<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 March 31, 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
--------------------------------------------------------------------------------
(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
--------------------------------------------------------------------------------
                       (Address of principal executive offices)

                                    (415) 548-0808
--------------------------------------------------------------------------------
                 (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 March 31, 1997, there were 636,720 shares of the Registrant's common
stock, par value $0.01 per share ("Common Stock") outstanding and 16,906,400
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 32 pages.

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

                                           1.

<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 
         March 31, 1997 (unaudited). . . . . . . . . . . . . . . . . . . . . .4

         Consolidated Statements of Operations for the three months ended 
         March 31, 1996 and 1997 (unaudited) . . . . . . . . . . . . . . . . .5

         Consolidated Statements of Cash Flows for the three months ended 
         March 31, 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 . . . . . . . . . . . . . . . . . . . . . 15

PART II. OTHER INFORMATION 

Item 2.  Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . 30

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 30

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
         

                                       2.

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                                       3.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                             CONSOLIDATED BALANCE SHEETS
                     (IN THOUSANDS, EXCEPT SHARE AND SHARE DATA)

<TABLE>
<CAPTION>
                                            ASSETS                              DECEMBER 31,     MARCH 31, 
                                                                                    1996            1997   
                                                                                ------------    -----------
                                                                                (AUDITED)      (UNAUDITED)
<S>                                                                           <C>            <C>
Current assets:
    Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .      $  41,657      $  23,971
    Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .             --          3,287
    Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . .            348            576
    Notes receivable from affiliates . . . . . . . . . . . . . . . . . . .            813          4,316
    Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .          1,431          1,976
    Advance to affiliate . . . . . . . . . . . . . . . . . . . . . . . . .             99             99
    License deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . .          5,255          5,255
    Investment in affiliate held for sale. . . . . . . . . . . . . . . . .          2,062          2,062
    Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .          2,743          4,055
                                                                                ---------      ---------
         Total current assets. . . . . . . . . . . . . . . . . . . . . . .         54,408         45,597
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . .         18,426         20,436
Investments in affiliates. . . . . . . . . . . . . . . . . . . . . . . . .         68,394         65,884
Telecommunication licenses and other intangibles, net. . . . . . . . . . .         18,484         18,146
License deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          3,042          3,042
Debt issuance costs, net . . . . . . . . . . . . . . . . . . . . . . . . .          6,431          6,179
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            173            140
                                                                                ---------      ---------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $ 169,358      $ 159,424
                                                                                ---------      ---------
                                                                                ---------      ---------

               LIABILITIES, MINORITY INTERESTS, REDEEMABLE CONVERTIBLE
                      PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable and accrued expenses. . . . . . . . . . . . . . . . .       $  7,313       $  8,369
                                                                                ---------      ---------
         Total current liabilities . . . . . . . . . . . . . . . . . . . .          7,313          8,369
Long-term debt, net. . . . . . . . . . . . . . . . . . . . . . . . . . . .         75,466         79,449
                                                                                ---------      ---------
    Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .         82,779         87,818
Minority interests in consolidated subsidiaries. . . . . . . . . . . . . .          5,685          5,533
Redeemable convertible Preferred Stock, $.01 par value per share; 
    21,541,480 shares designated; 15,973,200 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 $107,399 . . . . . . . . .        103,021        103,556
Commitments and contingencies (Note 8)
Stockholders' deficit: 
    Convertible Preferred Stock, $.01 par value per share; 
       1,200,000 shares designated; 933,200 shares issued 
       and outstanding in 1996 and 1997, respectively; 
       liquidation value of $793 . . . . . . . . . . . . . . . . . . . . .              9              9
    Common Stock, $.01 par value per share; 26,000,000
       shares authorized; 636,720 shares
       issued and outstanding in 1996 and 1997, respectively . . . . . . .              6              6
    Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . .         31,060         31,060
    Note receivable from stockholder . . . . . . . . . . . . . . . . . . .           (152)          (152)
    Unrealized gain (loss) on investments. . . . . . . . . . . . . . . . .             68             (5)
    Cumulative translation adjustment. . . . . . . . . . . . . . . . . . .            271              2
    Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . .        (53,389)       (68,403)
                                                                                ---------      ---------
         Total stockholders' deficit . . . . . . . . . . . . . . . . . . .        (22,127)       (37,483)
                                                                                ---------      ---------
         Total liabilities, minority interests, redeemable 
         convertible Preferred Stock and stockholders' deficit . . . . . .     $  169,358     $  159,424
                                                                                ---------      ---------
                                                                                ---------      ---------
</TABLE>
             See accompanying notes to Consolidated Financial Statements.

                                       4.

<PAGE>
         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                     Three months ended
                                                                                          March 31,
                                                                              ------------------------------
                                                                                   1996             1997
                                                                                (Unaudited)     (Unaudited)
                                                                              --------------- --------------
<S>                                                                           <C>             <C>
Operating revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $  --         $  519

Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             --            589
                                                                                ---------     ----------
    Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             --            (70)

Operating expenses: 
    Selling, general and administrative expenses . . . . . . . . . . . . .          2,259          6,254
    Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . .          1,419          4,672
    Minority interest in losses of consolidated subsidiaries . . . . . . .             --           (219)
                                                                                ---------     ----------
        Loss from operations . . . . . . . . . . . . . . . . . . . . . . .         (3,678)       (10,777) 
 
Other income (expense):
    Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . .            242            527
    Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . .           (119)        (4,236)
    Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (25)             7
                                                                                ---------     ----------
        Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $  (3,580)    $  (14,479) 
                                                                                ---------     ----------
                                                                                ---------     ----------
</TABLE>
             See accompanying notes to Consolidated Financial Statements.

                                       5.
<PAGE>
         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                              THREE MONTHS ENDED 
                                                                                                   MARCH 31,
                                                                                           ------------------------
                                                                                             1996            1997
                                                                                           --------        --------
                                                                                                  (UNAUDITED)  
<S>                                                                                      <C>            <C>
Cash flows from operating activities: 
  Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $  (3,580)      $(14,479) 
  Adjustments to reconcile net loss to net cash used in operating activities: 
  Depreciation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             12            222
  Amortization of telecommunication licenses and other intangibles . . . . . . . . .            161            338
  Amortization of debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . .             --            252
  Amortization of long-term debt discount. . . . . . . . . . . . . . . . . . . . . .             --          3,983
  Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . .          1,419          4,672
  Minority interest in losses of consolidated subsidiaries . . . . . . . . . . . . .             --           (152)
  Unrealized loss on investments . . . . . . . . . . . . . . . . . . . . . . . . . .             --            (73)
  Changes in operating assets and liabilities: 
       Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             --           (228)
       Other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (161)        (1,312)
       Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . .         (4,261)         1,056
                                                                                          ---------       --------
           Net cash used in operating activities . . . . . . . . . . . . . . . . . .         (6,410)        (5,721)
                                                                                          ---------       --------
Cash flows from investing activities: 
  Issuance of notes receivable from affiliates . . . . . . . . . . . . . . . . . . .             --         (3,503)
  Issuance of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .         (1,092)          (545)
  Advances to affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (2,096)            --
  Purchases of property and equipment. . . . . . . . . . . . . . . . . . . . . . . .           (126)        (2,232)
  Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             --         (3,287)
  Investments in affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (72)        (2,162)
  Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             37             33
                                                                                          ---------       --------
           Net cash used in investing activities . . . . . . . . . . . . . . . . . .         (3,349)       (11,696)
                                                                                          ---------       --------
Effect of foreign currency exchange rates on cash and cash equivalents . . . . . . .             --           (269)
                                                                                          ---------       --------
Net decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . .         (9,759)       (17,686)
Cash and cash equivalents at beginning of period.. . . . . . . . . . . . . . . . . .         25,398         41,657
                                                                                          ---------       --------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . .      $  15,639       $ 23,971
                                                                                          ---------       --------
                                                                                          ---------       --------
Supplemental cash flow information: 
  Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $      --       $     --
                                                                                          ---------       --------
                                                                                          ---------       --------
</TABLE>
             See accompanying notes to Consolidated Financial Statements.


                                       6.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 Debt Offering (as
    defined below).  IWC was incorporated in Delaware in January 1992 and
    develops, owns and operates wireless communications companies in emerging
    markets in Asia and Latin America.  These local wireless businesses
    ("LWBs") provide a variety of communication services, including cellular,
    wireless local loop ("WLL"), enhanced capacity trunked radio ("ECTR") and
    paging.  Together with its strategic partners, IWC has interests in Brazil,
    China, India, Indonesia, Malaysia, Mexico, New Zealand, Pakistan, Peru, and
    the Philippines.

    The Company's investments to date have principally been in the early 
    stage development of LWBs.  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 participation in 
    additional equity rounds to finance the infrastructure buildout of its 
    operating and nonoperating LWBs.  The ability of the Company to make 
    additional investments is dependent on the availability of 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, the Company 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 warrant
    to purchase 11.638 shares of Common Stock (a "Warrant," and, collectively,
    the "Warrants"), for total gross proceeds of $100 million (the "Debt
    Offering").  In November 1996, pursuant to the indenture agreement that
    governs the Original Notes (the "Indenture"), the Company 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 Debt 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 forty 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 (together, the
    "Company"), 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.  The results of operations
    for the three months ended March 31, 1997 are not necessarily indicative of
    results that may be expected for the year ended December 31, 1997.  

    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. ("SRC"), TeamTalk Limited ("TeamTalk"), New Zealand
    Wireless Limited ("New Zealand Wireless"), International Wireless
    Communications Asia Holdings, B.V. ("IWC Asia B.V."), International
    Wireless Communications Latin America Holdings, Limited 

                                       7.

<PAGE>


         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY


                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


    ("IWC Latin America") and International Wireless Communications Asia Holding
    N.V. ("IWC Asia N.V.")  and 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) BALANCE SHEET COMPONENTS 
    
Balance sheet components are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                       DECEMBER 31,     MARCH 31,
                                                                          1996            1997
                                                                      -------------    -----------
<S>                                                                  <C>              <C>
Other current assets
  Employee receivables . . . . . . . . . . . . . . . . . . . . .       $    179        $   498
  Taxes receivable . . . . . . . . . . . . . . . . . . . . . . .            820             --
  Other receivables. . . . . . . . . . . . . . . . . . . . . . .          1,373          2,461
  Prepaid expenses and other . . . . . . . . . . . . . . . . . .            371          1,096
                                                                       --------        -------
                                                                       $  2,743        $ 4,055
                                                                       --------        -------
                                                                       --------        -------
Property and equipment
  Furniture and fixtures . . . . . . . . . . . . . . . . . . . .       $    320        $   414
  Computer and office equipment. . . . . . . . . . . . . . . . .            935          1,202
  Automobiles. . . . . . . . . . . . . . . . . . . . . . . . . .            197            197
  Leasehold improvements . . . . . . . . . . . . . . . . . . . .            276            346
  Telecommunication equipment. . . . . . . . . . . . . . . . . .          9,930          6,681
  Construction in process. . . . . . . . . . . . . . . . . . . .          7,620         12,670
                                                                       --------        -------
                                                                         19,278         21,510
  Less accumulated depreciation. . . . . . . . . . . . . . . . .            852          1,074
                                                                       --------        -------
    Property and equipment, net. . . . . . . . . . . . . . . . .       $ 18,426        $20,436
                                                                       --------        -------
                                                                       --------        -------

Telecommunication licenses and other intangibles
  SRC/Via 1 project. . . . . . . . . . . . . . . . . . . . . . .       $  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          1,676
                                                                       --------        -------
    Telecommunication licenses and other intangibles, net. . . .       $ 18,484        $18,146
                                                                       --------        -------
                                                                       --------        -------

Accounts payable and accrued expenses
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . .       $  5,163       $  2,217
  Professional services. . . . . . . . . . . . . . . . . . . . .            718            899
  Employee compensation and benefits . . . . . . . . . . . . . .            619            488
  Equipment purchases. . . . . . . . . . . . . . . . . . . . . .             27          4,517
  Remaining TeamTalk purchase price. . . . . . . . . . . . . . .            156             37
  Share subscription payable to UTS. . . . . . . . . . . . . . .            178             --
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . .            452            211
                                                                       --------        -------
                                                                       $  7,313        $ 8,369
                                                                       --------        -------
                                                                       --------        -------
</TABLE>
                                       8.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(3) CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

As of March 31, 1997, available-for-sale securities consisted of the following
(in thousands):

<TABLE>
<CAPTION>
                                                          Unrealized    Estimated
                                                   Cost     losses     fair value
                                                --------- -----------  -----------
<S>                                           <C>         <C>         <C>
    U.S government securities. . . . . . . .   $   1,076    $  (2)    $   1,074
    Corporate debt securities. . . . . . . .      13,148       (3)       13,145
                                               ---------    -----     ---------
                                               $  14,224    $  (5)    $  14,219
                                               ---------    -----     ---------
                                               ---------    -----     ---------
</TABLE>

    As of March 31, 1997, cash and available-for-sale securities were
    classified as follows (in thousands):

    Cash . . . . . . . . . . . . . . . . . .   $  13,039
    Cash equivalents . . . . . . . . . . . .      10,932
    Short-term investments . . . . . . . . .       3,287
                                               ---------
                                               $  27,258
                                               ---------
                                               ---------
    
(4) 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 March 31,
    1997 (in thousands):

                                       9.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                    INVESTMENTS                                                     
                                    PERCENTAGE     IN AFFILIATED                                                    
                 AFFILIATED             OF           COMPANIES         ADDITIONAL     EQUITY IN LOSSES OF AFFILIATES
COUNTRY           COMPANY           OWNERSHIP          1995            INVESTMENT     ------------------------------
                                                                                      AMORTIZATION   LOSSES (GAINS) 
-------       -----------------     ----------     --------------      ----------     ------------   -------------- 
<S>         <C>                    <C>            <C>                 <C>            <C>            <C>             
Malaysia      Syarikat Telefon                                                                                      
              Wireless ("STW")....      30%         $  20,241          $  1,201          $  969        $  3,563     
                                                                                                                    
                                                                                                                    
              PT Rajasa Hazanah                                                                                     
Indonesia     Perkasa ("RHP").....      28%            24,220             8,556           1,278           3,468     
              Star Digitel Limited                                                                                  
China         ("SDL").............      40%                 -            20,000             347           1,000     
                                                                                                                    
              Universal                                                                                             
              Telecommunications                                                                                    
Philippines   Service, Inc. ("UTS").    19%                 -             1,906              51             (20)    
New Zealand   TeamTalk............     100%             2,338            (1,736)              -             602     
                                                    ---------         ---------        --------        --------     
                                                    $  47,246         $  30,005        $  3,170        $  8,613     
                                                    ---------         ---------        --------        --------     
                                                    ---------         ---------        --------        --------     

</TABLE>
<TABLE>
<CAPTION>
                                               
                                                        PORTION OF    
                                                        INVESTMENT    
                                                      EXCEEDING THE   
                                                     COMPANY'S SHARE  
                                   INVESTMENTS      OF THE UNDERLYING 
                                  IN AFFILIATED         HISTORICAL    
             AFFILIATED             COMPANIES           NET ASSETS    
COUNTRY       COMPANY                 1996                 1996       
-------    --------------         -------------      ---------------- 
<S>        <C>                    <C>                <C>
Malaysia       STW                 $  16,910            $  15,852     
               


Indonesia      RHP                    28,030               28,030     

China          SDL                    18,653               10,653     



Philippines    UTS                     1,875                  882     
New Zealand    TeamTalk                    -                    -     
                                   ---------            ---------     
                                   $  65,468            $  55,417     
                                   ---------            ---------     
                                   ---------            ---------     

</TABLE>

<TABLE>
<CAPTION>

                                                                                                                    
                                                                                                                    
                                                    INVESTMENTS                                                     
                                    PERCENTAGE     IN AFFILIATED                                                    
                 AFFILIATED             OF           COMPANIES         ADDITIONAL     EQUITY IN LOSSES OF AFFILIATES
COUNTRY           COMPANY           OWNERSHIP          1996            INVESTMENT     ------------------------------
                                                                                      AMORTIZATION       LOSSES  
-------       -----------------     ----------     --------------      ----------     ------------   -------------- 
<S>          <C>                   <C>            <C>                 <C>            <C>            <C>             
Malaysia      STW. . . . . .            30%          $  16,910           $  -          $  221            $   708   

Indonesia     RHP. . . . . .            28%             28,030              -             419              1,316   

China         SDL. . . . . .            40%             18,653              -             191              1,708   

Philippines   UTS. . . . . .            19%              1,875              -              12                 97   
                                                     ---------           ----          ------           --------
                                                     $  65,468           $  -          $  843           $  3,829   
                                                     ---------           ----          ------           --------
                                                     ---------           ----          ------           --------

</TABLE>
<TABLE>
<CAPTION>
                                                            PORTION OF    
                                                            INVESTMENT    
                                                          EXCEEDING THE   
                                                         COMPANY'S SHARE  
                                     INVESTMENTS        OF THE UNDERLYING 
                                    IN AFFILIATED           HISTORICAL    
              AFFILIATED              COMPANIES             NET ASSETS    
COUNTRY        COMPANY                   1997                   1997       
-------    -------------           -------------        ---------------- 
<S>        <C>                     <C>                  <C>
Malaysia     STW                     $  15,981              $  15,631  
                                                       
Indonesia    RHP                        26,295                 26,295  
                                                       
China        SDL                        16,754                 10,462  
                                                       
Philippines  UTS                         1,766                    870  
                                     ---------              ---------
                                     $  60,796              $  53,258  
                                     ---------              ---------
                                     ---------              ---------

</TABLE>
                                                 
                                                         
                                       10.               
                                                         
<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


   Financial information for significant affiliated companies accounted for by 
                   the equity method is as follows (in thousands):

<TABLE>
<CAPTION>
                                           
                                                  AS OF AND FOR THE YEAR ENDED
                                                       DECEMBER 31, 1996
                                                       -----------------
                                               STW            RHP          SDL
                                               ---            ---          ---
<S>                                      <C>             <C>         <C>
    Current assets . . . . . . . . . .   $      820       $  13,354   $  11,215
    Noncurrent assets. . . . . . . . .       41,686          64,556      55,617
    Current liabilities. . . . . . . .        6,909          23,341      12,460
    Noncurrent liabilities . . . . . .       33,526          63,834      47,817
    Net revenues . . . . . . . . . . .        1,858          10,268         436
    Net loss . . . . . . . . . . . . .     (11,873)        (12,072)     (2,618)

</TABLE>

<TABLE>
<CAPTION>
                                             AS OF AND FOR THE THREE MONTHS ENDED
                                                      MARCH 31, 1997
                                                     -----------------
                                               STW            RHP          SDL
                                               ---            ---          ---
                                           (Unaudited)    (Unaudited)   (Unaudited)
                                           -----------    -----------   -----------
<S>                                      <C>             <C>         <C>
    Current assets . . . . . . . . . .     $  8,250       $  20,872    $  9,618
    Noncurrent assets. . . . . . . . .       33,903          48,944      80,791
    Current liabilities. . . . . . . .        5,243          29,654      20,238
    Noncurrent liabilities . . . . . .       36,672          60,456      41,707
    Net revenues . . . . . . . . . . .          405           1,444         273
    Net loss . . . . . . . . . . . . .      (2,360)         (4,669)     (4,269)

</TABLE>

    COST INVESTMENTS

    The Company uses the cost method of accounting for three other investments
    as of March 31, 1997. These are PT Mobilkom Telekomindo ("Mobilkom"), RPG
    Paging Services Limited ("RPSL"), and Telecomunicaciones Globales, S.A. de
    C.V. ("Global Telecom").  The Company owns its holding in RPSL indirectly
    through its interest in STOL.  STOL purchased an additional 9% of RPSL in
    January 1997 for $2,100,000 which increased the Company's indirect interest
    from 7% to 13.3%.  The Company acquired its interest in Global Telecom, a
    Mexican long distance company in January 1997 for $62,000.  As of March 31,
    1997, the Company's ownership interests in these entities were 15%, 13.3%
    and 1.56%, respectively 

    The following represents the Company's carrying value of these cost
    investments:

                                           DECEMBER 31,     MARCH 31,
                                              1996            1997
                                           ------------     ---------
    Mobilkom . . . . . . . . . . . . .      $ 1,500         $ 1,500
    RPSL . . . . . . . . . . . . . . .        1,426           3,526
    Global Telecom . . . . . . . . . .           --              62
                                            -------         -------
                                            $ 2,926         $ 5,088
                                            -------         -------
                                            -------         -------



                                           11.

<PAGE>


         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    PRO FORMA SUMMARY

    The following unaudited pro forma summary combines the consolidated results
    of operations of the Company as if (i) TeamTalk had been a wholly owned
    consolidated subsidiary since January 1, 1996, (ii) ownership in RHP had
    been 28.3% since January 1, 1996, (iii) the acquisition of STOL had
    occurred on January 1, 1996, (iv) the acquisition of SDL had occurred at
    January 1, 1996 and (v) the acquisition of Protelsa had occurred at January
    1, 1996.  This pro forma summary does not necessarily reflect the results
    of operations as they would have been if the Company had acquired the
    entities as of January 1, 1996.

    Unaudited pro forma consolidated results of operations for the various
    acquisitions as described above are as follows (in thousands):

                                              THREE MONTHS ENDED
                                                  MARCH  31,
                                           ------------------------
                                             1996            1997
                                           --------        --------

    Revenues . . . . . . . . . . . . .     $   290        $    519 
    Net loss . . . . . . . . . . . . .      (6,344)        (14,479)
    

(5) NOTES RECEIVABLE FROM AFFILIATES

    In March 1997, the Company lent $3,500,000 to SDL.  The loan, which is
    evidenced by a promissory note, accrues interest at 9% per annum and is due
    upon written demand by the Company. 


(6) NOTES RECEIVABLE

    In March 1997, the Company loaned $500,000 to an unrelated third party. The
    loan, which 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 Clasbeep S.A.,
    an Ecuadorian paging corporation wholly owned by the borrower.


(7) STOCK OPTION/STOCK ISSUANCE PLAN


    On January 12, 1997 the Board of Directors granted options to purchase an
    aggregate of 127,095 shares of Common Stock at an exercise price of $9.375
    per share under the 1996 Stock Option/Stock Issuance Plan ("1996 SO/SIP").
    On February 1, 1997 the Board of Directors granted an option to purchase
    20,000 shares of Common Stock at an exercise price of $9.375 per share
    under the 1996 SO/SIP.  Further, on February 3, 1997 the Board of Directors
    granted options to purchase an aggregate of 206,187 shares of Common Stock
    at an exercise price of $9.375 per share under the 1996 SO/SIP.

    On February 28, 1997, the Board of Directors approved an amendment and
    restatement of the 1996 SO/SIP increasing the aggregate number of shares of
    Common Stock available for issuance over the term of the 1996 SO/SIP by
    411,526 shares to a total of 2,811,526 shares. Such amendment and
    restatement was approved by the stockholders of the Company on May 5, 1997.

                                       12.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(8) COMMITMENTS AND CONTINGENCIES

    CAPITAL CONTRIBUTIONS

    In order to protect IWC's investments in affiliates from ownership
    dilution, IWC anticipates making additional capital contributions to the
    LWBs as needed.

    GUARANTEE OF DEBT OF EQUITY INVESTEE

    In connection with a Malaysian Ringgit 91,000,000 (approximately
    $36,694,000 as translated using effective exchange rates at March 31, 1997)
    senior credit facility through a syndicate of Malaysian banks obtained by
    the Company's 30% equity investee, STW, the Company along with other STW
    shareholders, executed a financial "keep well" covenant pursuant to which
    they have agreed (i) to ensure that STW 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
    investments in STW to meet cost overruns. The loan is repayable by STW in
    eleven semi-annual installments beginning October 8, 1997. The Company and
    other STW 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 STW. In the event that the bank were to seek
    repayment from the STW 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 March 31,
    1997, this credit facility was fully drawn down. 

    The Company does not believe it is practicable to estimate the fair value
    of the guarantee 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 affiliate, New Zealand Wireless
    Limited, owns 15% of Mobilkom.  Mobilkom expects to fund the continued
    buildout of its network and the acquisition of subscriber terminals
    primarily through a seven-year $50 million 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 million under the credit facility. As of March 31, 1997, borrowings
    of approximately $21,637,000 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 million
    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 March 31, 1997, this credit facility was fully
    drawn down.

(9) SUBSEQUENT EVENTS


    On May 5, 1997, the Board of Directors granted options to purchase an
    aggregate of 342,000 shares of Common Stock at an exercise price of $9.375
    per share to certain service providers of the Company.

    On May 5, 1997, the Company entered into an agreement with Vanguard
    Cellular Financial Corp. (together with its wholly owned subsidiary, 
    Vanguard Cellular Operating Corp., "Vanguard"), pursuant to which Vanguard
    surrendered then outstanding warrants to purchase 323,880 shares of Series
    C Preferred Stock, 416,720 shares of Series D Preferred Stock and 64,120
    shares of Series F Preferred Stock in exchange for the issuance by the
    Company of a warrant to acquire 249,970 shares of Common Stock at a
    purchase price of $0.25 per share and a second warrant to purchase 554,750
    shares of Common Stock at an exercise price of $9.375 per share, which
    second warrant was subsequently surrendered by Vanguard in exchange for the
    issuance to certain officers and employees of Vanguard of an option to
    purchase 53,330 shares of Common Stock at an exercise price of $9.375 

                                       13.

<PAGE>

         INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    per share under the 1996 SO/SIP and options to purchase an aggregate of 
    501,420 shares of Common Stock at a purchase price of $9.375 per share 
    outside the 1996 SO/SIP.  Such transaction and the issuance of such options 
    and warrants by the Company were approved by the Board of Directors of the
    Company on February 28, 1997, and by the stockholders of the Company on May
    5, 1997.

    On or prior to May 6, holders of warrants to purchase an aggregate of
    28,520 shares of Series D Preferred Stock exercised such warrants pursuant
    to the "net-exercise" provisions thereof.  Upon such exercises, such
    warrantholders received an aggregate of 8,552 shares of Series D Preferred
    Stock.

    The holders of the Warrants issued in connection with the Debt Offering 
    are entitled to purchase 11.638 shares of Common Stock per Warrant,
    representing in the aggregate approximately 10.0% of the outstanding stock
    of the Company on a fully-diluted basis as of August 15, 1996.  In the
    event that a qualified initial public offering of Common Stock in which the
    Company raises at least $50 million in net cash proceeds does not occur on
    or prior to May 15, 1997, each unexercised Warrant will entitle the holder
    thereof to purchase an additional 2.645 shares of Common Stock.  The
    Company does not expect to complete such an offering on or prior to May 15,
    1997. 

                                       14.

<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 "RISK FACTORS THAT MAY AFFECT FUTURE RESULTS" AS WELL AS THOSE 
DISCUSSED IN THIS SECTION AND ELSEWHERE IN THIS REPORT, AND THE RISKS 
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.

RESULTS OF OPERATIONS
    
     The Company's net loss increased from $3.6 million for the three month 
period ended March 31, 1996 to $14.5 million for the corresponding period in 
1997, an increase of 304%.  These increases were due primarily to higher 
selling, general and administrative expenses, increases in equity in losses 
of affiliates and an increase in interest expense, as more fully described 
below.

     The Company recorded no operating revenues and cost of revenues for the 
three month period ended March 31, 1996 compared to $519,000 in operating 
revenues, offset by $589,000 in cost of revenues, for the corresponding 
period in 1997. The operating revenues and cost of revenues for the three 
month period ended March 31, 1997 resulted from the acquisition, effective 
April 30, 1996, of the remaining 50% of TeamTalk, which increased the 
Company's equity interest in TeamTalk to 100% and resulted in the 
consolidation of TeamTalk's operations in the Company's financial statements.

     The Company's selling, general and administrative expenses increased 
from $2.3 million for the three month period ended March 31, 1996 to $6.3 
million for the corresponding period in 1997, an increase of 177%.  This 
increase was due primarily to continued growth both in the Company's own 
general and administrative expenses, including salaries and benefits expense, 
professional fees and all other general and administrative expenses, and in 
the selling, general and administrative expenses of its consolidated 
subsidiaries that have commenced operations, primarily TeamTalk and SRC.  The 
Company's selling, general and administrative expenses for such period also 
reflected the consolidated results of four other subsidiaries whose 
operations are currently in the developmental stage, all of which contributed 
to the overall increase in the selling, general and administrative expenses 
from the three month period ended March 31, 1996  as compared to the 
corresponding period in 1997. 

     The primary components of the Company's selling, general and 
administrative expenses include (i) overall growth in the Company's own 
general and administrative expenses, including an increase in salaries and 
benefits from $819,000 for the three month period ended March 31, 1996 to 
$1.2 million for the corresponding period in 1997, an increase in 
professional fees from $565,000 for the three month period ended March 31, 
1996 to $638,000 for the corresponding period in 1997 and an increase in all 
other general and administrative expenses from $481,000 for the three month 
period ended March 31, 1996 to $849,000 for the corresponding period in 1997; 
and (ii) selling, general and administrative expenses of $617,000 and $2.0 
million for the three month period ended March 31, 1997 associated with the 
consolidation of the operations of TeamTalk and SRC, respectively, in the 
Company's consolidated financial statements as compared to $229,000 of 
selling, general and administrative expenses associated with the 
consolidation of the operations of SRC for the corresponding period in 1996.  
In addition, the Company reflected selling, general and administrative 
expenses of four other subsidiaries whose operations are currently in the 
developmental stage for the three month period ended March 31, 1997 with a 
resultant increase of $751,000 as compared to the corresponding period in 
1996. 

     The Company's equity in losses of affiliates increased from $1.4 million 
for the three month period ended March 31, 1996 to $4.7 million for the 
corresponding period in 1997, an increase of 229%.  For the three month 
period ended March 31, 1996, the equity in losses of affiliates was 
attributable to $899,000 of  operating losses and 

                                       15.

<PAGE>

$520,000 of expense relating to the amortization of telecommunication 
licenses.  For the corresponding period in 1997, equity in losses of 
affiliates consisted of $3.8 million of operating losses and $843,000 of 
expense relating to amortization of telecommunication licenses.  The increase 
in the equity in losses of affiliates is attributable primarily to the 
increase in the underlying operating losses of RHP, SDL and STW.  

     The Company's equity in losses of affiliate attributable to RHP 
increased from $78,000 for the three month period ended March 31, 1996 to 
$1.3 million for the corresponding period in 1997 as RHP's 70% owned 
consolidated subsidiary, Mobisel, continued to expand its operations and 
roll-out its nationwide telecommunication network. During this expansion 
phase, Mobisel's gross profit declined due primarily to greater pulse sharing 
and airtime costs and an increase in depreciation expense due to the 
build-out of Mobisel's telecommunication network.  In addition, as part of 
its expansion effort, Mobisel experienced growth in its selling, general and 
administrative expense base in order to meet the anticipated growth in its 
operations. The Company's amortization of telecommunication license 
attributable to RHP increased from $296,000 for the three month period ended 
March 31, 1996 to $419,000 for the corresponding period in 1997, an increase 
of 42%, due to the Company's additional investment of $8.6 million in RHP 
during October 1996.

     The Company's equity in losses of affiliates attributable to its 40% 
interest in SDL, which the Company acquired in November 1996, was $1.7 
million for the three month period ended March 31, 1997; and the Company's 
amortization of telecommunication license attributable to SDL was $191,000 
for the three month period ended March 31, 1997.  SDL operating losses are 
anticipated to increase throughout the foreseeable future as SDL continues to 
expand its operations within the Peoples Republic of China.  

     The Company's equity in losses of affiliate attributable to STW 
increased from $546,000 for the three month period ended March 31, 1996 to 
$708,000 for the corresponding period in 1997, an increase of 30%, and the 
Company's amortization of telecommunication license attributable to STW 
increased from $218,000 for the three month period ended March 31, 1996 to 
$221,000 for the corresponding period in 1997.

     The Company's interest income increased from $242,000 for the three 
month period ended March 31, 1996 to $527,000 for the corresponding period in 
1997, an increase of 118%.  This increase was due primarily to interest 
earned on the proceeds from the Debt Offering in August 1996, which were 
invested in short-term interest-bearing securities. 

     The Company's interest expense increased from $119,000 for the three 
month period ended March 31, 1996 to $4.2 million for the corresponding 
period in 1997. The increase in interest expense was primarily due to 
interest expense associated with the Debt Offering.

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.  Inflation and rapid fluctuations in inflation rates have had 
and may continue to have negative effects on the economies and securities 
markets of certain developing countries and could have an adverse effect on 
the operating companies and developmental stage projects in those countries, 
including an adverse effect on their ability to obtain financing.

     The value of the Company's investment in an operating company or 
developmental stage project is partially a function of the currency exchange 
rate between the dollar and the applicable local currency.  In addition, the 
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 
U.S. dollars.  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.  For example, the 
Company experienced a significant decline in the value of its investment in 
Mobilcom Mexico, its ECTR operating company in Mexico, as a result of the 
1994 devaluation of the Mexican peso and the resulting economic instability 
in Mexico.  Many of the currencies of developing countries have experienced 
steady devaluations relative to the U.S. dollar, and major adjustments have 
been made in the past and may again occur in the future, any of which could 
have a material adverse effect on the Company.

                                       16.

<PAGE>

     To the extent that the operating companies commence or have commenced 
commercial operations, any revenues they generate will generally be paid to 
the operating companies in the local currency.  By contrast, many significant 
liabilities of the operating companies (such as liabilities for the financing 
of telecommunications equipment) may be payable in U.S.  dollars or in 
currencies other than the local currency.  As a result, any devaluation in 
the local currency relative to the currencies in which such liabilities are 
payable could have a material adverse effect on the Company.

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 Debt Offering. 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 operating 
companies and developmental stage projects, to provide working capital and 
for general corporate purposes, including the expenses incurred in seeking 
and evaluating new investment opportunities. As of March 31, 1996 and March 
31, 1997, the Company had cash and cash equivalents and short-term investment 
balances of $15.6 million and $27.3 million, respectively.

     The Company has generated negative cash flow from operations since 
inception, and its operating companies and developmental stage projects are 
not expected to provide any cash to the Company in the foreseeable future. As 
a result, the Company is and will remain dependent upon raising funds from 
outside sources to fund its working capital needs, investments in operating 
companies and developmental stage projects, other cash requirements and to 
repay the Notes and any other indebtedness it may incur when it becomes due 
and payable.

     The Company believes its existing cash balance is sufficient to meet its 
minimum operating and contractual obligations through the end of fiscal 1997. 
However, the Company will require additional financing prior to December 31, 
1997, to meet its business objective of participating in additional equity 
rounds of financing on the operating company and developmental stage project 
level in order to finance the expansion of the operations of such operating 
companies and developmental stage projects. The Company has neither received 
commitments nor completed arrangements for additional financing, and there 
can be no assurance that 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. In addition, the Company 
intends to pursue additional investment opportunities for wireless 
communications projects and will require additional sources of financing in 
order to pursue those investments. However, there can be no assurance that 
such additional financing will be available on favorable terms or at all. See 
"--Additional Factors That May Affect Future Results--Company Level 
Risks--Negative Operating Cash Flow; Dependence on Additional Financing; No 
Commitments for Additional Financing."
    
     At the project level, IWC and its partners typically fund initial 
project investments using capital contributions either in the form of equity 
or shareholder loans. When projects become operational, IWC seeks to fund 
ongoing development of the project using third-party financing, preferably on 
a non-recourse basis to the Company.

     Mobilkom, IWC's national ECTR operating company in Indonesia, arranged a 
$50.0 million credit facility through a syndicate of Thai banks. This 
facility is secured by all of the assets and capital stock of Mobilkom, and 
$25.0 million of the facility has been guaranteed by Jasmine International 
Public Company Limited ("Jasmine"), a 56.25% owner of Mobilkom. As of March 
31, 1997, approximately $21.6 million was outstanding under this facility. 
The Company anticipates that the current $50.0 million facility will be 
sufficient for Mobilkom to meet all of its currently anticipated expenditures 
through 1997. Borrowings outstanding under this credit facility must be 
repaid in 16 quarterly installments commencing in 2000.

     Mobisel, IWC's national cellular operating company in Indonesia, in 
which the Company held an indirect 19.8% interest as of March 31, 1997 
through IWC's investment in RHP, has obtained a $60.0 million credit facility 
from Nissho Iwai.  This facility is secured by all of Mobisel's assets and a 
pledge of all of the capital stock of Mobisel held by RHP, which has also 
guaranteed the credit facility. The use of borrowings under the credit 
facility with Nissho Iwai is limited to expenditures necessary for the 
implementation and construction of Mobisel's network. Mobisel will require 
substantial additional financing to complete its planned capital expenditures 
through 1997 and 

                                       17.

<PAGE>

for other purposes. Accordingly, Mobisel has commenced discussions with a 
number of potential financing sources in order to obtain additional 
financing. Borrowings outstanding under this credit facility must be repaid 
in six equal semi-annual installments beginning in late 1998.

     STW, IWC's national WLL operating company in Malaysia, has arranged a 
Malaysian Ringgit 91.0 million (approximately $36.7 million as of March 31, 
1997) credit facility through a syndicate of Malaysian banks. This facility 
is secured by substantially all of STW's assets and a pledge of all of the 
capital stock of STW held by IWC and STW's other shareholders, and has been 
guaranteed by Shubila Holding Sdn Bhd, the 60% owner of STW, and certain 
officers of STW (including a former officer of IWC). In addition, STW 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 STW, IWC and the other STW shareholders have entered 
into a "keep well" covenant pursuant to which they have agreed (i) to insure 
that STW remains solvent and able to meet its financial liabilities when due, 
and (ii) to insure the timely completion of its WLL project and to make 
additional debt or equity investments in STW necessary to meet any cost 
overruns. The Company and other STW shareholders have also 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 STW. In the 
event that the banks were to seek repayment from the STW shareholders and the 
other shareholders were unable to honor their pro rata share of the 
liability, the Company might be liable for the full amount of the outstanding 
amount of the loan. Borrowings outstanding under this credit facility must be 
repaid in eleven semi-annual installments beginning October 8, 1997.

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 
REGISTRATION STATEMENT ON FORM S-1 AS FILED WITH THE COMMISSION ON FEBRUARY 
12, 1997, AS SUBSEQUENTLY AMENDED (REG. NO. 333-21687).

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 $68.4 million as of March 31, 1997. The
Company anticipates that its net losses will increase significantly 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

     The Company used cash in operations and investing activities of $73.2 
million for the year ended December 31, 1996, and $17.4 million for the 
three-months ended March 31, 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 require continuing 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 
December 31, 1997, to meet currently anticipated requirements for working 
capital and investments in its operating companies and developmental stage 
projects. In addition, the Company intends to pursue additional investment 
opportunities for wireless projects and anticipates that it will require 
additional sources of financing in order to fund those investments. 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 

                                       18.

<PAGE>

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. The 
Indenture contains certain restrictions on the ability of the Company to make 
investments in, or guarantee the indebtedness of, the operating companies and 
developmental stage projects. Accordingly, the Company's inability to obtain 
such additional financing would have a material adverse effect on the Company 
and could result in its insolvency or liquidation. 

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 March 31, 1997, the Company's long term debt was $79.4 
million, and its stockholders' deficit and redeemable convertible Preferred 
Stock was $66.1 million. 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 developmental stage 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 
developmental stage 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 developmental stage 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 (i) the Company will be able to obtain debt or 
equity refinancing on acceptable terms, or at all, in the future, (ii) the 
Company will be able to sell assets in a timely manner or on commercially 
acceptable terms or in an amount that will be sufficient to repay its 
indebtedness when due, (iii) the Company will be able to obtain the consents 
and approvals required in order to sell its interests in, or to receive 
dividends from, its operating companies or developmental stage projects or 
(iv) that the operating companies or developmental stage projects will in 
fact generate positive cash flow or that any such cash flow will be 
distributed to equity holders (particularly since the Company expects that 
its operating companies will generally reinvest all of their cash flow in 
development opportunities for the foreseeable future). 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 STW's Malaysian 
Ringgit 91 million (approximately $36,694,000 as translated using effective 
exchange rates at March 31, 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 developmental stage 
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 

                                       19.

<PAGE>

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. In particular, in early 1996, the 
Malaysian government initiated efforts to consolidate the Malaysian 
telecommunications industry, which, if completed would have forced a sale or 
merger of STW, the Company's Malaysian operating company, to or with one of a 
limited number of surviving telecommunications companies. There can be no 
assurance that the Malaysian government will not seek to take similar actions 
in the future. Likewise, other countries may seek to expropriate or 
confiscate assets of the Company. 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. See "--Project Level Risks--Risks Inherent in Foreign Investment." 

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

     The Company is a holding company with no business operations of its own. 
All of the operations of the Company 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 the Company to enable it to make investments in 
operating companies or developmental stage projects, meet working capital 
needs or other liabilities of the Company (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

    The Company's ability to sell or transfer its ownership interests in its
operating companies and developmental stage projects is generally subject to (i)
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) 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 developmental
stage 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 developmental stage projects currently has
any publicly traded securities and there can be no assurance that in the future
there will be either a public 

                                       20.

<PAGE>

or private market for the securities of the Company's operating companies or 
developmental stage 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 developmental stage 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 developmental stage projects, generally have the 
right to determine the timing and amount of any such dividends or 
distributions. 

LACK OF CONTROL OF OPERATING COMPANIES AND DEVELOPMENTAL STAGE PROJECTS

     The Company anticipates that it will often have a minority interest in 
its operating companies and developmental stage projects, in part because 
applicable laws often limit foreign investors to minority equity positions. 
Although the Company is actively involved in the management of most of the 
operating companies and developmental stage projects in which it has an 
ownership interest and intends to invest in the future in operating companies 
and developmental stage projects in which it can participate in management, 
its minority voting positions may preclude it from controlling 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, even where the Company has majority control of a 
project, the exercise of such control may be subject to contractual, 
regulatory or other restrictions. In addition, the Company may be unable to 
access the cash flow, if any, of its operating companies. See "--Company 
Level Risks--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 March 31, 1997, 
had operating companies or developmental stage projects in 13 foreign 
countries. Subject to the availability of additional financing, the Company 
anticipates that it will 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 developmental stage projects. This strategy presents the 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 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 developmental 
stage 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 substantive 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 

                                       21.

<PAGE>

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 March 31, 1997, Vanguard beneficially owned approximately 39% of the 
Company's equity, without giving effect to the warrant and option exchange 
transaction described in Note 9 of the Notes to Consolidated Financial 
Statements above. 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 directors to 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. 

CONFLICTS OF INTEREST

     Vanguard is not precluded from competing with the Company by itself or 
through affiliates by 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 certain of 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. 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 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. 
 
INFORMATION RELATING TO DEMOGRAPHIC, ECONOMIC, MARKET AND RELATED INFORMATION

     The information contained herein includes certain demographic and 
economic information, as well as information regarding cellular service, 
installation and penetration in the countries in which the Company has 
operating companies or developmental stage projects. This information was 
obtained from a number of sources and the Company has not independently 
verified any such information and there can be no assurance as to its 
accuracy. In addition, much of the information related to POPs are estimates 
and reflect data that may be incorrect or imprecise and such estimates and 
data have been obtained from a number of sources and the Company has not 
independently verified any such information. 

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 
developmental stage 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. 

                                       22.

<PAGE>

CLASSIFICATION OF NOTES AS DEBT; ORIGINAL ISSUE DISCOUNT

     Although the Company intends to treat the Notes as debt for all 
purposes, there can be no assurance that the Internal Revenue Service will 
agree that the Notes qualify as debt for federal income tax purposes. If the 
Notes are not respected as debt for such purposes, they would likely be 
recharacterized as an equity interest in the Company and the interest that 
accretes on the Notes would not be deductible by the Company when accrued or 
paid. Loss of such interest deductions would increase income taxes ultimately 
payable by the Company, and thus, reduce cash flow otherwise available to 
repay the Notes, which would have a material adverse effect on the Company. 
Recharacterization of the Notes as equity could also adversely affect 
non-corporate holders as well as non-United States holders of the Notes. 

     Assuming the Notes are respected as debt for federal income tax 
purposes, they will be subject to the original issue discount provisions of 
the Code because they will have been issued at a non-de minimis discount from 
their principal amount. Consequently, the holders of the Notes generally will 
be required to include amounts in gross income for federal income tax 
purposes in advance of receipt of the cash payments to which the income is 
attributable. 

     If a bankruptcy case is commenced by or against the Company under the 
United States Bankruptcy Code after the issuance of the Notes, the claim of a 
holder of any of the Notes with respect to the principal amount thereof may 
be limited to an amount equal to the sum of (i) the initial offering price 
allocable to the Notes and (ii) that portion of the original issued discount 
which is not deemed to constitute "unmatured interest" for purposes of the 
Bankruptcy Code. Any original issued discount that was not amortized as of 
any such bankruptcy filing would constitute "unmatured interest." 

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 developmental stage 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. 

                                       23.

<PAGE>

PROJECT LEVEL RISKS

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

     Most of the operating companies have generated operating losses and 
negative cash flow from operations, and the Company expects that most 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 developmental stage projects, particularly WLL 
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 developmental stage 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 developmental stage projects or require that certain planned projects be 
delayed or abandoned. In particular, at March 31, 1997 a significant portion 
of the Company's investments had been made in three operating companies 
(namely STW, which is developing a national WLL system in Malaysia; Mobisel, 
which is developing a national cellular system in Indonesia; and SDL, which 
is developing various regional cellular systems in China), and each of these 
operating companies will be required to obtain substantial additional 
financing in order to complete planned capital expenditures. 

     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 developmental stage 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 
developmental stage 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 developmental 
stage projects. 

     In addition, there can be no assurance that the operating companies or 
developmental stage 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. 

     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 developmental stage 
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. 

EARLY STAGE OF DEVELOPMENT OF WIRELESS PROJECTS

     Most of the Company's wireless projects are in the early stages of 
development. Only the nine operating companies, Via 1, SDL, RPSL, Mobisel, 
Mobilkom, STW, Mobilcom Mexico, TeamTalk and UTS, currently provide wireless 
communications services on a commercial basis, and many of these operating 
companies have only recently initiated such commercial service and have a 
limited number of subscribers. Although MOUs have been signed with local 
partners in the operating companies and developmental stage projects, in many 
cases definitive joint venture and shareholder agreements have not been 
prepared or signed, definitive legal entities have not been formed and/or 
required equity and debt financing has not been secured. Even where an MOU or 
definitive joint venture or shareholder agreement has been signed, there can 
be no assurance that the terms of the Company's participation in an operating 
company or developmental stage project will not be modified in a manner that 
is materially adverse to the Company, particularly because the Company 
usually holds a minority interest. The successful development and 
commercialization of these projects will depend on a number of significant 
financial, logistical, technical, marketing, legal and other 

                                       24.

<PAGE>

factors, the outcome of which cannot be predicted. Virtually all of the 
operating companies are, and in the future will be, newly-formed entities 
that have a limited operating history and that operate at a loss for a 
substantial period of time. These operating companies will require 
significant amounts of additional financing to fund capital expenditures, 
working capital requirements and other cash needs, including the costs of 
obtaining additional licenses. In addition, there can be no assurance that 
these projects will not encounter engineering, design or other operational 
problems. For example, STW, the Company's Malaysian WLL operating company, 
has experienced significant delays in network deployment and its marketing 
plans primarily as a result of adverse effects on STW of an attempt during 
the first half of 1996 by the Malaysian government to consolidate the 
Malaysian telecommunications industry. See "--Risks Inherent in Foreign 
Investment." As a result, in late 1996, IWC and its principal strategic 
partner in STW extensively reviewed and revised STW's business plan and 
strategy. There can be no assurance that the Company can successfully develop 
any of its existing or planned developmental stage projects or that any of 
these projects or any of its operating companies will achieve commercial 
success. Further, the Company's current and anticipated ownership interests 
in the operating companies and developmental stage projects are subject to 
modification and may even be eliminated completely due to the occurrence of 
certain events such as the re-negotiation of existing MOUs and/or agreements, 
changes in foreign laws or regulations affecting foreign ownership, 
government expropriation, financing contingencies and other factors. 
Likewise, the Company may voluntarily withdraw from one or more operating 
companies and/or developmental stage projects. 

RISKS INHERENT IN FOREIGN INVESTMENT

     The Company has invested substantial resources outside of the United 
States and plans to continue to do so in the future. Governments of many 
developing countries have exercised and continue to exercise substantial 
influence over many aspects of the private sector. For example, foreign 
ownership of telecommunications ventures is prohibited in China. In addition, 
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 
developmental stage projects may depend for required interconnections to 
land-line telephone networks and other services. Similarly, government 
actions in the future could have a significant adverse effect on economic 
conditions in a developing country or may otherwise have a material adverse 
effect on the Company and its operating companies and developmental stage 
projects. Expropriation, confiscatory taxation, nationalization, political, 
economic or social instability or other developments could materially 
adversely affect the value of the Company's interests in operating companies 
and developmental stage projects in particular developing countries. 

     For example, in early 1996 the Malaysian government announced a program 
designed to consolidate the Malaysian telecommunications industry which, if 
completed, would have forced the sale or merger of STW, the Company's 
Malaysian operating company, to one of a limited number of surviving 
telecommunications companies. Although the Malaysian government announced in 
July 1996 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 STW's network deployment and marketing plans thereby 
contributing to a 37% decrease in STW's subscribers during the quarter ended 
September 30, 1996. There can be no assurance that the Malaysian government 
will not initiate similar programs in the future. There can also be no 
assurance that the Malaysian national telephone company will not otherwise 
impose restrictions on STW, including restrictions on the ability of STW to 
interconnect its wireless network with the national telephone company's 
system, which could have a material adverse effect on the Company.  Moreover, 
there can be no assurance that other countries where the Company has 
operating companies or developmental stage projects will not initiate similar 
programs or impose other restrictions, which could have a material adverse 
effect on the Company. 

     The Company also may be adversely affected by political or social unrest 
or instability in foreign countries. Such unrest or instability resulting 
from political, economic, social or other conditions in foreign countries 
could have a material adverse effect on the Company. For example, in China, 
because foreign ownership of telecommunications operators is prohibited, the 
Company, through its ownership interest in SDL, has interests in China 
telecommunications projects through certain "cooperative agreements" with 
Chinese cellular operators. Pursuant to the terms of the cooperative 
agreements, SDL provides equipment and technical and engineering services to 
the cellular operators and, in return, is allocated a portion of the revenues 
or profits from the cellular operations. There can be no assurance that the 
Chinese government will not prohibit or otherwise impose restrictions on 
these types of arrangements, which could have a material adverse effect on 
the Company. 

                                       25.

<PAGE>

     The Company does not have political risk insurance in the countries in 
which it currently conducts business. Moreover, applicable agreements 
relating to the Company's interests in its operating companies are frequently 
governed by foreign law. As a result, in the event of a dispute, it may be 
difficult for the Company to enforce its rights. Accordingly, the Company may 
have little or no recourse upon the occurrence of any of these developments 
or if any of its partners seek to re-negotiate existing or future MOUs and/or 
other agreements. 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 or 
developmental stage project 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. 

TECHNOLOGICAL RISK; RISK OF OBSOLESCENCE

     The Company's operating companies and developmental stage projects 
generally use new and emerging technologies. For example, SDL, the Company's 
China Regional Cellular project, is required by the Chinese government to 
migrate to CDMA, a cellular technology that is not widely deployed on a 
commercial basis at the present time. Additionally, the MPT 1327 ECTR 
technology selected by a number of the Company's ECTR operating companies is 
currently operational in many countries but has had limited deployment for 
public use in developing countries. Although many of the technologies 
currently in use and to be used in the future by the Company have been 
developed by international telecommunications companies such as Nokia, 
Philips, Motorola, Ericsson, Lucent Technologies and Nortel, most are 
generally advanced technologies which have only recently been developed and 
commercially introduced. There can be no assurance that the operating 
companies and developmental stage projects will not experience technical 
problems in the commercial deployment of these technologies, particularly 
because they are being introduced in developing countries. In addition, the 
technology used in wireless communications is evolving rapidly and one or 
more of the technologies currently utilized or planned by the Company to be 
utilized may be unpopular with 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. 

RISK OF MODIFICATION OR LOSS OF LICENSES; UNCERTAINTY AS TO THE AVAILABILITY,
COST AND TERMS OF LICENSES; RESTRICTIONS ON LICENSES

     The Company's ability to retain and exploit the existing 
telecommunications licenses held by its operating companies and developmental 
stage projects, to renew such licenses when they expire, and to obtain new 
licenses in the future, are essential to the Company's operations. However, 
these licenses are typically granted by governmental agencies in developing 
countries, and there can be no assurance that these 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, and the Company may have limited or no legal 
recourse if any of these events were to occur. In addition, there can be no 
assurance that renewals to these licenses will be granted or, if renewed, 
that the renewal terms will not be substantially less favorable to the 
holders of the licenses than the original license terms, any of which could 
have a material adverse effect on the Company. Likewise, many of the 
Company's operating companies and developmental stage projects have not yet 
obtained all of the licenses necessary for their proposed operations, and no 
assurance can be given that any such licenses will be obtained. For example, 
the Brazilian government has not approved the transfer to Via 1, the 
Company's Brazilian ECTR operating company, of the 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 approval or to obtain other licenses would have a material adverse 
effect on the Company. 

     The Company believes that the opportunity to acquire substantial new 
wireless licenses in developing countries will exist only for a limited time. 
Further, although the Company's operating companies and developmental stage 
projects have, to date, obtained many of their operating licenses through 
private negotiations without having to participate in competitive bidding 
processes, the Company anticipates that governments of developing countries 
will increasingly discover the value of new wireless technologies and may 
require bidding for licenses, which would likely increase the cost of these 
licenses, perhaps substantially. In addition, the operating companies and 
developmental stage projects may be required to purchase licenses from other 
license holders in certain circumstances, for example, to gain network 
capacity or to increase geographic coverage. Furthermore, relevant 
governmental authorities may grant 

                                       26.

<PAGE>

additional telecommunications licenses covering the same geographical areas 
as the operating companies' and developmental stage projects' licenses or 
otherwise grant licenses which allow other companies to compete directly with 
such operating companies and developmental stage 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. In 
addition, licenses may be subject to significant operating restrictions or 
conditions, including restrictions on interconnection to the public telephone 
system or requirements that the operating companies or developmental stage 
projects complete construction or commence commercial operation of the 
networks by specified deadlines, which conditions, if not satisfied, may 
result in loss or revocation of the license. Accordingly, even if an 
operating company or developmental stage project is able to obtain a required 
license, there can be no assurance that such operating requirements will be 
satisfied and, as a result, there can be no assurance that such license will 
not be lost or revoked or that the restrictions imposed upon such license 
will prevent the commercial exploitation of such license, which could have a 
material adverse effect on the Company. 

DEPENDENCE ON OTHER TELECOMMUNICATIONS PROVIDERS

     The success of the Company's wireless systems will in many cases depend 
upon services provided by other telecommunications providers, some of which 
are competitors of the Company, the operating companies and/or the 
developmental stage projects. For example, the Company's operating companies 
and developmental stage projects generally require interconnection agreements 
with national or regional telephone companies in order for its wireless 
systems to connect with land-line telephone systems, and may require the use 
of microwave or fiber optic networks belonging to other parties to link its 
wireless systems. Although a number of operating companies have entered into 
required interconnection and/or linking agreements or have interconnection 
and/or linking 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 could have a material 
adverse effect on the Company. Specifically, STW, the Company's Malaysian WLL 
project, has in the past had difficulties obtaining interconnect services 
from its interconnect provider, which is a competitor of STW. In addition, 
STW's interconnect agreement expires in August 1997. Any failure of STW to 
obtain interconnect services pursuant to its interconnect agreement or to 
obtain a successor agreement would have a material adverse effect on STW. 

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. 

CONSTRUCTION RISKS

     The operating companies and developmental stage projects in which the 
Company invests typically require substantial construction of new wireless 
networks and additions to existing wireless networks. Construction activity 
will require the operating companies and developmental stage 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 the operating company or the developmental stage project or its 
subcontractors, such as those caused by acts of governmental entities, 
financing delays and catastrophic occurrences. Delays also can arise from 
design changes and material or equipment shortages or delays in delivery. 
Accordingly, there can be no assurance that the operating companies or 
developmental stage 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 subscriber contracts, 
franchises or licenses and could have a material adverse effect on the 
Company. In particular, telecommunications licenses often are granted on the 
condition that network construction be completed or commercial operations be 
commenced by a specified date. Failure to comply with these deadlines could 
result in the loss or revocation of the 

                                       27.

<PAGE>

licenses. In that regard, certain operating companies have failed to 
meet such deadlines in the past. Specifically, UTS, which provides ECTR 
services in the Visayas and Mindanao regions of the Philippines, failed 
to comply with the service date requirement contained in its provisional 
authority but subsequently cured such failure and expects to receive its 
final operating authority from the Philippine government by the end of 1997. 
Similarly, in the Via 1 Project, because the Company and its proposed 
partners were unable to comply with operations commencement deadlines 
with respect to their licenses, they had to apply for, and have 
received, 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 deadline 
extensions to similar defaults occurring in the future, which could have 
a material adverse effect on the Company. 

SUBSTANTIAL LEVERAGE

     As discussed above, the operating companies and developmental stage 
projects will require continuing sources of additional financing. Certain of 
the operating companies have substantial indebtedness and, to the extent that 
additional debt financing is available, such operating companies may incur 
additional indebtedness, and other operating companies or developmental stage 
projects may in the future incur substantial indebtedness, in relation to 
their respective base of equity capital. To the extent that any of the 
operating companies or developmental stage projects now has or in the future 
incurs a high level of indebtedness, such indebtedness will have important 
consequences to the Company, including (i) a possible restriction on such 
entity's ability to pay dividends or make other distributions to the Company, 
(ii) a possible limitation on such entity's ability to obtain additional debt 
financing and (iii) a possible impairment of such entity's ability to react 
to changes in the industry and economic conditions generally. 

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 the Company. 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 wireless services of the Company's operating companies and 
developmental stage projects are subject to governmental regulation, which 
may change from time to time. There can be no assurance that material and 
adverse changes in the regulation of the Company's existing or future 
operating companies or developmental stage projects will not occur in the 
future. To date, certain operating companies and developmental stage projects 
have been subject to foreign ownership restrictions, service requirements, 
restrictions on interconnection of wireless systems to government-owned or 
private telephone networks, subscriber rate-setting, technology and 
construction requirements, among others. These regulations may be difficult 
to comply with, particularly given demographic, geographic or other issues in 
a particular market. Further, changes in the regulatory framework may limit 
the ability to add subscribers to developing systems. An operating company's 
or developmental stage project's failure to comply with applicable 
governmental regulations or operating requirements could result in the loss 
of licenses or otherwise could have a material adverse effect on the Company. 

                                       28.

<PAGE>

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.

TAX RISKS

     Distributions of earnings and other payments received 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 operating companies in which the Company 
owns an equity interest 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") 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. 

                                       29.

<PAGE>

PART II. OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES.

SALES OF UNREGISTERED SECURITIES DURING THE THREE-MONTHS ENDED MARCH 31, 1997

     In January 1997, the Company issued options to purchase an aggregate of 
127,095 shares of Common Stock at an exercise price of $9.375 per share to 
certain service providers of the Company pursuant to the 1996 SO/SIP.  In 
addition, in February 1997, the Company issued options to purchase an 
aggregate of 226,187 shares of Common Stock at an exercise price of $9.375 
per share to certain service providers of the Company pursuant to the 1996 
SO/SIP.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS. 

EXHIBIT  DESCRIPTION
NO.   
------   -----------
    
10.9A    International Wireless Communications Holdings, Inc. 1996 Stock
         Option/Stock Issuance Plan, amended and restated as of February 3,
         1997
    
10.16B   Amended and Restated Shareholders' Agreement among Star Digitel
         Limited, Star Telecom Holding Limited ("STHL"), International Wireless
         Communications, Inc. ("IWC") and Vanguard China, Inc., dated April 4,
         1997
    
10.16C   Amended and Restated Noncompetition Agreement between STHL and IWC.,
         dated April 4, 1997
    
10.26    Agreement between IWC and Vanguard Cellular Financial Corp., dated May
         5, 1997, including:

         Exhibit A      Form of Warrant Agreement
         Exhibit B      Form of Warrant Agreement
         Exhibit C      Form of Incentive Stock Option
         Exhibit D      Form of Nonstatutory Option Agreement
         Exhibit E      Form of Guaranty
         Exhibit F      Form of Investment Representation Letter
         Exhibit G      Form of Vanguard Legal Opinion
         Exhibit H      Form of IWCH Legal Opinion
    
27.1     Financial Data Schedule


(b) REPORTS ON FORM 8-K 

    No Current Reports on Form 8-K were filed during the quarter ended March
31, 1997. 

                                       30.

<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:  May 14, 1996                         INTERNATIONAL WIRELESS
                                            COMMUNICATIONS HOLDINGS, INC.
                                            (Registrant)



                                            By: /s/ Douglas S. Sinclair  
                                               ---------------------------------
                                                    Douglas S. Sinclair
                                                    Vice President and Chief 
                                                    Financial Officer 


                                            By: /s/ Keith D. Taylor 
                                               ---------------------------------
                                                    Keith D. Taylor 
                                                    Controller and Chief 
                                                    Accounting Officer
    



                                           31.

<PAGE>
                                    EXHIBIT INDEX
                                           
                                           
EXHIBIT NO.   DESCRIPTION
-----------   -----------

<TABLE>
<CAPTION>

EXHIBIT 
  NO.    DESCRIPTION                                                              PAGE NO.
-------  -----------                                                              --------
<S>     <C>                                                                      <C>
10.9A    International Wireless Communications Holdings, Inc. 1996 Stock             33
         Option/Stock Issuance Plan, amended and restated as of February 3,
         1997 
         
10.16B   Amended and Restated Shareholders' Agreement among Star Digitel             49
         Limited, Star Telecom Holding Limited ("STHL"), International Wireless
         Communications, Inc. ("IWC") and Vanguard China, Inc., dated April 4,
         1997
         
10.16C   Amended and Restated Noncompetition Agreement between STHL and IWC.,        78
         dated April 4, 1997 
         
10.26    Agreement between IWC and Vanguard Cellular Financial Corp., dated May      88
         5, 1997, including:

         Exhibit A      Form of Warrant Agreement
         Exhibit B      Form of Warrant Agreement
         Exhibit C      Form of Incentive Stock Option
         Exhibit D      Form of Nonstatutory Option Agreement
         Exhibit E      Form of Guaranty
         Exhibit F      Form of Investment Representation Letter
         Exhibit G      Form of Vanguard Legal Opinion
         Exhibit H      Form of IWCH Legal Opinion    
         
27.1     Financial Data Schedule                                                    124

</TABLE>

    
                                       32.