##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 
 FORM 20-F
 
 (Mark One)
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from ___to ___
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 Date of event requiring this shell company report ______
 Commission
File Number: 000-50556
 VIATEL HOLDING (BERMUDA) LIMITED
  Not applicable
  Bermuda
  Inbucon House
Wick Road
Egham, Surrey TW20 0HR
United Kingdom
     Common Stock, Par Value US$ 0.01 Per Share
    o Yes þ No
 o þ
 þ o
  o o þ
 o þ
 o þ
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I
    
    
    6Item 1. Identity of Directors, Senior Management and Advisers
    
    
    6Item 2. Offer Statistics and Expected Timetable
    
    
    6Item 3. Key Information
    
    
    6Item 4. Information on the Company
    
    
    22Item 4a. Unresolved Staff Comments
    
    
    50Item 5. Operating and Financial Review and Prospects
    
    
    50Item 6. Directors, Senior Management and Employees
    
    
    66Item 7. Major Shareholders and Related Party Transactions
    
    
    73Item 8. Financial Information
    
    
    75Item 9. The Offer and Listing
    
    
    78Item 10. Additional Information
    
    
    80Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    95PART II
    
    
    98Item 12. Description of Securities other than Equity Securities
    
    
    98Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    98Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    98Item 15. Controls and Procedures
    
    
    98Item 16A. Audit Committee Financial Expert
    
    
    100Item 16B. Code of Ethics
    
    
    100Item 16C. Principal Accountant Fees and Services
    
    
    100Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    101Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    101PART III
    
    
    102Item 17. Financial Statements
    
    
    102Item 18. Financial Statements
    
    
    102Item 19. Exhibits
    
    
    102Financial Statements
    
    
    F-1Exhibit 4.8Exhibit 4.16Exhibit 4.17Exhibit 4.18Exhibit 4.19Exhibit 4.20Exhibit 8Exhibit 12.1Exhibit 12.2Exhibit 13Exhibit 4.16Exhibit 4.17Exhibit 4.18Exhibit 4.19Exhibit 4.20Exhibit 8Exhibit 12.1Exhibit 12.2Exhibit 13
  Presentation of Financial Information
 
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Predecessor and Successor
   Comparability of Financial Information
  Forward-Looking Statements
   
    
    the beliefs and expectations of management;
    
    our business plan, its advantages and our strategy for implementing the
business plan;
    
    our expectations as to future revenues, margins, expenses and capital requirements;
    
    our ability to raise additional cash from borrowings or other financings to fund
operations;
    
    our ability to maintain a viable cash and balance sheet position or to
become cash flow positive in our operations with additional funding;
    
    our ability to control costs and become profitable;
    
    our ability to generate revenues or positive cash flows; and
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
    
    the composition of revenues and cost of sales, including operating margins and the
use of professional, consultancy and/or contractor services provided by third
parties.
     
    
    our ability to obtain financing on acceptable terms and sufficiently to fund
our working capital requirements and business plan;
    
    our vulnerability to adverse general economic and industry conditions;
    
    the adverse effect of a highly competitive market for our products and services;
and
    
    our ability to retain the services of key management personnel.
 www.viatel.com
 
 PART I
 
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  4




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ITEM 3. KEY INFORMATION
 Selected Financial Data
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Successor
    
    Successor
    
    Successor
    
    Successor
    
    Successor
    
    
    PredecessorFrom
    
    
    FromYear
    
    Year
    
    Year
    
    
    
    
    
    June 7,
    
    
    January 1,Ended
    
    Ended
    
    Ended
    
    Year Ended
    
    2002 to
    
    
    2002 toDecember
    
    December
    
    December
    
    December
    
    December
    
    
    June 7,31, 2006
    
    31, 2005
    
    31, 2004
    
    31, 2003
    
    31, 2002
    
    
    2002Revenue:Communication services revenues
    
    
    31,621
    
    
    
    18,595
    
    
    
    12,147
    
    
    
    8,510
    
    
    
    2,793
    
    
    
    
    1,216Operations and maintenance fee revenue
    
    
    1,846
    
    
    
    1,964
    
    
    
    1,828
    
    
    
    1,707
    
    
    
    1,371
    
    
    
    
    1,451Total revenue
    
    
    33,467
    
    
    
    20,559
    
    
    
    13,975
    
    
    
    10,217
    
    
    
    4,164
    
    
    
    
    2,667Operating expenses:Cost of services sold
    
    
    (17,037
    )
    
    
    (12,691
    )
    
    
    (7,247
    )
    
    
    (4,953
    )
    
    
    (1,506
    )
    
    
    
    (1,518
    )Selling, general and administrative
    
    
    (49,017
    )
    
    
    (56,346
    )
    
    
    (65,244
    )
    
    
    (47,660
    )
    
    
    (30,840
    )
    
    
    
    (26,502
    )Gain on amounts due from bankruptcy estates
    
    
    4,216
    
    
    
    
    
    
    
    3,105
    
    
    
    358
    
    
    
    25,003
    
    
    
    
    Impairment
    
    
    
    
    
    
    (242
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (908
    )Depreciation and amortization
    
    
    (8,070
    )
    
    
    (6,538
    )
    
    
    (7,036
    )
    
    
    (4,464
    )
    
    
    (2,458
    )
    
    
    
    (1,736
    )Total operating expenses (net)
    
    
    (69,908
    )
    
    
    (75,817
    )
    
    
    (76,422
    )
    
    
    (56,719
    )
    
    
    (9,801
    )
    
    
    
    (30,664
    )Other operating income
    
    
    93
    
    
    
    362
    
    
    
    17,780
    
    
    
    Operating loss before reorganization items
    
    
    (36,348
    )
    
    
    (54,896
    )
    
    
    (44,667
    )
    
    
    (46,502
    )
    
    
    (5,637
    )
    
    
    
    (27,997
    )Reorganization items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,662,669Operating (loss) / income
    
    
    (36,348
    )
    
    
    (54,896
    )
    
    
    (44,667
    )
    
    
    (46,502
    )
    
    
    (5,637
    )
    
    
    
    2,634,672Other income / (expense):Interest and other income
    
    
    430
    
    
    
    260
    
    
    
    774
    
    
    
    1,555
    
    
    
    986
    
    
    
    
    1,007Interest expense
    
    
    (13,118
    )
    
    
    (8,199
    )
    
    
    (4,395
    )
    
    
    
    
    
    
    (11
    )
    
    
    
    (63
    )Net (loss) / income before taxation
    
    
    (49,036
    )
    
    
    (62,835
    )
    
    
    (48,288
    )
    
    
    (44,947
    )
    
    
    (4,662
    )
    
    
    
    2,635,616Taxation
    
    
    (510
    )
    
    
    (666
    )
    
    
    241
    
    
    
    229
    
    
    
    
    
    
    
    
    Net (loss) / income from continuing operations
    
    
    (49,546
    )
    
    
    (63,501
    )
    
    
    (48,047
    )
    
    
    (44,718
    )
    
    
    (4,662
    )
    
    
    
    2,635,616Discontinued operations:Income from discontinued operations
(including profit of $10,622 in 2006 on
disposal of Cybernet)
    
    
    10,698
    
    
    
    129
    
    
    
    869
    
    
    
    (2,647
    )
    
    
    
    
    
    
    
    Taxation
    
    
    (11
    )
    
    
    (6
    )
    
    
    (1
    )
    
    
    (12
    )
    
    
    
    
    
    
    
    Net income / (loss) from
discontinued operations
    
    
    10,687
    
    
    
    123
    
    
    
    868
    
    
    
    (2,659
    )
    
    
    
    
    
    
    
    
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Successor
    
    Successor
    
    Successor
    
    Successor
    
    Successor
    
    
    PredecessorFrom
    
    
    FromYear
    
    Year
    
    Year
    
    
    
    
    
    June 7,
    
    
    January 1,Ended
    
    Ended
    
    Ended
    
    Year Ended
    
    2002 to
    
    
    2002 toDecember
    
    December
    
    December
    
    December
    
    December
    
    
    June 7,31, 2006
    
    31, 2005
    
    31, 2004
    
    31, 2003
    
    31, 2002
    
    
    2002Net (loss) / income attributable to common
stockholders
    
    
    (38,859
    )
    
    
    (63,378
    )
    
    
    (47,179
    )
    
    
    (47,377
    )
    
    
    (4,662
    )
    
    
    
    2,635,616Net (loss) / income per common share
attributable to common shareholders, basic
and diluted  continuing operations
    
    
    (4.66
    )
    
    
    (5.97
    )
    
    
    (4.50
    )
    
    
    (4.18
    )
    
    
    (0.44
    )
    
    
    
    51.72Net income per common share attributable to
common shareholders, basic and diluted  discontinued operations
    
    
    1.01
    
    
    
    0.01
    
    
    
    0.08
    
    
    
    (0.25
    )
    
    
    
    
    
    
    
    Total
    
    
    (3.65    )
    
    
    (5.96
    )
    
    
    (4.42
    )
    
    
    (4.43
    )
    
    
    (0.44
    )
    
    
    
    51.72Weighted average common shares outstanding,
basic and diluted
    
    
    10,630
    
    
    
    10,630
    
    
    
    10,680
    
    
    
    10,705
    
    
    
    10,560
    
    
    
    
    50,963Other consolidated financial data:Net cash used in operating activities
    
    
    (7,937
    )
    
    
    (32,602
    )
    
    
    (48,338
    )
    
    
    (25,116
    )
    
    
    (13,765
    )
    
    
    
    (7,856
    )Net cash from / (used in) investing activities
    
    
    6,436
    
    
    
    (4,717
    )
    
    
    (4,333
    )
    
    
    (2,952
    )
    
    
    (1,667
    )
    
    
    
    (6,670
    )Net cash provided by financing activities
    
    
    16,818
    
    
    
    19,513
    
    
    
    44,158
    
    
    
    2
    
    
    
    
    
    
    
    
    
 Successor Company atDecember 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Consolidated Balance Sheet Data:Cash and cash equivalents
    
    
    17,679
    
    
    
    
    
    
    
    21,939
    
    
    
    29,510
    
    
    
    53,408Other current assets
    
    
    19,541
    
    
    
    12,780
    
    
    
    25,936
    
    
    
    19,924
    
    
    
    22,766Property and equipment, net
    
    
    41,605
    
    
    
    30,522
    
    
    
    37,559
    
    
    
    39,450
    
    
    
    37,947Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    210
    
    
    
    1,056
    
    
    
    Other assets
    
    
    6,784
    
    
    
    7,583
    
    
    
    7,630
    
    
    
    97
    
    
    
    6,930Total assets  continuing operations
    
    
    85,609
    
    
    
    50,885
    
    
    
    93,274
    
    
    
    90,037
    
    
    
    121,051
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Successor Company atDecember 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Total assets  held for sale
    
    
    
    
    
    
    5,524
    
    
    
    6,406
    
    
    
    4,845
    
    
    
    Total assets
    
    
    85,609
    
    
    
    56,409
    
    
    
    99,680
    
    
    
    94,882
    
    
    
    121,051Total current liabilities
    
    
    45,092
    
    
    
    28,695
    
    
    
    21,596
    
    
    
    29,602
    
    
    
    12,691Total long-term liabilities
    
    
    116,639
    
    
    
    58,074
    
    
    
    36,617
    
    
    
    304
    
    
    
    10,676Total
liabilities  continuing operations
    
    
    161,731
    
    
    
    86,769
    
    
    
    58,213
    
    
    
    29,906
    
    
    
    23,367Total liabilities  held for sale
    
    
    
    
    
    
    5,572
    
    
    
    6,075
    
    
    
    3,513
    
    
    
    Total liabilities
    
    
    161,731
    
    
    
    92,341
    
    
    
    64,288
    
    
    
    33,419
    
    
    
    23,367Net (liabilities) / assets
    
    
    (76,122
    )
    
    
    (35,932
    )
    
    
    35,392
    
    
    
    61,463
    
    
    
    97,684Capital stock
    
    
    106
    
    
    
    106
    
    
    
    106
    
    
    
    107
    
    
    
    106Stockholders (deficiency) / equity
    
    
    (76,122
    )
    
    
    (35,932
    )
    
    
    35,392
    
    
    
    61,463
    
    
    
    97,684
 Exchange Rates
  
 Capitalization and indebtedness
  Reasons for the offer and use of proceeds
  Risk Factors
  We will not be able to fund our operations without a refinancing of our existing
debt facilities and/or further financing, which may not be available on attractive
terms or at all.
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Form 20-F.
   9




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Our substantial level of debt may adversely affect our operations and financial conditions.
   10




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
    
    limiting our ability to obtain additional financing for our capital
expenditures, acquisitions, working capital or other general requirements;
    
    limiting our flexibility in planning for, or reacting to, changes in
our business, the competitive environment and the telecommunications
industry;
    
    placing us at a competitive disadvantage to competitors with less debt;
    
    making us more vulnerable to economic downturns, which could weaken our
ability to compete effectively and could reduce our flexibility in
responding to changing economic conditions;
    
    limiting our ability to take advantage of new business opportunities; and
    
    restricting our ability to invest further funds in order to finance our
ongoing operations and business plan.
 Our debt covenants limit our financing and other activities.
  
    
    incur additional indebtedness;
    
    make prepayments of certain
indebtedness;
    
    pay dividends;
    
    make investments;
    
    engage in transactions with stockholders and
affiliates;
    
    issue capital stock;
    
    create liens;
    
    sell assets;
    
    engage in mergers and consolidations;
    
    change the Chief Executive Officer; and
    
    increase the size of the Board.
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The Investors are holders of the Special Share which provides the Investors with
approval rights over material actions by the Company.
  We have a history of operating losses and expect these losses to continue.
  Our future operating results may be subject to significant fluctuation.
  
    
    our ability to raise additional financing;
    
    our ability to service and discharge our existing debt
obligations;
    
    general economic conditions;
    
    the conditions of the European telecommunications industry
in general;
    
    further price decreases in the European telecommunications
industry;
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
    
    our ability to introduce and support new products and services;
    
    our ability to extend our operations into new business markets and
territories;
    
    our ability to attract and retain customers;
    
    changes in the mix of services sold or channels through which services
are sold;
    
    capital expenditure requirements and costs relating to our network and
our businesses;
    
    the outcome of legal proceedings; and
    
    the effects of government
regulation and regulatory changes.
  We cannot assure you that we will be able to retain or find qualified replacements for
members of our senior management team and other key personnel.
  Our exposure to exchange rate fluctuations may have a material adverse effect on our
ability to meet certain obligations.
  We are subject to risks associated with operating in multiple countries.
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We cannot assure you that we will be able to enter into sales contracts sufficient to
meet our working capital requirements.
  Our revenue is concentrated in a limited number of customers.
  We cannot assure you that we will be able to retain or expand our existing customer base.
  We may not have the ability to support and develop new services and product lines.
  
    
    generate customer acceptance of such new services and product offerings;
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
    
    integrate necessary equipment and software into our network;
    
    enhance our billing, back-office and information systems required to
accommodate these new services and products;
    
    identify and sell other services and products for which we believe there
is a significant potential demand; and
    
    support, through back office resource, the growing number of customers that we gain.
  We may not be able to generate sufficient wholesale revenues to meet ongoing network
operating costs.
 
 System disruptions or failures could have a material adverse effect on our business.
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
    
    fire and flood;
    
    power loss;
    
    natural
disasters; and
    
    general transmission failures caused by a number of additional factors.
  Failure of key suppliers could affect our ability to operate our business.
  
    
    delays in new products and features from suppliers, impacting our product
development programs;
    
    discontinuance of products or services, impacting our ability to deliver
our products and services;
    
    deteriorating support quality, affecting operational and customer service; and
    
    higher volatility with regard to our demands on suppliers, and in stock
levels affected by customer returned equipment.
 .
 Our business strategy may include potential business combinations, strategic investments
and acquisitions.
  
    
    the potential disruption to our ongoing business and the distraction of our
management;
    
    the difficulty of integrating previously separate operations and
personnel;
    
    the difficulty of incorporating acquired technology and rights into
our products and
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services;
    
    unanticipated expenses related to acquired technologies and their integration
into existing technologies;
    
    potential unknown liabilities associated with acquired businesses; and
    
    higher than planned funding requirements to preserve and grow the value of
acquired companies.
 Electronic attack from hackers or computer viruses could disrupt our business.
  Rapid technological changes.
  The European telecommunications industry is highly competitive. Our market share, net
sales or net income could decline due to vigorous price and other competition.
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Government regulation could adversely affect our ability to provide services in
markets in which we operate.
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
    
    limited independence and impartiality of some NRAs;
    
    limitations on the powers of NRAs; and
    
    separate NRAs for telecoms and broadcasting, which increases the risk
of regulatory uncertainty given the advent of converged services.
  e-Communications
 An
adverse ruling in legal proceedings relating to the payment in France
of ROW fees could adversely affect our ability to operate the
European Network.
  Changes in the regulation of wholesale broadband services could adversely affect our
ability to meet certain obligations.
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Changes in the regulation of VoIP could adversely affect our ability to meet certain obligations.
  Because we are a Bermuda holding company and a foreign private issuer for purposes
of U.S. securities laws, persons who own our common shares may have more difficulty
in protecting their interests than persons who are shareholders of a publicly-held U.S.
corporation.
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We cannot assure you that an active trading market will develop or continue for our
common shares.
  The conversion, or even the prospect of conversion, of our convertible debt securities
could have a depressive effect on the trading activity of our common shares.
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The effect of the Groups internal cost recharge arrangements may be such as to
adversely impact the solvency of certain Group companies.
  You are unlikely to receive dividends on our common shares in the foreseeable future.
  Our reputation may be adversely impacted by the Predecessors bankruptcy proceeding.
  The Company may have potential liability with respect to past non-compliance of the
Predecessor under the Exchange Act.
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Some members of our Board of Directors may have conflicts of interest with us, and
some of these conflicts may be resolved in a manner adverse to us.
  
 ITEM 4. INFORMATION ON THE COMPANY
 Overview  New Viatel Organization
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History of the Predecessor
  24




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Chapter 11 Reorganization
  Operations of the Predecessor as at the Filing Date
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Asset/network disposals following the Filing Date
   Plan of Reorganization
  26




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Class description
    
    Treatment under the Plan of ReorganizationClass 1  Other Priority Claims
    
    Unimpaired
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Class 2  Convenience Claims (Unsecured
Claims of Face Amount US$500 or less,
excluding any Intercompany Claims)
    
    UnimpairedClass 3.01  NTFC Secured Claim
    
    UnimpairedClass 3.02  Other Secured Claims
    
    UnimpairedClass 4  General Unsecured Claims
    
    Pro rata share of 88% of
12,000,000 new common
shares of the Company of
US$0.01 each, issued in
connection with the Plan of
ReorganizationClass 5  Intercompany Claims
    
    ExtinguishedClass 6  Interests
    
    Cancelled
  Emergence from Chapter 11
 Operations of the Company as at June 7, 2002
   
    
    the European Network;
    
    leased capacity to a POP in New York;
    
    several inoperative voice switches; and
    
    certain receivables and cash-in-hand of the Predecessor.
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Evolution of operations of Viatel since June 7, 2002
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Viatel Business Plan
   Sales and Marketing
    Retail
 x
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
    
    Dedicated Internet Access Broadband: an xDSL broadband service, with
high performance and reliability, designed for the business user. This
service is based on a 1-to-1 contention ratio (contention being defined
as the number of organizations sharing the same bandwidth); in this way,
the customer has effectively its own dedicated bandwidth, maximising
service performance.
    
    Business and Small Office Broadband: an xDSL shared broadband service
aimed at small offices and people working from home.
    
    White label broadband: an xDSL shared broadband service, retailed
under the customers or another third partys brand, offering email, web
space and parental control if required.
    
    L2TP xDSL: a service that allows third parties to access national shared
and uncontended xDSL connectivity for the purpose of overlaying their
own IP services, without the need for substantial upfront and ongoing
interconnect costs.
    
    Dedicated Internet Access: a high bandwidth leased line Internet access
utilising our IP Network and worldwide peering agreements.
  
    
    Co-location: a managed service offering a flexible and cost-effective
alternative to an in-house facility. Dedicated full and half racks are
available and located in highly secure and monitored (on a 24 hour, 7
days a week basis) facilities in New York and across Europe.
    
    Managed Hosting: a service available on RedHat, Linux and Windows
operating systems. This service is a managed, dedicated web and Internet
applications hosting solution for business customers. Such applications
could be a web site, an e-business platform or an SAP application. This
service is again located in a highly secure and monitored (on a 24 hour,
7 days a week basis) facility.
  
    
    Managed Firewall: a fully managed and dedicated firewall solution. A
firewall is a set of hardware and software components used for the
protection of a network from unauthorised access. Firewalls might be
located in the customers premises for DIA and broadband connectivity or
in Viatels data centre for managed hosting customers and to secure
centralised Internet access from an IPVPN.
 31




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##### Table of Contents




    
    Managed Anti Spam & Anti Virus: an e-mail scanning service based on a
three tier architecture that blocks spam and viruses transmitted over
the Internet before reaching the customer network.
  
    
    Viatel Managed IPVPN: a secure, cost effective communications service
utilising a virtual IP network and allowing customers connectivity between sites, remote workers, business
partners and their own customers. If customers wish to
manage their own site equipment, they can choose a wires only option.
    
    Site-to-Site IPVPN: an IPVPN service that allows customers to access
private data, such as company information, across a public or shared
network. The Viatel IPVPN offering takes advantage of a number of access
technologies, such as xDSL, leased line and Ethernet. The service uses
the Companys MPLS (MultiProtocol Label Switching) network.
    
    Remote IPVPN: a service that allows customers with a distributed
workforce to access company data and systems, such as order entry and
work-flow management. An international roaming service option is also
available.
    
    Viatel Ethernet: a high bandwidth, flexible service to enable customers
to run data intensive or real time applications between sites; the
service is often used between data centres and as part of a business
continuity solution, such as for data replication and storage.
  
    
    Viatel IP Voice: comparable to a traditional voice access line service,
but routed over cost effective IP connections based on a range of access
technologies such as broadband, leased lines and Ethernet. We provide
the IP connection and a variety of gateways to IP enabled existing
customer equipment.
    
    Viatel Hosted IP Voice: a fully managed, bundled telephony solution,
including IP enabled phones, connectivity and private branch exchange
PBX functionality such as call forwarding and voice mail.
    
    Viatel VoIP VPN: a single, secure VPN network for integrated voice and
data traffic between customer sites and remote workers, helping to
reduce costs and improve efficiency.
  Wholesale
 32




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##### Table of Contents




    
    Leased Line: an end-to-end, managed, fully redundant international
private wire service that uses the European Network. The service is
provided at varying speeds and uses synchronous digital hierarchy
(SDH) transmission technology.
    
    Wavelengths: a service offering greater speed, flexibility and more
bandwidth utilization allowing carriers, ISPs and large corporate
customers, effectively, to design and operate their own networks.
    
    GigaBit Ethernet: High speed transmission service at 1 G/bit and 10
G/bit capacities delivered over SDH or Wavelengths. These services
enable customer data processing or networking equipment to communicate
over long distance using familiar and less expensive equipment
interfaces used more commonly within a building or campus environment.
Service routes can be protected or unprotected.
    
    IP transit: services where, starting with our own networks IP backbone
and then, by purchasing global IP transit from a number of carefully
selected partners, we are able to offer our customers cost-effective
connectivity to worldwide IP domains.
  
    
    Dark Fiber: we offer dark fiber to customers that may wish to make the
requisite capital investments in order to carry traffic over fiber. We
may also make available to our customers, in selected locations and
facilities, certain ducts on either an outright sale or leased basis.
    
    Co-location: services normally provided as ancillary to the
aforementioned dark fiber services. These services allow our customers,
who connect directly to our network, to install and operate their
equipment in our co-location facilities. A range of additional services
are also offered such as dedicated racks and secure cages designed to
allow increased security and remote monitoring of customers
applications co-located at the facility. These facilities are available
in data centres across Europe and in New York.
  33




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##### Table of Contents



Segmental Revenue
   US$000
 Year ended
    
    
    Year ended
    
    
    Year endedDecember
    
    
    December 31,
    
    
    December 31,31, 2006
    
    
    2005
    
    
    2004Total Retail Business  United Kingdom
    
    
    25,207
    
    
    
    15,361
    
    
    
    9,600United Kingdom
    
    
    1,874
    
    
    
    1,369
    
    
    
    960Switzerland
    
    
    440
    
    
    
    330
    
    
    
    373Western Europe
    
    
    4,605
    
    
    
    2,290
    
    
    
    2366North America
    
    
    1,341
    
    
    
    1,209
    
    
    
    676Total Wholesale Business
    
    
    8,260
    
    
    
    5,198
    
    
    
    4,375Total Revenue  Continuing Operations
    
    
    33,467
    
    
    
    20,559
    
    
    
    13,975
  The European Network
 34




---



##### Table of Contents



35




---



##### Table of Contents



Global Voice Transaction
  Relevant Assets
  36




---



##### Table of Contents



The Netherlands, Belgium and United Kingdom
 France
 Germany (PEN 3 network)
 Germany (PEN 2 network)
  
 37




---



##### Table of Contents



Consideration Paid to the Company
  
    
    a cash payment of 18.5 million (US$23.7 million approximately) net of all
applicable taxes;
    
    title (or such nearest equivalent legal form of ownership as Global Voice is
able to transfer) to five fiber pairs in the Global Voice metropolitan networks in
6 European cities (Amsterdam, Utrecht, Rotterdam, Frankfurt, Hamburg and
Dusseldorf);
    
    title (or pending its ability to convey such title, an IRU) to five fiber
pairs in the Global Voice metropolitan network in London, such commitment to be
effective as from January 2, 2007;
    
    preferential pricing from Global Voice for up to two additional fibers on all
of Global Voices current metropolitan networks  covering in total 14 European
cities and, where available, on all future metropolitan networks constructed by
Global Voice;
    
    preferential pricing from Global Voice for access to specified buildings
directly connected to Global Voices metropolitan networks;
    
    an indefeasible right of use for twenty years in three fiber pairs on each
section of the PEN 3 network, as and when such sections are made operational by
Global Voice;
    
    access to additional buildings on the Global Voice network at cost plus 15 percent; and
    
    from the first anniversary of Completion, a contribution of one-half of the
operating costs with respect to those sections of the European Network on which
Global Voice acquired an interest.
 Operational Issues
   38




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##### Table of Contents



Impact of Global Voice Transaction
  Description of Certain Indebtedness
  April 2004 Financing
       39




---



##### Table of Contents



July 2005 Financing
   40




---



##### Table of Contents



pari passu
 March 2006 Financing
    41




---



##### Table of Contents



pari passu
 December 2006 Financing
    pari passu
 April 2007 Financing
    42




---



##### Table of Contents



pari passu
 Regulation
     Autorité de Régulation des Communications
électroniques et des Postes
( ), Bundesnetzagentur Onafhankelijke Post en Telecommunicatie Autoriteit De
 43




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##### Table of Contents



Belgische regulator voor de postdiensten en de telecommunicatie
 Organizational Structure
  Ownership by Viatel HoldingName of Subsidiary
    
    Jurisdiction of Incorporation
    
    (Bermuda) LimitedVTL-TP (Bermuda) Limited
    
    Bermuda
    
    
    100
    %Viatel Holding (Europe) Limited
    
    England and Wales
    
    
    100
    %Viatel Operations SA(1)
    
    France
    
    
    100
    %Viatel Belgium NV
    
    Belgium
    
    
    100
    %VTL, Inc. (2)
    
    US
    
    
    100
    %Viatel Broadband Limited
    
    England and Wales
    
    
    100
    %
 Name of Subsidiary
    
    Jurisdiction of Incorporation
    
    Ownership by VTL, Inc.Viatel Belgium Limited
    
    England and Wales
    
    
    100
    %VTL (UK) Limited
    
    England and Wales
    
    
    100
    %Viatel Circe Assets Limited
    
    England and Wales
    
    
    100
    %
 Ownership by Viatel HoldingName of Subsidiary
    
    Jurisdiction of Incorporation
    
    (Europe) LimitedViatel Equipment Limited
    
    England and Wales
    
    
    100
    %VTL Wavenet Limited
    
    England and Wales
    
    
    100
    %Viaphone AG
    
    Switzerland
    
    
    100
    %Viatel Global Communications B.V.
    
    The Netherlands
    
    
    100
    %Viatel German Asset GmbH
    
    Germany
    
    
    100
    %VTL Telecom GmbH
    
    Germany
    
    
    100
    %
 Ownership by VTL (UK)Name of Subsidiary
    
    Jurisdiction of Incorporation
    
    LimitedViatel Internet Limited
    
    England and Wales
    
    
    100
    %
 44




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##### Table of Contents



Ownership by Viatel GlobalName of Subsidiary
    
    Jurisdiction of Incorporation
    
    Communications B.V.Viafoperations Communications B.V.
    
    The Netherlands
    
    
    100
    %
 
 (1)
    
    It is a requirement of French law that there be 7 shareholders of a
corporation organized as a société anonyme(SA). The minority shares in Viatel
Operations SA are held by each of 6 nominee shareholders.(2)
    
    As from January 6, 2003.(3)
    
    Prior to January 12, 2004, known as Netcom Internet Limited. Property, Plant and Equipment
      45




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##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)ESSEN (BELGIUM)
    
    REGEN
    
    15 sqmLEERS-NORD
    
    REGEN
    
    1 RackLIEGE
    
    REGEN
    
    15 sqmANTWERP WOMMELGEN
    
    MOR
    
    15 sqmHASSELT
    
    REGEN
    
    15 sqmANTWERP BELIEWEG (ALASKA)
    
    MOR
    
    15 sqmGENT (MERELBEKE)
    
    MOR
    
    15 sqmGENT (BRUGGE)
    
    REGEN
    
    15 sqmLEUVEN
    
    STORAGE (Potential future POP)
    
    200 sqmESTAMPUIS
    
    MOR
    
    15 sqmTOURNAI
    
    REGEN
    
    15 sqmMONS
    
    REGEN
    
    15 sqmCHARLEROI (CHATELET)
    
    REGEN
    
    15 sqmANTWERP VOSVELD 20
    
    STORAGE (Potential future POP)
    
    100 sqm offices  620 sqm techBRUSSELS MIDI (RUE DE France)
    
    POP
    
    95 sqmANTOING
    
    REGEN
    
    15 sqmNAMUR
    
    REGEN
    
    15 sqmBRUSSELS TOLL-LAAN
    
    POP/OFFICE
    
    450 sqmKORTRIJK
    
    REGEN
    
    15 sqmAVIGNONET (LAURAGAIS)
    
    MOR
    
    15 sqmPARIS AUBERVILLERS CEDEX (VICTOR-HUGO)
    
    RACK SPACE
    
    room 12, 1 rackAVAILLES-EN-CHATERELLAULT
    
    MOR
    
    15 sqmLYON (RUE GEORGE MARANNE) 2
    
    POP
    
    16 sqmLISLE ADAM (MOURS) (A16)
    
    MOR
    
    15 sqmPARIS AUBERVILLIERS CEDEX (GARDINOUX)
    
    POP
    
    1 600 x 600 rackAZY-SUR-MARNE (NOGENT LARTAND)
    
    MOR
    
    15 sqm
 46




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##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)MEAUX
    
    MOR
    
    15 sqmBORDEAUX (MERIGNAC)
    
    POP
    
    1267 sqmCAYEUX-SUR-MER
    
    REGEN
    
    150 sqmCAZAN (VERMEGUES)
    
    MOR
    
    25 sqmCHAROLLES (LP2) (VENDENESSE)
    
    MOR
    
    25 sqmCONDE-SUR-MARNE
    
    REGEN
    
    15 sqmCORBEIL (ESSONNES) (LP7)
    
    MOR
    
    25 sqmCOURRIERES
    
    MOR
    
    15 sqmBIACHES (PERONNE) #1
    
    REGEN
    
    25 sqmBOURBON (LP3)
    
    MOR
    
    25 sqmBELLEVILLE (LP1) (MONTMERLE)
    
    MOR
    
    25 sqmBON-ENCONTRE
    
    MOR
    
    25 sqmFOS-SUR-MER
    
    MOR
    
    25 sqmBLOIS
    
    MOR
    
    25 sqmGRISOLLES
    
    MOR
    
    25 sqmBLANZAY
    
    MOR
    
    25 sqmMEILHAN SUR GARONNE
    
    MOR
    
    25 sqmLAVOURS (LG2)
    
    MOR
    
    25 sqmBRIARE (LP5)
    
    REGEN
    
    25 sqmST MARTIN-DE-BRETHENCOURT
    
    MOR
    
    25 sqmTHOUROTTE
    
    MOR
    
    15 sqmSOUPPES-SUR-LOING (LP6)
    
    MOR
    
    25 sqmPICHEGU (ST GILES) (MARNEGA)
    
    MOR
    
    25 sqmPARIS LA DEFENSE (COURBEVOIE)
    
    POP
    
    215 sqmPOILHES
    
    MOR
    
    25 sqmMONTFAUCON (CADEROUSSE)
    
    REGEN
    
    25 sqmTOULOUSE
    
    POP
    
    816 sqmARTENAY (ORLEANS)
    
    POP
    
    25 sqmREVIGNY-SUR-ORNAIN (CONTRISSON)
    
    MOR
    
    15 sqm
 47




---



##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)SAULT BRENAZ (LG1)
    
    MOR
    
    25 sqmSETE (MONTPELLIER)
    
    REGEN
    
    25 sqmAMIENS (PARC DACTIVITIES)
    
    POP
    
    750 sqm warehouse + 5 car parksST CHRISTOPHE-DE-DOUBLE
    
    MOR
    
    25 sqmSTRASBOURG
    
    POP
    
    500 sqmNEVERS (LP4)
    
    MOR
    
    25 sqmMONTELIMAR
(SAULCE SUR RHONE)
    
    MOR
    
    25 sqmMARSEILLETTE
    
    MOR
    
    25 sqmXOUAXANGE (HESSE)
    
    MOR
    
    15 sqmNANCY RUE JAURES
    
    POP
    
    500 sqmNAMBSHEIM (BS1)
    
    MOR
    
    15 sqmNERSAC
    
    MOR
    
    25 sqmPARIS 35 RUE DES JEUNEURS  BASEMENT (BASTILLE)
    
    POP
    
    97 sqmANDANCETTE
    
    MOR
    
    25 sqmPARIS 35 RUE DES JEUNEURS  2ND FLR (BASTILLE)
    
    POP/OFFICE
    
    50 sqmVERETZ (TOURS)
    
    MOR
    
    25 sqmPARIS 38 RUE DES JEUNEURS  4TH
    
    POP
    
    3 RACKSPARIS 35 RUE DES JEUNEURS  3RD FLR (BASTILLE)
    
    POP/OFFICE
    
    270 sqmTROUSSEY (VILLOROY SUR MEHOLLE)
    
    MOR
    
    15 sqmDUSSELDORF IN DER STEELE 29
    
    POP
    
    1 600 x 800 CabinetDERNBACH
    
    MOR
    
    15 sqmDUSSELDORF HALLE CONNECTAPARK
    
    POP
    
    900 sqm equipment room plus officeELTEN
    
    MOR
    
    15 sqmMANNHEIM
    
    POP
    
    600 sqm
 48




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##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)NAUROD
    
    MOR
    
    15 sqmLINZ
    
    REGEN
    
    15 sqmFRANKFURT 19 WEISSMULLERSTRASSE
    
    POP
    
    1 600 x 800 CabinetBERG LANGWIESE (GASLINE)
    
    MOR
    
    15 sqmKAPPELLA (KAPPELLEN)
    
    MOR
    
    15 sqmPORZ
    
    MOR
    
    15 sqmFRANKFURT 90 KLEYERSTRASSE
    
    MOR/OFFICE
    
    45 sqmAMSTERDAM SCHIPLUIDENLAAN (DELFLANDLAAN)
    
    POP/OFFICE
    
    450 sqm, 5 car park spaces (basement)AMSTERDAM NIKHEF BUILDING
    
    POP
    
    1 rackAMSTERDAM WORLD TRADE CENTRE
    
    POP/OFFICE
    
    182 sqmAMSTERDAM HALFWEG
    
    POP
    
    200 sqmAMSTERDAM 144 GYROKOOPWEG
    
    POP
    
    3 racksAMSTERDAM 58 GYROKOOPWEG (INTERXION)
    
    POP
    
    1 rackZANDVOORT
    
    REGEN
    
    200 sqmLEERSUM
    
    MOR
    
    15 sqmROTTERDAM ALBERT PLESMANWEG (SOERWEG 5B)
    
    POP
    
    200 sqmWORLD FASHION CENTER (17th floor)
    
    ROOF SITE
    
    100 sqm on siteDOORN
    
    MOR
    
    10 sqmOLTEN
    
    MOR
    
    50 sqmBASEL
    
    POP
    
    4 racksBERN
    
    POP
    
    50 sqmEPENDES
    
    REGEN
    
    100 sqmZURICH 225 JOSEF STR
    
    POP
    
    2 racksZURICH 569 BADENEERSTRASSE
    
    POP
    
    810 sqmZURICH 560 SCHAFFHAUSERSTRASSE
    
    POP/OFFICE
    
    65 sqm
 49




---



##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)GENEVA
    
    POP
    
    77 sqmGENEVA (Rue de la Confederation 6)
    
    POP
    
    1 rackLONDON PARK STREET
    
    POP
    
    1 rackSNOW HILL
    
    MOR
    
    15 sqmPOLEGATE
    
    REGEN
    
    50 sqm (equipment room)PEASE POTTAGE
    
    MOR
    
    35 sqmPAKENHAM
    
    MOR
    
    15 sqmMANCHESTER WILLIAMS HOUSE
    
    POP
    
    1 rackLONDON TELEHOUSE NORTH
    
    POP/OFFICE
    
    243 sqm (2600 sq ft)LONDON GLOBAL SWITCH
    
    POP
    
    1 rack 1 ductEGHAM INBUCON HOUSE
    
    POP/OFFICE/NOC
    
    1405 sqmLONDON 8 HARBOUR EXCHANGE (TELECITY 2)
    
    POP
    
    1 rack  ref 1 Z 18LONDON TELEHOUSE NORTH (NETCOM)
    
    POP
    
    1 racksLONDON BRICK LANE (INTERXION)
    
    POP
    
    1 x 600 x 600 rackLONDON TELEHOUSE EAST
    
    POP
    
    3 racksLONDON HOSTING CENTRE (PSINET)
    
    POP
    
    3 racksLOWESTOFT
    
    REGEN
    
    250 sqmBRACKNELL
    
    OFFICE/POP
    
    2,240 sqmLONDON 7 HARBOUR EXCHANGE (REDBUS)
    
    POP
    
    1 rack 8thfloorLONDON BONNINGTON HOUSE (TELECITY 1)
    
    POP
    
    4 racksNEW YORK 60 HUDSON
    
    POP
    
    550 sqmFIBERNET BIRMINGHAM
    
    POP
    
    rack E11 (60cm x 60 cm)FIBERNET COVENTRY
    
    POP
    
    rack A10FIBERNET LEEDS 2
    
    POP
    
    rack D11FIBERNET LEICESTER
    
    POP
    
    rack B10FIBERNET READING
    
    POP
    
    rack D5
 50




---



##### Table of Contents



Total Equipment or Facility AreaProperty name
    
    Site Type
    
    (leased total area may be larger)FIBERNET EDINBURGH
    
    POP
    
    1 rackLONDON GOSWELL ROAD
    
    POP
    
    1 rackLONDON HEATHROW (ix Europe)
    
    POP
    
    1 rackFIBERNET NORTHAMPTON
    
    POP
    
    1 rackLONDON SOVEREIGN HOUSE (REDBUS)
    
    POP
    
    1 rackLONDON BRAHAM ST (L3)
    
    POP
    
    1 rack
  
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 The following discussion should be read in conjunction with our financial
statements and the notes thereto included elsewhere in this  Form 20-F . The
following discussion includes certain forward-looking statements. See Forward
Looking Statements on page 2. For a discussion of important factors, see Item 3.
Key Information  Risk Factors.
 General
   Critical Accounting Policies and Estimates
  51




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##### Table of Contents



Revenue and Cost of Sales
      Impairment of Long-lived Assets
  52




---



##### Table of Contents




    
    where a measurable trend has been established, cash inflows from existing
services are forecast based upon historical performance along with monthly growth
rates in line with those achieved over prior periods for which relevant data is
available;
    
    where a measurable trend has not been established, estimates of future
inflows are based on current recurring revenues and the order pipeline relevant
to the assets;
    
    cash inflows from new services or the other sales channels described in
connection with the Viatel Business Plan are forecast based on good faith estimates of
sales order value. In addition, alternative customer profiles are modeled to test the
level of assumed revenues for reasonableness in the absence of historic market data;
    
    estimates of cash outflows relating to costs are typically based on current run rates;
    
    additional staff costs are included where additional sales heads or other
staff resources are required to meet revenue targets;
    
    estimates of cost reductions are based on reasonable assessment and, where
indicated, based on third party professional advice; and
    
    cash flows associated with future capital expenditure that would increase the
service potential of the relevant asset or group of assets are excluded.
  53




---



##### Table of Contents




    
    the ability of the Company commercially to exploit (and gain additional
revenue streams through) the additional metropolitan network assets acquired in
connection with the Global Voice Transaction. See Item 4. Information on the
Company  Global Voice Transaction;
    
    the ability of the Company to lower its costs of sale in the wholesale market
through its purchase and successful integration of new electronic equipment into
the European Network. See Item 4. Information on the Company  Sales and
Marketing  Wholesale; and
    
    the ability of the Company successfully to implement its Revised Wholesale
Strategy and to generate the anticipated new revenue streams.
   
 
 
 Accounting for loan notes
   54




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Legal Proceedings
  Results of Operations
  Year Ended
    
    Year Ended
    
    Year EndedDecember 31, 2006
    
    December 31, 2005
    
    December 31, 2004% of
    
    
    
    % of
    
    
    
    % of$000

    
    revenue
    
    $000
    
    revenue
    
    $000
    
    revenueRevenue
    
    
    33,467
    
    
    
    100
    
    
    
    20,559
    
    
    
    100
    
    
    
    13,975
    
    
    
    100Cost of services sold
    
    
    (17,037
    )
    
    
    (51
    )
    
    
    (12,691
    )
    
    
    (62
    )
    
    
    (7,247
    )
    
    
    (52
    )Selling, general & administrative
    
    
    (49,017
    )
    
    
    (146
    )
    
    
    (56,346
    )
    
    
    (274
    )
    
    
    (65,244
    )
    
    
    (467
    )Gains on amounts due from bankruptcy estates
    
    
    4,216
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    3,105
    
    
    
    22Impairment
    
    
    
    
    
    
    
    
    
    
    (242
    )
    
    
    (1
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    (8,070
    )
    
    
    (24
    )
    
    
    (6,538
    )
    
    
    (32
    )
    
    
    (7,036
    )
    
    
    (50
    )Other operating income
    
    
    93
    
    
    
    
    
    
    
    362
    
    
    
    2
    
    
    
    17,780
    
    
    
    127Operating loss
    
    
    (36,348
    )
    
    
    (108
    )
    
    
    (54,896
    )
    
    
    (267
    )
    
    
    (44,667
    )
    
    
    (319
    )Interest and other income
    
    
    430
    
    
    
    1
    
    
    
    260
    
    
    
    1
    
    
    
    774
    
    
    
    6Interest expense
    
    
    (13,118
    )
    
    
    (39
    )
    
    
    (8,199
    )
    
    
    (40
    )
    
    
    (4,395
    )
    
    
    (31
    )Taxation
    
    
    (510
    )
    
    
    (2
    )
    
    
    (666
    )
    
    
    (3
    )
    
    
    241
    
    
    
    2
 55




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##### Table of Contents



Year Ended
    
    Year Ended
    
    Year EndedDecember 31, 2006
    
    December 31, 2005
    
    December 31, 2004% of
    
    
    
    % of
    
    
    
    % of$000
    
    revenue
    
    $000
    
    revenue
    
    $000
    
    revenueNet loss  continuing operations
    
    
    (49,546
    )
    
    
    (148
    )
    
    
    (63,501
    )
    
    
    (309
    )
    
    
    (48,047
    )
    
    
    (343
    )Discontinued operations:Income from discontinued operations (including
profit of US $10,622 in 2006 on disposal of Cybernet)
    
    
    10,698
    
    
    
    32
    
    
    
    129
    
    
    
    1
    
    
    
    869
    
    
    
    6Taxation
    
    
    (11
    )
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (1
    )
    
    
    Net income from discontinued operations
    
    
    10,687
    
    
    
    32
    
    
    
    123
    
    
    
    1
    
    
    
    868
    
    
    
    6Net loss
    
    
    (38,859
    )
    
    
    (116
    )
    
    
    (63,378
    )
    
    
    (308
    )
    
    
    (47,179
    )
    
    
    (338
    )
 Foreign Currency
   Inflation
  Results of Operations for the year ended December 31, 2006 as compared with the year
ended December 31, 2005
  Revenue
   56




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Cost of Sales
       57




---



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Selling, General and Administrative Expenses
     Gains on Amounts due from Bankruptcy Estates
   Impairment
  Depreciation and Amortization
  58




---



##### Table of Contents



Other Operating Income
  Operating Loss
  Interest and Other Income
   Interest Expense
  Net Loss from Continuing Operations
  Discontinued Operations
 59




---



##### Table of Contents



Capital Expenditure
  Results of Operations for the year ended December 31, 2005 as compared with the year
ended December 31, 2004
  Revenue
      60




---



##### Table of Contents



Cost of Sales
       Selling, General and Administrative Expenses
    61




---



##### Table of Contents



Gains on Amounts due from Bankruptcy Estates
  Impairment
  Depreciation and Amortization
   Other Operating Income
  Operating Loss
  Interest and Other Income
  62




---



##### Table of Contents



Interest Expense
  Net Loss from Continuing Operations
  Discontinued Operations
  Capital Expenditure
  Liquidity and Capital Resources
    63




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##### Table of Contents



Commitments
  Contractual Obligations
 Less than 1
    
    
    
    
    
    
    
    
    
    More than 5US$000
    

    TOTAL

    
    year

    
    1-3 years

    
    3-5 years
    
    yearsStandby maintenance contracts
    
    
    19,508
    
    
    
    4,883
    
    
    
    2,445
    
    
    
    1,919
    
    
    
    10,261Operating leases
    
    
    35,598
    
    
    
    5,832
    
    
    
    7,797
    
    
    
    6,209
    
    
    
    15,760
 64




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##### Table of Contents



Less than 1
    
    
    
    
    
    
    
    
    
    More than 5TOTAL
    
    year
    
    1-3 years
    
    3-5 years
    
    yearsLoan note payments
    
    
    175,563
    
    
    
    
    
    
    
    62,911
    
    
    
    
    
    
    
    112,652Interest on loan notes
    
    
    4,986
    
    
    
    
    
    
    
    4,452
    
    
    
    
    
    
    
    534Total contractual cash commitments
    
    
    235,655
    
    
    
    10,715
    
    
    
    77,605
    
    
    
    8,128
    
    
    
    139,207
  Research and Development and Capital Expenditures
  Year ended
    
    Year ended
    
    Year endedUS$000
    
    December 31, 2006
    
    December 31, 2005
    
    December 31, 2004Capital expenditure
    
    
    1,922
    
    
    
    4,707
    
    
    
    3,847Research and development
    
    
    876
    
    
    
    1,321
    
    
    
    1,093
 Recent Accounting Pronouncements Not Yet Adopted
   65




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66




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##### Table of Contents



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Name
    
    Age
    
    Date of Appointment
    
    PositionLeslie Goodman
    
    
    61
    
    
    July 24, 2002
    
    Chairman of the Board (1), (2), (5)Lucy Woods
    
    
    48
    
    
    May 9, 2003
    
    Chief Executive Officer and DirectorS. Dennis Belcher
    
    
    66
    
    
    August 8, 2002
    
    Director (1), (2), (5)Kevin Power
    
    
    53
    
    
    October 25, 2002
    
    Director (1), (2), (5)Thomas E. Doster IV
    
    
    38
    
    
    August 8, 2002
    
    Director (2), (3)Iain Burnett
    
    
    43
    
    
    December 7, 2005
    
    Director (3)Didier Delepine
    
    
    59
    
    
    December 7, 2005
    
    Director (5)Steve Best
    
    
    40
    
    
    July 25, 2004
    
    Chief Technical OfficerStuart Blythe
    
    
    42
    
    
    September 29, 2003
    
    Senior Vice President and General Counsel (4)Andrew Court
    
    
    44
    
    
    August 29, 2006
    
    Chief Financial Officer (4)
 
 (1)
    
    Member of the Audit Committee.(2)
    
    Member of the Remuneration Committee.(3)
    
    Serves as representative of Morgan Stanley.(4)
    
    Member of the Disclosure Committee.(5)
    
    Member of the Financing Committee. Leslie Goodman.
 Lucy Woods.
 67




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S. Dennis Belcher.
 Kevin Power.
 Didier Delepine.
 Thomas E. Doster IV.
 Iain Burnett.
 Steve Best.
 68




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Stuart Blythe.
 Andrew Court.
  Compensation


69



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Board Practices
 Board of Directors
    70




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Committees of the Board of Directors
      Employees
  71




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2006
    
    2005
    
    2004Engineering and Operations
    
    
    54
    
    
    
    47
    
    
    
    50Sales, Services and Marketing
    
    
    87
    
    
    
    107
    
    
    
    143Finance
    
    
    11
    
    
    
    12
    
    
    
    14Management Information Systems
    
    
    5
    
    
    
    12
    
    
    
    9Legal and Human Resources
    
    
    8
    
    
    
    8
    
    
    
    7Other
    
    
    1
    
    
    
    2
    
    
    
    2Total
    
    
    166
    
    
    
    188
    
    
    
    225
  May 31, 2007
    
    Total
    
    UK
    
    Belgium
    
    France
    
    Germany
    
    NetherlandsEngineering &
Operations
    
    
    57
    
    
    
    50
    
    
    
    1
    
    
    
    3
    
    
    
    1
    
    
    
    2Sales, Services and
Marketing
    
    
    99
    
    
    
    95
    
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    1Finance
    
    
    13
    
    
    
    12
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Management
Information Systems
    
    
    7
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Legal and Human
Resources
    
    
    7
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    184
    
    
    
    172
    
    
    
    1
    
    
    
    5
    
    
    
    3
    
    
    
    3
  Share Ownership
 Beneficial Ownership of Executive Officers and Directors
   72




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Equity Incentive Plan and Employee Benefit Trust
      73




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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Security Ownership of Certain Beneficial Owners
  Percentage ofAmount and Nature of
    
    OutstandingName and Address of Beneficial Owner(1)
    
    Beneficial Ownership(1)
    
    Shares(2)Morgan Stanley & Co. Incorporated(3)
    
    1,621,562 common shares
    
    
    15.2
    %1585 Broadway, New York, NY 10036The Värde Fund L.P. (4)
    
    882,531 common shares
    
    
    8.3
    %8500 Normande Lake Blvd. #1570Minneapolis MN 55437Kanagawa Holdings, LLC (5)
    
    691,850 common shares
    
    
    6.5
    %80 West 12thStreetNew York, New York 10011-8660
 
 1.
    
    Beneficial ownership is determined in accordance with the rules of the U.S.
SEC. In computing the number of common shares beneficially owned by a person and
the percentage ownership of that person, common shares subject to options and
warrants held by that person that are currently exercisable or exercisable within
60 days are deemed outstanding. Such common shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other
person. Except as indicated in the footnotes to this table, the Shareholder
named in the table has sole voting and investment power with respect to our
common shares set
forth opposite such Shareholders name.2.
    
    Based on 10,630,000 common shares outstanding as of May 31, 2007.3.
    
    Information based on the Schedule 13D/A, dated April 17, 2007, of Morgan
Stanley. As a result of the amendment of the 2004 Notes under the terms of, and
subject to Morgan Stanley exercising its rights under, the Letter Agreement (and
not taking into account any additional shares that may be issued to third parties
in connection, in particular, with any conversion of the 2004 Notes pursuant to
the terms of the Letter Agreement), Morgan Stanley will be deemed the beneficial
owner of 60,532,651 shares (or 87.05% of the Companys outstanding shares)
comprised of: (1) the 1,621,562 common shares directly owned by Morgan Stanley;
and (2) 74




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##### Table of Contents



58,911,089 common shares issuable upon conversion of $44,183,317 2004 Notes held by
Morgan Stanley (comprising of $35,650,000 principal amount of 2004 Notes and
$8,533,317 additional 2004 Notes representing accrued interest on the 2004 Notes up
to the interest payment date of January 15, 2007), based on the lowest possible
conversion price under the 2004 Notes of $0.75 per share. The exact number of
common shares into which the 2004 Notes are convertible is not calculable at the
present time because the conversion price used for such conversion is based upon a
calculation of the total equity value of the Company, to be calculated at the time
of conversion by the Board (subject to approval of the majority noteholders). See
Item. 4 Company Information  Description of Certain Indebtedness.4.
    
    Information based on the Schedule 13G, dated February 11, 2005, of The Värde Fund L.P., The
Värde Fund V L.P., The Värde Fund VI L.P., Värde Investment Partners L.P., The
Värde Select Fund L.P., The Värde Fund (Cayman) Limited, The Värde Fund V GP LLC,
The Värde Fund VI GP LLC, Värde Investment Partners GP LLC, Värde Partners L.P.,
Värde Partners Inc. and Värde Management International Inc., George G. Hicks,
Gregory S. McMillan, Marcia L. Page. The address for The Värde Fund (Cayman)
Limited is 2nd Floor Harbour Centre, P.O. Box 896, George Town BWI. All other
entities can be contacted at the address listed in the table. As a result of any
conversion of the 2004 Notes exercised pursuant to the terms of the Letter
Agreement (and not taking into account any additional shares that may be issued to
third parties in connection, in particular, with any conversion of the 2004 Notes
pursuant to the terms of the Letter Agreement), Värde would be deemed the
beneficial owner of 17,407,382 shares (or 64.1% of the Companys outstanding
shares) comprised of: (1) the 882,531 common shares directly owned by Värde; and
(2) 16,524,851 common shares issuable upon conversion of $12,393,638 2004 Notes
held by Värde (comprising of $10,000,000 principal amount of 2004 Notes and
$2,393,638 additional 2004 Notes representing accrued interest on the 2004 Notes up
to the interest payment date of January 15, 2007), based on the lowest possible
conversion price under the 2004 Notes of $0.75 per share. The exact number of
common shares into which the 2004 Notes are convertible is not calculable at the
present time because the conversion price used for such conversion is based upon a
calculation of the total equity value of the Company, to be calculated at the time
of conversion by the Board (subject to approval of the majority noteholders). See
Item. 4 Company Information  Description of Certain Indebtedness.5.
    
    Information based on the Schedule 13G, dated August 14, 2006, of Kanagawa Holdings, LLC,
Honjo, Inc. and David Shuldiner. Related Party Transactions
    75




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ITEM 8. FINANCIAL INFORMATION
 Consolidated Statements and Other Financial Information
 Financial Statements
  Legal Proceedings
  76




---



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77




---



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78




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not less than £300,000
     79




---



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Dividend Policy
  Significant Changes
 80




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##### Table of Contents



ITEM 9. THE OFFERING AND LISTING
 Listing Details
 The Predecessor
  High
    
    LowPeriod
    
    (in USD)Fiscal 1998
    
    
    23.50
    
    
    
    5.00Fiscal 1999
    
    
    57.50
    
    
    
    17.00Fiscal 2000
    
    
    75.38
    
    
    
    1.63First Quarter 2001
    
    
    5.75
    
    
    
    0.56Second Quarter 2001 (1)
    
    
    0.86
    
    
    
    0.06Third Quarter 2001 (2)
    
    
    0.06
    
    
    
    0.03
 
 (1)
    
    On May 2, 2001, the Nasdaq National Market suspended trading of the common
stock of the Predecessor.(2)
    
    In July 2001, the Nasdaq National Market delisted the common stock of the Predecessor. The Successor
  High
    
    LowPeriod
    
    (in USD)To the year end December 31, 2003
    
    
    8.00
    
    
    
    0.50First Quarter 2004
    
    
    2.75
    
    
    
    0.75Second Quarter 2004
    
    
    1.90
    
    
    
    0.90Third Quarter 2004
    
    
    1.20
    
    
    
    0.60Fourth Quarter 2004
    
    
    1.50
    
    
    
    0.60First Quarter 2005
    
    
    0.96
    
    
    
    0.60Second Quarter 2005
    
    
    0.75
    
    
    
    0.07
 81




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##### Table of Contents



High
    
    LowPeriod
    
    (in USD)Third Quarter 2005
    
    
    0.07
    
    
    
    0.00Fourth Quarter 2005
    
    
    0.04
    
    
    
    0.00First Quarter 2006
    
    
    0.09
    
    
    
    0.00Second Quarter 2006
    
    
    0.08
    
    
    
    0.00Third Quarter 2006
    
    
    0.07
    
    
    
    0.00October 2006
    
    
    0.05
    
    
    
    0.00November 2006
    
    
    0.00
    
    
    
    0.00December 2006
    
    
    0.06
    
    
    
    0.00January 2007
    
    
    0.00
    
    
    
    0.00February 2007
    
    
    0.00
    
    
    
    0.00March 2007
    
    
    0.06
    
    
    
    0.01April 2007
    
    
    0.01
    
    
    
    0.01May 2007
    
    
    0.06
    
    
    
    0.00
  Markets
  
 ITEM 10. ADDITIONAL INFORMATION
 Description of Share Capital
   Historical Movement in the Authorized Share Capital of the Company
  82




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Memorandum of Association and Bye-Laws
     83




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##### Table of Contents



Objects and Purposes
  
    
    to carry on the business of constructing, establishing, owning, providing
operating and maintaining telecommunications networks in all parts of the
world and to provide telecommunications services;
    
    to carry on business as a holding company and to acquire and hold shares,
stocks, debenture stock, bonds, mortgages, obligations and securities issued
or guaranteed by any entity;
    
    to acquire such shares and other securities by subscription, syndicate
participation, tender, purchase, exchange or otherwise;
    
    to coordinate the administration, policies, management, supervision,
control, research, planning, trading and any and all other activities of, and
to act as financial advisers and consultants to, any companies which may or
which may become a group company;
    
    to provide financing and financial investment, management and advisory
services to any group company; and
    
    as set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to the Bermuda Act.
 Board Actions
  84




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Board Remuneration
  Directors Borrowing Powers
  Election or Removal of Directors
    85




---



##### Table of Contents



,
  Common Shares
     86




---



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Voting Rights
  Dividends
  Rights in Liquidation
  Transfer of Shares
  Amendment of Memorandum of Association and Bye-Laws
   87




---



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Meetings of Shareholders
     88




---



##### Table of Contents



Access to Books and Records and Dissemination of Information
   Amalgamation
  Continuation
  Appraisal Rights and Shareholder Suits
  89




---



##### Table of Contents



Material Contracts
       90




---



##### Table of Contents



Exchange Controls and Other Limitations Affecting Security Holders
    91




---



##### Table of Contents




    
    the acquisition or holding of land in Bermuda, except that required for
its business and held by way of lease or tenancy for terms of not more than 50
years or, with the consent of the Minister of Finance, that required to
provide accommodation or recreational facilities for its employees and held by
way of lease or tenancy for terms of not more than 21 years;
    
    except as otherwise provided in the Bermuda Act, the taking of mortgages
on land in Bermuda;
    
    the acquisition of any bonds or debentures secured on any land in Bermuda
except bonds or debentures issued by the Bermuda government or a public
authority; or
    
    the carrying on of business of any kind in Bermuda other than with
persons outside Bermuda, except in certain limited circumstances such as doing
business with another exempted company in Bermuda in furtherance of our
business carried on outside Bermuda.
 Taxation
  
    
    for purposes of the U.S. Internal Revenue Code, a citizen or resident of
the United States;
    
    a corporation or other entity taxable as a corporation created or
organized under the laws of the United States or any political subdivision
thereof;
    
    an estate, the income of which is subject to U.S. federal income taxation
regardless of its source; or
    
    a trust which is subject to supervision of a court within the United
States and the control of one or more U.S. persons.
 92




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##### Table of Contents




    
    Bermuda law;
    
    the U.S. Internal Revenue Code and current and proposed regulations under
the Internal Revenue Code;
    
    the administrative policies published by the U.S. Internal Revenue Service,
or IRS; and
    
    judicial decisions;
   Bermuda Tax Considerations
  93




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##### Table of Contents



U.S. Tax Considerations
 Taxation of Dividends Distributed on our Common Shares .
    Taxation of Disposition of our Common Shares.
  94




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##### Table of Contents



Passive Foreign Investment Company Status.
  
    
    75% or more of its gross income is passive income, which includes
interest, dividends and certain rents and royalties not earned in the active
conduct of a trade or business (the Income Test); or
    
    50% or more of its assets, measured quarterly, generally by fair market
value, produce, or are held for the production of, passive income (the
Asset Test).
   
    
    the Predecessor corporation was not a PFIC; and
    
    we were not a PFIC for any of our 2003, 2004 or 2005 taxable years.
   95




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##### Table of Contents



Controlled Foreign Corporation
  Information Reporting and Backup Withholding
   Documents on Display
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Currency Exchange Risks
 97




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Transaction risks
      98




---



##### Table of Contents



Translation risks
    Hedging against foreign exchange risks
    99




---



##### Table of Contents



Sensitivity analysis
  Interest Rates
    100




---



##### Table of Contents



PART II
 
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
 101




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##### Table of Contents




    
    pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the company;
    
    provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management
and directors of the company; and
    
    provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the companys assets that could have
a material effect on the financial statements.
  102




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103




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
    
    we have engaged an external law firm to review on an ongoing basis various
aspects of our Exchange Act disclosure procedures;
    
    we have established a Disclosure Committee operating under a written Disclosure
Committee Charter approved by our Board. The Disclosure Committee Charter was
adopted by our Chief Executive Officer and Chief Financial Officer and ratified by
our Board. The Charter enumerates the Committees responsibilities, including
designing disclosure controls, monitoring their effectiveness and supervising the
preparation of our disclosure documents.
The current members of the Disclosure Committee are General Counsel Stuart
Blythe, Chief Financial Officer Andrew Court, Legal Director Laura King and
Financial Controller Toni Flore. However, following the departure from the
Company of the previous Chief Financial Officer and acting Chief Financial
Officer, Andrew Court was only appointed after the year-end. Members of the
Disclosure Committee oversee the gathering of information in connection with the
preparation of the reports that we file under the Exchange Act, including this
Form 20-F, and work to ensure the accuracy and completeness of our disclosures
in such reports;
 
    
    the members of our Disclosure Committee have been directly involved in the
preparation and review of this Form 20-F; and
    
    further, our Board has approved and adopted a written Code of Ethics. See Item
16B. Code of Ethics.
   
 ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
  
 ITEM 16B. CODE OF ETHICS
  104




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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
   Year ended December 31,US$000(1)
    
    2006
    
    
    2005
    
    
    2004Audit Fees (2)
    
    
    504
    
    
    
    516
    
    
    
    321Audit-Related Fees (3)
    
    
    
    
    
    
    
    
    
    
    75Total audit
and audit-related fees
    
    
    504
    
    
    
    516
    
    
    
    396Tax Fees (4)
    
    
    66
    
    
    
    78
    
    
    
    27Total Fees
    
    
    570
    
    
    
    594
    
    
    
    423
 
 (1)
    
    Predominantly all fees are billed in Pounds Sterling. The exchange rates
used in preparing this table are GBP:US$ 1:1.96 for 2006, 1:1.73 for 2005 and 1:1.833
for 2004.(2)
    
    Consists of fees rendered for professional services for the audit of our
annual financial statements and services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years.(3)
    
    Consists of fees for additional audit-related services.(4)
    
    Consists of fees for UK tax compliance services. Audit Committees pre-approval policies and procedures
  105




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##### Table of Contents



ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  
 PART III
 
 ITEM 17. FINANCIAL STATEMENTS
  
 ITEM 18. FINANCIAL STATEMENTS
  
 ITEM 19. EXHIBITS
 ExhibitNumber
    
    
    
    Description of Exhibit1.1
    
    -
    
    Certificate of Incorporation of Viatel Holding (Bermuda) Limited. (Previously
filed as Exhibit 1.1 to the Companys Form 20-F for the year ended December 31, 2002
dated March 22, 2004 and incorporated by reference herein.)
 106




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ExhibitNumber
    
    
    
    Description of Exhibit1.2
    
    -
    
    Memorandum of Association of Viatel Holding (Bermuda) Limited. (Previously filed
as Exhibit 1.2 to the Companys Form 20-F for the year ended December 31, 2002 dated
March 22, 2004 and incorporated by reference herein.)1.3
    
    -
    
    Amendment to Memorandum of Association of Viatel Holding (Bermuda) Limited.
(Previously filed as Exhibit 1.3 to the Companys Form 20-F for the year ended December
31, 2002 dated March 22, 2004 and incorporated by reference herein.)1.4
    
    -
    
    Bye-laws of Viatel Holding (Bermuda) Limited effective from April 21, 2004.
(Amending and reinstating those Bye-Laws previously filed as Exhibit 99.2 to the
Companys Form 6-K dated February 5, 2004.)2.1
    
    -
    
    Form of Registration Rights Agreement, among Viatel Holding (Bermuda) Limited and
the other parties thereto. (Previously filed as Exhibit 2 to the Companys Form 20-F
for the year ended December 31, 2002 dated March 22, 2004 and incorporated by reference
herein.)2.2
    
    -
    
    Registration Rights Agreement, among Viatel Holding (Bermuda) Limited and the
other parties thereto. (Previously filed as Exhibit 2 to the Companys Form 6-K dated
April 28, 2004 and incorporated by reference herein.)4.1
    
    -
    
    Investment and Note Purchase Agreement, among Viatel Holding (Bermuda) Limited
and the other parties thereto. (Previously filed as Exhibit 1 to the Companys Form 6-K
dated April 28, 2004 and incorporated by reference herein).4.2
    
    -
    
    Shareholders Agreement, among Viatel Holding (Bermuda) Limited and the other
parties thereto. (Previously filed as Exhibit 3 to the Companys Form 6-K dated April
28, 2004 and incorporated by reference herein).4.3
    
    -
    
    Form of Note, due 2014. (Previously filed as Exhibit 4 to the Companys Form 6-K
dated April 28, 2004 and incorporated by reference herein).4.4
    
    -
    
    Investment and Note Purchase Agreement among Viatel Holding (Bermuda) Limited and
the other parties thereto dated June 23, 2005. (Previously filed as Exhibit 4.4 to the
Companys Form 20-F for the year ended December 31, 2005 and incorporated by reference
herein).4.5
    
    -
    
    Letter Agreement among Viatel Holding (Bermuda) Limited and the other parties
thereto dated June 23, 2005. (Previously filed as Exhibit 4.5 to the Companys Form
20-F for the year ended December 31, 2005 and incorporated by reference herein).
 107




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibit4.6
    
    -
    
    Form of Note, due 2007 in relation to the July 2005 Financing. (Previously filed
as Exhibit 4.6 to the Companys Form 20-F for the year ended December 31, 2005 and
incorporated by reference herein).4.7
    
    -
    
    Employment Agreement between Viatel Holding (Bermuda) Limited and the Chief
Executive Officer, dated April 21, 2004. (Previously filed as Exhibit 4.7 to the
Companys Form 20-F for the year ended December 31, 2005 and incorporated by reference
herein).4.8
    
    -

    
    Amendment No. 3, waiver and consent relating to the Investment and Note Purchase
Agreement dated 23 June 2005 among Viatel Holding (Bermuda) Limited and the other
parties thereto dated March 14, 2006. (Previously filed as Exhibit 4.8 to the Companys
Form 20-F for the year ended December 31, 2005 and incorporated by reference herein).4.9
    
    -

    
    Form of Note, due 2007 in relation to the March 2006 Financing. (Previously filed
as Exhibit 4.9 to the Companys Form 20-F for the year ended December 31, 2005 and
incorporated by reference herein).4.10
    
    -

    
    Share Purchase Agreement among Viatel Holding (Bermuda) Limited and the other
parties thereto dated October 20, 2005. (Previously filed as Exhibit 4.10 to the
Companys Form 20-F for the year ended December 31, 2005 and incorporated by reference
herein).4.11
    
    -

    
    Master Network Sale and Lease Agreement among Viatel Holding (Bermuda) Limited and
the other parties thereto dated June 15, 2006. (Previously filed as Exhibit 4.14 to the
Companys Form 20-F for the year ended December 31, 2005 and incorporated by reference
herein).4.12
    
    -

    
    Network Operational Agreement among Viatel Holding (Bermuda) Limited and the other
party thereto dated June 15, 2006. (Previously filed as Exhibit 4.15 to the Companys
Form 20-F for the year ended December 31, 2005 and incorporated by reference herein).4.13
    
    -
    
    Instrument of Settlement in relation to the EBT among Viatel Holding (Bermuda)
Limited and the other party thereto dated July 18, 2005. (Previously filed as Exhibit
4.16 to the Companys Form 20-F for the year ended December 31, 2005 and incorporated
by reference herein).4.14
    
    -
    
    EBT Contribution Covenant in relation to the Lucy Woods Dependent Trust dated
July 19, 2005. (Previously filed as Exhibit 4.17 to the Companys Form 20-F for the
year ended December 31, 2005 and incorporated by reference herein).
 108




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibit4.15
    
    -
    
    Form of EBT Contribution Covenant in relation to the Stuart Blythe and Steve
Best Dependent Trusts. (Previously filed as Exhibit 4.18 to the Companys Form 20-F for
the year ended December 31, 2005 and incorporated by reference herein).4.16
    
    -
    
    Amendment No. 4, Waiver and Consent relating to the Investment and Note Purchase
Agreement dated June 23, 2005 among Viatel Holding (Bermuda) Limited and the other
parties thereto dated December 21, 2006.4.17
    
    -
    
    Form of Note, due 2007 in relation to the December 2006 Financing.4.18
    
    -
    
    Amendment No. 5, Waiver and Consent relating to the Investment and Note Purchase
Agreement dated June 23, 2005 among Viatel Holding (Bermuda) Limited and the other
parties thereto dated April 3, 2007.4.19
    
    -
    
    Form of Note, due 2007 in relation to the April 2007 Financing.4.20
    
    -
    
    Amendment to the Senior Increasing Rate Notes among Viatel Holding (Bermuda)
Limited and the holders of the Senior Increasing Rate Notes dated June 27, 2007.8
    
    -
    
    List of subsidiaries of Viatel Holding (Bermuda) Limited.11
    
    -
    
    Code of Ethics. (Previously filed as Exhibit 11 to the Companys Form 20-F for
the year ended December 31, 2002 dated March 22, 2004 and incorporated by
reference herein.)12.1
    
    -
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.12.2
    
    -
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.13
    
    -
    
    Certification of the Chief Executive Officer and the Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.15.1
    
    -
    
    Amended Disclosure Statement with Respect to the First Amended Joint Chapter 11
Plan of Reorganization of Viatel, Inc. and Certain of its Subsidiaries (Previously
filed as Exhibit 2.1 to the Companys Form 8-K dated January 22, 2002 and incorporated
by reference herein.)
 109




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##### Table of Contents



Viatel Holding (Bermuda) LimitedBy:
    
    /s/ Lucy Woods

Lucy Woods Chief
Executive Officer
  110




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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2006 and December 31, 2005
    
    
    F-3Consolidated Statements of Operations and Comprehensive Loss for the
years ended December 31, 2006, 2005 and 2004
    
    
    F-5Consolidated Statements of Shareholders Equity for the years ended
December 31, 2006 2005 and 2004
    
    
    F-6Consolidated Statements of Cash Flows for the years ended December 31,
2006, 2005 and 2004
    
    
    F-7Notes to the Consolidated Financial Statements
    
    
    F-8
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-2




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##### Table of Contents



VIATEL HOLDING (BERMUDA) LIMITED AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December
    
    
    December31, 2006
    
    
    31, 2005ASSETSCurrent assets:Cash and cash equivalents
    
    
    17,679
    
    
    
    Accounts receivable (net of allowance for
doubtful debts of $451, 2005  $644)
    
    
    3,766
    
    
    
    1,905Amounts receivable from bankruptcy estates within
one year
    
    
    
    
    
    
    1,565VAT receivable
    
    
    3,373
    
    
    
    2,775Prepaid expenses and other current assets
    
    
    12,402
    
    
    
    6,535Assets held for sale
    
    
    
    
    
    
    5,524Total current assets
    
    
    37,220
    
    
    
    18,304Non-current assets:Property and equipment, net
    
    
    41,605
    
    
    
    30,522Deferred financing costs
    
    
    6,784
    
    
    
    7,583Total assets
    
    
    85,609
    
    
    
    56,409LIABILITIES AND SHAREHOLDERS DEFICITCurrent liabilities:Bank overdraft
    
    
    
    
    
    
    4,436Accounts payable
    
    
    18,862
    
    
    
    13,201Accrued expenses
    
    
    8,818
    
    
    
    4,384Accrued interest
    
    
    4,293
    
    
    
    3,109Deferred revenue
    
    
    7,171
    
    
    
    1,062Other current liabilities
    
    
    5,948
    
    
    
    2,503Liabilities held for sale
    
    
    
    
    
    
    5,572Total current liabilities
    
    
    45,092
    
    
    
    34,267Longterm liabilities:Loan notes
    
    
    88,946
    
    
    
    58,074Deferred revenue
    
    
    27,693
    
    
    
    Total longterm liabilities
    
    
    116,639
    
    
    
    58,074Total liabilities
    
    
    161,731
    
    
    
    92,341Commitments and contingencies (Note 11)Shareholders deficit:Common stock, $0.01 par value: 2006  250,000,000
shares authorized; 10,630,000 shares issued and
outstanding, 2005  250,000,000 shares
authorized; 10,630,000 shares issued and
outstanding
    
    
    106
    
    
    
    106Additional paidin capital
    
    
    117,625
    
    
    
    117,625Accumulated other comprehensive income
    
    
    7,602
    
    
    
    8,933
 F-3




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##### Table of Contents



(United States dollars, inthousands, unless specificallystated)December
    
    
    December31,2006
    
    
    31,2005Accumulated deficit
    
    
    (201,455
    )
    
    
    (162,596
    )Total shareholders deficit
    
    
    (76,122
    )
    
    
    (35,932
    )Total liabilities and shareholders deficit
    
    
    85,609
    
    
    
    56,409
 See accompanying notes to consolidated financial statements.
 F-4




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##### Table of Contents



VIATEL HOLDING (BERMUDA) LIMITED AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2004Revenue:Communication services revenues
    
    
    31,621
    
    
    
    18,595
    
    
    
    12,147Operations and maintenance fee revenue
    
    
    1,846
    
    
    
    1,964
    
    
    
    1,828Total revenue
    
    
    33,467
    
    
    
    20,559
    
    
    
    13,975Operating expenses:Cost of services sold (exclusive of
depreciation shown below)
    
    
    (17,037
    )
    
    
    (12,691
    )
    
    
    (7,247
    )Selling, general and administrative
    
    
    (49,017
    )
    
    
    (56,346
    )
    
    
    (65,244
    )Gain on amounts due from bankruptcy estates
    
    
    4,216
    
    
    
    
    
    
    
    3,105Impairment
    
    
    
    
    
    
    (242
    )
    
    
    Depreciation and amortization
    
    
    (8,070
    )
    
    
    (6,538
    )
    
    
    (7,036
    )Total operating expenses (net)
    
    
    (69,908
    )
    
    
    (75,817
    )
    
    
    (76,422
    )Other operating income
    
    
    93
    
    
    
    362
    
    
    
    17,780Operating loss
    
    
    (36,348
    )
    
    
    (54,896
    )
    
    
    (44,667
    )Other income / (expense):Interest and other income
    
    
    430
    
    
    
    260
    
    
    
    774Interest expense
    
    
    (13,118
    )
    
    
    (8,199
    )
    
    
    (4,395
    )Net loss from continuing operations before taxation
    
    
    (49,036
    )
    
    
    (62,835
    )
    
    
    (48,288
    )Taxation
    
    
    (510
    )
    
    
    (666
    )
    
    
    241Net loss from continuing operations
    
    
    (49,546
    )
    
    
    (63,501
    )
    
    
    (48,047
    )Discontinued operations:Income from discontinued operations (including
profit of $10,622 in 2006 on disposal of Cybernet)
    
    
    10,698
    
    
    
    129
    
    
    
    869Taxation
    
    
    (11
    )
    
    
    (6
    )
    
    
    (1
    )Net income from discontinued operations
    
    
    10,687
    
    
    
    123
    
    
    
    868Net loss
    
    
    (38,859
    )
    
    
    (63,378
    )
    
    
    (47,179
    )Foreign currency translation adjustment
    
    
    (1,331
    )
    
    
    (9,526
    )
    
    
    3,545Comprehensive loss
    
    
    (40,190
    )
    
    
    (72,904
    )
    
    
    (43,634
    )Weighted average common shares outstanding, basic
and diluted
    
    
    10,630
    
    
    
    10,630
    
    
    
    10,680Net loss per common share attributable to common
shareholders, basic and diluted  continuing
operations
    
    
    (4.66
    )
    
    
    (5.97
    )
    
    
    (4.50
    )Net income per common share attributable to common
shareholders, basic and diluted  discontinued
operations
    
    
    1.01
    
    
    
    0.01
    
    
    
    0.08Total
    
    
    (3.65
    )
    
    
    (5.96
    )
    
    
    (4.42
    )
  F-5




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##### Table of Contents



VIATEL HOLDING (BERMUDA) LIMITEDAND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Number of
    
    
    
    
    
    
    
    
    
    
    
    
    
    ForeignShares of
    
    
    
    
    
    Additional
    
    Deferred
    
    CurrencyCommon
    
    Common
    
    PaidIn
    
    Stock
    
    Translation
    
    AccumulatedStock
    
    Stock
    
    Capital
    
    Compensation
    
    Adjustment
    
    Deficit
    
    TotalBalance at January 1, 2004
    
    
    10,730,000
    
    
    
    107
    
    
    
    98,494
    
    
    
    (13
    )
    
    
    14,914
    
    
    
    (52,039
    )
    
    
    61,463Shares cancelled
    
    
    (100,000
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Stock options forfeited
    
    
    
    
    
    
    
    
    
    
    (61
    )
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    (48
    )Beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    17,612
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,612Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,545
    
    
    
    
    
    
    
    3,545Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,179
    )
    
    
    (47,179
    )Balance at December 31, 2004
    
    
    10,630,000
    
    
    
    106
    
    
    
    116,045
    
    
    
    
    
    
    
    18,459
    
    
    
    (99,218
    )
    
    
    35,392Beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    1,580
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,580Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,526
    )
    
    
    
    
    
    
    (9,526
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,378
    )
    
    
    (63,378
    )Balance at December 31, 2005
    
    
    10,630,000
    
    
    
    106
    
    
    
    117,625
    
    
    
    
    
    
    
    8,933
    
    
    
    (162,596
    )
    
    
    (35,932
    )Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,331
    )
    
    
    
    
    
    
    (1,331
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,859
    )
    
    
    (38,859
    )Balance at December 31, 2006
    
    
    10,630,000
    
    
    
    106
    
    
    
    117,625
    
    
    
    
    
    
    
    7,602
    
    
    
    (201,455
    )
    
    
    (76,122
    )
 F-6




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##### Table of Contents



VIATEL HOLDING (BERMUDA) LIMITED
 
 AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASHFLOWS
  Year Ended
    
    Year Ended
    
    Year EndedDecember 31,
    
    December 31,
    
    December 31,2006
    
    2005
    
    2004Cash flows from operating activities:Net loss
    
    
    (38,859
    )
    
    
    (63,378
    )
    
    
    (47,179
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    8,261
    
    
    
    7,989
    
    
    
    9,140Loss on disposal of property and equipment
    
    
    3,579
    
    
    
    79
    
    
    
    344Interest expense on long-term debt
    
    
    8,256
    
    
    
    5,603
    
    
    
    2,930Amortization of deferred financing costs
    
    
    1,632
    
    
    
    969
    
    
    
    461Amortization of loan note discount
    
    
    1,604
    
    
    
    1,540
    
    
    
    1,003Deferred income tax liability
    
    
    
    
    
    
    55
    
    
    
    (257
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (48
    )Profit on sale of Cybernet
    
    
    (10,622
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities, net of effect of acquisitions:Decrease/(increase) in accounts and notes receivable
    
    
    119
    
    
    
    (718
    )
    
    
    859Increase in accrued interest expense on loan Notes
    
    
    1,184
    
    
    
    1,154
    
    
    
    1,955Decrease/ (increase) in amounts receivable from exchange contracts
    
    
    
    
    
    
    10,552
    
    
    
    (10,552
    )(Increase) / decrease in prepaid expenses and other receivables
    
    
    (4,356
    )
    
    
    98
    
    
    
    374Decrease in amounts receivable from bankruptcy estates
    
    
    1,565
    
    
    
    3,755
    
    
    
    1,937Increase in deferred revenue
    
    
    27,693
    
    
    
    
    
    
    
    96Decrease in accounts payable, accrued expenses and other current liabilities
    
    
    (7,606
    )
    
    
    (300
    )
    
    
    (9,401
    )Net cash used in operating activities
    
    
    (7,550
    )
    
    
    (32,602
    )
    
    
    (48,338
    )Cash flows from investing activities:Capital expenditures
    
    
    (2,026
    )
    
    
    (4,707
    )
    
    
    (3,847
    )Increase in restricted cash
    
    
    (387
    )
    
    
    (10
    )
    
    
    (486
    )Proceeds from disposal of Cybernet, net of costs and cash at disposal
    
    
    8,462
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    6,049
    
    
    
    (4,717
    )
    
    
    (4,333
    )Cash flows from financing activities:Proceeds from loan notes
    
    
    22,086
    
    
    
    16,000
    
    
    
    52,250Deferred financing costs associated with loan notes
    
    
    (832
    )
    
    
    (923
    )
    
    
    (8,092
    )(Repayment of) / proceeds from overdraft facility
    
    
    (4,436
    )
    
    
    4,436
    
    
    
    Net cash provided by financing activities
    
    
    16,818
    
    
    
    19,513
    
    
    
    44,158Effects of exchange rate changes on cash
    
    
    953
    
    
    
    (3,605
    )
    
    
    955Net increase / (decrease) in cash and cash equivalents
    
    
    16,270
    
    
    
    (21,411
    )
    
    
    (7,558
    )Cash and cash equivalents included in assets held for sale
    
    
    1,409
    
    
    
    881
    
    
    
    868Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    21,939
    
    
    
    29,510Cash and cash equivalents at end of period
    
    
    17,679
    
    
    
    
    
    
    
    21,939Cash and cash equivalents included in assets held for sale
    
    
     
    
    
    
    1,409
    
    
    
    881Supplemental disclosure of cash flow activityInterest paid
    
    
    350
    
    
    
    13
    
    
    
    2Interest received
    
    
    215
    
    
    
    254
    
    
    
    775Taxes paid
    
    
    153
    
    
    
    128
    
    
    
    Receipts from bankruptcy estates
    
    
    5,785
    
    
    
    3,081
    
    
    
    5,612Receipt from Global Voice transaction
    
    
    23,641
    
    
    
    
    
    
    
    
  F-7




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##### Table of Contents



VIATEL HOLDING (BERMUDA) LIMITED
AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(
 (1) Nature of Business and Basis of Presentation
      F-8




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##### Table of Contents



(2) Significant Accounting Policies
  (a) Basis of Consolidation
  (b) Use of Estimates
  (c) AICPA Practice Bulletin, Confirmation Contingencies in Fresh Start Reporting
  (d) Revenue and Cost of Services Sold
  F-9




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##### Table of Contents



(e) Advertising Costs
  (f) Taxation
  (g) Net Loss per Common Share
  (h) Property and Equipment
 F-10




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##### Table of Contents



Communications systems and network infrastructure
    
    5 to 18 yearsFurniture, office and computer equipment
    
    2 to 5 yearsLand
    
    Not depreciated
 (i) Research and Development
  Year ended
    
    Year ended
    
    Year endedDecember 31, 2006
    
    December 31, 2005
    
    December 31, 2004Research and development
    
    
    876
    
    
    
    1,321
    
    
    
    1,093
 (j) Intangible Assets
    (k) Impairment of Longlived Assets
  F-11




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##### Table of Contents



(l) Cash and Cash Equivalents
  (m) Restricted Cash
   (n) Amounts Receivable from Exchange Contracts
  (o) Loan Notes
     (p) Foreign Currency Translation
 F-12




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##### Table of Contents



(q) Financial Instruments, Derivatives and Concentration of Credit Risk
       F-13




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##### Table of Contents



(r) Stock Option Plan
   Year Ended
    
    
    Year EndedDecember 31
    
    
    December 312005
    
    
    2004Net loss as reported
    
    
    (63,378
    )
    
    
    (47,179
    )Add: noncash stockbased
compensation income, net of tax
    
    
    
    
    
    
    (48
    )Less: SFAS 123 stockbased
compensation charge, net of tax
    
    
    
    
    
    
    69Pro forma net loss
    
    
    (63,378
    )
    
    
    (47,158
    )Proforma basic and diluted loss
per share
    
    
    (5.96
    )
    
    
    (4.42
    )Basic and diluted net loss per
common share, as reported
    
    
    (5.96
    )
    
    
    (4.42
    )
 F-14




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(s) Segment Information
  (t) Comprehensive Loss
  (u) Recent Accounting Pronouncements Not Yet Adopted
     F-15




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##### Table of Contents



(3) Property and Equipment
  2006
    
    
    2005Land and buildings
    
    
    564
    
    
    
    482Communications systems and network infrastructure
    
    
    68,049
    
    
    
    49,792Furniture, office and computer equipment
    
    
    2,505
    
    
    
    1,85771,118
    
    
    
    52,131Less accumulated depreciation
    
    
    (29,513
    )
    
    
    (21,609
    )Net book value
    
    
    41,605
    
    
    
    30,522
 F-16




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##### Table of Contents



(4) Intangible Assets
  2006
    
    
    2005Customer Relationships
    
    
    2,209
    
    
    
    1,927Less accumulated amortization
    
    
    (2,209
    )
    
    
    (1,927
    )Net book value
    
    
    
    
    
    
    
  (5) Deferred financing costs
  2006
    
    
    2005Financing costs
    
    
    9,848
    
    
    
    9,015Less accumulated amortization
    
    
    (3,064
    )
    
    
    (1,432
    )Net book value
    
    
    6,784
    
    
    
    7,583
 (6) Loan notes
  F-17




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F-18




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(7) The Global Voice Transaction
      F-19




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##### Table of Contents



(8) Other operating income
  9) Discontinued Operations
   Year EndedDecember 312005ASSETSCurrent assets:Cash and cash equivalents
    
    
    1,409Restricted cash
    
    
    496Accounts receivable
    
    
    1,981VAT receivable
    
    
    (68
    )Prepaid expenses and other current assets
    
    
    170Total current assets
    
    
    3,988Property and equipment, net
    
    
    336Intangible assets, net
    
    
    1,200
 F-20




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Year EndedDecember 312005Total assets
    
    
    5,524LIABILITIESCurrent liabilities:Accounts payable
    
    
    1,231Accrued expenses
    
    
    1,477Deferred revenue
    
    
    2,854Other current liabilities
    
    
    10Total current liabilities
    
    
    5,572
  Period ended
    
    
    Year ended
    
    
    Year endedMarch 21,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2004Total revenue
    
    
    4,538
    
    
    
    18,266
    
    
    
    14,815Operating expenses:Cost of services sold
    
    
    (3,044
    )
    
    
    (12,674
    )
    
    
    (9,291
    )Selling, general and administrative
    
    
    (1,276
    )
    
    
    (5,057
    )
    
    
    (2,552
    )Depreciation and amortization
    
    
    (192
    )
    
    
    (1,210
    )
    
    
    (2,104
    )Total operating expenses (net)
    
    
    (4,512
    )
    
    
    (18,941
    )
    
    
    (13,947
    )Other operating income
    
    
    49
    
    
    
    802
    
    
    
    Operating income
    
    
    75
    
    
    
    127
    
    
    
    868Other incomeInterest and other income
    
    
    1
    
    
    
    2
    
    
    
    1Net income before taxation
    
    
    76
    
    
    
    129
    
    
    
    869Taxation
    
    
    (11
    )
    
    
    (6
    )
    
    
    (1
    )Net income from discontinued operations
    
    
    65
    
    
    
    123
    
    
    
    868Profit on disposal
    
    
    10,622
    
    
    
    
    
    
    
    Net income from discontinued operations
    
    
    10,687
    
    
    
    123
    
    
    
    868
 (10) Taxation
    F-21




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Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,2006
    
    
    2005Loss before tax
    
    
    (49,036
    )
    
    
    (62,835
    )@30%
    
    
    (14,711
    )
    
    
    (18,851
    )Permanent differences
    
    
    (1,421
    )
    
    
    689Effect of overseas tax rates
    
    
    3,300
    

    
    (25,970
    )Effect of double taxation
    
    
    
    
    
    
    125Prior year adjustment
    
    
    10,585
    
    
    
    40Valuation allowance movement
    
    
    2,757
    

    
    44,633Total tax
charge  continuing operations
    
    
    510
    
    
    
    666
      December 31,
    
    
    December 31,2006
    
    
    2005US net operating loss carryforwards
    
    
    1,747
    
    
    
    1,208Foreign net operating loss carryforwards
    
    
    162,060
    
    
    
    109,337Foreign property and equipment temporary
differences
    
    
    117,455
    
    
    
    167,960Total gross deferred tax assets
    
    
    281,262
    
    
    
    280,505Less valuation allowance
    
    
    (281,262
    )
    
    
    (280,505
    )Net deferred tax assets
    
    
    
    
    
    
    
   F-22




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(11) Commitments and Contingencies
 (a) Leases and long-term contracts
   Network
    
    
    Standby
    
    
    
    
    
    
    MotorLocations
    
    
    Maintenance
    
    
    Office Space
    
    
    Vehicles
    
    
    Total2007
    
    
    4,845
    
    
    
    4,883
    
    
    
    959
    
    
    
    29
    
    
    
    10,7162008
    
    
    3,222
    
    
    
    1,464
    
    
    
    816
    
    
    
    
    
    
    
    5,5022009
    
    
    2,945
    
    
    
    981
    
    
    
    814
    
    
    
    
    
    
    
    4,7402010
    
    
    2,579
    
    
    
    984
    
    
    
    814
    
    
    
    
    
    
    
    4,3772011
    
    
    2,002
    
    
    
    935
    
    
    
    814
    
    
    
    
    
    
    
    3,751Thereafter
    
    
    15,353
    
    
    
    10,261
    
    
    
    407
    
    
    
    
    
    
    
    26,021Total minimum
payments
    
    
    30,946
    
    
    
    19,508
    
    
    
    4,624
    
    
    
    29
    
    
    
    55,107
 F-23




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(b) Litigation
     F-24




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F-25




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not less than £300,000
   F-26




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Onafhankelijke Post en Telecommunicatie Autoriteit




F-27




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(c) Amounts due from Liquidators of bankruptcy estates




(d) The Employee Benefit Trust










(12) Segment and Geographic Data




F-28



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Year ended
    
    
    Year ended
    
    
    Year endedDecember
    
    
    December 31,
    
    
    December 31,31, 2006
    
    
    2005
    
    
    2004Total
Retail Business  United Kingdom
    
    
    25,207
    
    
    
    15,361
    
    
    
    9,600United Kingdom
    
    
    1,874
    
    
    
    1,369
    
    
    
    960Switzerland
    
    
    440
    
    
    
    330
    
    
    
    373Western Europe
    
    
    4,605
    
    
    
    2,290
    
    
    
    2366North America
    
    
    1,341
    
    
    
    1,209
    
    
    
    676Total Wholesale Business
    
    
    8,260
    
    
    
    5,198
    
    
    
    4,375Total Revenue  Continued Operations
    
    
    33,467
    
    
    
    20,559
    
    
    
    13,975
    (13) Valuation and Qualifying Accounts
  Year
    
    
    Year
    
    
    YearEnded
    
    
    Ended
    
    
    EndedDecember
    
    
    December
    
    
    December31, 2006
    
    

31, 2005
    
    

31, 2004Allowances for doubtful debtsBalance at beginning of period
    
    
    (644
    )
    
    
    (1,567
    )
    
    
    (1,648
    )Additions charged to costs and expenses
    
    
    (471
    )
    
    
    (3,219
    )
    
    
    (883
    )Utilizations
    
    
    664
    
    
    
    4,142
    
    
    
    964Balance at end of period
    
    
    (451
    )
    
    
    (644
    )
    
    
    (1,567
    )
 (14) Authorized Share Capital
  F-29




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(15) Related Party Transactions
      (16) Subsequent events
   F-30