth in its operations.  In addition, Mobisel's interest 
expense increased for the three month period ended September 30, 1997 as 
Mobisel had fully drawn down the $60.0 million credit facility arranged in 
October 1996 to finance the construction of its nationwide network.  Also, in 
order to finance this expansion effort, Mobisel entered into, and utilized 
the majority of, a syndicated short-term notes facility arranged in January 
1997. These funds enabled Mobisel to continue to build-out of its nationwide 
cellular network and were also utilized for general corporate purposes.  
Lastly, Mobisel recognized significant foreign exchange translation losses 
associated with the remeasurement of its US Dollar-denominated credit 
facility due to the devaluation of the Indonesian Rupiah during the three 
month period ended September 30, 1997.

    The Company's equity in losses of affiliates attributable to its 40% 
interest in SDL, which the Company acquired in November 1996, was $1.8 
million for the three month period ended September 30, 1997.  SDL's operating 
losses are anticipated to increase for the foreseeable future as SDL 
continues to expand its operations in China.

    The Company's interest expense increased from $2.5 million for the three 
month period ended September 30, 1996 to $5.1 million for the corresponding 
period in 1997.  The increase in interest expense was primarily due to 
interest expense associated with the Unit Offering which occurred in August 
1996.

The Company's interest income decreased from $513,000 for the three month 
period ended September 30, 1996 to $399,000 for the corresponding period in 
1997.  The decrease in interest income was primarily due to a reduction in 
the cash and cash equivalent balances, as derived from the Unit Offering in 
August 1996, available for investment in short-term interest bearing 
securities during the period. 

IMPACT OF INFLATION AND CURRENCY FLUCTUATION

    Many developing countries have experienced substantial, and in some 
periods extremely high, rates of inflation and resulting high interest rates 
for many years.  They have also experienced significant fluctuations in their 
exchange rates.  In addition, many of the currencies of developing countries 
have experienced steady, and in some currencies, substantial devaluations 
relative to the U.S. dollar.  For example, since mid-1997, a number of 
currencies of Southeast Asia countries, including Indonesia and Malaysia, 
have experienced significant declines in their exchange rates relative to the 
U.S. Dollar.  Such inflation and devaluations have had, and may continue to 
have significant negative effects on the economies and securities markets of 
certain developing countries, and could have material adverse effect on the 

                                     21

<PAGE>

Company's operating companies in such countries, including an adverse effect 
on their subscriber levels and on their ability to obtain financing.  Because 
tariffs in many of the countries in which the Company's operating companies 
operate are regulated, such operating companies may not always be able to 
increase tariffs in response to inflation or currency devaluations, which 
could have a material adverse effect on the results of operations of such 
operating companies.

    The U.S. dollar-denominated value of the Company's investment in an 
operating company or other wireless project is partially a function of the 
currency exchange rate between U.S. dollar and the applicable local currency. 
In addition, the Company's operating companies will report their results of 
operations in the local currency and, accordingly, the Company's results of 
operations will be affected by changes in currency exchange rates between 
those currencies and the U.S. dollar.  In general, the Company does not hedge 
against foreign currency exchange rate risks.  As a result, the Company may 
experience economic loss with respect to its investments and fluctuations in 
its results of operations solely as a result of currency exchange rate 
fluctuations.  The Company does not carry currency convertibility risk 
insurance.

    To the extent that the Company's operating companies commence, or have 
commenced, commercial operations, any revenues they generate will generally 
be received by such operating companies in the local currency.  By contrast, 
many significant liabilities of such 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 the Company.  
In addition, certain operating companies may have U.S. dollar denominated 
debt financings.  It is typical that the operating companies attempt to 
obtain local currency denominated financings when available, although certain 
entities are only able to obtain U.S. dollar-denominated funding.  The 
primary foreign currency to which the Company is exposed is the Indonesian 
Rupiah.  As discussed in more detail later, Mobisel, the Company's national 
cellular operating company in Indonesia, has incurred U.S. dollar debt 
through its credit facility with Nissho Iwai.  Further, it is anticipated 
that substantial additional U.S. dollar debt will be sought to fund future 
capital expenditures of Mobisel.  Revenues to repay such U.S. dollar debt 
will be denominated in the Indonesian Rupiah.  Recently the Indonesian Rupiah 
fluctuated unfavorably against the U.S. dollar in conjunction with other 
currencies in Asia, and as a result, the amounts outstanding under the Nissho 
Iwai credit facility increased substantially on an Indonesian 
Rupiah-denominated basis.  As a consequence, Mobisel will have to increase 
operating revenues to compensate for this unfavorable fluctuation or absorb 
the impact of this foreign exchange exposure in their current and future 
operations.  Although the Company and its operating companies attempt to 
match assets and liabilities, to the extent possible, it is not always 
possible due to sovereign foreign capital restrictions or the availability of 
credit facilities in currencies other than the U.S. dollar.

LIQUIDITY AND CAPITAL RESOURCES
   
   To date, the Company has funded its cash requirements primarily through 
the use of the net proceeds of a series of Preferred Stock private 
placements, bridge loans and the Unit Offering. Except for the Pakistan 
Bridge Facility, the bridge loans have generally been converted into 
Preferred Stock. The proceeds from these financings were mainly used to fund 
the Company's investments in its operating companies and other wireless 
projects, to provide working capital and for general corporate purposes. As 
of December 31, 1996 and September 30, 1997, the Company had cash and cash 
equivalents balances of $41.6 million and $6.5 million, respectively.
   
   The Company has generated negative cash flow from operations since 
inception, and its operating companies and other wireless projects are not 
expected to provide any positive cash flow or any cash distributions to the 
Company for the foreseeable future.  See "--Additional Factors that May 
Affect Future Results--Company Level Risks--Negative Operating Cash Flow; 
Dependence on Additional Financing; No Commitments for Additional Financing" 
and "--Additional Factors that May Affect Future Results--Company Level 
Risks--Holding Company Structure; Limitations on Access to Cash Flow of 
Operating Companies."  As a result, the Company is and will remain dependent 
upon raising funds from outside sources to fund its working capital needs, 
investments in its operating companies and other wireless projects, to repay 
the Notes and any other indebtedness it may incur when it becomes due and 
payable and other cash requirements.


                                     22

<PAGE>
   
   The Company believes that its existing cash balance is sufficient to meet 
its minimum operating and contractual obligations through the end of June 
1998. However, the Company will require additional financing prior to such 
date to meet its business objective of participating in additional capital 
calls of the operating companies, including the second subscription of SDL 
shares for an aggregate subscription price of $19,000,000, to finance 
expansion of their respective operations.  The Company has no commitments or 
arrangements for additional financing, and there can be no assurance that 
this additional financing will be available to the Company on acceptable 
terms when required by the Company or at all. The Company's inability to 
obtain such additional financing on acceptable terms would have a material 
adverse effect on the Company.   See "--Additional Factors that May Affect 
Future Results--Company Level Risks--Negative Operating Cash Flow; Dependence 
on Additional Financing; No Commitment for Additional Financing."
   
   Historically, the Company and its partners have typically funded initial 
investments in its operating companies and other wireless projects through 
capital contributions either in the form of equity or shareholder loans.  
When such projects have become operational, the Company has sought to fund 
their ongoing development using third-party financing, preferably on a 
non-recourse basis to the Company.
   
   Mobisel has obtained a $60.0 million credit facility from Nisso Iwai. This 
facility is secured by all of Mobisel's assets and a pledge of all of the 
Mobisel capital stock  held by RHP and  has also been guaranteed by RHP. 
Borrowings under the credit facility with Nissho Iwai are to be used solely 
for the implementation and construction of Mobisel's network.  Borrowings 
outstanding under this credit facility must be repaid in six equal 
semi-annual installments commencing in May 1998.  Mobisel will require 
substantial additional financing to complete its planned capital expenditures 
through 1998 and for other working capital needs.  Accordingly, Mobisel has 
commenced discussion with a number of potential financing sources in order to 
obtain additional financing.  Mobisel entered into a syndicated short-term 
notes facility agreement in January 1997 with PT Bank Unum Servitia, as 
arranger, whereby the banks agreed to purchase Indonesian Rupiah ("Rp") 
60,000,000,000 of short-term notes and interest notes of Rp15,000,000,000 (in 
aggregate approximately $22.8 million as at September 30, 1997).  Borrowings 
outstanding under this short-term notes facility must be repaid in February 
1998.  These short-term notes and interest notes will have a repayment 
priority to the existing loans outstanding.  Mobisel is currently in 
discussion with a variety of financial arrangers.  The Company is actively 
working with its local partners to establish a short and medium term 
financing plan for Mobisel.  Lastly, the RHP shareholders have contributed 
$1.1 million in shareholder loans and it is anticipated that the shareholders 
will be required to provide additional financial support in the short-term 
permitting Mobisel to address its short term cash constraints.  See 
"--Additional Factors that May Affect Future Results--Project Level 
Risks--Negative Operating Cash Flow; Dependence on Additional Financing; No 
Commitment for Additional Financing."
   
   Prismanet has arranged a Malaysian Ringgit ("RM") 91.0 million 
(approximately $28.0 million as at September 30, 1997) credit facility 
through a syndicate of Malaysian banks. This facility is secured by 
substantially all of Prismanet's assets and a pledge of all of the capital 
stock of Prismanet held by the Company and Prismanet's other shareholders. In 
addition, the facility has been guaranteed by Shubila Holding Sdn. Bhd., the 
60% owner of Prismanet, and certain directors of Prismanet (including a 
former officer of the Company). Also, Prismanet has agreed to assign to and 
deposit with the banks all of its cash, including revenues, loan drawings and 
shareholder advances. In addition to pledging their capital stock in 
Prismanet, the Company and the other Prismanet shareholders have entered into 
a "keep well" covenant pursuant to which they have agreed (i) to ensure that 
Prismanet remains solvent and able to meet its financial liabilities when 
due, and (ii) to ensure the timely completion of its wireless local loop 
project and to make additional debt or equity investments in Prismanet 
necessary to meet any cost overruns. Accordingly, the Company and other 
Prismanet shareholders could be jointly or severally liable for amounts 
payable under the credit facility in the event of default by Prismanet. 
Borrowings outstanding under this credit facility must be repaid in eleven 
semi-annual installments beginning October, 1997.  As of September 30, 1997, 
this facility was fully drawn down and it is the intention of the Company and 
its partners to seek additional third party debt financing to fund 
Prismanet's capital expenditures and to refinance outstanding indebtedness 
under the credit facility. Subsequent to September 30, 1997, the Company, 
consistent with its write-down in its investment in Prismanet, decided it 
would not participate in a RM20.0 million capital contribution, and 
accordingly, agreed to reduce its equity investment in Prismanet.  Initially 
Shubila Holding Sdn. Bhd. has agreed to contribute the Company's pro rata 
share of its capital contribution whereby the Company's equity investment 
will be reduced to 25.0%.  In addition, Shubila Holding Sdn. Bhd. has the 
option to fund sufficient additional funds to reduce our ultimate holdings in 
Prismanet to 22.5%.
   
   In August 1997, the Company completed the Pakistan Bridge Facility with TDI
and VCFC, whereby the Company received written commitments from these and
certain other stockholders of the Company for an aggregate 


                                     23

<PAGE>

amount of $29 million in exchangeable bridge loans.  The Pakistan Facilities 
comprise: (A) the $22 million PWH Pakistan Facility, and (B) the $7 million 
IWCH Pakistan Facility that is available to the Company for general corporate 
and other purposes.  The PWH Pakistan Facility which was fully drawn in 
August 1997 for the specific purpose of funding the cash portion of the 
purchase price of the Company's investment in Mobilink and the Company's pro 
rata share of the shareholder capital calls and shareholder loans required to 
finance the operations of Mobilink.  The Pakistan Bridge Facility contains 
significant restrictions on the Company's ability to raise additional debt or 
equity financing until all amounts outstanding under the Pakistan Facilities 
are repaid in full.

   SDL has funded its current operating and capital expenditures through 
borrowings under a $7.0 million credit facility from Bank Bira, and $8 
million and $20 million credit facilities from The Toronto-Dominion Bank. In 
addition, IWC China loaned $4.3 million to SDL during the nine month period 
ended September 30, 1997.  SDL continues to require substantial financial 
resources to fund its commitments through 1998. SDL is currently in 
negotiations to finance its operations and capital expenditures with certain 
vendors and financial institutions. The failure of SDL to obtain additional 
financing would have a material adverse effect on its ability to conduct 
business.

   Following a recent review of its investment and operating strategy, the 
Company has decided to focus its resources on developing its larger cellular 
and SMR investments.  As part of this realignment and in order to raise 
additional capital, the Company proposes to sell all or a portion of its 
interests in TeamTalk, Mobilkom and UTS.  The Company anticipates that the 
sale or partial sale of these three investments will occur within the next 12 
months.  However, in part because there exists no public market for the 
Company's ownership interests in these investments, there can be no assurance 
that any of these investments will be sold upon terms acceptable to the 
Company within such time period or at all.
   
    The businesses of the Company's operating companies and other wireless 
projects are capital intensive and will require continuing sources of outside 
financing to fund working capital needs, capital expenditures and other cash 
requirements.  In particular, SDL and Mobisel will require substantial 
additional financing in order to complete planned capital expenditures. 
However, there can be no assurance that the Company's operating companies and 
the other projects will be able to obtain required additional financings on 
acceptable terms or at all, which could have a material adverse effect on the 
Company.  In addition, there can be no assurance that the operating companies 
will be able to pay their indebtedness or other liabilities when due.  See 
"--Additional Factors that May Affect Future Results--Project Level 
Risks--Negative Operating Cash Flow; Dependence on Additional Financing." 

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

    THE COMPANY OPERATES IN A RAPIDLY CHANGING ENVIRONMENT THAT INVOLVES A 
NUMBER OF RISKS, SOME OF WHICH ARE BEYOND THE COMPANY'S CONTROL.  THE 
FOLLOWING DISCUSSION HIGHLIGHTS SOME OF THESE RISKS.  THESE RISKS SHOULD BE 
READ IN CONJUNCTION WITH THE "RISK FACTORS" SECTION INCLUDED IN THE COMPANY'S 
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, AS FILED 
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") ON APRIL 15, 
1997. 

     IN ADDITION, SINCE THE FILING OF SUCH ANNUAL REPORT ON FORM 10-K, THE 
COMPANY HAS UNDERTAKEN A REALIGNMENT OF ITS BUSINESS STRATEGY AWAY FROM ITS 
SMALLER PROJECTS AND HAS DECIDED TO FOCUS ITS RESOURCES TOWARD LARGER-SCALE 
PROJECTS, PARTICULARLY CELLULAR PROJECTS, IN WHICH THE COMPANY DIRECTLY OR 
EFFECTIVELY EXERCISES SIGNIFICANT OPERATIONAL CONTROL.  ACCORDINGLY, THE 
FOLLOWING RISKS SHOULD ALSO BE READ IN LIGHT OF SUCH REVISED BUSINESS 
STRATEGY.

COMPANY LEVEL RISKS

CONTINUING LOSSES; LIMITED OPERATING HISTORY 

The Company has incurred net losses since its inception and had an 
accumulated stockholders' deficit of approximately $73.7 million as of 
September 30, 1997. The Company anticipates that its net losses will increase 
in the foreseeable future, and there can be no assurance as to whether or 
when the Company's operations will become profitable. See "--Results of 
Operations."  The Company has a limited operating history. Since its 
inception in January 1992, the Company's activities have been concentrated 
primarily in the early stage development of its wireless projects, including 
the selection of local partners, the formation of operating companies and the 
pursuit of operating licenses. 

NEGATIVE OPERATING CASH FLOW; DEPENDENCE ON ADDITIONAL FINANCING; NO COMMITMENTS
FOR ADDITIONAL FINANCING


                                     24

<PAGE>

    The Company used cash in operations and investing activities of $73.2 
million for the year ended December 31, 1996, and $51.9 million for the nine 
months ended September 30, 1997, and expects such negative cash flows to 
continue and likely increase in the foreseeable future. Because of such 
negative cash flow and negative working capital and the capital intensive 
nature of the Company's business, the Company will continually require 
additional sources of outside debt and equity financing to fund its working 
capital needs, investments and other cash requirements.  In particular, the 
Company will require additional financing prior to June 30, 1998, to meet 
currently anticipated requirements for working capital and investments in its 
operating companies and other wireless projects. In addition, the Company may 
pursue additional investment opportunities for wireless projects that are 
consistent with the recent realignment of its business strategy and 
anticipates that additional sources of financing would be required in order 
to fund those investments, if any. However, the Company has neither received 
commitments nor completed arrangements for additional financing, and there 
can be no assurance that any additional debt or equity financing will be 
available to the Company on acceptable terms when required by the Company or 
at all. If adequate sources of additional financing are not available, the 
Company may be forced (i) to delay, scale back or eliminate one or more of 
its projects, (ii) to suffer a significant dilution of its equity interest or 
loss of value in one or more of its investments, or (iii) to liquidate one or 
more of its investments.  In addition, the Company may be unable to repay its 
liabilities (including the Notes) as they become due, and may be unable to 
meet its working capital and other cash requirements. Accordingly, the 
Company's inability to obtain such additional financing would have a material 
adverse effect on the Company. In order to secure financing for certain 
operating companies, Vanguard has in the past provided certain guarantees on 
behalf of the Company. However, Vanguard is not obligated to provide such 
guarantees and there can be no assurance that Vanguard will continue to 
provide such guarantees in the future, which could have a material adverse 
effect on the Company.

SUBSTANTIAL LEVERAGE

    The Company is highly leveraged and has indebtedness that is substantial 
in relation to its stockholders' equity, including its redeemable convertible 
Preferred Stock. As of September 30, 1997, the Company's long term debt was 
$110.4 million, and its stockholders' deficit and redeemable convertible 
Preferred Stock were $73.7 million and $104.7 million, respectively. The high 
level of the Company's indebtedness will have important consequences, 
including (i) limitations on the Company's ability to obtain additional debt 
financing in the future and (ii) limitations on the Company's flexibility in 
reacting to changes in the industry and economic conditions generally.  In 
addition, most of the existing operating companies and other wireless 
projects will not be subject to any limitations restricting the incurrence of 
additional indebtedness, and, to the extent that the Company is successful in 
its strategy of obtaining additional financing at the operating company or 
other wireless project level, the amount of such indebtedness could increase 
substantially, which may have consequences similar to those described in 
clauses (i) and (ii) above with respect to the Company. 

RISK OF INABILITY TO REPAY NOTES AT MATURITY

    The Company has had net losses and has generated negative cash flow from 
operations since inception.  Further, as discussed below under "--Holding 
Company Structure; Limitations on Access to Cash Flow of Operating 
Companies," the Company does not expect that it will generate positive cash 
flow through dividends or other distributions from its operating companies 
for the foreseeable future. Accordingly, the Company's ability to repay the 
Notes and any other indebtedness which it may incur from time to time at 
maturity will be dependent on developing one or more sources of financing 
prior to the maturity of such indebtedness. The Company may, among other 
things, (i) seek to refinance all or a portion of such indebtedness at 
maturity through sales of additional debt or equity securities of the Company 
or other borrowings, (ii) seek to sell all or a portion of its interests in 
one or more of its operating companies or other wireless projects (subject to 
the restrictions described below under "--Company Level Risks--Restrictions 
on Transfer of Ownership Interests") or (iii) negotiate with its financial 
and strategic partners to permit the cash, if any, produced by the operating 
companies to be distributed to equity holders. There can be no assurance that 
the Company will be successful in achieving any of the foregoing alternatives.


                                     25

<PAGE>

In addition, a default under the Notes or such other indebtedness as the 
Company may incur in the future, for example, could in turn permit lenders 
under Prismanet's Malaysian RM 91 million (approximately $28 million at 
September 30, 1997) senior credit facility, and possibly under other debt 
instruments of the operating companies, to declare borrowings outstanding 
thereunder to be due and payable pursuant to cross-default clauses, 
permitting the lenders under such debt instruments to proceed against any 
collateral pledged as security therefor. Any failure by the Company to repay 
the Notes when due would have a material adverse effect on the Company.

RISK OF GOVERNMENTAL ACTIONS RESULTING IN VIOLATION OF INDENTURE

    The Indenture pursuant to which the Notes were issued, contains covenants 
that impose certain requirements with respect to sales or other dispositions 
of assets with a fair market value in excess of $500,000 (including capital 
stock in operating companies and in other wireless projects) by the Company 
and certain subsidiaries of the Company ("Asset Sales"). Among other things, 
the Indenture requires that at least 85% of the consideration for an Asset 
Sale be in cash and that the Company receive consideration equal to the fair 
market value of the assets in question. However, if an Asset Sale occurs 
because of governmental action (for example, by expropriation or 
confiscation), or in certain other circumstances including, among other 
things, a sale of the Company's investment in certain operating companies 
compelled by other stockholders of such operating company or pursuant to 
rights granted to certain bank lenders of certain operating companies, the 
requirement that the Company receive fair market value for the assets shall 
be deemed to have been satisfied to the extent that the difference between 
the fair market value of such assets and the actual consideration received in 
such Asset Sale (and all other Asset Sales subject to this exception) is less 
than 10% of the "total market value of equity" of the Company. However, if an 
Asset Sale is compelled by governmental action, the Indenture still requires 
that at least 85% of the consideration be in cash. 

    In certain of the countries in which the Company has made investments, 
there is a risk that the Company's investments may be confiscated or 
expropriated by governmental authorities. See "--Project Level Risks--Risks 
Inherent in Foreign Investment." To the extent that the consideration, if 
any, received by the Company in connection with these expropriations or 
confiscations failed to satisfy the covenants under the Indenture, such a 
violation will be deemed an event of default under the Indenture entitling 
the holders of the Notes to demand immediate repayment thereof and to proceed 
against their collateral, which would have a material adverse effect on the 
Company. 

HOLDING COMPANY STRUCTURE; LIMITATIONS ON ACCESS TO CASH FLOW OF OPERATING 
COMPANIES

    IWCH is a holding company with no business operations of its own. All of 
the operations of IWCH are conducted through its wholly owned subsidiary, 
IWC, and its affiliated companies, which are separate and distinct legal 
entities and have no obligation, contingent or otherwise to make any funds 
available to IWCH to enable it to make investments in operating companies or 
other wireless projects, meet working capital needs or other liabilities of 
IWCH (including liabilities under the Notes), or for any other reason. In 
addition, most of the operating companies have generated negative cash flow 
from operations, and the Company expects that most operating companies will 
continue to generate negative cash flow from operations for the foreseeable 
future. Further, to the extent that any of the operating companies generates 
positive cash flow, the Company may be unable to access such cash flow 
because (i) it owns 50% or less of the equity of most of such entities and, 
therefore, does not have the requisite control to cause such entities to pay 
dividends to their equity holders; (ii) 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 such entities are likely 
to continue to be subject to such restrictions and prohibitions for the 
foreseeable future; (iii) the Company expects that its operating companies 
will generally reinvest all of their cash flow in development opportunities 
for the foreseeable future; and/or (iv) some of the countries in which such 
entities conduct business, tax the payment and repatriation of dividends or 
otherwise restrict the repatriation of funds. As a result, the Company does 
not expect that it will be able to generate any significant cash flow through 
dividends or other distributions from the operating companies in the 
foreseeable future, and there can be no assurance that the Company will be 
able to generate any significant cash flow from the operating companies at 
any time in the future. 

RESTRICTIONS ON TRANSFER OF OWNERSHIP INTERESTS

                                     26

<PAGE>

    The Company's ability to sell or transfer its ownership interests in its 
operating companies and other wireless projects (i) is generally subject to 
limitations contained in the agreements between the Company and its local 
partners including, in certain cases, complete prohibitions on sales or 
transfers for a period of years, co-sale rights and/or rights of first 
refusal and (ii) may be subject to provisions in local operating licenses and 
local governmental regulations that, in certain cases, prohibit or restrict 
the transfer of the Company's ownership interests in such operating companies 
and other wireless projects. Moreover, the Company and its local partners 
have in the past been required to pledge their capital stock in certain 
operating companies to secure credit facilities obtained by those operating 
companies, and the Company may be prohibited from transferring or otherwise 
disposing of such capital stock so long as it is pledged as collateral for 
those credit facilities. In addition, none of the operating companies or 
other wireless projects currently has any publicly traded securities and 
there can be no assurance that in the future there will be either a public or 
private market for the securities of the Company's operating companies or 
other wireless projects. As a result, the Company's ability to liquidate any 
or all of its investments may be substantially limited and there can be no 
assurance that the Company will be able to do so in a timely manner, or at 
all in the event that the Company is required to do so in order to satisfy 
its cash needs, including providing funds for investments and repayment of 
indebtedness. Moreover, even if any sales are completed, the prices realized 
on those sales could be less than the Company's investment, and there may be 
substantial local taxes imposed on the Company in the case of any such sales 
and, in any event, there can be no assurance that there will not be 
substantial taxes or other restrictions on the ability of the Company to 
repatriate any amounts realized upon the sale of any such investments. In 
addition, certain of the operating companies and other wireless projects are 
or may be parties to credit agreements that restrict their ability to pay 
dividends or make other distributions to their equity investors, and the 
Company's local partners, by virtue of their majority ownership interest in 
the operating companies and other wireless projects, generally have the right 
to determine the timing and amount of any such dividends or distributions. 

LIMITS ON CONTROL OF OPERATING COMPANIES AND OTHER WIRELESS PROJECTS

    Although the Company controls or exerts significant influence over its 
operating companies and other wireless projects, the Company is subject to 
significant contractual, regulatory or other restrictions. In most cases, the 
Company's local partners in the operating companies and other wireless 
projects have veto powers over significant operational, financial and 
management matters that may preclude the Company from controlling or 
directing the operations of such entities and implementing strategies that it 
favors, including strategies involving the expansion or development of 
projects or the pursuit of certain financing alternatives. Moreover, SDL is 
prohibited by Chinese law from operating or managing any of its 
telecommunications ventures in China, which limits its influence over all 
project matters. See "--Project Level Risks--Risks Inherent in Foreign 
Investment". In addition, regardless of whether it holds a majority or 
minority interest, the Company may be unable to access the cash flow, if any, 
of its operating companies and other wireless projects as a result of 
contractual, regulatory and other limitations. See "--Holding Company 
Structure; Limitations on Access to Cash Flow of Operating Companies." 

RISKS INHERENT IN GROWTH STRATEGY

    The Company has grown rapidly since inception, and as of September 30, 
1997, had operating companies or other wireless projects in 11 foreign 
countries. Subject to the availability of additional financing, the Company 
anticipates that it may make additional investments in wireless projects in 
other foreign countries and is actively seeking and evaluating new investment 
opportunities in foreign countries where it currently has operating companies 
or other wireless projects. This strategy raises risks inherent in assessing 
the value, strengths and weaknesses of development opportunities, in 
evaluating the costs and uncertain returns of building and expanding the 
facilities for operating systems and in integrating and managing the 
operations of additional operating systems. The Company's growth strategy 
will place significant demands on the Company's operational, financial and 
marketing resources and on its management. Any failure to manage the Company 
effectively could have a material adverse effect on the Company. 

RISK OF REGISTRATION UNDER INVESTMENT COMPANY ACT OF 1940

    Because the Company often acquires minority ownership positions in
operating companies and development stage projects, there is a risk that these
ownership positions could be deemed to be investment securities and that the
Company could be characterized as an investment company under the Investment
Company Act of 1940 (the "Investment Company Act"). Due to the Company's active
role in developing and managing the operating companies and its contractual
rights as an equity holder, the Company believes that a substantial majority of
its interests in the 

                                     27

<PAGE>

operating companies are the equivalent of joint venture interests rather than 
investment securities. Therefore, the Company believes that it is not an 
investment company and intends to continue its business and conduct its 
operations so as not to become subject to the Investment Company Act. If the 
Commission or its staff were to take the position, or if it were otherwise 
asserted, that the Company is an investment company, the Company could be 
required either (i) to liquidate its investments in one or more operating 
companies or other wireless projects and change the manner in which it 
conducts its operations to avoid being required to register as an investment 
company or (ii) to register as an investment company. If the Company were 
required to register under the Investment Company Act, it would be subject to 
substantial regulations with respect to capital structure, operations, 
transactions with affiliates and other matters. In addition, a determination 
that the Company is subject to the Investment Company Act would constitute an 
event of default under the Indenture and permit acceleration of the Notes. If 
the Company were found to be an investment company but was not registered 
under the Investment Company Act, the Company would be prohibited from, among 
other things, conducting public offerings in the U.S. or engaging in 
interstate commerce in the U.S., the Company would be subject to monetary 
penalties and injunctive relief in an action brought by the Commission, and 
certain contracts to which the Company is a party (including the Indenture 
and the Notes) might be rendered unenforceable or subject to rescission by 
any party thereto. As a result, any determination that the Company is an 
investment company would have a material adverse effect on the Company and 
would likely require that the Company cease operations.

CONTROL OF THE COMPANY

    At September 30, 1997, Vanguard beneficially owned approximately 36.1% of 
the Company's equity.  Vanguard has provided and continues to provide a 
number of services to the Company relating to the formation, development and 
operation of wireless communications services, including identification and 
evaluation of wireless communications opportunities, review of business and 
technical plans and assistance in training operating company personnel.  
Vanguard has the right to elect three of the ten members of the Company's 
Board of Directors and currently has three representatives on such Board, 
including Haynes G. Griffin, Chairman of the Board of Directors. As a result, 
Vanguard may have the ability to effectively control the Company and direct 
its business and affairs. In addition, such concentration of ownership may 
have the effect of delaying or preventing a change in control of the Company. 

CONFLICTS OF INTEREST

    Vanguard is not precluded from competing with the Company by itself or 
through affiliates from developing, owning and/or operating international 
wireless communications businesses, including businesses that use the same or 
similar technologies or provide the same services as the Company's existing 
and future operating companies. This is true even though the Company acquired 
substantially all of Vanguard's interests in its international wireless 
projects in December 1995. Further, although many of the agreements governing 
the relationship between the Company and its local partners contain 
preemptive rights, rights of first refusal and/or rights of co-sale with 
respect to the sale of shares in the Company's joint ventures, Vanguard is 
not precluded from co-investing with the Company in such joint ventures. For 
example, in April 1997, Vanguard purchased a 7% equity interest in SDL 
directly from STHL, the Company's local partner in SDL, and in August 1997, 
Vanguard co-invested with the Company in Mobilink and acquired a 6% indirect 
equity interest in Mobilink.

    In addition, in May 1997, the Company and Vanguard consummated a 
transaction, pursuant to which Vanguard surrendered warrants to purchase 
shares of Preferred Stock of the Company in exchange for the issuance of a 
warrant to purchase Common Stock of the Company at $0.25 per share issued to 
Vanguard and options to purchase Common Stock of the Company at $9.375 per 
share issued to various members of the management of Vanguard, including two 
individuals who currently serve as directors of the Company (the "Vanguard 
Warrant/Option Exchange").  In addition, Vanguard has in the past provided 
certain guarantees of indebtedness of operating companies on behalf of the 
Company. In particular, in September 1997, Vanguard provided a guarantee of 
certain indebtedness of SDL on behalf of IWC China and received a warrant to 
purchase 68,819 shares of the Company's Common Stock as consideration for 
such guarantee.  Although the directors designated by Vanguard may abstain 
from voting on matters in which the interests of the Company and Vanguard are 
in conflict, they are not obligated to do so, and the Company has not adopted 
any formal policies or procedures designed to prevent actual conflicts of 

                                     28

<PAGE>

interest from occurring. As a result, the presence of potential or actual 
conflicts could affect the process or outcome of Board deliberations. There 
can be no assurance that such conflicts of interest will not materially 
adversely affect the Company. Further, other stockholders of the Company and 
their affiliates have engaged, or may in the future engage, in transactions 
with the Company or its operating companies or other wireless projects and 
participate in wireless communications businesses that are competitive with 
those of the Company.

DEPENDENCE ON KEY PERSONNEL

    The success of the Company and its growth strategy depends in large part 
on the ability of the Company to attract and retain key management, marketing 
and operating personnel at each of the Company, operating company and other 
wireless project levels. There can be no assurance the Company will be able 
to attract and retain the qualified personnel needed for its business, 
particularly because of the amount of international travel required of the 
Company's managers and because experienced local managers are often 
unavailable. In addition, the loss of the services of one or more members of 
its senior management team, particularly John D. Lockton or Hugh B. L. 
McClung, could have a material adverse effect on the Company. The Company 
does not have any key man life insurance on any of its executive officers.


                                     29

<PAGE>

REPORTING STANDARDS; FINANCIAL STATEMENTS OF OPERATING COMPANIES; TIMELY
COMPLIANCE WITH INFORMATIONAL AND FILING REQUIREMENTS

    Companies in developing countries are subject to accounting, auditing and 
financial standards and requirements that differ, in some cases 
significantly, from those applicable to U.S. companies. In addition, there 
may be substantially less publicly available information about companies in a 
developing country than there is about U.S. companies. The Company's ability 
to comply with the informational and filing requirements of the Indenture and 
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to 
which it is or will be subject will depend on the timely receipt of accurate 
and complete financial and other information from the Company's operating 
companies and other wireless projects. The failure to receive such 
information on a timely basis could have a material adverse effect on the 
Company, including preventing it from satisfying the informational and filing 
requirements of the Indenture and the Exchange Act. 

RISK OF INABILITY TO FINANCE A CHANGE OF CONTROL OFFER

    Upon the occurrence of a Change of Control (as defined in the Indenture 
to include (i) a sale or transfer by the Company or a Restricted Subsidiary 
(as defined in the Indenture) of all or substantially all of its assets; (ii) 
the adoption of a plan of liquidation; (iii) the acquisition of greater than 
50% of the voting power by an entity other than Vanguard or (iv) upon the 
change of a majority of the Board of Directors), the Company will be required 
to make an offer to purchase all of the outstanding Notes at the price set 
forth in the Indenture. The Company's failure to purchase the Notes would 
result in a default under the Indenture. In the event of a Change of Control, 
there can be no assurance that the Company would have sufficient assets to 
satisfy all of its obligations under the Indenture. Future debt of the 
Company may also contain prohibitions of certain events or transactions which 
would constitute a Change of Control or require the obligations thereunder to 
be retired upon a Change of Control. 

NO CASH DIVIDENDS ON COMMON STOCK

    The Company is prohibited under the terms of the Indenture from paying 
dividends or making other distributions with respect to the Company's capital 
stock, including the Common Stock while the Notes are outstanding. The 
Company anticipates that all earnings, if any, will be retained for the 
operation and expansion of the Company's business. 

RISKS INHERENT IN GROWTH STRATEGY

The Company has grown rapidly since its inception and, as of September 30, 
1997, had operating companies or other wireless projects in 11 foreign 
countries. Subject to the availability of additional financing, the Company 
may make additional investments in wireless projects in other foreign 
countries. This strategy entails risks inherent in assessing the value, 
strengths and weaknesses of development opportunities, in evaluating the 
costs and uncertain returns of building and expanding the facilities for 
operating systems and in integrating and managing the operations of 
additional operating systems. The Company's growth strategy will place 
significant demands on the Company's operational, financial and marketing 
resources and on its management. Any failure to manage the Company 
effectively could have a material adverse effect on the Company.


                                     30

<PAGE>

PROJECT LEVEL RISKS

OPERATING LOSSES AND NEGATIVE CASH FLOW; DEPENDENCE ON ADDITIONAL 
FINANCING/CAPITAL

    In the past, each of the Company's operating companies have generated 
operating losses and negative cash flow from operations, and the Company 
expects that certain of its operating companies will continue to generate 
operating losses and negative cash flow from operations for the foreseeable 
future. The business of the operating companies and other wireless projects 
is capital intensive and, in light of such anticipated negative cash flow 
from operations, will require continuing sources of outside financing to fund 
working capital needs, capital expenditures and other cash requirements. The 
Company's strategy is to seek such additional financing at the operating 
companies primarily from third parties and not from the Company or its 
partners. However, there can be no assurance that the operating companies and 
other wireless projects will be able to obtain the financing required to make 
planned capital expenditures, provide working capital or meet other cash 
needs. Failure to obtain such financing could have a material adverse effect 
on the Company and, among other things, could result in the loss or 
revocation of licenses held by the operating companies or other wireless 
projects or require that certain planned projects be delayed or abandoned. In 
particular, at September 30, 1997 a significant portion of the Company's 
investments had been made in six operating companies (namely Via 1, which is 
developing a regional SMR system in Brazil; Prismanet, which is developing a 
national WLL system in Malaysia; TeamTalk, which is developing a nationwide 
SMR system in New Zealand; Mobisel, which is developing a national cellular 
system in Indonesia; SDL, which is developing various regional cellular 
systems in China; and Mobilink, which is developing a national cellular 
system in Pakistan), and each of these operating companies will be required 
to obtain substantial additional financing in order to complete planned 
capital expenditures required to achieve their respective business plans. 

    The failure of the operating companies and other wireless projects to 
obtain additional financing could have a material adverse effect on the 
Company and, among other things, could result in the loss or revocation of 
licenses held by certain of the such operating companies and other wireless 
projects, require that certain planned projects be delayed, scaled back or 
abandoned, delay or prevent growth in subscriber levels and harm 
relationships with local partners. For example, SDL currently requires 
substantial additional capital to build out its network and make required 
payments. The failure to obtain such capital could delay growth in adding 
subscribers and result in the loss of SDL's right to cooperate with its local 
partners in one or more of the seven provinces targeted by SDL or the Beijing 
municipality. Moreover, Mobisel currently lacks sufficient financing to 
purchase required handsets and build out its network. The failure to obtain 
such financing could result in the merger, sale or liquidation of Mobisel. 

    In most cases, under agreements with its local partners, the Company and 
its partners may be required to make additional equity investments in 
operating companies or other wireless projects, and the Company's or such 
partners' inability or unwillingness to do so could result in the dilution of 
such party's equity interest or a significant impairment or loss of the value 
of the Company's investment. Moreover, the Company and its other strategic 
partners have in the past been required, and in the future likely will be 
required, to guarantee and/or pledge their respective equity interests to 
secure certain indebtedness of the operating companies and other wireless 
projects and otherwise to provide certain assurances to lenders. See 
"--Liquidity and Capital Resources." The Indenture contains certain 
restrictions on the ability of the Company to make investments in, or 
guarantee the indebtedness of, the operating companies and other wireless 
projects. 

    In addition, there can be no assurance that the operating companies or 
other wireless projects will be able to pay their indebtedness or other 
liabilities when due. Any failure to pay such indebtedness or other 
liabilities when due could have a material adverse effect on the Company. See 
"--Company Level Risks--Negative Operating Cash Flow; Dependence on 
Additional Financing; No Commitments For Additional Financing" below. 
Moreover, to date, most of the debt financing obtained by the operating 
companies has been secured by assets of the respective operating companies, 
and it is likely that any debt financing the operating companies or other 
wireless projects obtain in the foreseeable future will also be similarly 
secured. The pledge of assets to secure debt financing may limit the 
operations of the operating companies and make it substantially more 
difficult to obtain additional financing from other sources. 


                                     31

<PAGE>

DEPENDENCE ON LOCAL ECONOMIES; INFLATION; CURRENCY DEVALUATIONS AND 
FLUCTUATIONS

The Company's operating companies are dependent, in large part, on the 
economies of the developing countries in which they have operations. Many 
developing countries have experienced substantial, and in some periods 
extremely high, rates of inflation and resulting high interest rates for many 
years, as well as significant fluctuations in their exchange rates. For 
example, several Latin American countries, including Brazil, experienced 
extremely high rates of inflation in 1993 and 1994. Recently, many of the 
currencies of developing countries have experienced steady devaluations of 
their currencies relative to the U.S. dollar. For example, since mid-1997, a 
number of currencies of Southeast Asian countries, including Indonesia, have 
experienced dramatic declines in their exchange rates relative to the U.S. 
dollar. Such inflation, fluctuations and devaluations have had, and may 
continue to have, significant negative effects on the economies and 
securities markets of developing countries, including rapid increases in 
interest rates, limited credit availability and solvency problems experienced 
by many companies and banks with U.S. dollar-denominated loans. Developments 
such as these could result in higher unemployment and slower economic growth 
in the countries in which the Company's operating companies do business, 
which in turn could have a material adverse effect on such operating 
companies, including an adverse effect on their subscriber levels and on 
their ability to obtain financing. Because tariffs in many of the countries 
in which Company's operating companies operate are regulated, certain 
operating companies may often be unable to increase tariffs in response to 
inflation or currency devaluations, which could have a material adverse 
effect on the results of operations of such operating companies. Revenues 
generated by the Company's operating companies are generally paid in the 
local currency. By contrast, many significant liabilities of such operating 
companies (such as liabilities for the financing of telecommunications 
equipment) are payable in U.S. dollars. As a result, any devaluation in the 
local currency relative to the U.S dollar could have a material adverse 
effect on such operating companies and the Company. For example, in 
Indonesia, a substantial part of Mobisel's debt is U.S. dollar denominated. 
Unless the Indonesian government allows a tariff increase, Mobisel could 
experience difficulties in servicing the debt, which could have a material 
adverse effect on Mobisel and the Company. 

    The U.S. dollar-denominated value of the Company's investment in its 
operating companies and other wireless projects is partially a function of 
the currency exchange rate between the U.S. dollar and the applicable local 
currency. In addition, such operating companies and other wireless projects 
will report their results of operations in the local currency and, 
accordingly, the Company's results of operations may be adversely affected by 
changes in currency exchange rates between those currencies and the U.S. 
dollar. In general, the Company does not hedge against foreign currency 
exchange rate risks. As a result, the Company may experience economic loss 
with respect to its investments and fluctuations in its results of operations 
solely as a result of currency exchange rate fluctuations. The Company does 
not carry currency convertibility risk insurance.

EARLY STAGE OF DEVELOPMENT OF WIRELESS PROJECTS

    Although the Company's operating companies currently provide wireless 
communications services on a commercial basis, they are in the early stage of 
operations, have a limited number of subscribers and are expected to incur 
losses for a substantial period of time. The successful development and 
commercialization of each of the Company's operating companies and other 
wireless projects will depend on a number of significant financial, 
logistical, technical, engineering, marketing, administrative, regulatory and 
other factors, the outcomes of which cannot be predicted.  For example, 
Prismanet, the Company's Malaysian WLL operating company, experienced 
significant delays in network deployment and its marketing plans in 1996 
primarily as a result of adverse effects on Prismanet of an attempt by the 
Malaysian government to consolidate the Malaysian telecommunications 
industry. See "--Risks Inherent in Foreign Investment." As a result, the 
Company and its principal strategic partner in Prismanet extensively reviewed 
and revised Prismanet's business plan and strategy. Pursuant to this revised 
business plan, Prismanet applied for an allocation of additional spectrum 
from the Malaysian regulatory authorities in early 1997.  However, Prismanet 
was recently informed that it would not receive such spectrum allocation in 
the foreseeable future, and the management of Prismanet has undertaken a 
second review of its business plan and strategy.  Primarily as a result of 
the foregoing, which the Company believes has significantly diminished 
Prismanet's business prospects and, consequently, the value of the Company's 
investment in Prismanet, the Company recorded a significant write-down of its 
investment in Prismanet during the quarter ended September 30, 1997.  

RISKS INHERENT IN FOREIGN INVESTMENT

    The Company has invested substantially all of its resources outside of 
the U.S. and plans to continue to invest substantially all of its resources 
outside of the U.S. in the future. Governments of many developing countries 
have exercised and continue to exercise substantial influence over many 
aspects of the private sector. In some cases, the government owns or controls 
(i) companies that are or may in the future become competitors of the Company 
or (ii) companies (such as national telephone companies) upon which the 
operating companies and other wireless projects may depend for required 
interconnections to wireline telephone networks and other essential services, 
such as the leasing of lines. For example, foreign ownership or operation of 
telecommunications ventures is prohibited in China and is limited in 
Indonesia. In China and Brazil, in many cases joint venture and shareholder 
agreements have not been prepared or signed and/or definitive legal entities 
have not been formed. For example, SDL is cooperating with its local partners 
in seven provinces and one municipality to construct cellular networks. In 
four of such provinces, definitive joint venture entities have not been 
formed and SDL is operating under cooperative agreements with its partners 
that are not likely to be enforceable under current Chinese law. In the three 
provinces where definitive joint venture entities have been formed or are in 
the advanced stages of formation, all of the operating permits and other 
requisite governmental approvals have not yet been received and the validity 
of the definitive joint venture structural model has not been tested.  
Accordingly, there can be no assurance that the agreements based on this 
model will be legally enforceable. 

                                     32

<PAGE>

Further, in Brazil, although the Company and one local partner have entered 
into a shareholders' agreement for the formation and corporate governance of 
Via 1, the initial capitalization of Via 1 has not yet been completed.  In 
addition, although Via 1 is using the licenses held by the Company and its 
local partners, formal operating agreements to permit the use of such 
licenses have not yet been executed.

    Government actions in the future could have a significant adverse effect 
on economic conditions in a foreign country or may otherwise have a material 
adverse effect on the Company and its operating companies and other wireless 
projects. Expropriation, confiscatory taxation, nationalization, political, 
economic or social unrest or instability or other developments in foreign 
countries could materially adversely affect the value of the Company's 
interests in its operating companies and other wireless projects in 
particular developing countries. For example, from January 1995 to January 
1997, the government of Pakistan shut down all cellular services in the city 
of Karachi, which forced Mobilink to cease its operations in that city. The 
shutdown ordered by the Pakistani government contributed to significantly 
slower growth in Mobilink's subscriber base during the two-year shut down. 
Also, in early 1996 in Malaysia, the Malaysian government announced a program 
designed to consolidate the Malaysian telecommunications industry which, if 
completed, would have forced the sale or merger of Prismanet, the Company's 
Malaysian operating company, to one of a limited number of surviving 
telecommunications companies. Although the Malaysian government subsequently 
announced that it did not intend to proceed with this program, the activities 
of the Malaysian government in connection with such program resulted in 
significant delays in Prismanet's network deployment, marketing plans and 
subscriber growth. There can be no assurance that other countries where the 
Company has operating companies and other wireless projects will not impose 
similar restrictions or initiate similar programs in the future. The 
imposition of any such restriction or initiation of any such program could 
have a material adverse effect on the Company. The Company does not have 
political risk insurance in the countries in which it currently conducts 
business.

    Although there are no laws, regulations or binding judgments in Pakistan 
that bar a lender's right to receive interest from a borrower under a debt 
obligation, a constitutionally established body in Pakistan has voided a 
number of statutory provisions which it determined violated Islamic 
principles relating to riba (an Islamic term analogous to interest). This 
determination is being appealed and reviewed in the courts in Pakistan. If 
the determination that interest is contrary to Islamic principles is upheld, 
ordinary civil courts in Pakistan might be persuaded to void contracts 
pertaining to interest payments on moneys borrowed, including such contracts 
made by the Government of Pakistan. This would result in substantial economic 
disruption and could have a material adverse effect on the Pakistani economy, 
Mobilink and the Company, including the unavailability to Mobilink of 
financing from foreign lenders. There can be no assurance that the appeal or 
review petition will be successful.

    Finally, many of the agreements the Company enters into in connection 
with its operating companies and other wireless projects are governed by the 
laws of, and are subject to dispute resolution in the courts of, or through 
arbitration proceedings in, the country, province or state in which the 
operating companies and other wireless projects are located. The Company 
cannot predict whether such forums will provide it with an effective and 
efficient means of resolving disputes that may arise in the future. Moreover, 
even if the Company is able to obtain a satisfactory decision through 
arbitration or a court proceeding, there can be no assurance of the 
enforcement of the award or judgment, and the Company's ability to obtain or 
enforce relief in the U.S. is uncertain.

TECHNOLOGICAL RISK; RISK OF OBSOLESCENCE

Although the Company's operating companies currently use well-established 
technologies, they may in the future deploy advanced technologies that may 
only recently have been developed and commercially introduced. There can be 
no assurance that these operating companies will not experience technical 
problems in the commercial deployment of any such advanced technologies, 
particularly if they are initially introduced in developing countries. In 
addition, the technologies used in wireless communications are evolving 
rapidly and one or more of the technologies currently utilized or planned by 
the Company to be utilized may, when deployed, be poorly received by its 
customers or may become obsolete, which, in either case, would likely have a 
material adverse effect on the Company. There can be no assurance that the 
Company will be able to keep pace with ongoing technological changes in the 
wireless telecommunications industry. Any technical problems or obsolescence 
could have a material adverse effect on the Company.


                                     33

<PAGE>

RISKS ASSOCIATED WITH LICENSES

    The ability of the Company's operating companies or their local partners 
to retain and utilize their respective telecommunications licenses, to renew 
such licenses when they expire and to obtain new licenses in the future is 
essential to the Company's operations. However, there can be no assurance 
that governmental agencies will not seek to unilaterally limit, revoke or 
otherwise adversely modify the terms of these licenses in the future, any of 
which could have a material adverse effect on the Company. The Company may 
have limited or no legal recourse if any of these events were to occur. See 
"--Risks Inherent in Foreign Investment." In the future, additional licenses 
may be sought to expand operations, and no assurance can be given that any 
such licenses will be obtained. In addition, certain of the licenses will 
automatically revert back to the government after a specified period of time, 
and there can be no assurance that renewals to these and the other licenses 
will be granted or, if renewed, that the renewal terms will not be 
substantially less favorable to the Company than the original license terms, 
any of which could have a material adverse effect on the Company. Moreover, 
the transfer of licenses often requires the approval of governmental 
entities. For example, the Brazilian government has not approved the transfer 
to Via 1 of entities holding licenses contributed or to be contributed to it 
by its current and proposed shareholders, and there can be no assurance that 
such approval will be obtained. The failure to obtain such approvals, and 
other approvals, licenses and/or renewals could, have a material adverse 
effect on the Company. 

    Additionally, because foreign ownership of telecommunications ventures is
prohibited in China, SDL is not itself the holder of any telecommunications
licenses, and is therefore dependent on its local partners to obtain, retain and
renew the licenses necessary for the commercial operations of SDL's cellular
networks. In addition, the cooperative joint ventures being formed between SDL
and SDL's local partners to build local cellular networks will generally have a
term of 20 years, at the end of which the cooperative joint ventures will be
terminated. Any failure by the relevant Chinese parties to obtain, retain or
renew such licenses and joint venture arrangements could have a material adverse
effect on SDL and the Company. To the extent the Company's operating companies
and other wireless projects require additional licenses to expand their
respective businesses, they may be forced to participate in competitive bidding
processes or to purchase licenses from other license holders at higher prices
than may have historically been paid. 

    Furthermore, relevant governmental authorities may grant additional 
telecommunications licenses, possibly on better terms, covering the same 
geographical areas as the operating companies' or other wireless projects' 
licenses or otherwise grant licenses which allow other companies to compete 
directly with the operating companies and other wireless projects for 
wireless subscribers. Although the inherent limitation on suitable frequency 
bands may provide some protection against the issuance of competing licenses, 
there can be no assurance that such competitive licenses will not be granted 
or, if granted, that they will not have a material adverse effect on the 
Company. For example, the Pakistan Telecommunications Authority (the "PTA"), 
which regulates the provision of telecommunications services, has the 
authority to grant a GSM license to Pakistan Telecommunications Company 
Limited, the current provider of national wireline services. 

    Many of the licenses granted to the Company's operating companies and 
other wireless projects contain significant restrictions and other 
requirements, including those relating to geographic coverage, network 
capacity, technology, interconnection to the public wireline network, 
attainment of minimum subscriber levels, network construction and commercial 
operation deadlines and the local manufacturing of equipment. Failure to 
comply with these restrictions and other requirements may result in the loss, 
revocation or restriction of the licenses, penalties or increased costs. 
Moreover, certain of the Company's operating companies and other wireless 
projects have in the past failed to comply or may presently not be in 
compliance with certain restrictions and other requirements. In Brazil, for 
example, the Company and its proposed partners were unable to comply with 
operations commencement deadlines with respect to their licenses and, as a 
result, were required to obtain extensions of such deadlines. Although such 
failures have not to date led to the loss of any licenses, there can be no 
assurance that the relevant governmental authorities will not seek to revoke 
licenses as a result of these past defaults or refuse to grant further 
deadline extensions, which could have a material adverse effect on Via 1 and 
the Company. In addition, Mobilink may currently be in technical violation of 
certain requirements of its license relating to network capacity and local 
handset manufacturing. There can be no assurance that the Mobilink license 
will not be unilaterally revoked for any


                                     34

<PAGE>

such violations of the terms of its license, which revocation would have a 
material adverse effect on Mobilink and the Company.

SUBSTANTIAL LEVERAGE

    Pursuant to the Company's strategy of financing with debt at the project 
level where possible, most of the operating companies have substantial 
indebtedness and, to the extent that additional debt financing is available, 
may in the future incur substantial additional indebtedness, in relation to 
its base of equity capital. Such indebtedness has important consequences to 
the future operations of such operating companies, including that: (i) such 
operating companies will have significant cash requirements to service debt, 
reducing funds available for operations and future business opportunities and 
increasing the vulnerability of the operating companies to adverse general 
economic and industry conditions; (ii) the operating companies may be 
restricted in the future from obtaining additional financing, whether for 
future working capital, additional capital expenditures or other general 
corporate purposes; (iii) the operating companies' high level of indebtedness 
may adversely impact their flexibility in planning for, or reacting to, 
changes to their businesses and market conditions and their ability to 
compete with less highly leveraged competitors; and (iv) the operating 
companies may be restricted in their ability to pay dividends or make other 
distributions to the Company. There can be no assurance that the operating 
companies will be able to pay their indebtedness or other liabilities when 
due. Any failure to pay such indebtedness or other liabilities when due could 
have a material adverse effect on the operating companies and the Company. 
See "--Project Level Risks--Negative Operating Cash Flow; Dependence on 
Additional Financing."

DEPENDENCE ON OTHER TELECOMMUNICATIONS PROVIDERS

    Just as is the case with cellular operators in the U.S., the success of 
the Company's wireless networks will in many cases depend upon services 
provided by other telecommunications providers, some of which are competitors 
of the Company or its operating companies or other wireless projects. For 
example, interconnection agreements with national or regional telephone 
companies are generally required in order for the wireless networks of the 
Company's operating companies and other wireless projects to interconnect 
with wireline telephone networks, and may require the use of microwave, fiber 
optic or other lines belonging to other parties to link their wireless 
networks. Although a number of operating companies have entered into 
interconnection and/or leased-line agreements or have interconnection and/or 
leased-line arrangements in place, the revocation, loss or modification of 
any of these existing agreements or arrangements or the failure to obtain 
necessary agreements and/or arrangements in the future on reasonable terms, 
could have a material adverse effect on the operating companies and the 
Company. The terms under which the operating companies are currently 
permitted to interconnect with certain other networks, or may be permitted to 
do so in the future, may restrict their ability to exploit significant 
opportunities, or to otherwise manage their respective businesses 
efficiently. For example, Mobilink currently interconnects to the local 
wireline operator in Pakistan pursuant to an oral understanding and does not 
have a written interconnection agreement. While Mobilink is currently 
negotiating a definitive interconnection agreement, there can be no assurance 
that it will be able to do so, or that any interconnection agreement entered 
into will be on reasonable terms. Any failure of Mobilink to continue to have 
access to interconnection would have a material adverse effect on Mobilink 
and the Company. Also, in China, although the Company believes that the 
Ministry of Post and Telecommunications, the principal body responsible for 
regulation of the telecommunications industry and the local exchange provider 
(the "MPT"), supports the construction by SDL and its local partners of 
cellular networks in China, there can be no assurance that such support will 
continue. Any decision by the MPT not to support the development by Star 
Digitel and its local partners of cellular networks would have a material 
adverse effect on Star Digitel and the Company. 

DEPENDENCE ON PARTNERS

    The Company will generally continue to depend on its local partners to 
obtain required licenses in all of its wireless projects. In addition, the 
Company may become dependent on strategic partners with resources beyond 
those of the Company to pursue larger scale projects, including certain WLL 
projects. In WLL projects, the Company may require the participation of a 
larger telecommunications company possessing the substantial capital and 
operating resources required to finance and deploy a WLL system. The failure 
of the Company to identify and enter into relationships with strong partners, 
or the failure of those partners to provide these resources, may have a 
material adverse effect on the Company. 


                                     35

<PAGE>
CONSTRUCTION AND OPERATING RISKS

    The Companies operating companies and other wireless projects typically 
require substantial construction of new wireless networks and additions to 
existing wireless networks. Construction activity requires such operating 
companies and other wireless projects 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 such operating companies 
and other wireless projects or their subcontractors, such as those caused by 
acts of governmental entities, financing delays and catastrophic occurrences. 
Delays can also arise from design changes, material and equipment shortages, 
delays in delivery and the inability to obtain required financing. 
Accordingly, there can be no assurance that the operating companies and other 
wireless projects 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 predicted subscriber growth, contracts, franchises or 
licenses and could have a material adverse effect on the Company.

    In addition, the success of the operating companies and other wireless 
projects will depend on effective and cost-efficient management information, 
billing and collection systems that allow the Operating Companies to send 
bills and collect payments on a timely basis. For example, Mobisel, the 
Company's national cellular project in Indonesia, recently installed a new 
billing and collection system which created a more accurate subscriber 
database. As a result, Mobisel was required to write down a portion of its 
subscriber base. Failure to implement such systems and procedures could 
result, among other things, in substantial amounts of uncollectible accounts 
receivable and inaccurate subscriber records. See "--Risks Associated With 
Licenses."    

CUSTOMER RISKS; SUBSCRIBER FRAUD

    Customer attrition (commonly referred to in the telecommunications 
industry as "churn") results in the loss of future revenue from subscribers 
whose service is disconnected and the inability to recoup any unrecovered 
costs incurred in acquiring the subscriber, typically equipment subsidies and 
dealer commissions. Churn occurs for several reasons, including primarily 
disconnection by a company for non-payment of bills and to a lesser extent 
disconnection by the subscriber who chooses to switch to a competing service 
or terminate service, particularly when two or more vendors offer the same 
wireless service in a single market. The Company expects that as the 
subscriber bases of its operating companies grow and the industry matures, 
the churn rates of the operating companies may increase. The inability of the 
operating companies to maintain their churn at a relatively low level could 
have a material adverse effect on the Company and its operating companies. 
Also, because it may be more difficult for operating companies to ascertain 
the creditworthiness of potential customers, they may experience a higher 
level of bad debt expense than otherwise would be the case. The failure to 
effectively manage customer credit risk would have a material adverse effect 
on the Company. All cellular networks are subject to fraud. Fraud can take 
many forms, including subscribers misrepresenting their backgrounds or 
financial capabilities to obtain cellular service ("subscription fraud"), 
sophisticated technology-based theft of subscriber identification codes for 
use on stolen cellular phones ("cloning") and users employing false 
identification to roam into a network ("roaming fraud"). All types of 
cellular fraud found in the U.S. are found in developing countries. While the 
Company believes it is taking reasonable steps to forestall fraud in its 
networks, there can be no assurance that fraud will not substantially effect 
the revenues or profits of one or more of its operating companies.

COMPETITION

    Although the implementation of advanced wireless technologies is in the
early stages of deployment in most developing countries, the Company believes
that its business will become increasingly competitive, particularly as
businesses and foreign governments realize the market potential of these
wireless technologies. A number of large American, Japanese and European
companies, including U.S.-based regional Bell operating companies ("RBOCs") and
large international telecommunications companies, are actively engaged in
programs to develop and commercialize wireless technologies in developing
counties. In many cases, the Company will also compete against local land-line
carriers, including government-owned telephone companies. Most of these
companies have substantially greater financial and other resources, including
research and development staffs and technical and marketing capabilities than

                                     36

<PAGE>

the Company. Subject to the availability of additional spectrum, the Company 
anticipates that there will be increasing competition for additional licenses 
and increased competition to the extent such licenses are obtained by others. 
Although the Company intends to employ relatively new technologies, there 
will be a continuing competitive threat from even newer technologies which 
may render the technologies employed by the Company obsolete. 

REGULATION

    The Company's operating companies and other wireless projects are 
generally subject to a high degree of regulation by the governments in the 
countries in which they operate. Such regulations are constantly evolving and 
may change significantly over time. Many of the countries in which the 
Company has interests have only recently adopted laws and regulations 
pertaining to telecommunications services, and in many cases these laws and 
regulations are undergoing significant revision and re-evaluation. There can 
be no assurance that material and adverse changes in the regulation of the 
Company's operating companies and other wireless projects will not occur in 
the future. To date, certain operating companies and other wireless projects 
have been subject to regulations in many areas, including with respect to 
restrictions on foreign ownership or operation, service requirements, foreign 
debt registration and approval requirements, restrictions on interconnection 
of wireless systems to government-owned or private telephone networks, 
subscriber rate-setting, technology and construction requirements. As in the 
U.S., these regulations can impose significant restrictions on operations. 
The failure to comply with applicable governmental regulations or operating 
requirements could result in the loss of licenses, limit the ability of an 
operating company or other wireless project to add subscribers or otherwise 
have a material adverse effect on the Company. In addition, delays caused by 
governmental approval or licensing procedures could have a material adverse 
effect on the Operating Companies and the Company. See "--Project Level 
Risks--Risks Inherent in Foreign Investment." To the extent that any of the 
Operating Companies seeks to make a dividend or other distribution to the 
Company, or to the extent that the Company seeks to liquidate its investment 
in an Operating Company and repatriate monies from a relevant country, local 
taxes, foreign exchange controls or other restrictions may effectively 
prevent the transfer of funds to the Company or the exchange of local 
currency for U.S. dollars.
    
FOREIGN CORRUPT PRACTICES ACT

    The Company is subject to the Foreign Corrupt Practices Act ("FCPA"), 
which generally prohibits U.S. companies and their intermediaries from 
bribing foreign officials for the purpose of obtaining or keeping business or 
licenses or otherwise obtaining favorable treatment. Although the Company has 
taken precautions to comply with the FCPA, there can be no assurance that 
such precautions will protect the Company against liability under the FCPA, 
particularly as a result of actions which may in the past have been taken or 
which may be taken in the future by agents and other intermediaries for whose 
actions the Company may be held liable under the FCPA. In particular, the 
Company may be held responsible for actions taken by its strategic or local 
partners even though such strategic or local partners are themselves 
typically foreign companies which are not subject to the FCPA; and the 
Company has no ability to control such strategic or local partners. Any 
determination that the Company has violated the FCPA could have a material 
adverse effect on the Company.

IMPORT DUTIES ON NETWORK EQUIPMENT AND HANDSETS

    The Company's wireless projects are highly dependent upon the successful 
and cost-efficient importation of infrastructure equipment and handsets from 
North America, Europe and Japan. In certain countries in which the Company 
operates, network equipment and handsets are subject to significant import 
duties and other taxes. There can be no assurance that these import duties 
will not increase significantly in the future, which could have a material 
adverse effect on the applicable wireless project.

RADIO FREQUENCY EMISSION CONCERNS

    Certain consumers have alleged that serious health risks have resulted 
from the use of certain mobile communications devices. The actual or 
perceived health risks of mobile communications devices could adversely 
affect mobile communication service providers, including the Company, 
through, among other things, reduced subscriber growth, reduced network 
usage, the threat of product liability suits and limitations on financing.


                                     37

<PAGE>

TAX RISKS

Distributions of earnings and other payments received by the Company from the
Company's operating subsidiaries and affiliates are likely to be subject to
withholding taxes imposed by the jurisdictions in which such entities are formed
or operating. In general, a U.S. corporation may claim a foreign tax credit
against its federal income tax expense for such foreign withholding taxes and
foreign taxes paid directly by corporate entities in which the Company owns 10%
or more of the voting stock. The ability to claim such foreign tax credits and
to utilize net foreign losses is, however, subject to numerous limitations, and
the Company may incur incremental tax costs as a result of these limitations or
because the Company is not in a tax paying position in the U.S. Special U.S. tax
rules apply to U.S. taxpayers that own stock in a "passive foreign investment
company" (a "PFIC") that could also increase the Company's effective rate of
taxation. In general, a non-U.S. corporation will be treated as a PFIC if at
least 75 percent of its income is "passive income" or if at least 50 percent of
its assets are held for the production of "passive income." A non-U.S.
corporation that owns 25 percent or more of the stock of a non-U.S. subsidiary
is treated as receiving a proportionate share of the income of, and as owning a
proportionate share of the assets of, such subsidiary. It is possible that
certain of the Operating Companies are PFICs. Generally, except to the extent
the Company makes an election to treat a PFIC in which it owns stock as a
"qualified electing fund" (a "QEF election") in the first taxable year in which
the Company owns the PFIC's stock, (i) the Company would be required to allocate
gain recognized upon the disposition of stock in the PFIC and income recognized
upon receiving certain dividends ratably over the Company's holding period for
the stock in the PFIC, (ii) the amount allocated to each year other than the
year of the disposition or dividend payment would be taxable at the highest U.S.
tax rate applicable to corporations, and an interest charge for the deemed
deferral benefit would be imposed with respect to the tax attributable to each
year, and (iii) gain recognized upon disposition of PFIC shares would be taxable
as ordinary income. If the Company were to make the QEF election, as described
above, the Company would be required in each year that the PFIC qualification
tests are met to include its pro rata share of the QEF's earnings as ordinary
income and its pro rata share of the QEF's net capital gain as long-term capital
gain, whether or not such amounts are actually distributed. The Company has not
made any QEF elections with respect to any non-U.S. corporation in which it
holds stock. The Company may also be required to include in its income for U.S.
income tax purposes its proportionate share of the earnings of those foreign
corporate subsidiaries that are classified as "controlled" foreign corporations
without regard to whether distributions have been received from such companies.


                                     38

<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS -- Not Applicable.

ITEM 2.  CHANGES IN SECURITIES.

(a), (b) Changes in Rights of Security Holders

(c) Sales of Unregistered Securities During the Three Months Ended 
September 30, 1997

(i) On August 18, 1997, the Company issued and sold an aggregate of 493,510 
shares of Common Stock to IWC for a promissory note in the principal amount 
of $6,159,000.  Such shares were subsequently contributed by IWC to certain 
wholly owned subsidiaries and were eventually transferred to an unrelated 
party as partial payment of the purchase price for the Company's acquisition 
of an interest in Mobilink.

(ii) Also on August 18, 1997, the Company issued warrants to purchase an 
aggregate of 247,756 shares of Common Stock at a strike price of $0.01 per 
share to 31 persons, including TDI, VCFC and other stockholders and service 
providers of the Company, and/or their respective affiliates, in connection 
with the Pakistan Bridge Facility.

(iii) On September 18, 1997, the Company issued warrants to purchase an 
aggregate of 69,601 shares of Common Stock to Vanguard in connection with the 
Vanguard SDL Guarantee.

(iv) On September 24, 1997, the Company issued a warrant to purchase an 
aggregate of 81,982 shares of Common Stock at a strike price of $0.01 per 
share to an unaffiliated third party as payment for the Company's share of a 
finder's fee in connection with its investment in Mobilink.

(v) In connection with the foregoing issuances of warrants to purchase shares 
of the Company's Common Stock, the number of shares issuable upon exercise of 
the Unit Warrants increased from an aggregate of 2,809,746 to an aggregate of 
2,875,169 pursuant to the terms of the Unit Warrants.

The issuances of the Company's securities described in clauses (i) to (iv) 
above were deemed exempt from registration under the Securities Act of 1933, 
as amended (the "Securities Act"), in reliance upon Section 4(2) thereof.  
The recipients of the securities in the transactions described in such 
clauses represented their intentions to acquire such securities for 
investment only and not with a view to or for sale in connection with any 
distribution thereof, and appropriate legends were affixed to the instruments 
evidencing the securities issued in such transactions.  All recipients had 
adequate access, primarily through their relationships with the Company, to 
information about the Company. The issuance of the Company's securities 
described in clause (v) above was deemed exempt from registration because no 
"sale" occurred within the meaning of the Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES -- Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On August 18, 1997, holders of the requisite number of shares of the 
Company's capital stock approved the following matters by written consent in 
lieu of a meeting:

(a) The amendment and restatement of the company's Amended and Restated 
    Certificate of Incorporation to provide, among other things, for the 
    designation of Series G-1, Series G-2, Series H-1 and Series H-2 
    Preferred Stock, including the rights, preferences, privileges and 
    restrictions granted to or imposed upon such series;

(b) A waiver of certain anti-dilution and other rights under the Company's
    Amended and Restated Certificate of Incorporation in connection with the
    transactions effected as part of the Pakistan Bridge Facility;


                                     39

<PAGE>


(c) Certain approvals required pursuant to, waivers of rights contained in and
    amendments to the Series F Purchase Agreement, the Registration Rights
    Agreement and the  Investor Rights Agreement in connection with the
    Pakistan Bridge Facility; and

(d) The reinvestment by the Company of the proceeds from the sale of the 
    Company's 1.56% equity interest in Mobilcom Mexico, which sale was 
    consummated in June 1997.

Holders of 560,640 shares of the Company's Common Stock, representing 67% of 
the then-outstanding shares of Common Stock; 753,200 shares of the Company's 
Series A Preferred Stock, representing 81% of the then-outstanding shares of 
Series A Preferred Stock; 1,229,240 shares of the Company's Series B 
Preferred Stock, representing 100% of the then-outstanding shares of Series B 
Preferred Stock; 1,627,320 shares of the Company's Series C Preferred Stock, 
representing 92% of the then-outstanding shares of Series C Preferred Stock; 
3,301,901 shares of the Company's Series D Preferred Stock, representing 90% 
of the then-outstanding shares of Series D Preferred Stock; 3,972,240 shares 
of the Company's Series E Preferred Stock, representing 100% of the 
then-outstanding shares of Series E Preferred Stock; and 3,439,080 shares of 
the Company's Series F-1 Preferred Stock, representing 76% of the 
then-outstanding shares of Series F-1 Preferred Stock voted in favor of the 
foregoing matters.  No holders of shares of the then-outstanding capital 
stock of the Company voted against the foregoing matters.

ITEM 5.  OTHER INFORMATION -- Not Applicable.


                                     40

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
    
(a) EXHIBITS. 


 EXHIBIT NO.  DESCRIPTION
 -----------  -----------
 2.10A (1)    Share Purchase Agreement between Motorola International
              Development Corporation ("MIDC") and International Wireless 
              Communications Pakistan Limited ("IWCPL"), dated July 17, 1997
 
 2.10B (2)    Share Purchase Agreement between Continental Communications
              Limited ("CCL") and IWCPL, dated July 17, 1997
 
 2.10C (3)    Restated and Amended Shareholders Agreement among MIDC, Saif
              Telecom (Pvt) Ltd ("Saif") and IWCPL, dated August 13, 1997
 
 2.10D (4)    Side Letter regarding Shareholder Obligations among IWCPL, Saif,
              MIDC and Saif, dated August 13, 1997
 
 2.10E (5)    Amended and Restated Shareholders' Agreement among IWCPL,
              Pakistan Wireless Holdings Limited ("PWH"), Vanguard Pakistan, 
              Inc. ("Vanguard Pakistan") and South Asia Wireless Communications
              (Mauritius) Limited ("SAWC"), dated August  13, 1997
 
 2.10F (5)    IWC Group Agreement between PWH and Vanguard Pakistan, dated
              August 13, 1997; Voting Trust Agreement between PWH and 
              Vanguard Pakistan, dated August 13, 1997
 
 2.10G (5)    Deed of Adherence to IWCPL Shareholders Agreement among IWCPL,
              PWH, Vanguard Pakistan and SAWC, dated August 27, 1997
 
 2.10H (6)    License granted to Pakistan Mobile Communications Limited by the
              Government of Pakistan, Ministry of Communications, dated July 
              6, 1992 (the "Mobilink License")
 
 2.10I (5)    Re-validation of the Mobilink License, dated August 9, 1997
 
 2.10J (5)    Letter Agreement Amending the Restated and Amended Shareholders
              Agreement Among MIDC, Saif and IWCPL dated August 1997.
 
10.13G        Amendment Agreement among PT Rajasa Hazanah Perkasa, Nissho 
              Iwai Corporation, PT Bina Reksa Perdana, International Wireless 
              Communications, Inc. ("IWC") and PT Deltonya Satya Dinamika, 
              dated October 29, 1996

10.16F       Deed of Adherence between Star Digitel Limited ("SDL") and IWC
             China Limited ("IWC China"), dated June 18, 1997

10.16G       Bridge Loan Agreement between Star Digitel Limited ("SDL") and the
             Toronto-Dominion Bank ("TD-Bank") dated May 16, 1997 ("SDL Bridge
             Loan Agreement")

10.16H       Pledge Agreement made by IWC in favor of TD-Bank, dated June 5,
             1997

10.16I       Reimbursement Agreement by and among SDL, Star Telecom Holding
             Limited ("STHL") and Vanguard Cellular Financial Corporation
             ("VCFC"), dated May 16, 1997

10.16J       SDL Bridge Loan Agreement Supplement No. 1 between SDL and TD-Bank
             dated September 18, 1997 ("Bridge Loan Supplement")

10.16K(7)    Reimbursement Agreement between IWC China and VCFC in connection
             with the Bridge Loan Supplement, dated September 18, 1997

10.16L       Amended and Restated Negative Pledge Agreement made by IWC and IWC
             China in favor of TD-Bank, dated September 18, 1997

10.16M       Conditional Deed of Adherence between SDL and VCFC dated September
             18, 1997

10.28A (5)   Loan Agreement between International Wireless Communications 
             Holdings, Inc. ("IWCH"), VCFC and TD-Bank, dated 
             August 18, 1997
 
10.28B (5)   Exchange Agreement between IWCH, VCFC, TD-Bank and other 
             Noteholders and Warrantholders, dated August 18, 1997
 
10.28C (5)   Amended and Restated Certificate of Incorporation of IWCH, 
             dated September 10, 1997
 
10.28D (5)   Intercreditor and Collateral Agency Agreement dated August 18, 
             1997
 
10.28E (5)   IWCH Tranche A Senior Exchangeable Note



                                      41

<PAGE> 

 EXHIBIT NO.  DESCRIPTION
 -----------  -----------
 10.28F (5)   IWCH Warrant to Purchase Common Stock
 
 10.28G (5)   Loan Agreement between PWH, VCFC and TDI, dated August 18, 1997
 
 10.28H (5)   PWH Tranche A Exchangeable Senior Secured Note
 
 10.28I (5)   Pledge Agreement between PWH and TDI, dated August 18, 1997
 
 10.28J (5)   Security Agreement among PWH and TDI, dated August 18, 1997
 
 10.28K (5)   Stock Option Agreement between IWCH and PWH, dated August 18, 
              1997
 
 10.28L (5)   Supplement to Share Purchase Agreement between IWCH and 
              Continental Communications Limited, dated August 18, 1997
 
 10.28M (5)   Sixth Amended and Restated Investor Rights Agreement, dated 
              August 27, 1997
 
 10.28N (5)   Amended and Restated Registration Rights Agreement, dated 
              August 27, 1997
 
 10.280       Memorandum of Understanding among Vanguard Cellular Systems, 
              Inc., Electra Investment Trust PLC and certain other 
              shareholders of IWCH listed therein, dated August 14, 1997
 27.1         Financial Data Schedule
 
------------------

(1) Incorporated by reference to Exhibit No. 10.27A to the Registrant's
    Quarterly Report on Form 10-Q, filed with the Securities and Exchange
    Commission on  August 12, 1997 (the "June 1997 Form 10-Q")
(2) Incorporated by reference to Exhibit No. 10.27B to the June 1997 Form 10-Q
(3) Incorporated by reference to Exhibit No. 10.27C to the June 1997 Form 10-Q
(4) Incorporated by reference to Exhibit No. 10.27D to the June 1997 Form 10-Q
(5) Incorporated by reference to an Exhibit with the same exhibit number to the
    Registrant's Current Report on Form 8-K, filed with the Securities and
    Exchange Commission on September 12, 1997.
(6) Incorporated by reference to Exhibit No. 10.27G to the June 1997 Form 10-Q
(7) To be filed by amendment.

(b) REPORTS ON FORM 8-K 

    On September 11, 1997, the Company filed a Current Report on Form 8-K to
report the acquisition by the Company of a 20% indirect equity interest in
Mobilink and the financing of such acquisition through the proceeds from
Pakistan Bridge Facility.  Mobilink is a Pakistani corporation that provides
cellular services in Pakistan. No financial statements for Mobilink or for the
Registrant were required to be filed with such Report on Form 8-K.



                                     42

<PAGE>

                                 SIGNATURES
    

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  November 14, 1997     INTERNATIONAL WIRELESS
                             COMMUNICATIONS HOLDINGS, INC.
                             (Registrant)
                             
                             
                             
                             By:  /s/ Douglas S. Sinclair  
                                 -----------------------------------
                                  Douglas S. Sinclair
                                  Executive Vice President and 
                                  Chief Financial Officer 
                             
                             
                             By:  /s/ Keith D. Taylor 
                                 -----------------------------------
                                  Keith D. Taylor 
                                  Vice President, Controller and 
                                  Chief Accounting Officer
                                  



                                   43


<PAGE>

                              EXHIBIT INDEX*
    
<TABLE>
<CAPTION>

                                                                                  EDGAR 
 EXHIBIT NO.  DESCRIPTION                                                      DOCUMENT NO.
 -----------  -----------                                                      -----------
<S>           <C>                                                              <C>

 2.10A (1)    Share Purchase Agreement between Motorola International                -
              Development Corporation ("MIDC") and International Wireless          
              Communications Pakistan Limited ("IWCPL"), dated July 17, 1997         
                                                                                 
 2.10B (2)    Share Purchase Agreement between Continental Communications            -
              Limited ("CCL") and IWCPL, dated July 17, 1997                       
                                                                                 
 2.10C (3)    Restated and Amended Shareholders Agreement among MIDC, Saif           -
              Telecom (Pvt) Ltd ("Saif") and IWCPL, dated August 13, 1997          
                                                                                 
 2.10D (4)    Side Letter regarding Shareholder Obligations among IWCPL,             -
              Saif, MIDC and Saif, dated August 13, 1997                         
                                                                                 
 2.10E (5)    Amended and Restated Shareholders' Agreement among IWCPL,              -
              Pakistan Wireless Holdings Limited ("PWH"), Vanguard Pakistan,       
              Inc. ("Vanguard Pakistan") and South Asia Wireless Communications     
              (Mauritius) Limited ("SAWC"), dated August  13, 1997                 
                                                                                 
 2.10F (5)    IWC Group Agreement between PWH and Vanguard Pakistan, dated           -
              August 13, 1997; Voting Trust Agreement between PWH and            
              Vanguard Pakistan, dated August 13, 1997                           
                                                                                 
 2.10G (5)    Deed of Adherence to IWCPL Shareholders Agreement among IWCPL,         -
              PWH, Vanguard Pakistan and SAWC, dated August 27, 1997             
                                                                                 
 2.10H (6)    License granted to Pakistan Mobile Communications Limited by           -
              the Government of Pakistan, Ministry of Communications, dated      
              July 6, 1992 (the "Mobilink License")                                
                                                                                 
 2.10I (5)    Re-validation of the Mobilink License, dated August 9, 1997            - 
                                                                                 
 2.10J (5)    Letter Agreement Amending the Restated and Amended Shareholders        -
              Agreement Among MIDC, Saif and IWCPL dated August 1997.                - 
                                                                                 
 10.13G       Amendment Agreement among PT Rajasa Hazanah Perkasa, Nissho            2
              Iwai Corporation, PT Bina Reksa Perdana, International Wireless     
              Communications, Inc. ("IWC") and PT Deltonya Satya Dinamika,         
              dated October 29, 1996                                             

 10.16F       Deed of Adherence between Star Digitel  Limited                        3
              ("SDL") and IWC China Limited ("IWC China"), dated June 18, 1997

 10.16G       Bridge Loan Agreement between Star Digitel Limited ("SDL") and         4
              the Toronto-Dominion Bank ("TD-Bank") dated May 16, 1997 
              ("SDL Bridge Loan Agreement")

 10.16H       Pledge Agreement made by IWC in favor of TD-Bank, dated                5
              June 5, 1997 

 10.16I       Reimbursement Agreement by and among SDL, Star Telecom Holding         6
              Limited ("STHL") and Vanguard Cellular Financial Corporation
              ("VCFC"), dated May 16, 1997

 10.16J       SDL Bridge Loan Agreement Supplement No. 1 between SDL and             7
              TD-Bank dated September 18, 1997 ("Bridge Loan Supplement")

 10.16K(7)    Reimbursement Agreement between IWC China and VCFC in                  -
              connection with the Bridge Loan Supplement, dated 
              September 18, 1997

 10.16L       Amended and Restated Negative Pledge Agreement made by                 8
              IWC and IWC China in favor of TD-Bank, dated 
              September 18, 1997

 10.16M       Conditional Deed of Adherence between SDL and VCFC dated               9
              September 18, 1997

                                                                                 
 10.28A (5)   Loan Agreement between International Wireless Communications           -
              Holdings, Inc. ("IWCH"), VCFC and TD-Bank, dated August 18, 1997 
                                                                                 
 10.28B (5)   Exchange Agreement between IWCH, VCFC, TD-Bank and other               -
              Noteholders and Warrantholders, dated August 18, 1997              
                                                                                 
 10.28C (5)   Amended and Restated Certificate of Incorporation of IWCH,             -
              dated September 10, 1997 -                                         
                                                                                 

</TABLE>


                                          44

<PAGE>


<TABLE>
<CAPTION>

                                                                                  EDGAR 
 EXHIBIT NO.  DESCRIPTION                                                      DOCUMENT NO.
 -----------  -----------                                                      -----------
<S>           <C>                                                              <C>

 10.28D (5)   Intercreditor and Collateral Agency Agreement dated August 18,         -
              1997                                                               
                                                                                 
 10.28E (5)   IWCH Tranche A Senior Exchangeable Note                                - 
                                                                                 
 10.28F (5)   IWCH Warrant to Purchase Common Stock                                  - 
                                                                                 
 10.28G (5)   Loan Agreement between PWH, VCFC and TDI, dated August 18, 1997        -
               -                                                                 
 10.28H (5)   PWH Tranche A Exchangeable Senior Secured Note                         - 
                                                                                 
 10.28I (5)   Pledge Agreement between PWH and TDI, dated August 18, 1997            - 
                                                                                 
 10.28J (5)   Security Agreement among PWH and TDI, dated August 18, 1997            - 
                                                                                 
 10.28K (5)   Stock Option Agreement between IWCH and PWH, dated August 18,          -
              1997                                                               
                                                                                 
 10.28L (5)   Supplement to Share Purchase Agreement between IWCH and                -
              Continental Communications Limited, dated August 18, 1997          
                                                                                 
 10.28M (5)   Sixth Amended and Restated Investor Rights Agreement, dated            -
              August 27, 1997                                                    
                                                                                 
 10.28N (5)   Amended and Restated Registration Rights Agreement, dated              -
              August 27, 1997                                                    

 10.28O       Memorandum of Understanding among Vanguard Cellular Systems,          10
              Inc., Electra Investment Trust PLC and certain other 
              shareholders of IWCH listed therein, dated August 14, 1997
                                                                                 
 27.1         Financial Data Schedule                                               11

</TABLE>
-----------------

(1) Incorporated by reference to Exhibit No. 10.27A to the Registrant's
    Quarterly Report on Form 10-Q, filed with the Securities and Exchange
    Commission on  August 12, 1997 (the "June 1997 Form 10-Q")
(2) Incorporated by reference to Exhibit No. 10.27B to the June 1997 Form 10-Q
(3) Incorporated by reference to Exhibit No. 10.27C to the June 1997 Form 10-Q
(4) Incorporated by reference to Exhibit No. 10.27D to the June 1997 Form 10-Q
(5) Incorporated by reference to an Exhibit with the same exhibit number to the
    Registrant's Current Report on Form 8-K, filed with the Securities and
    Exchange Commission on September 12, 1997.
(6) Incorporated by reference to Exhibit No. 10.27G to the June 1997 Form 10-Q
(7) To be filed by amendment.


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