<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

  (X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
   -    EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                                                       -----------------

                                    OR

  (_)   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM         TO 
                                                            -------    --------
                           COMMISSION FILE NUMBER

           INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
-------------------------------------------------------------------------------
          (Exact name of Registrant as Specified in Its Charter)

            Delaware                                         94-3248701
----------------------------------------               ------------------------
  (State or Other Jurisdiction of                         (I.R.S. Employer
  Incorporation or Organization)                         Identification No.)

400 South El Camino Real, Suite 1275, San Mateo, California         94402
-----------------------------------------------------------   -----------------
     (Address of Principal Executive Offices)                     (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:       None
                                                           --------------------

Securities registered pursuant to Section 12(g) of the Act:       None
                                                           --------------------

    Indicate by check mark whether the Registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                                   Yes    X       No
                                       -------      -------

     Indicate by a check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of Registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-K or any amendment to this Form 10-K. /X/

     As of March 31, 1998 there were 1,310,230 shares of the Registrant's 
common stock outstanding and 23,085,351 shares of the Registrant's preferred 
stock outstanding. Each such share of preferred stock is currently 
convertible into one share of the Registrant's common stock.

<PAGE>


           THIS ANNUAL REPORT ON FORM 10-K CONTAINS FORWARD-LOOKING 
STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF 
THE REGISTRANT, WHICH INVOLVE RISKS AND UNCERTAINTIES. THE REGISTRANT'S 
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE 
FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN IMPORTANT FACTORS, 
INCLUDING THOSE SET FORTH UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS," PARTICULARLY THOSE SET FORTH 
UNDER "--ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS" AND ELSEWHERE IN 
THIS ANNUAL REPORT ON FORM 10-K.

                              PART I

ITEM 1.  BUSINESS

     THE FOLLOWING DESCRIPTION OF THE BUSINESS OF THE REGISTRANT IS QUALIFIED 
IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND THE FINANCIAL STATEMENTS 
(INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS ANNUAL REPORT ON 
FORM 10-K. AS USED HEREIN, THE TERM "THE COMPANY" REFERS TO THE REGISTRANT 
AND ITS WHOLLY OWNED SUBSIDIARY, INTERNATIONAL WIRELESS COMMUNICATIONS, INC. 
("IWC"), UNLESS THE CONTEXT OTHERWISE REQUIRES OR UNLESS OTHERWISE EXPRESSLY 
STATED. AN "OPERATING COMPANY" REFERS TO A WIRELESS COMMUNICATIONS COMPANY OR 
PROJECT IN WHICH THE COMPANY HAS INVESTED AND THAT HAS COMMENCED PROVIDING 
WIRELESS COMMUNICATIONS SERVICE ON A COMMERCIAL BASIS. REFERENCE TO "DOLLARS" 
AND "$" REFERS TO UNITED STATES DOLLARS, UNLESS OTHERWISE EXPRESSLY STATED.

I.  OVERVIEW

     The Company is a leading operator, owner and developer of wireless 
communications networks in major emerging markets in Asia and Latin America. 
Through its operating companies, the Company constructs cellular networks in 
China, provides cellular services in Pakistan and Indonesia, and is 
developing a digital enhanced specialized mobile radio ("ESMR") network in 
Brazil. These four markets (the "Markets") comprise four of the six largest 
developing countries in the world based on population. The companies in which 
the Company has an interest in the Markets (the "Operating Companies") have 
licenses or, as in the case of China, cooperative arrangements, covering an 
estimated 752 million POPs. In Brazil, the Company owns or controls the right 
to vote a majority of the equity of the Operating Company. In China, Pakistan 
and Indonesia, the Company owns a significant minority position in, and 
exercises substantial influence over, the Operating Companies. As of December 
31, 1997, the Company's equity interests in the Operating Companies 
represented an estimated 218 million equity POPs. Based on its equity POPs, 
the ompany believes that it is one of the largest cellular operators in Asia 
and in the developing world.

     The following table provides certain summary information with respect to 
the Operating Companies as of December 31, 1997. The information set forth 
below is qualified by reference to, and should be read in conjunction with, 
the more complete descriptions of the Operating Companies set forth under 
"Operating Companies."

<TABLE>
<CAPTION>
                                                                           PPP                             EQUITY
                                                                        ADJUSTED           POPS             POPS
                                                                         GDP PER        COVERED BY       COVERED BY
                         TYPE OF        OPERATING         EQUITY         CAPITA          LICENSES         LICENSES         TOTAL
      COUNTRY            PROJECT         COMPANY         INTEREST        ($)(1)            (MM)             (MM)        SUBSCRIBERS
      -------            -------         -------         --------        ------            ----             ----        -----------
<S>                   <C>            <C>                 <C>             <C>            <C>              <C>            <C>
China............     Cellular       Star Digitel         40.0%(3)          3,483        351.8(3)(4)        93.0(3)      43,000
                      (regional)     Limited (2)
Brazil...........     SMR/ESMR       Via 1                62.0%(5)          6,102         53.1(6)           51.6(5)      19,000
                      (regional)     RMD-Brasil          100.0%
Pakistan.........     Cellular       Mobilink             23.4%(7)          2,424        143.8(8)           33.6(7)      52,000
                      (national)
Indonesia........     Cellular       Mobisel              19.8%             4,730        203.5(8)           40.3         30,000
                      (national)                                                     ------------       --------       --------
Total:                                                                                   752.2             218.6        144,000
</TABLE>

                                     2
<PAGE>

-------------
(1)  Source: EIU/Datastream. Figures refer to country PPP Adjusted GDP per 
     capita for 1996.
(2)  Star Digitel Limited has entered into, or expects to enter into,
     cooperative joint venture agreements with local partners that operate
     regional cellular networks.
(3)  IWC owns a 40% interest in Star Digitel Limited, which in turn shares
     the revenues or profits derived from the cellular networks in each
     province in which it cooperates with its local partners. Equity POPs
     covered by licenses in China reflect such sharing arrangements.
(4)  Source: China Business Weekly/GRS Company.
(5)  Reflects the Company's estimated equity interest in Via 1 after
     giving effect to the completion of its formation and the
     consolidation of existing licenses, as currently anticipated, and the
     proposed addition of a new equity partner. See "--Operating
     Companies--Brazil--Via 1 and RMD."
(6)  Source: IBGE population statistics and New York Times Atlas.
(7)  Gives effect to the exercise of two options to purchase shares in the
     holding company through which the Company holds its interest in
     Mobilink from the other shareholders of such holding company.
     Includes the Company's pro rata share of a 4% indirect interest held
     in escrow. See "--Operating Companies--Pakistan--Mobilink."
(8)  Source: United Nations Population Fund. Population figures for mid-year
     1997.

     Star Digitel Limited ("Star Digitel"), the Operating Company in China, 
is developing cellular networks with its local partners in the eastern 
portion of the province of Guangdong ("Eastern Guangdong") and in the 
provinces of Hebei, Shandong, Yunnan, Hainan, Sichuan and Gansu 
(collectively, the "Star Digitel Provinces"). These areas cover a total of 
approximately 351 million POPs, which exceeds the combined population of the 
U.S. and Canada. In addition, Star Digitel is participating in the 
development of a CDMA network being constructed in the city of Beijing. As of 
December 31, 1997, there were approximately 43,000 subscribers on these 
networks. Star Digitel has been involved in developing cellular networks with 
its local partners since 1992. The Company believes that, through Star 
Digitel, the Company is involved in the development of networks with the 
potential to provide cellular services to more POPs than any other foreign 
company in China.

     Via Movel 1 Comunicacoes S.A. ("Via 1") and RMD do Brasil Ltda. 
("RMD-Brasil"), the Operating Companies in Brazil (collectively, the 
"Combined Company"), provide specialized mobile radio ("SMR") services in 
major cities in Brazil. Subject to receipt of various governmental approvals 
and the consent of its local partners in Via 1, the Company plans to combine 
the operations of Via 1 and RMD-Brasil. The Combined Company holds licenses 
for 1,760 channels covering an estimated 53 million POPs. As of December 31, 
1997, Via 1 had approximately 7,000 subscribers and RMD had approximately 
12,000 subscribers in Brazil. The Company plans to upgrade the Combined 
Company's networks from SMR to ESMR services in selected markets to increase 
capacity and offer additional services and features such as enhanced dispatch 
(group calling and instant conferencing), high-quality telephone and text 
messaging.

     Pakistan Mobile Communications (Pvt.) Limited ("Mobilink"), the 
Operating Company in Pakistan, is the sole licensed provider of GSM digital 
cellular services in Pakistan, holding a nationwide GSM cellular license 
covering approximately 143 million POPs. Mobilink is currently providing 
services in twelve of the major urban areas of Pakistan, including the cities 
of Karachi, Lahore and Faisalabad. Mobilink has experienced rapid subscriber 
growth during 1997, increasing from 16,000 subscribers on January 1, 1997 to 
approximately 52,000 subscribers as of December 31, 1997.

     PT Mobile Selular Indonesia ("Mobisel"), the Operating Company in 
Indonesia, operates a cellular network and holds a nationwide license in 
Indonesia covering approximately 203 million POPs. The network currently 
provides coverage to portions of Java, Bali, Lombok and the Lampung region of 
Southern Sumatra. Mobisel seeks to leverage the wide area and low cost 
characteristics inherent in the 470 MHz frequency band in which it operates 
to offer superior geographic coverage, including service to the rural areas 
of Indonesia and Indonesia's major road systems. As of December 31, 1997, 
Mobisel had approximately 30,000 subscribers.

     The Company also holds interests in certain smaller providers of SMR, 
wireless local loop and paging services in Asia and Latin America. In 1997, 
as part of the realignment of the Company's business strategy toward 

                                     3
<PAGE>

larger-scale projects which the Company controls or over which it exercises 
significant influence, the Company decided to offer for sale all or a portion 
of its interests in certain of these projects.

RECENT DEVELOPMENTS

     RMD ACQUISITION

     On January 23, 1998, the Company acquired all of the outstanding capital 
stock of Radio Movil Digital Americas, Inc. ("RMD") in a merger (the "RMD 
Acquisition"). The purchase price was 5,381,009 shares of the Company's 
Series I Preferred Stock with an aggregate liquidation preference of $73.9 
million. In addition, the Company paid $4.8 million of RMD's expenses 
incurred in connection with the RMD Acquisition. See "--Acquisition of RMD." 
As a result of the RMD Acquisition, the Company acquired, among other assets, 
RMD's wholly owned Brazilian subsidiary, RMD-Brasil. RMD-Brasil holds 960 
channels and provides SMR services in major cities in central and south 
Brazil. RMD also has SMR operations in Venezuela, with 480 channels and 6,000 
subscribers as of December 31, 1997, and Argentina, with 150 channels and 
2,400 subscribers as of December 31, 1997. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results--Risks Associated with Integration of 
RMD-Brasil and Via 1" and "--Operating Companies--Brazil--Via 1 and RMD."

     In connection with the RMD Acquisition, the Company and RMD entered into 
an Amended and Restated Senior Secured Note and Warrant Purchase Agreement 
dated January 23, 1998 (the "BT Purchase Agreement") with BT Foreign 
Investment Corporation ("BTFIC"). Pursuant to the BT Purchase Agreement, RMD 
refinanced certain existing indebtedness to BTFIC and borrowed an additional 
$10 million, thereby increasing to $25 million the total principal amount of 
its indebtedness to BTFIC (the "BT Loan"). The Company granted BTFIC warrants 
initially exercisable for 155,840 shares of its Common Stock in connection 
with the BT Loan. The warrants have a 10-year term and an exercise price of 
$0.01 per share. The BT Loan is secured by all of the Company's assets in 
Brazil, including the Company's interests in Via 1 and RMD-Brasil. The BT 
Purchase Agreement also contains significant restrictions on the Company's 
ability to utilize proceeds from the sale of assets in Latin America. See 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations--Liquidity and Capital Resources."

     FINANCING EFFORTS; ASSET SALES

     In December 1997, the Company deferred its proposed initial public offering
of its Common Stock and began efforts to raise additional capital through the
sale of its interests in certain of its smaller wireless communications
businesses in Asia and Latin America and through an interim equity financing. In
addition, in March 1998 the Company retained financial advisors to assist it in
its review of various strategic and financial alternatives.

     On March 2, 1998, the Company entered into a non-binding letter of intent
to sell its interests in certain SMR wireless projects in Peru, Chile and
Ecuador. On March 17, 1998, the Company entered into a letter agreement to sell
its Venezuelan SMR operations.  The purchase price will be based upon the number
of qualified channels held in the business, which has not been determined.  The
consummation of these sales are subject to numerous conditions, and there can be
no assurance that these sales will close.

     On March 10, 1998, Vanguard Cellular Systems, Inc., the Company's largest
stockholder ("Vanguard") purchased shares of the Company's Series J Preferred
Stock and a related Warrant to Purchase Common Stock for $10 million as the
first tranche of an $18 million interim financing (the "Series J Financing").
Pursuant to the purchase agreement executed by the Company and Vanguard in
connection with the Series J Financing, the second tranche of the Series J
Financing must close on or before April 24, 1998. The Company has offered its
remaining stockholders the right to participate in the second tranche of the
Series J Financing and is currently in discussions with various stockholders
regarding their participation. Although the Company has received indications of
interest from various stockholders, there can be no assurance that the Company
will receive commitments for the entire amount of the second tranche of the
Series J Financing.

     As of March 31, 1998 the Company had approximately $1.5 million in cash 
and cash equivalents, of which $1.0 million is restricted pursuant to the 
IWCH Pakistan Facility (as defined below).  See "Certain Relationships and 
Related Transactions--Pakistan Facilities."  The Company estimates that these 
cash resources should be sufficient to allow it to continue operations at 
anticipated levels through approximately May 31, 1998, assuming that the 
Company obtains a waiver of a minimum cash reserve covenant contained in the 
IWCH Pakistan Facility and without giving effect to any proceeds that might 
be available to the Company from the sale of its interests in certain smaller 
wireless communications businesses or the second tranche of the Series J 
Financing. However, there can be no assurance that the Company will not 
require additional debt or equity financing before such time.  See 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations--Liquidity and Capital Resources."

     On April 6, 1998, the Company entered into a share purchase and sale 
agreement (the "Prismanet Sale Agreement") to sell its 22.5% interest in
Prismanet (M) Sdn. Bhd. ("Prismanet"), a wireless local loop service provider in
Malaysia, to Shubila Holding Sdn. Bhd. ("Shubila"), the majority shareholder of
Prismanet, for an aggregate purchase price of $4 million payable on or before
October 1, 1999.  Conditions precedent to the closing of the Prismanet Sale
Agreement include the release by a syndicate of Malaysian banks of the Company's
shares in Prismanet and the release of the Company from any liability under the
Collateral Agreement, entered into by Prismanet, the Company and the other
shareholders of Prismanet and Permata Merchant Bank Berhad, as arranger (the
"Prismanet Collateral Agreement"), in connection with a ringgit 91 million
(approximately $24.6 million as of March 31, 1998) credit facility provided by
such banks. Prismanet is currently in payment default under this facility, and
the banks declared the entire amount of the facility to be due and payable.
Pursuant to the Prismanet Collateral Agreement, the Company and such other
shareholders would be jointly and severally liable for amounts due under the
credit facility. Further, Prismanet's default under its credit facility or a
default under the collateral agreement may be deemed events of default under the
Indenture dated August 15, 1996, between the Company and Marine Midland Bank as
Trustee (the "Indenture"), either of which would have a material adverse effect
on the Company. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources" and "--Additional
Factors that May Affect Future Results--Risks Associated with Indebtedness."

     Except for the non-binding letter of intent for the sale of the Company's
SMR projects in Peru, Chile and Ecuador, the letter agreement for the sale of
the Company's Venezuelan SMR operations, the Prismanet Sale Agreement and the
indications of interest from various stockholders regarding the second tranche
of the Series J Financing, the Company has no commitments to sell any of its
other assets or to obtain any additional debt or equity financing. If adequate
sources of additional financing are not available, the Company will have to
significantly curtail its operations (which may result in the loss or revocation
of licenses held by Operating Companies, the delay, scale back or elimination of
one or more of its projects or the merger, sale, liquidation or dilution in one
or more of its investments), may be unable to repay its liabilities (including
the Unit Notes (as defined below)) as they become due, and may be unable to meet
its working capital and other cash requirements.  For example, if the Company
does not make a required $19.0 million capital contribution to Star Digitel by
June 17, 1998, its 40% equity interest in Star Digitel could be reduced to an
approximately 15% equity interest, and the Company could be forced to sell its
equity interest in Star Digitel.  In addition, if the Company does not make a
required $2.1 million shareholder loan to Mobilink by the end of 1998, its
equity interest in Mobilink could be subject to significant dilution or a forced
sale.  Any of such events would have a material adverse affect on the Company.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

    MANAGEMENT CHANGES

    Since December 31, 1997, the Company has undergone various management
changes.  In March 1998, the Company hired Van E. Snowdon as President and Chief
Executive Officer to succeed John D. Lockton, who was elected Vice Chairman of
the Board of Directors (the "Board"). Mr. Snowdon is a director of the Company
and formerly served as President of Vanguard Communications, Inc., an affiliate
of Vanguard. In February 1998, the Company hired Steven D. Overly as Senior Vice
President and General Counsel. Mr. Overly formerly served as Vice President and
General Counsel of Lockheed Martin Telecommunications, a major satellite
manufacturer and telecommunications service provider. A number of persons have
recently ceased to provide services to the Company, including Douglas S.
Sinclair, who ceased serving as Executive Vice President and Chief Financial 
Officer in March 1998 and James M. Dixon, who ceased serving as Executive Vice
President in February 1998. The Company believes that the recent management
changes will not have a material adverse effect on the Company's operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Additional Factors That May Affect Future Results--Dependence on Key
Personnel; Recent Management Changes."


                                     4

<PAGE>

                                     5
<PAGE>

THE MARKETS

     The Company believes that the wireless communications opportunities in 
the Markets are attractive due to their substantial populations, large unmet 
demand for telecommunications services, historically strong economic growth 
and favorable competitive environments.

<TABLE>
<CAPTION>
                                                                         CHINA      BRAZIL   PAKISTAN    INDONESIA   UNITED STATES
                                                                         -----      ------   --------    ----------  -------------
<S>                                                                     <C>         <C>      <C>         <C>         <C>
SUBSTANTIAL POPULATION
    Population (mm)(1)...............................................   1,243.7      163.1     143.8        203.5         271.6
    Population Growth-Year Ended December 31, 1996(2)................       1.1%       1.3%      2.7%         1.4%          0.6%
LARGE UNMET DEMAND
    Telephone Lines per 100 POPs(3)..................................       4.5        9.6       1.8          2.1          64.0
    Waiting Time for Installation of Wireline Telephone (months)(4)..       2.4        8.4       8.4          2.4             0
    Cellular Penetration (% of POPs)(5)..............................       0.6%       1.9%     0.05%         0.3%         16.3%
ECONOMIC GROWTH
    Annual Real GDP Growth 1996(6)...................................       9.7%       3.0%      4.1%         7.8%          2.4%
</TABLE>

-----------
(1)  Source: United Nations Population Fund. Population figures for mid-year 
     1997.
(2)  Source:  Economist Intelligence Unit, Second Quarter and Third Quarter 
     1997 Report.
(3)  Source:  ITU, Data as of 1996.
(4)  Source: ITU, World Telecommunication Development Report 1996/1997. Data 
     as of 1995.
(5)  Source: Global Mobile, September 18, 1997. Data as of December 31, 1996. 
     "Cellular Penetration" means the number of cellular subscribers as a 
     percentage of the total population.
(6)  Source: IMF, World Economic Outlook, May 1997 and EIU Country Forecasts, 
     August 31, 1997. "Real GDP Growth" means growth in gross domestic 
     product after adjustment for inflation during the relevant measurement 
     period.

SUBSTANTIAL  POPULATION.  The Markets are among the largest in the world and 
are  characterized  by rapidly growing  populations.  The Markets comprise 
four of the six largest developing countries in the world based on population.

LARGE, UNMET DEMAND FOR TELECOMMUNICATIONS SERVICES. The Markets are 
characterized by large unmet demand for telecommunications services, as 
evidenced by low wireline and cellular penetration and long waiting times for 
the installation of phone lines. In the Markets, wireless communications 
services are often a substitute for wireline telephone services. The wireline 
penetration rate per 100 inhabitants in the Markets in 1996 ranged from 1.8 
to 9.6, versus 64.0 for the U.S.

ECONOMIC GROWTH. Although several of the Markets (including in particular 
Indonesia) have recently experienced significant economic downturns, the 
Markets have experienced strong economic growth in recent years. During the 
period from 1991 to 1996, the Markets experienced a weighted average compound 
annual growth rate in real GDP of 7.8% versus 2.4% for the U.S.

FAVORABLE COMPETITIVE ENVIRONMENTS. The Company believes that the Markets 
have generally favorable competitive environments. In each of Pakistan and 
China, there are only three cellular operators. In Indonesia, although there 
are a number of competitors, the Company focuses on serving non-urban areas 
where there is frequently less competition. In Brazil, there will be two 
cellular operators and up to two ESMR competitors in each market.

                                     6
<PAGE>

STRATEGY

     The Company's principal business objective is to become a leading 
provider of wireless communications services focusing on large emerging 
markets where significant opportunities for growth in telecommunications 
services exist. Key business strategies for achieving this objective have 
included the following.

BUILD ON STRONG PARTNER RELATIONSHIPS. The Company seeks to maintain close 
working relationships with financially strong and/or strategically 
well-positioned partners. The Company's partners include: in China, the 
People's Liberation Army (the "PLA"); in Brazil, Rede Brasil Sul ("RBS"); in 
Pakistan, Motorola, Inc. ("Motorola"); and in Indonesia, PT (Persero) 
Telecomunikasi Indonesia ("Telkom Indonesia"). The Company's strategy is to 
work with its partners both to build its existing businesses and to identify 
and develop incremental business opportunities which could leverage off the 
current businesses.

ACQUIRE LICENSES AT LOW COST. By avoiding expensive auction payments for 
licenses the Company has been successful in acquiring its interest in 
wireless licenses at relatively low cost. The Company believes that having a 
low cost basis will be increasingly important as the telecommunications 
industries in the Markets develop and competition based on price becomes more 
prevalent.

CONTROL OVER OPERATING COMPANIES. The Company controls or exercises 
significant management control over each of the Operating Companies. In 
addition to holding substantial equity interests and contractual rights in 
the Operating Companies, the Company seeks to participate in their day-to-day 
operations. Contractual arrangements generally allow the Company to approve 
key matters such as operating budgets, business plans, human resource 
decisions and major corporate transactions. Additionally, members of senior 
management of the Company frequently serve as senior executives and directors 
of each Operating Company, thereby giving the Company direct influence over 
the strategy and operations of the Operating Companies.

PURSUE DEBT FINANCING AT OPERATING COMPANY LEVEL. Whenever possible, the 
Company generally seeks to finance the Operating Companies with debt at the 
project level. Although start-up funding is typically provided by equity 
contributions from the Company and its project partners, initial construction 
and expansion of the wireless network is usually financed by debt provided by 
equipment vendors, commercial banks and other third parties. Once the project 
becomes operational, the Company seeks to obtain long-term debt financing 
with limited or no recourse to the Company or its project partners.

II.  OPERATING COMPANIES

     For a discussion of the risks associated with the ownership and 
operation of the Operating Companies, see "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results."

     CHINA - GREAT WALL CELLULAR

     The Company currently holds a 40% indirect equity interest in Star 
Digitel. Vanguard also holds a 7% indirect interest in Star Digitel. Star 
Digitel was founded in 1992 and since its inception has been involved in the 
development and construction of cellular networks in China, in cooperation 
with various local commercial entities (the "PLA Partners") that have close 
relationships with the PLA.

     In 1995, the Ministry of Posts and Telecommunications (together with its 
successor ministry as of March 1998, the Ministry of Information Industry, 
the "MPT"), the principal government agency responsible for regulation of the 
telecommunications industry and the principal provider of wireless services 
in China, agreed to cooperate with the PLA in developing networks using 
spectrum in the 800 MHz frequency band which had previously been allocated to 
the PLA (the "PLA/MPT Cooperation").

     Star Digitel is developing 800 MHz cellular networks in the Star Digitel 
Provinces, which include Eastern Guangdong and the provinces of Hebei, 
Shandong, Yunnan, Hainan, Sichuan and Gansu. The Star Digitel 

                                     7
<PAGE>

Provinces encompass a total of 351 million POPs and approximately 124 million 
urban POPs. In addition, Star Digitel is participating in developing one of 
the first commercial CDMA cellular networks in China in the municipality of 
Beijing. Beijing has a population of 11.1 million people.

     Within the Star Digitel Provinces, as of December 31, 1997, Star Digitel 
had established eight networks with 128 cellular base stations. These 
networks served approximately 43,000 subscribers as of December 31, 1997. 
Cellular services are currently being provided in 14 of Star Digitel's 
networks in six of the seven Star Digitel Provinces: Eastern Guangdong, 
Hebei, Shandong, Hainan, Sichuan and Gansu.

COUNTRY OVERVIEW

     With over 1.2 billion people, China is the most populous country in the 
world, and has a land area of approximately 3.7 million square kilometers. 
For political and administrative purposes, China is divided into 23 
provinces, five autonomous regions and four municipalities, each reporting 
directly to the central government. Each of the 23 provinces has a population 
larger than most European countries. In recent years, China has experienced 
rapid economic and significant population growth, as evidenced by real GDP 
and population growth rates of approximately 9.7% and 1.1% respectively, for 
the year ended December 31, 1996.

     Guangdong is the fifth largest province in China, with a population of 
over 66 million people, including an urban population estimated at 17 million 
people. Guangdong ranks first among Chinese provinces in terms of GDP and had 
an estimated 3 million wireless subscribers as of August 31, 1997. Located 
immediately to the north of Hong Kong, Guangdong has been a major focus of 
economic development since the early 1980s.

     Hebei has a population of over 63 million people, with 20 million people 
living in urban areas. Hebei ranks seventh among Chinese provinces in terms 
of GDP and had approximately 230,000 wireless subscribers as of December 31, 
1996. Hebei borders both the province of Shandong and the municipality of 
Beijing.

     Shandong is the third largest province in China with a population of 
over 86 million people, including an urban population of over 44 million 
people. Shandong ranks second among the provinces in China in terms of GDP. 
As of December 1996, Shandong had approximately 320,000 wireless subscribers. 
Shandong includes the Yantai Region in the northeastern part of the province, 
which consists of 12 major urban and business centers with a population of 
over 16 million people, as well as the coastal city of Qingdao, economic 
development zone established by the Chinese government. Both the Yantai 
Region and Qingdao are among the 14 coastal open cities currently promoted by 
the Chinese government to attract foreign investment.

     Yunnan has a population of approximately 38 million people, including an 
urban population estimated at 10 million people. As of December 31, 1996, 
Yunnan had approximately 100,000 wireless subscribers. Because Yunnan borders 
the countries of Myanmar, Laos and Vietnam, it has become the gateway to 
China for these neighboring countries.

     Hainan is one of the smallest provinces in China, with a population of 
only seven million people. Despite its small size, however, Hainan had over 
50,000 wireless subscribers as of December 31, 1996. Hainan has been 
designated by the Chinese government as a special economic zone.

     Sichuan is the largest province in China, with a population of over 97 
million people, including an urban population of over 23 million people. It 
ranks fourth among Chinese provinces in terms of GDP, and had approximately 
260,000 wireless subscribers as of December 31, 1996. Sichuan is currently at 
the center of the Chinese government's plan to develop the economies of its 
western provinces.

     Gansu has a population of approximately 23 million people, including an 
urban population of over 8 million people. Gansu has been chosen by the 
Chinese government to receive economic incentives in order to lure business. 
Lanzhou, the capital of Gansu, is the gateway for companies seeking to do 
business in the northwestern frontier areas of China.

                                     8
<PAGE>

     Beijing, the capital of China, has a population of over 11 million 
people. As of October 31, 1997, Beijing had approximately 575,000 wireless 
subscribers.

     The telecommunications industry has become one of the fastest developing 
industries in China. Currently, China ranks third in the world in terms of 
the number of people using mobile phones, after the United States and Japan. 
According to FT Mobile, it is estimated that this number exceeded 11 million 
as of the end of 1997 and will exceed 30 million by the year 2000. Despite 
the rapid growth in the number of subscribers, the wireless penetration rate 
in China is still low compared to other Asian and international markets. FT 
Mobile estimates that between 1991 and the year 2000, investment in China's 
telecommunications infrastructure will be US $100 billion, with investments 
in wireless infrastructure representing approximately 30% of this total.

OPERATING COMPANY OVERVIEW

     Star Digitel's cellular networks are being constructed in cooperation 
with the PLA Partners, who the Company believes have been granted or 
delegated by the PLA the right to use certain frequencies in the 800 MHz 
spectrum to construct regional cellular networks for commercial use in each 
of the Star Digitel Provinces. See "License and Interconnection." Pursuant to 
the PLA/MPT Cooperation, in each region in which a cellular network has been 
or will be built, the relevant PLA Partner is to provide the frequencies to 
be used by the local network, and the MPT, through its corresponding local 
Posts and Telecommunications Administrative Bureau ("PTA"), is to provide all 
necessary numbers and interconnection to the MPT's existing wireline network.

STRUCTURE IN STAR DIGITEL PROVINCES

     Star Digitel has entered into various cooperative arrangements with the 
PLA Partner in each of the Star Digitel Provinces in order to develop AMPS 
cellular networks. Currently, certain regulatory restrictions exist in China 
which prohibit participation by foreigners or foreign investment enterprises 
in the operation and management of companies providing telecommunications 
services in China. See "--Additional Factors That May Affect Future 
Results--Risks Inherent in Foreign Investment." As a result, Star Digitel has 
structured and will structure its operations such that it is a provider of 
telecommunications equipment, services and financing to Chinese 
telecommunications providers rather than a direct provider of cellular 
services.

     In the province of Hebei, the city of Qingdao in the province of 
Shandong and in Eastern Guangdong, Star Digitel has implemented the CJV Model 
as an operating model which it has developed to comply with the Chinese 
foreign ownership prohibition. The CJV Model generally involves the formation 
of a domestic cooperation company (a "Great Wall Company") in a province by 
the local PLA Partner and, in some cases, with the local PTA, and the 
formation by Star Digitel of a cooperative joint venture company (a "CJV 
Company") with the local PLA Partner or Great Wall Company. The Great Wall 
Company will operate the cellular network. The CJV Company will enter into an 
Equipment and Services Contract with the Great Wall Company pursuant to which 
the CJV Company will build the cellular network and provide technical 
services in return for a network usage and technical services fee from the 
Great Wall Company, which will typically equal a percentage of the revenues 
or net profits earned in operating the cellular network, plus, in some cases, 
connection fees or a fixed equipment fee for a set amount of years. Star 
Digitel will, in turn, receive a percentage of the revenues or profits of the 
CJV Company. Although the percentage of revenues or profits to be received by 
Star Digitel will vary by province, Star Digitel will, in most cases, be 
entitled to receive a percentage of the revenues or profits of the CJV 
Company that is greater than that distributable to the PLA Partner (or Great 
Wall Company) until its capital contributions are recovered. In most cases, 
Star Digitel will hold a majority of the seats on the CJV Company's board of 
directors and will be responsible for directing the day-to-day operations of 
the CJV Company. The typical contract forming a CJV Company (the "CJV 
Contract") has a term of approximately 20 years, at the expiration of which 
the CJV Company will be dissolved or all fixed assets of the CJV Company will 
either become the property of the local PLA Partner (or Great Wall Company) 
or be distributed to Star Digitel and the local PLA Partner (or Great Wall 
Company) according to their equity interests in the CJV Company. If, in the 
future, foreign participation in the operations or ownership of companies 
providing telecommunications services in China is permitted, the Equipment 
and Services Contract or CJV Contract will typically provide that the parties 
will use their best efforts to permit Star Digitel to operate the cellular 
network and to convert the rights and interests of the CJV Company, or Star 
Digitel, as applicable, under the Equipment and 

                                     9
<PAGE>

Services Contract, into an equity interest in the Great Wall Company and, in 
some cases, extend the 20 year term of the CJV Contract.

     Although the legality of the CJV Model has not yet been formally tested 
in a court proceeding or administrative tribunal and there can be no 
assurance that the CJV Model is legally binding and complies with the Chinese 
foreign ownership prohibition, the Company understands that similar models 
are in use by other foreign companies that are investing in the Chinese 
telecommunications services market, including by foreign investors who are 
investing in China United Telecommunications Corporation ("Unicom"), China's 
second national carrier, in the construction of its GSM cellular and wireless 
paging networks. However, the Company is not aware of the exact terms of 
these structures. See "Management's Discussion and Analysis of Financial 
Condition and Results of Operations--Additional Factors That May Affect 
Future Results--Risks Inherent in Foreign Investment."

     In the provinces of Yunnan, Hainan, Sichuan and Gansu and in the 
provinces of Shandong aside from Qingdao, Star Digitel has not yet begun 
implementation of the CJV Model. To date, Star Digitel has entered into 
agreements with the local PLA Partner in these provinces that set forth a 
general scheme for the cooperation of the parties in constructing and 
operating a cellular network in each respective province. These agreements 
typically provide for the provision by Star Digitel of equipment and 
technical and engineering services to the cellular network in exchange for 
the allocation to Star Digitel of a portion of the revenues or profits of the 
network. The Company believes that the legal enforceability of these 
agreements is unlikely, due to their generality and the lack of approval of 
such agreements by appropriate authorities in China. However, because of the 
good relations that Star Digitel has forged with its local partners and the 
past compliance of the PLA Partners with the terms of these agreements, the 
Company believes that the local partners will continue to honor the terms and 
conditions of these agreements until the CJV Model can be implemented. The 
failure of the PLA Partners to honor their obligations under these agreements 
would have a material adverse effect on the business and prospects of Star 
Digitel and the Company. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Risks Inherent in Foreign Investment."

     The Company believes that implementation of the CJV Model in each Star 
Digitel Province is necessary in order to improve the enforceability of Star 
Digitel's agreements with its local partners. The Company further believes 
that implementation of the CJV Model will allow Star Digitel to enhance 
further its relationships with the PLA Partners and with the Great Wall 
Companies. While, under the CJV Model, Star Digitel does not control the 
Great Wall Companies and their operation of the cellular networks, the 
Company believes that such relationships will enable Star Digitel to exert a 
certain degree of influence on the management and operations of the cellular 
networks on a day-to-day basis without violating the current written Chinese 
policies and regulations prohibiting foreign ownership and operation of 
telecommunications enterprises.

     The Company believes that the MPT supports the construction of cellular 
networks by the Great Wall Companies using the PLA's 800 MHz spectrum. 
However, there can be no assurance that such support will continue, 
especially in light of the MPT's recent sale to the public of an interest in 
its cellular networks in Guangdong, which compete with Star Digitel's 
cellular network in Eastern Guangdong. See "--Competition." Neither the MPT 
nor the local PTA has yet formally approved the agreements between Star 
Digitel and the local PLA Partners in Hebei, Qingdao and Eastern Guangdong. 
In addition, in certain of the Star Digitel Provinces, the brand name "China 
Telecom", a trademark owned by the MPT, is used in the marketing of cellular 
services by the 

                                     10
<PAGE>

PLA Partners (or Great Wall Companies). However, the MPT has not formally 
granted to the PLA Partners (or Great Wall Companies) the right to use the 
"China Telecom" brand name to market cellular services. Any decision by the 
MPT not to support the development of cellular networks using the PLA's 800 
MHz spectrum would have a material adverse effect on Star Digitel and the 
Company.

BEIJING CDMA PROJECT

     Star Digitel is currently participating in a project to develop and 
construct an 800 MHz CDMA cellular network in Beijing. Star Digitel has 
invested in the project through its subsidiary, Shenzhen China Telecom 
Technology Company Limited ("SCTT"), a Chinese foreign equity joint venture 
company in which Star Digitel holds a 95% equity interest. On August 12, 
1997, SCTT and two other investors each entered into identical contracts with 
the Beijing Shenzhou Great Wall Telecommunications Technology Development 
Center ("Shenzhou Great Wall"), a company affiliated with the PLA, to invest 
jointly in the development and construction of the CDMA network in Beijing 
(the "Beijing Cellular Network") by Shenzhou Great Wall and the Beijing PTA. 
Shenzhou Great Wall and the Beijing PTA have formed a Great Wall Company to 
operate the network. The Beijing Cellular Network is still in the early 
stages of development and commenced commercial operations in December 1997. 
Star Digitel does not have any active involvement in the management of the 
development of the Beijing Cellular Network. In addition, it is unclear 
whether the business license of SCTT permits it to make such an investment. 
If such investment were successfully challenged, the Company could be 
required to divest its interest in the Beijing Cellular Network, which could 
have a material adverse effect on Star Digitel and the Company. Subsequent to 
year end, one of the two other investors withdrew from the project. Star 
Digitel and the other remaining investor were given the right of first 
refusal to take up its share of the investment in the project on a pro-rata 
basis.

CURRENT OPERATIONS AND DEVELOPMENT PLAN

     Services are currently offered in certain cities in the Star Digitel 
Provinces. As of December 31, 1997, the cellular networks in the Star Digitel 
Provinces had 128 operational cell sites. Currently, these cellular networks 
have the capacity to serve in the aggregate approximately 112,300 subscribers 
based on various operating and usage assumptions. Star Digitel intends to 
expand the coverage and increase significantly the capacity of the cellular 
networks in the Star Digitel Provinces. As of December 31, 1997, the Beijing 
Cellular Network had 31 operational cell sites, a total capacity of 
approximately 45,000 subscribers and served approximately 2,000 subscribers.

     As of December 31, 1997, Star Digitel's cellular networks had the number 
of subscribers set forth below.

<TABLE>
<CAPTION>
                                                       TOTAL               URBAN            NUMBER OF
           PROVINCE                                    POPS                 POPS            SUBSCRIBERS
           --------                                    -----               ------           -----------
<S>                                              <C>                   <C>                <C>
                                                                         (MILLIONS)
Guangdong..............................                35.2                  17.0              22,900
Hebei..................................                63.3                  20.1               7,200
Shandong...............................                86.4                  44.5               5,900
Yunnan.................................                38.9                  10.0                 -
Hainan.................................                 7.0                   1.1               1,200
Sichuan................................                97.5                  23.8               3,500
Gansu..................................                23.5                   8.1               2,700
                                                 ------------------    ---------------    ----------------
          Total:                                      351.8                 124.6              43,400
                                                 ------------------    ---------------    ----------------
</TABLE>

     The cellular networks in each of the Star Digitel Provinces are being 
constructed using AMPS technology. However, pursuant to the PLA/MPT 
Cooperation, the PLA and MPT contemplated the construction of a nationwide 
CDMA network in China using the PLA's 800 MHz frequency spectrum. 
Accordingly, it is contemplated that all cellular networks operating using 
the PLA's frequency will ultimately employ CDMA technology. As a result, Star 
Digitel will ultimately be required or may otherwise determine to upgrade its 
cellular networks to CDMA technology. However, in certain of the Star Digitel 
Provinces, Star Digitel does not currently have agreements granting to it the 
right to construct networks using CDMA technology. See "--Regulatory 
Overview" and "Management's Discussion and Analysis of Financial Condition 
and Results of Operations--Additional Factors That May Affect Future Results--

                                     11
<PAGE>

Risks Associated with Licenses." Star Digitel currently purchases network 
equipment from Motorola and Northern Telecom.

LICENSE AND INTERCONNECTION

     In each Star Digitel Province, the Company believes that the PLA has 
granted to the PLA Partner the right to use 2x10 MHz of spectrum in the 800 
MHz frequency band which the PLA has informed the Company has been allocated 
to the PLA and the Central Military Commission, and that the PLA Partner has, 
in turn, contributed such right to the Great Wall Company in each Star 
Digitel Province where the CJV Model is being implemented. The use of such 
spectrum for the development of commercial cellular networks is subject in 
all circumstances to the needs and military requirements of the PLA. While 
the Company believes that the PLA has been allocated such spectrum and that 
the use of such spectrum has been granted to the PLA Partners (or Great Wall 
Companies), in many circumstances Star Digitel has not been provided with 
definitive documentation relating to such grants. In the event it is 
determined that the PLA has not been allocated such spectrum, or that the PLA 
Partner (or Great Wall Company) has not been granted the right to use such 
spectrum in a Star Digitel Province, or in the event the PLA determined that 
it required the use of such spectrum for military purposes, the PLA Partner 
(or Great Wall Company) would not have the right to operate the cellular 
network in such Star Digitel Province, which would have a material adverse 
effect on Star Digitel and the Company. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results--Continuing Losses; Limited Operating History" 
and "--Risks Associated with Licenses."

     Star Digitel anticipates that its networks will occupy all of the 2x10 
MHz of spectrum granted to the PLA Partner in each Star Digitel Province. 
However, the Company understands that approximately 2x3 MHz of spectrum has 
been reserved by the PLA for use in the operation of a CDMA network. As a 
result, in the event that the PLA Partner in a Star Digitel Province 
determines to grant the right to develop the CDMA network to a party other 
than Star Digitel, the amount of spectrum available for Star Digitel's 
networks would be reduced, which could have a material adverse effect on Star 
Digitel and the Company.

     Although current Chinese regulations provide that the approval of the 
State Radio Regulatory Commission (the "SRRC") is required for the transfer 
of any PLA-controlled frequency band from military to civilian use, the 
Company understands that the PLA has neither sought nor obtained any such 
SRRC approval for the use of the spectrum by the PLA Partner (or Great Wall 
Company). The consequences of failing to obtain such SRRC approval are 
unclear.

     The PTA in each Star Digitel Province currently provides interconnection 
to the local wireline network. While the PLA/MPT Cooperation contemplates 
that the local PTA in each province will provide interconnection, other than 
in Qingdao, there is currently no formal interconnection agreement between 
the local PTA and the cellular network in each Star Digitel Province. The 
inability of a cellular network in a Star Digitel Province to interconnect 
with the MPT's wireline network would have a material adverse effect on Star 
Digitel and the Company. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Dependence on Other Telecommunications Providers."

SALES AND MARKETING

     Star Digitel and its partners intend to launch a promotional advertising 
campaign that will target local business users in the Star Digitel Provinces. 
The strategy of Star Digitel and its partners is designed to take advantage 
of the unmet demand for cellular services in the Star Digitel Provinces. Star 
Digitel and its partners plan to create a consistent service package within 
each of the Star Digitel Provinces in terms of equipment prices, tariff 
packages and value added services. Star Digitel and its partners intend to 
distribute cellular services through retail stores, independent agents and 
dealers and through the sale of prepaid services. In addition, continued 
efforts are being made to develop new sales channels such as retail-oriented 
organizations and co-marketing opportunities with key industry players.

                                     12
<PAGE>

COMPETITION

     Currently, the principal provider of cellular mobile telephone services 
in the Star Digitel Provinces is the MPT, which operates GSM and TACS 
networks. The MPT, through the local PTAs, is also the monopoly wireline 
provider in each of the Star Digitel Provinces. In late 1997, the MPT 
transferred its cellular networks in Guangdong and Zheijang provinces to 
China Telecom (Hong Kong) Limited and sold an interest therein to the public 
in an initial public offering. The second largest provider of cellular 
services in the Star Digitel Provinces is Unicom, a joint venture whose 
principal shareholders are the Ministry of Information Industry as the 
successor to the Ministry of Electronics Industry, the Ministry of Power and 
the Ministry of Railways, which is in the process of constructing cellular 
networks using GSM technology and wireless paging networks in most major 
cities in China. Unicom is also positioning itself as a competitor of the MPT 
for providing wireline services. The MPT is likely to remain the dominant 
provider of cellular services in China.

INVESTMENT; CAPITAL EXPENDITURES; FINANCING

     As of December 31, 1997, the Company had expended approximately $33.3 
million to acquire its 40% equity interest in, and make shareholder loans to, 
Star Digitel. In January 1998, the Company deposited an additional $400,000 
into escrow to serve as collateral in connection with a $1 million short term 
debt facility provided by ING Barings. Further, in March 1998, the Company 
funded an additional $4 million to Star Digitel as its pro-rata share of a 
$10 million capital call declared by Star Digitel. Subject to raising 
sufficient debt or equity capital, the Company currently expects and is 
contractually obligated to contribute an additional $19 million to Star 
Digitel on or before June 17, 1998.  See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations -- Liquidity and 
Capital Resources."

     Star Digitel has in the past funded a significant portion of its 
expenditures with borrowings under its Bank Bira $7 million credit facility, 
and its Toronto Dominion $8 million and $20 million bridge loans. Borrowings 
under the Bank Bira credit facility bear interest at LIBOR plus 2.75% and 
have been guaranteed by the shareholders of Star Digitel. Currently, Star 
Digitel has borrowed the full amount available under the Bank Bira credit 
facility, which will mature in July 1998. Borrowings under the two Toronto 
Dominion bridge loans bear interest at LIBOR plus 2.25%, or 2.50% if the 
bridge loans are extended. The two Toronto Dominion bridge loans are 
guaranteed by each shareholder of Star Digitel up to its pro rata share, 
except that the Company's share of the guarantee has been guaranteed by 
Vanguard. Currently, Star Digitel has borrowed the full amounts available 
under the two Toronto Dominion bridge loans, which will mature in May 1998. 
See "Certain Relationships and Related Transactions--TD Bridge Loans to Star 
Digitel." In addition, in January 1998, ING Barings provided Star Digitel 
with a $1 million short term debt facility, which is currently fully drawn 
and has been cash collateralized by the shareholders.

     Star Digitel has budgeted capital expenditures of approximately $139.0 
million through 1998, primarily to fund network expansion, including a 
capital contribution of $20 million to fund construction of the Beijing 
Cellular Network. Star Digitel does not currently have commitments for most 
of the funds necessary to finance such capital expenditures. Star Digitel is 
currently in negotiations to finance its operations and capital expenditures 
through vendor financing and other credit facilities and borrowings. There 
can be no assurance that Star Digitel will be successful in obtaining such 
financing. The failure of Star Digitel to obtain such financing would have a 
material adverse effect on the ability of Star Digitel to continue to conduct 
its business. In addition, Star Digitel will in the future require 
substantial additional financing to continue the expansion of its networks as 
well as for other corporate purposes. In particular, substantial funding will 
be required to upgrade the networks in the Star Digitel Provinces using CDMA 
technology. There can be no assurance that Star Digitel will be able to 
obtain any such financing. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Negative Operating Cash Flow; Critical Dependence on 
Additional Financing."

CORPORATE GOVERNANCE

     Pursuant to an Amended and Restated Shareholders' Agreement entered into 
as of April 4, 1997 among the Company, Star Digitel, Star Telecom Holding 
Limited ("STHL") and a subsidiary of Vanguard, the Company has the right to 
designate five of 10 members of the board of directors of Star Digitel, 

                                     13
<PAGE>

including the vice chairman of the board of directors of Star Digitel. In 
addition, the Company has the right, subject to the consent of STHL, to 
appoint the chief executive officer, the vice president of engineering and 
the chief financial officer of Star Digitel. Certain significant corporate 
actions require unanimous approval of the board of directors of Star Digitel. 
In addition, certain significant corporate actions require approval by a 75% 
vote of the shareholders of Star Digitel.

LOCAL STRATEGIC PARTNERS

     In addition to the  Company's  40% interest in Star  Digitel,  STHL owns 
53% of Star  Digitel and Vanguard  owns 7% of Star Digitel.

     STHL is a publicly  traded Hong Kong company that owns one of the 
largest  paging and  internet  service  providers in Hong Kong. It is 
majority owned by China  Strategic  Holdings Ltd.  ("CSH").  The Chairman of 
CSH,  Mr. Oei Hong Leong,  is the Co-Chairman of Star Digitel.  Shareholders 
of CSH include Hutchison Whampoa Co. and Morgan Stanley.

REGULATORY OVERVIEW

     The telecommunications industry in China is subject to a high degree of 
regulation by the Chinese government through a number of government 
ministries. The most important of these is the MPT, which has overall 
responsibility for the regulation of postal and public telecommunications 
operations and services in China. The MPT is also the primary provider of 
both wireline and wireless telecommunications services in China. See 
"Competition." Among other things, the MPT, together with the State Planning 
Commission, regulates the pricing of tariffs and handset financing.

     Prior to 1993, the Chinese telecommunications industry was operated and 
managed exclusively by the Chinese central government and foreign investment 
in telecommunications businesses was prohibited. However, in 1993, under 
immense pressure from the State Council, the MPT liberalized certain 
telecommunications businesses, allowing domestic entities not controlled by 
the MPT to operate such businesses. Notwithstanding such liberalization, a 
complete ban on foreign investment in telecommunications businesses was 
maintained.

     In 1994, the State Council authorized the establishment of Unicom as a 
second telecommunications network operator. Unicom was officially established 
on July 1, 1994. In November 1994, the MPT issued a notice (the "Notice") 
permitting local governments, state owned enterprises and institutions and 
domestic telecommunications network operators to invest jointly with the MPT 
and its subordinate enterprises in telecommunications projects. The Notice 
further provided that, subject to certain conditions, domestic enterprises 
engaging in the telecommunications business should actively utilize overseas 
investment and that foreign investment in the construction of 
telecommunications networks was allowed and encouraged.

     Despite these developments, foreign investors are currently still not 
permitted to operate or manage telecommunications networks or provide 
telecommunications services in China. See "--Additional Factors That May 
Affect Future Results--Risks Inherent in Foreign Investment." The current 
policy emphasizes that while some foreign investment is now to be allowed, it 
is not to extend to a direct equity share in a telecommunications enterprise. 
The ban on the operation of telecommunications networks by foreign companies 
or domestic companies in which foreign companies have invested (i.e., 
foreign-invested enterprises such as Chinese-foreign joint ventures) remains. 
Foreign investment is only allowed in the construction of the networks. 

     The Company has been informed that on February 8, 1998, China 
Electronics Systems Engineering Company ("CESEC"), an entity that the Company 
believes was formed by the PLA to engage in the provision of commercial 
communications services, issued an unpublished supplemental notice (the 
"CESEC Notice") on cooperative construction and investment in CDMA cellular 
projects in China.  The CESEC Notice established guidelines for participation 
and investment in CDMA projects by the PLA and other investors, including 
Star Digitel.  The CESEC Notice provides, among other things, that the 
expansion of the construction of AMPS networks shall no longer be conducted 
and that existing AMPS investors will be permitted to participate in the 
investment of CDMA networks. Based upon Star Digitel's discussions with its 
local partners, the Company does not believe that the CESEC Notice will be 
interpreted by the relevant governmental authorities to require a termination 
of the construction of Star Digitel's existing AMPS networks. Further, the 
Company believes that completion of such networks will not require any 
further approvals from any governmental authorities that may be bound by the 
provisions of the CESEC Notice.  However, it is unclear how the relevant 
authorities will interpret and apply the foregoing restrictions on expansion 
of Star Digitel's networks and whether Star Digitel's local partners in the 
Star Digitel Provinces will be bound by such interpretations. Accordingly, 
there can be no assurance that the CESEC Notice will not prohibit Star 
Digitel from expanding its existing AMPS networks, which would have a 
material adverse on Star Digitel and the Company.  The CESEC Notice also 
includes various restrictions relating to the structure of investments in 
CDMA projects.  Although the effect of these provisions is not clear, Star 
Digitel may be required to renegotiate its existing agreements with its local 
partners in connection with the proposed transition of its existing AMPS 
networks to CDMA.  See "--Current Operations and Development Plan."  If such 
renegotiations are required, there can be no assurance that new agreements 
will be reached on acceptable terms or at all, which may have a material 
adverse effect on Star Digitel and the Company.

     In order to provide a uniform regulatory framework to encourage the 
orderly development of the telecommunications industry in China, the MPT is 
currently preparing an initial draft of a telecommunications law. The MPT has 
not yet submitted such law to the National People's Congress. If such 
telecommunications law is adopted, it is expected to become the basic 
telecommunications statute in China. Although the Company expects that such 
telecommunications law would have a positive effect on the overall 
development of the telecommunications industry in China and in the overall 
climate for foreign investment and participation in the 

                                     14
<PAGE>

Chinese telecommunications sector, the nature and scope of the regulation 
contemplated by such law is not fully known. There can be no assurance that 
such telecommunications law, if adopted, would not have a material adverse 
effect on Star Digitel's business. See "Management's Discussion and Analysis 
of Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Regulation."

     To ensure the orderly development of telecommunications infrastructure 
and services, the State Planning Commission ("SPC") is empowered by the State 
Council to exercise responsibility over the approval of all 
telecommunications development projects with domestic investment involving 
total capital investment in excess of Renminbi 50 million. With respect to 
any telecommunications development project involving foreign investment, 
under general foreign investment policies, the approval of the SPC is 
required if the project's total investment exceeds $30 million. Accordingly, 
project proposals and feasibility study reports for such projects, following 
review and approval by the MPT or the relevant local PTA, must be submitted 
for approval to the SPC.

     As of December 1, 1996, the Renminbi yuan, the currency of China, became 
fully convertible for current account transactions, including profit 
repatriation and interest payments. No approvals are needed in order to 
acquire foreign exchange for a current account transaction. Strict controls 
continue for capital account transactions in foreign exchange. Capital 
account transactions include loans, direct and portfolio investments and 
investments in negotiable securities.

     Star Digitel is permitted under Chinese law to receive profits and 
distributions from its Chinese investments, including from the CJV Companies. 
Star Digitel, in turn, is permitted under Hong Kong law to remit dividends 
and profits to foreign shareholders, including the Company.

     BRAZIL - VIA 1 AND RMD

     Via 1 was formed in April 1997 as the entity through which RBS, Grupo 
Arbi, a Brazilian industrial financial group ("Grupo Arbi"), and the Company 
will provide SMR services in the major cities in Brazil. The Company 
currently holds a 47.3% indirect equity interest in Via 1. The remaining 
52.7% equity interest is owned by a wholly owned subsidiary of RBS. After 
completion of the initial capitalization of Via 1, including the planned 
addition of Grupo Arbi as an equity partner in Via 1 and the capitalization 
of various shareholder loans and other contributions made by the Company and 
RBS to Via 1 to date, the Company expects to hold an equity interest of 
approximately 62% in Via 1. The Company's equity interest will be subject to 
adjustment in the future for capital contributions made by the shareholders 
of Via 1. See "--Project Background; Corporate Governance."

     In January 1998, the Company consummated the RMD Acquisition and thereby 
acquired RMD-Brasil. The Company is currently in discussions with its 
partners regarding the formation of the Combined Company and is in the 
preliminary stages of combining the operations of Via 1 and RMD-Brasil in 
order to realize operational and other synergies. See "--Project Background; 
Corporate Governance." The Company believes that upon its formation, the 
Combined Company will have sufficient channel capacity to transition selected 
markets in Brazil to ESMR services and will be one of the leading SMR/ESMR 
service providers in Brazil.

COUNTRY OVERVIEW

     With a population of over 160 million people, Brazil is the fifth most 
populous country in the world and has the highest real GDP in Latin America, 
estimated at $749 billion in 1996. Brazil has experienced a significant 
increase in international trade due in part to steady economic growth and 
structural economic reforms, including the implementation of a successful 
anti-inflation plan (the "Real Plan"), and a free-trade and customs union 
with Argentina, Uruguay, Paraguay and Chile ("Mercosur"). Under the Real 
Plan, Brazil has lowered inflation from an annual rate of 2,709% in 1993 and 
910% in 1994 to 14.8% in 1995 and 9.3% in 1996 as measured by the IGP-DI, a 
widely used indicator of inflation in Brazil.

     The Company believes that there is a significant unmet demand for both 
wireline and wireless communication services in Brazil. Although Brazil is 
the fifth most populous country in the world, it ranks thirty-ninth in terms 
of teledensity, with only 19% of all residences receiving telephone service. 
In addition, 

                                     15
<PAGE>

substantial waiting times exist for both landline and cellular service in 
Brazil. For example, the waiting time for installation of a landline 
telephone in Brazil is approximately 8.4 months.

     The Company believes that a significant portion of Brazil's unmet demand 
for telecommunications services is for the business communications needs of 
various industries such as transportation, communications, media, 
construction, technical maintenance, security and agriculture. The wireless 
communication needs of these industries are currently being addressed by a 
combination of cellular and SMR services. However, the Company believes that 
many of the wireless communication needs of these segments could be better 
served by ESMR services.

OPERATING COMPANY OVERVIEW

     CURRENT OPERATIONS AND DEVELOPMENT PLAN. In anticipation of the 
incorporation of Via 1, the Company and RBS commenced operations under the 
tradename "Via 1" in Porto Alegre, Novo Hamburgo and Caxias do Sul in July 
1996 and in Rio de Janeiro in March 1997. The Company and RBS are currently 
managing the operations of Via 1 through SRC, the Company's indirect wholly 
owned Brazilian subsidiary and Telcom-Telecomunicacoes Brasil, Ltda., a 
wholly owned subsidiary of Via 1. The Company anticipates that SRC will be 
contributed to Via 1 as part of the initial capitalization of Via 1. As of 
December 31, 1997, Via 1 was operational in 18 cities in Brazil. Via 1 is 
using a combination of Uniden and Nokia infrastructure equipment in these 
operations. As of December 31, 1997, Via 1 had approximately 7,000 
subscribers and had installed 21 transmission sites and constructed 520 
channels.

     In January 1998, the Company acquired RMD-Brasil, which began providing 
SMR services in Brazil in September 1995 and which had approximately 12,000 
subscribers as of December 31, 1997. RMD-Brasil currently offers services in 
14 cities in Brazil, including Sao Paulo and Rio de Janeiro. As of December 
31, 1997 RMD-Brasil had installed 22 transmission sites and had constructed 
211 channels.

     LICENSES AND INTERCONNECTION. Via 1 has four wholly owned subsidiaries 
and a 50% interest in a fifth company that hold licenses for an aggregate of 
540 channels in the 800 MHz frequency band. The Company, through SRC, 
indirectly holds licenses for 140 channels in the same frequency band. The 
Company and RBS have agreed that the Company will contribute SRC to Via 1 as 
part of the initial capitalization of Via 1. See "--Project Background; 
Corporate Governance." (Via 1's licenses together with SRCs licenses are 
referred to herein as the "Via 1 Licenses.") The Via 1 Licenses cover 
approximately 48 million POPs located primarily in southern and central 
Brazil.

     After the initial capitalization of Via 1, the Company anticipates that 
Grupo Arbi will contribute licenses for 120 channels in the 800 MHz range 
(the "Grupo Arbi Licenses") in exchange for a minority equity interest in Via 
1. The Grupo Arbi Licenses cover areas located primarily in southern Brazil 
and include channels in the State of Sao Paulo and the city of Rio de 
Janeiro. In anticipation of the execution of a formal agreement with Grupo 
Arbi that provides for its contribution of the Grupo Arbi Licenses and its 
participation as an equity holder in Via 1, Via 1 has been constructing and 
operating the Grupo Arbi Licenses since July 1996. Although Grupo Arbi has 
permitted the unrestricted use of the Grupo Arbi Licenses by Via 1 to date, 
there can be no assurance that the Company, RBS and Grupo Arbi will 
successfully formalize Grupo Arbi's participation in Via 1, which could have 
a material adverse affect on Via 1 and the Combined Company.

     RMD, through RMD-Brasil, holds licenses for 960 channels, covering 
approximately 49 million POPs in Brazil (the "RMD-Brasil Licenses"). Key 
cities in which RMD-Brasil has licenses include Sao Paulo and Rio de Janeiro. 
Assuming the contribution of the Grupo Arbi Licenses to Via 1 and the 
consolidation of Via l and RMD-Brasil, the Combined Company will hold 
licenses for an aggregate of 1,760 channels in the 800 MHz frequency band 
covering approximately 53 million POPs as shown in the following table:

                                     16
<PAGE>

                     COMBINED COMPANY LICENSE POSITION(A)
<TABLE>
<CAPTION>

                                                                                    GRUPO ARBI        RMD-BRASIL
                                                   POPS      VIA 1 LICENSES         LICENSES           LICENSES           TOTAL
                                                 (MM)(B)       (CHANNELS)          (CHANNELS)         (CHANNELS)        (CHANNELS)
                                                 --------    --------------        -----------       ------------       ---------
<S>                                              <C>         <C>                   <C>               <C>                <C>
STATE OF RIO GRANDE DO SUL
       Caxias do Sul.......................         0.33              20                  _               _                 20
       Novo Hamburgo.......................         0.23              20                  _               _                 20
       Osorio..............................         0.03              20                  _               _                 20
       Porto Alegre........................         2.91              80                 20              60                160
       Santa Maria.........................         0.23              20                  _               _                 20
STATE OF SANTA CATARINA
       Blumenau............................         0.23              20                  _               _                 20
       Criciuma............................         0.16               5                  _               _                  5
       Florianopolis.......................         0.27              40                 20              40                100
       Itajai..............................         0.13               5                  _               _                  5
       Joinville...........................         0.40              20                  _               _                 20
       Tubarao.............................         0.08               5                  _               _                  5
STATE OF PARANA
       Curitiba............................         1.97              20                  _             100                120
STATE OF SAO PAULO
       Bauru...............................         0.29              20                  _               _                 20
       Campinas............................         0.91              15                 20              60                 95
       Jundiai.............................         0.29              60                  _               _                 60
       Limeira.............................         0.23              20                  _               _                 20
       Piracicaba..........................         0.30              30                  _               _                 30
       Ribeirao Preto......................         0.46              10                  _              60                 70
       Sao Jose dos Campos.................         0.49              20                 20              80                120
       Sao Jose do Rio Preto...............         0.32              20                  _              60                 80
       Santos..............................         0.41              40                 20              80                140
       Sao Paulo...........................        17.11              10                  _              20                 30
       Sorocaba............................         0.43              40                  _              20                 60
STATE OF RIO DE JANEIRO
       Duque de Caxias.....................         0.72              20                  _               _                 20
       Rio de Janeiro......................        11.21              20                 20              80                120
STATE OF MINAS GERAIS
       Belo Horizonte......................         3.62              20                  _              40                 60
DISTRITO FEDERAL
       Brasilia............................         1.82               _                  _             100                100
STATE OF ESPIRITO SANTO
       Vitoria.............................         0.27              20                  _               _                 20
STATE OF BAHIA
       Salvador............................         2.42              20                  _              40                 60
STATE OF PERNAMBUCO
       Recife..............................         2.81               _                  _             100                100
STATE OF CEARA
       Fortaleza...........................         1.97               20                                20                 40
                                             -----------     ------------       -------------    ------------        -----------
TOTALS.....................................        53.05              680               120             960               1760
</TABLE>

-------------
(a)  The licenses are subject to substantial  risk. See  "--Additional  
     Factors That May Affect Future  Results--Risks  Associated with 
     Licenses."
(b)  Source: IBGE and the New York Times Atlas.

                                      17
<PAGE>

     The Via 1 Licenses, the Grupo Arbi Licenses and the RMD-Brasil Licenses, 
most of which were granted between 1992 and 1994, generally have terms of 15 
years. Under Brazilian law in effect when such licenses were granted, the 
licensee was required to commence commercial operations using its license 
within one year after the grant date. Current law has increased this 
operational deadline to two years after the date that the Agreement between 
the licensee and the public authority relating to the license is published in 
the Official Gazette. Extensions of such deadline are available from the 
relevant governmental agency under certain circumstances. Via 1 failed to 
meet the operational deadlines with respect to Via 1 Licenses and Grupo Arbi 
Licenses covering an aggregate of 300 channels, 160 of which were not built 
out, due in part to radio interference from television stations. Such radio 
interference has recently been eliminated in most areas, and Via 1 has 
applied for extensions of the applicable operational deadlines with respect 
to these 160 channels. Via 1 expects that extensions will be granted for such 
channels. With regard to the remaining 140 channels, the Company believes 
that Via 1 can cure these failures by constructing and commencing operations 
using such channels in the future and that such channels are therefore not 
subject to a substantial risk of forfeiture. RMD-Brasil has, in the past, 
failed to meet the applicable operational deadlines with respect to certain 
RMD-Brasil Licenses covering a total of 330 channels. The Company believes 
that RMD-Brasil can cure these failures by constructing and commencing 
operations using such channels in the future and that such channels are 
therefore not subject to a substantial risk of forfeiture. However, there can 
be no assurance that any of the extensions described above will be granted 
and failure to obtain such extensions could have a material adverse effect on 
the Combined Company and the Company. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results--Risks Associated with Licenses."

     None of the licenses proposed to be held by the Combined Company contain 
restrictions regarding the technology which may be used under such licenses, 
provided that the equipment used by the Combined Company is approved by the 
Brazilian Telecommunications Agency. Except for type approvals with respect 
to certain radios, the equipment used by Via 1 and RMD-Brasil in connection 
with their respective current operations has been approved by the Brazilian 
Telecommunications Agency.

     The continued joint operation and the consolidation of the Via 1 
Licenses and the Grupo Arbi Licenses as well as the consolidation of such 
licenses with the RMD-Brasil Licenses and the joint operation of Via 1 and 
RMD-Brasil are subject to receipt of certain approvals, authorizations or 
exemptions from the Brazilian Telecommunications Agency. Further, the legal 
formation of the Combined Company may require certain additional governmental 
approvals, authorizations or exemptions. There can be no assurance that such 
approval, authorizations or exemptions will be received. Failure to obtain 
such approvals could result in, among other things, the forfeiture of some or 
all of the Via 1 Licenses, Grupo Arbi Licenses and could have a material 
adverse effect on Via 1, RMD-Brasil and the Company. See "Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations--Additional Factors That May Affect Future Results--Risks 
Associated With Licenses."

     Subject to certain limitations, Brazilian law currently permits SMR 
operators to interconnect with the PSTN. However, neither Via 1 nor 
RMD-Brasil currently has any formal agreements providing for interconnection 
with the PSTN at specified rates, primarily because interconnecting traffic 
is minimal in Via 1's and RMD-Brasil's current respective operations and does 
not account for a significant portion of their respective revenues. However, 
interconnecting traffic will likely account for a significant portion of the 
future revenues of the Combined Company as it transitions selected markets to 
ESMR services. As such, it will become increasingly important for the 
Combined Company to enter into interconnection agreements with local exchange 
carriers that provide for interconnection to the PSTN at acceptable rates. 
There can be no assurance that the Combined Company will be able to enter 
into such agreements on acceptable terms or at all. The failure of the 
Combined Company to enter into such agreements or the inability to 
interconnect to the PSTN at acceptable rates would have a material adverse 
effect on the Combined Company and the Company.

     SALES AND MARKETING STRATEGY. Each of Via 1's and RMD-Brasil's sales and 
marketing efforts currently focus primarily on providing cost-effective 
communications services to businesses in the local distribution, financial 
services, utility and construction industries in southern and central Brazil. 
The Company believes that the Combined Company will have more capacity for 
wide area coverage than any other SMR operator in Brazil and intends to use 
this capacity to develop a wide area ESMR network for businesses in these 
areas.

                                      18
<PAGE>

COMPETITION

     The Combined Company's primary competition consists of two other 
multi-site SMR service providers, MComcast and Airlink Servicos e Comercio 
Ltda. ("Airlink"). In much of its planned network, the Company does not 
believe that the Combined Company will compete directly with MComcast or 
Airlink as these two operators have historically focused on the largest 
cities in Brazil, as compared to the Combined Company, whose operations are 
expected to focus on coverage of the broader geographic area of southern and 
central Brazil. In Sao Paulo, the Combined Company's primary competitors are 
Airlink and, to a lesser extent, MComcast. In Rio de Janeiro, the Combined 
Company's primary competitor is Airlink. Competition in other cities is 
characterized by diverse, small, single market SMR operations.

INVESTMENT; CAPITAL EXPENDITURES; FINANCING

     As of December 31, 1997, the Company had funded approximately $20.7 
million into the operations of Via 1. In addition, in connection with license 
rights obtained by the Company in the Vanguard Project Exchange, the Company 
allocated $5.9 million to those license rights derived from Vanguard's right 
to participate in Via 1. As of December 31, 1997, Via 1 had approximately 
$11.9 million in capital expenditures, which were used primarily for the 
construction of its network.

     The Combined Company has budgeted capital expenditures of approximately 
$18.0 million for 1998 primarily to fund network expansion and for the 
subscriber terminals. The Combined Company will seek to fund its capital 
expenditures through a combination of external financing and additional 
equity or debt investments by the Company and the other shareholders of Via 
1. The Combined Company's inability to obtain necessary financing in order to 
make such additional investments on a timely basis may delay its planned 
capital expenditures and could have a material adverse effect on the Combined 
Company and the Company. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Competition."

     In January 1998, in connection with the RMD Acquisition, RMD entered 
into the BT Loan Agreement, pursuant to which it refinanced $15 million of 
existing indebtedness to BTFIC and borrowed an additional $10 million. A 
significant portion of the amount borrowed pursuant to the BT Loan has been 
used to finance the operations of RMD-Brasil and Via 1. The Company has 
pledged its shares in Via 1, SRC and RMD-Brasil as well as the assets of 
RMD-Brasil and SRC to BTFIC to secure repayment by RMD of the BT Loan. 
Subject to receipt of RBS' consent and in connection with the completion of 
the capitalization of Via 1, it is anticipated that the Company will also 
pledge the assets of Via 1 to BTFIC to secure the BT Loan. See "--Project 
Background; Corporate Governance" and "Management's Discussion and Analysis 
of Financial Condition and Results of Operations--Liquidity and Capital 
Resources."

STRATEGIC PARTNERS. 

    RBS, the Company's partner in Via 1, is one of Brazil's largest media 
companies, with operations in television and radio broadcasting and newspaper 
publishing predominantly located in southern Brazil. In addition to its 
contribution of licenses to Via 1, RBS has expedited the importation of 
infrastructure equipment, assisted in negotiations with governmental 
regulatory authorities and has permitted Via 1 to co-locate its transmitters 
on RBS' transmission sites in various cities in Brazil. The Company has 
provided Via 1 technical services, operational management and assisted in 
procuring the equipment necessary for the development of Via 1's network.

     Grupo Arbi, the Company's proposed additional partner in Via 1, holds 
interests in several areas of the Brazilian economy, including pension funds, 
telecommunications, metal-mechanics and banking. Grupo Arbi is affiliated 
with Arbi Transnational, Inc., an international financial advisory company 
specializing in Latin American mergers and acquisitions.

                                      19
<PAGE>

PROJECT BACKGROUND; CORPORATE GOVERNANCE

     In August 1995, IWC and a wholly owned subsidiary of RBS entered into a 
stockholders agreement providing for the initial capitalization of Via 1 (the 
"Via 1 Stockholders Agreement"). As the first step of this initial 
capitalization, RBS incorporated Via 1 as its wholly owned indirect 
subsidiary and contributed to Via 1 four companies that hold a total of 530 
channels and a 50% equity interest in a fifth company holding 10 channels 
covering the city of Sao Paulo to Via 1. In May 1997, the Company contributed 
$4 million in cash to Via 1 for a 47.3% indirect equity interest in Via 1, 
thereby diluting RBS' equity interest from 100% to 52.7%. Pursuant to the 
planned second step of the initial capitalization of Via 1, the Company will 
contribute SRC, which indirectly holds licenses for 140 channels, to Via 1, 
thereby initially increasing the Company's indirect equity interest in Via 1 
to 62.5% and diluting RBS' equity interest in Via 1 to 37.5%. As part of this 
second step, it is anticipated that RBS will also capitalize certain 
shareholder loans to Via 1 and that the Company will capitalize certain 
shareholder loans to, and other investments in, Via 1's operations. After the 
completion of this second step, and subject to adjustment for anticipated 
additional capital contributions by the Company and RBS prior to the date 
that the second step is consummated, it is anticipated that the Company's 
indirect interest in Via 1 will increase and that RBS' equity interest in Via 
1 will be correspondingly diluted. However, there can be no assurance that 
the Company and RBS will agree on the capitalization of outstanding 
shareholder loans and the Company's other investments in Via 1's operations 
in the manner described above or at all. In addition, the Company and RBS are 
currently negotiating with Grupo Arbi regarding its participation in Via 1. 
The current negotiations contemplate Grupo Arbi participating in Via 1 by 
contributing the Grupo Arbi Licenses for a 7% equity interest in Via 1, which 
interest will be subject to dilution as a result of the capitalization of the 
shareholder loans and other investments in Via 1's operations by the Company 
and RBS described above. In the event that Grupo Arbi receives an equity 
interest in Via 1, the equity interests of the Company and RBS in Via 1 will 
correspondingly be diluted.

     Based upon the current negotiations among the parties, the Company 
anticipates that its indirect equity interest in Via 1 will be approximately 
70% after the consummation of the foregoing transactions. There can be no 
assurance that the Company, RBS and Grupo Arbi will agree to the proposed 
terms of Grupo Arbi's participation in Via 1. The failure of Grupo Arbi to 
contribute the Grupo Arbi Licenses to Via 1 could have a material adverse 
effect on Via 1, the Combined Company and the Company. See "--Licenses and 
Interconnection."

     The Company is also in discussions with its partners regarding the 
formation of the Combined Company and is in the preliminary stages of 
combining the operations of Via 1 and RMD-Brasil in order to realize 
operational and other synergies. Based upon the current negotiations among 
the parties, the Company anticipates that its equity interest in the Combined 
Company will be greater than its equity interest in Via 1. However, there can 
be no assurance that the Company, RBS and Grupo Arbi will agree upon the 
terms of the formation of the Combined Company. Further, the formation of the 
Combined Company is subject to various governmental approvals, authorizations 
and exemptions. The failure of the Company and its partners to agree upon the 
terms of the formation of the Combined Company or the failure to receive the 
requisite governmental approvals, authorizations and exemptions could have a 
material adverse effect on Via 1, RMD-Brasil and the Company.

REGULATORY OVERVIEW

     Telecommunications services in Brazil are regulated by a number of laws, 
decrees and regulations specific to each type of telecommunications service. 
The Brazilian Constitution was amended in 1995 to permit the Brazilian 
government to grant concessions to entities to provide telecommunications 
services. On July 19, 1996, the Brazilian legislature enacted Law No. 9295 
(the "Minimum Law") which authorized companies to provide cellular mobile 
services, certain other limited services, such as SMR services, and satellite 
telecommunication services upon receiving a concession from the Brazilian 
government. In July 1997, the Brazilian legislature enacted Law No. 9472 (the 
"General Telecommunications Law"), which included, among other things (i) the 
creation of a national telecommunications agency ("Anatel") and delegation of 
authority to Anatel with respect to license grants for telecommunication 
services and (ii) privatization of Telebras, the state-owned telephone 
company. See "Management's Discussion and Analysis of Financial Condition and 
Results of Operations--Additional Factors That May Affect Future 
Results--Regulation."

                                      20
<PAGE>

     There are no limitations on foreign ownership of SMR service providers 
in Brazil. However, new regulations enacted in November 1997 (the "November 
1997 Regulations") set forth various restrictions on the SMR operations and 
the ownership and transfer of SMR licenses. With regard to ownership and 
transfer of SMR licenses, the November 1997 Regulations provide that an SMR 
license may not hold more than 200 channels in a single geographic area or 
hold more than one license to provide SMR services in a single geographic 
area. The November 1997 Regulations allow the transfer of licenses between 
controlled and controlling companies as well as to third parties as long as 
the transferee fulfills all the technical, financial and economic 
requirements of the license, undertakes to comply with all the terms of the 
agreement entered into by the transferor with respect to the license and 
succeeds to the rights and obligations of the transferor pursuant to the 
license. Transfer of licenses (other than between controlled and controlling 
companies) is only permitted after the commencement of commercial operations 
under the license and requires prior approval of Anatel. Transfer of licenses 
between controlled and controlling companies may be done at any time subject 
to receipt of prior approval from Anatel.

     In addition to various technical operational requirements, the November 
1997 Regulations also provide that SMR services in Brazil may only be 
provided to corporate persons or groups of corporate persons that are engaged 
in a specific activity and that SMR services may not be rendered to 
individuals. Further, the November 1997 Regulations impose certain 
limitations on SMR service providers with respect to interconnection of their 
networks to the PSTN and with other SMR licensees. An SMR service provider 
may interconnect with the PSTN only through a single point in a geographic 
area, is subject to certain limitations on the amount of traffic that may be 
routed through the PSTN and must utilize the PSTN operated by the regional 
state-owned telephone companies for any calls between networks outside of the 
local service area. Interconnection within SMR networks may also not be 
permitted between distinct SMR licensees or by an entity which controls more 
than one SMR license in the same service area. Under this regulatory 
framework, calls between customers on different networks in different 
licensed service areas where an SMR operator controls SMR licenses would have 
to be routed through the PSTN.

     The Company believes that the restrictions and limitations on SMR 
operators contained in the November 1997 Regulations will not have a material 
adverse effect on Via 1's current operations or the Combined Company's 
proposed operations. However, there can be no assurance that the November 
1997 Regulations will be administered as currently anticipated or that 
further regulations will not be promulgated that further restrict the 
Combined Company's proposed operations. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results--Risks Associated with Licenses" and 
"--Regulation."

     PAKISTAN - MOBILINK

     The Company currently holds a 32.54% equity interest in International 
Wireless Communications Pakistan Limited ("IWCPL"), the holding company 
through which the Company holds its 19.1% indirect equity interest in 
Mobilink, and exercises voting control over an additional 11.76% equity 
interest in IWCPL owned by Vanguard. In addition, the Company holds an option 
to acquire shares currently representing an additional 1.54% of IWCPL and is 
a party to a put-call option agreement to purchase shares representing 5.71% 
of IWCPL on the date of exercise. Upon exercise of both of these options in 
their entirety, the Company shall hold or have voting control over a majority 
of the equity of IWCPL. IWCPL in turn owns a 58.69% equity interest in 
Mobilink. See "--Corporate Governance." Mobilink is the sole licensed 
provider of GSM cellular services in Pakistan. Currently, Mobilink provides 
GSM cellular services in 12 of the major urban areas of Pakistan, including 
Karachi, Lahore and Faisalabad, the three largest cities in Pakistan. The 
Company believes that Mobilink has become the fastest growing cellular 
provider in Pakistan. The Mobilink network consists of two switches and 59 
cellular base stations. As of December 31, 1997, Mobilink had approximately 
52,000 subscribers, compared to 16,000 subscribers at the end of 1996. For 
the year ended December 31, 1997 Mobilink achieved positive EBITDA.

COUNTRY OVERVIEW

     Pakistan is the seventh most populous country in the world, with a 
population of approximately 143 million. Pakistan is believed to have one of 
the highest population growth rates in the world and has experienced strong 
economic growth as evidenced by a real GDP growth rate of 4.1% for the fiscal 
year ended

                                      21
<PAGE>

June 30, 1996, and a targeted real GDP growth rate of 3.4% for the fiscal 
year ended June 30, 1997. Pakistan has one of the lowest fixed line 
penetration rates in the world at 1.77%, and a cellular penetration rate of 
only 0.05%. In recent years, the government of Pakistan has taken various 
steps to encourage growth in existing sectors and to encourage investment in 
sectors previously dominated by the government in an attempt to broaden 
Pakistan's economic base. Recent government legislation has significantly 
reduced telecommunications infrastructure and cellular handset duties, which 
is accelerating the growth in cellular telecommunications in Pakistan.

     Until December 31, 1995, the state-owned Pakistan Telecommunications 
Company ("PTCL"), or its predecessor, the Pakistan Telegraph and Telephone 
Department (the "PTTD"), was the sole supplier of telecommunications services 
in Pakistan. On January 1, 1996, as part of the deregulation and 
privatization policies described above, PTCL was made into an independent 
company and a small percentage of shares were made available to the public. 
PTCL currently holds an exclusive license to provide local and international 
telephone services in Pakistan until 2003. In addition, Mobilink and its two 
competitors hold non-exclusive licenses to provide cellular services in 
Pakistan. Mobilink's license provides for the provision of cellular services 
using digital GSM technology, whereas the other operators' licenses provide 
for the provision of cellular services using analog AMPS technology. 
Mobilink's license to provide GSM cellular services expires in 2007, whereas 
its competitors' AMPS cellular licenses expire in 2005.

OPERATING COMPANY OVERVIEW

     CURRENT OPERATIONS AND DEVELOPMENT PLAN. Mobilink launched its 
commercial operations in August 1994, and was operational in six cities in 
Pakistan, including Karachi, Lahore and Faisalabad, with approximately 2,500 
subscribers as of December 31, 1994. However, operations were suspended in 
Karachi due to the suspension of all wireless communications by the Pakistani 
government in its effort to curb ethnic violence. See "Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations--Additional Factors That May Affect Future Results--Risks Inherent 
in Foreign Investment."

     At the time the ban on wireless telecommunications in Karachi was lifted 
at the end of 1996, Mobilink had developed a significant network in the 
northern provinces of Pakistan, including Lahore and Faisalabad, with over 
16,000 subscribers. Since the relaunch of operations in Karachi in early 
1997, Mobilink has experienced markedly increased subscriber growth rates and 
had over 52,000 subscribers as of December 31, 1997.

     Mobilink's cellular network operates in the 900 MHz frequency band and 
is being constructed using GSM technology. Mobilink uses Siemens switching 
equipment and Motorola radio equipment in its network. See "Technology."

     LICENSES AND INTERCONNECTION. Mobilink holds a non-exclusive nationwide 
license to provide cellular services in Pakistan. Mobilink has been assigned 
2x10 MHz of spectrum in the 900 MHz frequency band to provide such cellular 
services. The license has a term of 15 years, and expires in 2007. At that 
time, Mobilink will be required to seek governmental approval to renew the 
license. The license by its terms contains certain conditions on construction 
and operation of the network. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Risks Associated with Licenses."

     Mobilink operates under an interconnection agreement with PTCL that 
permits Mobilink's cellular network to be connected to the wireline network 
operated by PTCL. This interconnection agreement provides for interconnection 
at the PTCL's standard interconnection rates subject to certain volume 
discounts. The interconnection agreement will remain in force until December 
2000 and is renewable for an additional three years upon mutual consent of 
the parties. There can be no assurance that PTCL will consent to the renewal 
of the interconnection agreement upon its expiration or that the standard 
interconnection rates charged by PTCL will continue to enable Mobilink to 
operate its business cost-effectively, either of which could have a material 
adverse effect on Mobilink and the Company.

     SALES AND MARKETING. Mobilink seeks to be the provider of superior 
quality cellular services in Pakistan. In addition to being committed to 
providing high-quality customer service and broad, geographical coverage, 
Mobilink 

                                      22
<PAGE>

stresses the technological advantages of its digital GSM service. The Company 
believes that the enhancements inherent in Mobilink's digital GSM services, 
such as greater security, superior data capabilities, short messaging service 
and closed user group capabilities, will assist in differentiating Mobilink's 
services from that of the competitive analog AMPs providers. Mobilink is the 
only cellular operator in Pakistan that has been granted a single nationwide 
access code for all of the subscribers on its network, regardless of their 
locations within Pakistan. This means that, unlike Instaphone and Paktel's 
subscribers, Mobilink's subscribers traveling within Pakistan need not inform 
their callers as to the area code in which they are located in order to 
receive a call successfully. Mobilink is currently in the process of 
negotiating roaming agreements with other GSM cellular operators that will 
permit international roaming between the signatories.

     Motorola owns 30% of Mobilink. As a result of its association with 
Motorola, Mobilink has the right to use the phrase "a Motorola Network" in 
its advertising and promotional materials and seeks to leverage its 
association with Motorola in order to position Mobilink as a superior brand 
among a wide sector of the population in Pakistan.

COMPETITION

     Mobilink currently has two competitors, Pakom Limited ("Instaphone") and 
Paktel Limited ("Paktel"), who provide cellular telephone services in all of 
the major cities in Pakistan. Both Instaphone and Paktel use analog AMPS 
technology and their networks currently offer wider coverage than Mobilink's 
network.

     In addition, because Mobilink's and its competitors' licenses are 
non-exclusive, the PTA may grant additional licenses to provide cellular 
services to third parties in the future. Further, pursuant to the Pakistan 
Telecommunications (Reorganization) Act, 1996 (the "Pakistan 
Telecommunications Act"), the PTA has the express authority, but not the 
obligation, to grant a cellular license to PTCL. Based upon discussions by 
Mobilink with officials at the PTA, the Company does not believe that any 
such additional licenses will be granted in the near future except in the 
event of a merger among the existing cellular providers. However, there can 
be no assurance that the PTA will not grant one or more of such additional 
licenses, which would further increase the competitive environment for 
cellular services in Pakistan and could have a material adverse affect on 
Mobilink and the Company.

INVESTMENT; CAPITAL EXPENDITURES; FINANCING

     As of December 31, 1997, the Company had expended approximately $26.1 
million to acquire its 19.09% indirect equity interest in, and to make 
capital contributions and shareholder loans to, Mobilink. The Company 
financed $22 million of such amount though the PWH Pakistan Facility (as 
defined below), pursuant to which Pakistan Wireless Holdings Limited ("PWH"), 
a wholly owned subsidiary of the Company and the holding company through 
which the Company holds its interest in IWCPL, borrowed $22 million from 
various stockholders and affiliates of the Company. See "Certain 
Relationships and Related Transactions--Private Placement 
Transactions--Pakistan Facilities." In February 1998, the Company entered 
into an agreement with Vanguard Pakistan, Inc., a wholly owned subsidiary of 
Vanguard and a shareholder of IWCPL ("Vanguard Pakistan"), pursuant to which 
Vanguard Pakistan agreed to contribute the Company's pro-rata share of a 
$3,639,588 capital call by IWCPL, which pro-rata share currently represents a 
1.54% equity interest in IWCPL in exchange for an $18,600 fee. Vanguard 
Pakistan also granted the Company an option (the "Vanguard Pakistan Option") 
to purchase this equity interest for $1,240,371. The Vanguard Pakistan Option 
will expire on May 16, 1998, unless sooner exercised. In addition, pursuant 
to the Side Letter dated August 18, 1997, among the Company, the shareholders 
of Mobilink, and the other shareholders of IWCPL (the "Mobilink Side 
Letter"), the Company has agreed to contribute an additional $2.1 million in 
shareholder loans to Mobilink through the end of 1998. If the Company fails 
to provide such loans, then the Company's interest in IWCPL shall be 
converted into a direct equity interest in Mobilink, and the other 
shareholders of Mobilink shall have a pro-rata right to purchase all of the 
Company's equity interest in Mobilink at a purchase price equal to 50% of the 
then fair market value of such equity interest. See "Management's Discussion 
and Analysis of Financial Condition and Results of Operations--Additional 
Factors that May Affect Future Results--Negative Operating Cash Flow; 
Critical Dependence on Additional Financing."

     As of December 31, 1997 Mobilink had approximately $18.9 million in 
capital expenditures, which were used primarily for the construction of its 
network.

     Mobilink has financed a significant portion of its past capital 
expenditures through a combination of shareholder capital contributions, 
shareholder loans and short- and long-term debt facilities from Citibank N.A.

                                      23
<PAGE>

("Citibank") and Sanwa Bank Limited ("Sanwa Bank"). As of December 31, 1997, 
Mobilink had outstanding an aggregate of approximately $11.8 million in 
shareholder loans, which accrue interest at a rate of Euro U.S.$ LIBOR plus 
1.5% for foreign currency loans and 15% for local currency loans. Such 
shareholder loans are repayable in seven installments commencing September 
1999. Mobilink has also obtained a $15 million long-term finance facility 
from Citibank which accrues interest at a rate of LIBOR plus 0.25% to 0.50% 
based upon the amount of time borrowings under the facility remain 
outstanding. Such facility is repayable in eleven semi-annual installments, 
which commenced in March 1997, and, as of December 31, 1997, approximately 
$12.1 million was outstanding under such facility. Mobilink has also borrowed 
$20 million from Sanwa Bank. Interest on such amount accrues at a rate of 
Euro U.S.$ LIBOR plus 0.30%, and is payable semi-annually.  The Citibank loan 
and the Sanwa loan, prior to it being repaid in full, have been guaranteed by 
Motorola, a shareholder of Mobilink. Subsequent to December 31, 1997 the 
Sanwa Bank loan was replaced by an ABN Amro $20 million local currency loan 
facility. This facility is currently guaranteed by Motorola and has a term of 
three years. Pursuant to the Mobilink Side Letter, IWCPL has agreed that if 
the guarantees of indebtedness of Mobilink issued by Motorola in connection 
with the foregoing indebtedness of Mobilink are not terminated on or before 
August 26, 1998, then IWCPL will forfeit to Motorola shares in Mobilink 
corresponding to up to a 4% equity interest in Mobilink. In addition, in 
March 1998, Mobilink entered into a $32 million vendor financing agreement 
with Motorola Credit Corporation ("Motorola Credit"), an affiliate of 
Motorola, for the purchase of certain infrastructure equipment (the "Motorola 
Vendor Financing"). Amounts borrowed under such agreement accrue interest at 
a rate of LIBOR plus 1.5% and are secured by a lien on such equipment. IWCPL 
has also pledged shares in Mobilink representing an 8.5% equity interest in 
Mobilink to Motorola Credit to secure the indebtedness of Mobilink under such 
agreement. 

     Mobilink has budgeted capital expenditures of $40.2 million in 1998, 
primarily to fund the continued buildout of the network. Mobilink expects to 
fund these capital expenditures through a combination of shareholder loans, 
the Motorola Vendor Financing and additional vendor and other financing. 
There can be no assurance that Mobilink will be able to obtain any such 
financing. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations--Additional Factors That May Affect Future 
Results--Negative Operating Cash Flow; Critical Dependence on Additional 
Financing."

LOCAL AND STRATEGIC PARTNERS

     The Company currently holds a 19.09% indirect equity interest in 
Mobilink through PWH's 32.54% equity interest in IWCPL. The Company's local 
partner in Mobilink is Saif Telecom (Pvt) Limited ("Saif"), which owns an 
11.31% interest in Mobilink. Saif is a Pakistan company that is controlled by 
the Saifullah Group, a large industrial holding company based in northern 
Pakistan. The Company's other partners in Mobilink include Motorola, which 
was the majority shareholder of Mobilink prior to the Company's purchase of 
an interest in Mobilink and currently owns a 30.00% interest in Mobilink; 
South Asia Wireless Communications (M) Ltd. ("SAWC"), an affiliate of the 
Asian Infrastructure Fund, an Asian telecommunications investment fund, which 
owns a 20.00% indirect interest in Mobilink; Vanguard Pakistan, which owns a 
6.91% indirect interest in Mobilink; and Asia Pacific Cellphone Co., Inc. 
("APC"), an affiliate of a Saudi financial institution, which owns a 12.69% 
indirect interest in Mobilink.

     Pursuant to the Vanguard Pakistan Option, the Company has the right 
purchase an additional 1.54% interest in IWCPL from Vanguard Pakistan on or 
before May 16, 1998. Upon exercise of the Vanguard Pakistan Option in its 
entirety, the Company's indirect equity interest in IWCPL would increase to 
34.08% and its indirect equity interest in Mobilink would correspondingly 
increase to 20.00%. In addition, the Company holds an option (the "Mobilink 
Put-Call Option") to purchase an additional 5.71% interest in IWCPL from APC 
for an aggregate purchase price of approximately $6.5 million, which amount 
is subject to adjustment based upon the capital contributions and shareholder 
loans made by APC in respect of such 5.71% interest and the period of time 
elapsed between the date APC originally purchased such 5.71% and the date 
that the option is exercised. APC has a corresponding right to put such 
interest to the Company at the same purchase price at any time during the 
term of the option. The Mobilink Put-Call may be exercised only once by the 
Company or APC and will expire on December 31, 1998, unless sooner exercised. 
Upon exercise of the Mobilink Put-Call Option and the Vanguard Pakistan 
Option, the Company's indirect equity interest in IWCPL would increase to 
39.79%, and its corresponding indirect equity interest in Mobilink would 
increase to 23.35%.

                                      24
<PAGE>

CORPORATE GOVERNANCE

     PWH and Vanguard Pakistan are parties to a voting trust agreement (the 
"IWC Group Agreement") pursuant to which the Company, through PWH, has the 
right to exercise voting control over all of the shares in IWCPL currently 
held or hereafter acquired by Vanguard Pakistan. The IWC Group Agreement also 
provides, among other things, (i) that Vanguard Pakistan may make PWH's 
pro-rata share of any shareholder loans or capital calls declared by IWCPL if 
PWH elects not to make such shareholder loans or capital calls; (ii) that 
Vanguard Pakistan may exercise the Mobilink Put-Call Option if such option is 
not exercised by PWH prior to December 15, 1998; (iii) that Vanguard Pakistan 
shall have a right of first refusal with respect to any transfer of shares in 
IWCPL by PWH and that each of PWH and Vanguard Pakistan shall have reciprocal 
rights of co-sale with respect to any transfer of shares in IWCPL by either 
party. See "Directors and Officers of the Registrant--Compensation Committee 
Interlocks and Insider Participation."

     The shareholders of IWCPL are parties to the IWCPL Shareholders 
Agreement, which provides that the Company has the right to appoint 50% of 
the directors of IWCPL. The IWCPL Shareholders Agreement also provides that a 
vote of 90% of the shareholders of IWCPL is required for certain major 
corporate decisions relating to IWCPL and all decisions relating to Mobilink 
that require super majority board approval pursuant to the Restated and 
Amended Shareholders Agreement dated August 18, 1997, among the shareholders 
of Mobilink (the "Mobilink Shareholders Agreement"). The IWCPL Shareholders 
Agreement provides further that in the event that such a 90% vote is not 
obtained with respect to a matter (a "Deadlock") and the matter is resolvable 
by maintaining the status quo, then the IWCPL directors on the Board of 
Mobilink will vote to maintain the status quo. However, if the Deadlock 
concerns a matter than cannot be resolved by maintaining the status quo and 
the parties are unable to resolve the Deadlock after 30 days of good faith 
negotiations or an additional 90 days of negotiations relating to a potential 
disposition of their respective interests in IWCPL, then IWCPL will be 
liquidated and the shares of Mobilink held by IWCPL will be distributed to 
IWCPL's shareholders in proportion to their respective equity interests in 
IWCPL.

     The Mobilink Shareholders Agreement provides that IWCPL has the right to 
appoint six of the ten directors of Mobilink. The Mobilink Shareholders 
Agreement also requires a super majority vote of 80% of the shareholders of 
Mobilink and/or eight of the ten directors of Mobilink for certain major 
corporate actions. In addition, pursuant to the Mobilink Side Letter, the 
shareholders of Mobilink and the shareholders of IWCPL agreed to contribute 
their pro-rata share of shareholder loans in an aggregate principal amount of 
$15 million during 1998. The Company's pro-rata share of such loans required 
to be made during the remainder of 1998 is $2.1 million. If the Company fails 
to provide such loans, then PWH's equity interest in IWCPL shall be converted 
into a direct equity interest in Mobilink, and the other shareholders of 
Mobilink shall have a pro-rata right to purchase all of such equity interest 
at a purchase price equal to 50% of the then fair market value of such equity 
interest. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations--Additional Factors that May Affect Future 
Results--Negative Operating Cash Flow; Critical Dependence on Additional 
Financing." Further, pursuant to the Mobilink Side Letter, IWCPL agreed to 
place shares of Mobilink representing a 4% equity interest in Mobilink in 
escrow, pending the termination or reduction of certain shareholder 
guarantees of the indebtedness of Mobilink issued by Motorola on or before 
August 26, 1998. If such guarantees are not terminated by such date, up to 
all of such escrowed shares will be forfeited to Motorola, thereby decreasing 
IWCPL's equity interest in Mobilink to 54.69%.

REGULATORY OVERVIEW

     Pursuant to the Pakistan Telecommunications (Re-Organization) Ordinance, 
1995 and the Pakistan Telecommunications (Re-Organization) Act, (1996) the 
Government of Pakistan established the PTA. The Pakistan Telecommunications 
Act grants to the PTA overall responsibility for the regulation and 
administration of the telecommunications industry in Pakistan, including 
responsibility with respect to the issuance of licenses, the setting of 
technical standards, the setting of guidelines for interconnection and the 
regulation of tariffs.

     The Pakistani government may, as and when it considers necessary, issue 
policy directives on matters relating to telecommunications with which PTA 
must comply, including with respect to the number of licenses which can be 
issued, foreign ownership of telecommunications businesses and national 
security matters.

                                      25
<PAGE>

     The Pakistan Telecommunications Act also provides for the constitution 
of a Frequency Allocation Board ("FAB") to be funded by the PTA and governed 
by regulations promulgated by the FAB. The FAB has the exclusive authority to 
allocate and assign portions of the radio frequency spectrum to the 
government, providers of telecommunications services and systems, radio and 
television broadcasting operations, public and wireless operators and others.

     Under Pakistani law, there are currently no restrictions on the foreign 
ownership of telecommunications companies providing basic telecommunication 
services (such as Mobilink).

     Pursuant to the Foreign Exchange Regulation Act, 1947, permission of the 
State Bank of Pakistan is required for the acquisition of shares in 
telecommunication entities, unless the entity is a listed company or conducts 
business as a manufacturing concern. The transfer of securities held by a 
person resident outside Pakistan to another person resident outside Pakistan 
on the same basis against payment outside Pakistan is subject to a general 
exemption granted by the State Bank of Pakistan. Dividends, all accretions to 
the capital by way of bonus or rights shares and proceeds on sale may be 
repatriated or remitted from Pakistan at the official rate of exchange 
through an authorized dealer in foreign exchange.

     The import of goods, including telecommunications apparatus and 
equipment, is subject to customs duties and sales tax at varying rates, and 
may require specific authorization/permission from the Pakistani government.

     INDONESIA - MOBISEL

     The Company currently owns a 19.8% indirect equity interest in Mobisel, 
a provider of cellular services in Indonesia, through its 28.3% direct equity 
interest in RHP, which owns 70.0% of Mobisel. The shareholders of RHP are 
currently considering a $10 million shareholder capital call (the "Mobisel 
Capital Call"). In addition, the Company is currently negotiating options to 
acquire an additional 33% interest in RHP from the other shareholders of RHP 
(collectively, the "Mobisel Option"). If the Company exercises the Mobisel 
Option in its entirety and if no shareholder of Mobisel other than the 
Company participates in the Mobisel Capital Call, the Company would acquire a 
majority equity interest in RHP and Mobisel. There can be no assurance that 
the Mobisel Option or the Mobisel Capital Call will be consummated. Mobisel 
is the sole provider of NMT-450i cellular services in Indonesia. Mobisel's 
nationwide license has no expiration date, and no requirements on the number 
of subscribers. Mobisel provides cellular services throughout Indonesia and 
is currently providing services to over 30,000 subscribers in portions of 
Java, Bali, Lombok and the Lampung region of Southern Sumatra. Mobisel 
markets its services under the name "ORBIT."

     Mobisel seeks to leverage the wide area and low cost characteristics 
inherent in the NMT-450i technology being utilized by Mobisel to offer 
superior geographical coverage, including service to the rural areas of 
Indonesia and Indonesia's major road systems. As of December 31, 1997, 
Mobisel's cellular network included five switches and 92 cellular base 
stations.

COUNTRY OVERVIEW

     Indonesia is the fourth most populous country in the world, with a 
population of approximately 203 million. Although the Indonesian economy has 
experienced a severe economic downturn in recent months, Indonesia previously 
experienced rapid economic and significant population growth, as evidenced by 
real GDP and population growth rates of approximately 7.8% and 1.4%, 
respectively, for the year ended December 31, 1996. The current fixed line 
penetration in Indonesia is approximately 2.1 lines per 100 people, with the 
majority of the line concentration in urban areas. Cellular penetration is 
estimated at 0.3 lines per 100 people.

     In recent years, the government of Indonesia has taken various steps to 
encourage growth in existing sectors and to encourage investment in sectors 
previously dominated by the government. Recent government legislation has 
lead to an acceleration in cellular penetration. New legislation includes the 
removal of import duties on subscriber handsets and wireless infrastructure. 
In addition, cellular operators are now allowed to carry domestic long 
distance traffic. Legislation has also lead to the formation of joint 
ventures between Telkom Indonesia, the national telephone company of 
Indonesia, and cellular operators.

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<PAGE>

     The Company believes that there is significant pent-up demand for 
telecommunications services which results in attractive growth prospects for 
the cellular telecommunications industry in Indonesia.

OPERATING COMPANY OVERVIEW

     CURRENT OPERATIONS AND DEVELOPMENT PLAN. As of December 31, 1997, 
Mobisel provided cellular services to approximately 30,000 subscribers. 
Mobisel offers subscribers traditional cellular services as well as 
value-added services such as voice mail, call waiting, three-way conference 
calling and call forwarding. Mobisel intends to expand further its cellular 
services in the future and is currently exploring opportunities to provide 
additional value-added services such as closed user groups, caller line 
identification and short message services.

     As of December 31, 1997, Mobisel's cellular network had 92 operational 
cell sites. Mobisel's network currently provides coverage to portions of 
Java, Bali, Lombok and the Lampung region of Southern Sumatra and has a 
capacity to serve approximately 58,500 subscribers. Mobisel currently intends 
to expand the geographic coverage of its cellular network as well as to 
increase the capacity of its cellular network in existing areas of coverage.

     Mobisel's cellular network operates in the 470 MHz frequency band and is 
being constructed using NMT-450i technology. See "Technology." Mobisel 
purchases network equipment from Nokia, Ericsson, Hans Damm and Tecnomen OY. 
Mobisel also has technical assistance agreements with Sema Group UK Limited 
and Telecon Ltd.

     LICENSE AND INTERCONNECTION. Mobisel holds a license to offer cellular 
services throughout Indonesia. Pursuant to the terms of the license, Mobisel 
is obligated to provide coverage in Java, Bali, Lombok and the Lampung region 
of Southern Sumatra by April 1998. The license has no fixed term and does not 
limit the number of subscribers. The Ministry of Tourism, Post and 
Telecommunications of Indonesia (the "MTPT") has granted to Mobisel a license 
to use 2x4.5 MHz of spectrum in the 470 MHz frequency band to provide 
cellular services. Mobisel has applied to the MTPT for a license to use an 
additional 2x4.5 MHz of spectrum in the 470 MHz frequency band. The Director 
General of the MTPT has issued a letter of "no objection" for the issuance of 
such frequency license subject to payment of the necessary fees and 
coordination with any existing users. If it receives such frequency, Mobisel 
intends to use it to ease the introduction of the new digital service.

     Mobisel has received permission from the MTPT to operate a service based 
on CDMA technology within the existing NMT band. Mobisel will seek to exploit 
this using the existing network of cell sites.

      Mobisel operates under an interconnection arrangement with Telkom 
Indonesia that permits Mobisel's cellular network to be connected to the 
wireline network operated by Telkom Indonesia. This interconnection agreement 
provides for interconnection at the rates published from time to time by the 
MTPT and will remain in effect as long as Mobisel's operating license remains 
in effect. There can be no assurance that the interconnection rates set by 
the MTPT will continue to enable Mobisel to operate its business 
cost-effectively.

     SALES AND MARKETING. Mobisel's marketing strategy focuses on increasing 
brand awareness, improving the coverage and capacity of its cellular network, 
introducing additional distribution channels and providing superior customer 
service. While Mobisel's competitors are focusing on providing services 
primarily in Indonesia's urban markets, Mobisel utilizes the advantages 
inherent in NMT-450i systems to provide increased coverage more cost 
effectively than competing cellular providers. This cost-effective coverage 
will enable Mobisel to provide nationwide roaming services and coverage in 
suburban and rural areas not served by Indonesia's other cellular operators.

     Mobisel currently markets its services through independent distributors, 
dealers, retailers and agents. In addition, Mobisel markets its services 
through company-owned stores operated under the name "ORBIT Station" as well 
as company-owned mobile vans and kiosks. In 1997, Mobisel also entered into 
joint promotion arrangements with local banks and credit card companies in 
order to increase the distribution of its services in a manner that reduces 
exposure to bad debt.

                                      27
<PAGE>

COMPETITION

     Mobisel's primary competitors in the Indonesian telecommunications 
market are PT Kommikasi Selular Indonesia, PT Telekomindo Primabhakti and PT 
Metro Selular Nusantara, each of which operates a non-overlapping regional 
AMPS network, and PT Satelit Palapa Indonesia, PT Telekommunikasi Selular and 
PT Excelkomindo Pratama, each of which operates a nationwide GSM network. In 
addition, the MTPT recently awarded two licenses to operate DCS 1800 or PHS 
networks in and around Jakarta, which will result in the entry of two 
additional competitors into the Indonesian cellular market and is in the 
final stage of the tender process for the issuance of PCS/PCN operation 
permits for Sumatra, Java and the Eastern Region of Indonesia. GSM and 
PCS/PCN networks enjoy certain advantages over NMT-450i networks, 
particularly in the areas of international roaming, higher capacity in urban 
environments and lower handset costs. Competition is limited to handset 
pricing, marketing and services.

INVESTMENT; CAPITAL EXPENDITURES; FINANCING

     As of December 31, 1997, the Company had expended approximately $22.8
million to acquire its 28.3% interest in, and to make capital contributions 
and shareholder loans to, RHP. In addition, in connection with the Vanguard 
Project Exchange (as defined herein), the Company allocated $11.5 million to 
license rights derived from Vanguard's right to participate in Mobisel that 
were obtained by the Company in the Vanguard Project Exchange. The Company is 
currently negotiating the terms of the Mobisel Capital Call and the Mobisel 
Option with the other shareholders of RHP. The Company anticipates that the 
Company will acquire a majority equity interest in RHP if the Mobisel Option 
is exercised in its entirety and if no shareholder other than the Company 
participates in the Mobisel Capital Call. There can be no assurance that the 
Company will be able to negotiate the Mobisel Option or the Mobisel Capital 
Call on favorable terms, or at all.

     In March 1996, Mobisel obtained a five-year $60.0 million credit 
facility from Nissho Iwai to finance the construction of its network and the 
purchase of subscriber terminals. Borrowings under such credit facility bear 
interest at a floating rate based on LIBOR plus a 2.5% margin per annum and 
are secured by all of Mobisel's assets and a pledge of all of the capital 
stock of Mobisel held by RHP. RHP has also guaranteed the credit facility, 
but no guarantee was required by the Company or the other RHP shareholders. 
In addition, Mobisel has agreed to assign to and deposit with Nissho Iwai all 
of its cash, including revenues, loan drawings and shareholders' advances. 
Currently, approximately $60.0 million of indebtedness is outstanding under 
this credit facility.  Mobisel is currently negotiating the rescheduling of 
the principal and interest payments currently due under this facility.

     In January 1997, Mobisel issued approximately Rp. 75 billion of 
Indonesian Rupiah-denominated short-term notes to a group of lenders led by 
PT Bank Umum Servitia ("BUS") and arranged by PT Makindo Securities 
("Makindo"). Such short-term notes have a term of six months, extendable to 
one year, and bear interest at a rate of a weighted average of 6-month JIBOR 
plus 3.5% per annum. Mobisel has successfully negotiated the rescheduling of 
such short-term notes with BUS and Makindo until 1999.

     Mobisel has budgeted capital requirements of approximately $1.3 million 
for 1998, primarily to provide an upgrade to its customer service and billing 
system and to implement a pre-paid service. Mobisel currently expects to fund 
such capital requirements through capital contributions from its 
shareholders. However, Mobisel does not have commitments from its 
shareholders for such funds. While Mobisel is also currently negotiating with 
a number of financial institutions to obtain such financing, there can be no 
assurance that Mobisel will be successful in obtaining any such financing. 
The failure by Mobisel to obtain such funding would have a material adverse 
effect on the ability of Mobisel to continue to conduct its business and 
could result in the merger, sale, bankruptcy or liquidation of Mobisel. 
Because of such lack of funding, Mobisel is currently unable to purchase 
handsets from suppliers, which has prevented Mobisel from enrolling 
additional subscribers to its network. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Liquidity and 
Capital Resources" and "Management's Discussion and Analysis of Financial 
Condition and Results of Operations--Additional Factors That May Affect 
Future Results--Negative Operating Cash Flow; Critical Dependence on 
Additional Financing."

                                      28
<PAGE>

LOCAL AND STRATEGIC PARTNERS

     The Company's three principal strategic partners in Mobisel are Telkom 
Indonesia and Telkom Indonesia's pension fund foundation, Yayasan Dana 
Pensiun Pegawai PT Telkom, which own 25% and 5% of Mobisel, respectively; PT 
Deltona Satya Dinamika ("DSD"), which indirectly owns approximately 17% of 
Mobisel through its approximate 24% equity interest in RHP; PT Bina Reksa 
Perdana ("BRP"), which indirectly owns approximately 31% of Mobisel through 
its approximate 44% equity interest in RHP; and Nissho Iwai, which indirectly 
owns 2.1% of Mobisel through its 3% equity interest in RHP. Telkom Indonesia 
also holds an interest in, and provides interconnection to, each of Mobisel's 
competitors. See "Competition."

CORPORATE GOVERNANCE

     In accordance with the Shareholders Agreement among the shareholders of 
RHP dated November 9, 1995, as amended and the Articles of Association of RHP 
(collectively, the "RHP Shareholders Agreement"), RHP is managed by three 
directors under the supervision of four commissioners. Pursuant to the RHP 
Shareholders Agreement, the Company has the right to designate one of the 
three directors of RHP and one of the four commissioners of RHP. Currently, 
David Venn, the Company's Senior Vice President, Operations Asia, is the 
acting President-Director of Mobisel. Further, pursuant to the RHP 
Shareholders Agreement, certain significant corporate actions require 
unanimous approval of the directors or approval of the commissioners or 
shareholders of RHP.

     Pursuant to the Cooperation Agreement dated November 30, 1995, "Mobisel 
Shareholders Agreement"), Mobisel is managed by five directors under the 
supervision of five commissioners. RHP, as the majority shareholder of 
Mobisel, has the right to appoint three directors, including the 
President-Director, and three commissioners of Mobisel. Telkom Indonesia has 
the right to appoint two directors and two commissioners, including 
President-Commissioner, of Mobisel. Pursuant to the Mobisel Shareholders 
Agreement, all decisions of the directors and commissioners of Mobisel shall 
be reached through a process of discussion and consensus. However, if the 
parties are unable to reach such a consensus, actions may be taken upon the 
vote of a majority of the directors or commissioners present, as applicable. 
In the event of a tie, the President-Director or President-Commissioner, as 
applicable, will have a casting vote.

REGULATORY OVERVIEW

     The telecommunications industry in Indonesia is subject to a high degree 
of regulation by the Indonesian government through a number of government 
ministries, the most important of which is the MTPT, which has overall 
responsibility for the regulation and administration of the 
telecommunications industry in Indonesia. The Directorate General of Post and 
Telecommunications (the "DGPT") implements regulatory policies, awards and 
enforces the licenses granted by the MTPT to sector participants, and 
supervises frequency management and standardization of equipment. As part of 
this standardization function, the DGPT approves the network configurations 
and systems of cellular network operators and is responsible for quality 
checks to assure compliance with national technological and equipment 
standards. As a result of the foregoing, major policy and management 
decisions by Mobisel that can affect national telecommunications development 
in Indonesia, including decisions with respect to the coverage and 
technological capabilities of Mobisel's cellular network, may require 
consultation with, or the approval of, Indonesian government agencies. In 
addition, the Indonesian government regulates tariffs charged by 
telecommunications operators, including cellular operators.

     Under Indonesian law, there are currently no restrictions on the foreign 
ownership of telecommunications companies providing basic telecommunications 
services (such as Mobisel) except that in respect of such companies, (i) at 
least 5% of the capital stock must be owned by an Indonesian entity, (ii) 
either Telkom Indonesia or PT. (Persero) Indonesian Satelite Corporation Tbk 
is required to hold shares therein and (iii) the MTPT appears to have a 
policy of restricting foreign ownership to a maximum of 35% of the capital 
stock therein, although exceptions to this policy have been granted. The 
Company's indirect ownership interest in Mobisel upon the exercise of the 
Mobisel Option and if no shareholder other than the Company participated in 
the Mobisel Capital Call would be 

                                      29
<PAGE>

greater than 35%. In addition, the MTPT is currently considering issuing 
additional restrictions on foreign investment in telecommunications 
companies. The extent of any such regulation is currently unknown.

     Both RHP and Mobisel are regulated by the Investment Coordination Board 
("BKPM"). RHP is licensed as a Penanaman Modal Asing (PMA) company by BKPM, 
and Mobisel is licensed as a Penanaman Modal Dalam Negire (PMDN) company by 
BKPM. RHP is permitted under Indonesian law to remit dividends and profits to 
foreign shareholders, including the Company, if RHP meets certain legal 
reserve requirements. Mobisel has been granted an exemption from import 
duties and a deferral of value added taxes on plant and equipment imported to 
construct its cellular network.

III.  OTHER OPERATING COMPANIES

     As part of the realignment of its overall business strategy towards 
larger scale projects in which the Company either directly or effectively 
exercises significant operational control, the Company is currently 
re-evaluating its strategic alternatives regarding its other investments and 
opportunities in smaller scale projects. As part of this re-evaluation, the 
Company is considering, among other things, the sale of all or a part of 
certain of these investments.

WIRELESS LOCAL LOOP

     The Company currently holds a 22.5% equity interest in Prismanet, a 
provider of wireless local loop services in Malaysia. Prismanet currently 
holds a national license to provide wireless telecommunications services 
throughout Malaysia and has been granted 2x6 MHz of spectrum nationwide in 
the 800 MHz frequency band. As of December 31, 1997, Prismanet had 
approximately 8,000 subscribers. See also "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Results of 
Operations" and "--Liquidity and Capital Resources."

SPECIALIZED MOBILE RADIO

     The Company has interests in a number of SMR/ESMR projects in the 
Asia-Pacific region and Latin America. These interests include the following 
operational projects:

     VENEZUELA. Radio Movil Digital de Venezuela, C.A., ("RMD Venezuela"), a 
wholly owned subsidiary of RMD, currently holds one of two nationwide SMR 20 
year licenses, renewable for one 20-year period, in Venezuela comprising 480 
channels (40 assigned and 440 reserved for future use) in six regions 
covering 21.9 million POPs. RMD Venezuela commenced operations in March 1994, 
and as of December 31, 1997, had approximately 6,000 subscribers.

     ARGENTINA. Radio Movil Digital Argentina S.A., a wholly owned subsidiary 
of RMD, and Radio Servicios S.A., an 80% owned subsidiary of RMD (together, 
"RMD Argentina"), together hold licenses covering 180 channels covering major 
cities in Argentina with a term of 15 years and encompassing a total of 14.9 
million POPs. RMD Argentina commenced operations in May 1995, and as of 
December 31, 1997 had approximately 2,400 subscribers.

     NEW ZEALAND. TeamTalk, a wholly owned subsidiary of the Company, owns 
333 channels nationwide in New Zealand. These licenses cover 3.5 million POPs 
and have no expiration date. TeamTalk commenced operations in August 1994, 
and as of December 31, 1997 had approximately 8,000 subscribers.

     INDONESIA. The Company indirectly owns a 15% equity interest in PT 
Mobilkom Telekomindo ("Mobilkom"), an Indonesian entity which has a national 
ESMR operating license. Mobilkom owns over 200 channels nationwide covering 
approximately 203 million POPs. Mobilkom commenced operations in September 
1995, and as of December 31, 1997, Mobilkom had approximately 3,900 
subscribers.

                                      30
<PAGE>

     PHILIPPINES. The Company owns an equity interest of approximately 15.4% 
in Universal Telecommunications Service, Inc. ("UTS"), an entity that owns a 
provisional SMR license covering the provinces of Visayas and Mindanao, and 
has received provisional authority to expand into the provinces of Manila and 
Luzon. UTS owns 362 channels covering approximately 27 million POPs. UTS 
commenced operations in July 1996, and as of December 31, 1997, UTS had 
approximately 1,000 subscribers.

     In addition to the foregoing SMR projects, the Company has majority
interests in developmental stage SMR projects in Peru, Chile and Ecuador.

PAGING

     The Company, either directly or through its 56% interest in Star Telecom 
Overseas (Cayman Islands) Limited ("STOL"), has equity interests in a number 
of paging projects in Asia and Latin America. The Company's partners in STOL 
are STHL, the Company's partner in Star Digitel, and Barings Communication 
East Asia, an affiliate of ING Barings. These paging interests include the 
following projects:

     INDIA. Through STOL, the Company indirectly owns a 10.64% equity 
interest in RPG Paging Service Limited ("RPSL"), an entity providing paging 
services in the Indian cities of New Delhi, Ahmedabad and Madras. RPSL 
commenced operations in Ahmedabad and Madras in May 1995, and in New Delhi in 
June 1995, and as of December 31, 1997, RPSL had approximately 71,000 
subscribers.

     THAILAND.   Through  STOL,  the  Company  indirectly  owns  an  11.2%  
indirect  equity  interest  in  WorldPage  Co.  Ltd. ("WorldPage"),  an 
entity  providing paging services  throughout  Thailand.  WorldPage  
commenced  operations in June 1994,  and as of January 31, 1998, had 
approximately 51,000 subscribers.

     TAIWAN.  Through STOL, the Company  indirectly owns a 6.7% equity 
interest in First  International  Telecommunications  Co. Ltd.  ("FIT"),  a 
Taiwanese  entity.  FIT launched paging services in the northern and southern 
regions of Taiwan in December 1997 and as of December 31, 1997, had 
approximately 20,000 subscribers..

     PERU. The Company owns a 66.0% interest in Uniworld S.A.  ("Uniworld"),  
a Peruvian  entity which owns a nationwide  paging license.  Uniworld 
commenced operations in December 1997, and as of December 31, 1997 had 
approximately 300 subscribers.

IV. COMPETITION

     Because the implementation of advanced wireless technologies is in the 
early stages of deployment in many of the Markets, the Company believes there 
are significant opportunities to form, develop and operate companies that 
deploy these technologies. The Company believes its business will become 
increasingly competitive, particularly as businesses and foreign governments 
realize the market potential of wireless technologies. A number of large 
American, Japanese and European companies, including RBOCs and large 
international telecommunications companies, are actively engaged in programs 
to develop and commercialize wireless technologies in emerging markets which 
will compete with the Operating Companies. In some of the Markets, the 
Company will also compete with local wireline carriers, including 
government-owned telephone companies. Most of these companies have 
substantially greater financial and other resources than the Company, 
including research and development staffs and technical and marketing 
capabilities. The Company's competitive strategy depends on the service 
offered and the competitor. Subject to the availability of additional 
spectrum, the Company anticipates that there will be increasing competition 
for additional licenses and increased competition once licenses are obtained 
from other wireless operators and, in some cases, from government-owned 
telephone companies. In view of the continuing development of the 
telecommunications industry, it is anticipated that there will be a 
continuing competitive threat from new technologies which may render the 
technologies employed by certain Operating Companies obsolete or place the 
Company at a cost disadvantage. There can be no assurance that any of the 
Operating Companies will compete successfully in the marketplace. See 
"--Additional Factors That May Affect Future Results--Competition" and 
"--Technological Risk; Risk of Obsolescence."

                                  31
<PAGE>

V.  TECHNOLOGY

CELLULAR

     A cellular system consists of a series of overlapping cell sites, each 
with a cellular tower. These cell sites are linked by wireline or microwave 
to a mobile telephone switching office, which consists of a central computer 
that controls the network and a switch to route calls between cells and the 
public switched telephone network. Many cellular systems significantly 
enhance their capacity by adopting a system of frequency reuse whereby the 
same frequencies are used in non-contiguous cells. Historically, most 
cellular systems have been based on analog technologies such as AMPS (the 
U.S. standard), TACS (the UK/European standard) or NMT (the Nordic/European 
standard). Analog technologies are now being superseded by digital systems, 
which have the benefit of greater spectrum efficiency, resulting in higher 
subscriber capacity. Other benefits of digital technologies include higher 
quality, international roaming and greater security.

     Spectrum for cellular servicer is usually allocated in the 470 MHz, 800 
MHz or 900 MHz frequency bands, depending on the country and the standard 
used. Additionally, in many countries, spectrum is also being made available 
in the 1.8 and 1.9 GHz bands for Personal Communications Services ("PCS") or 
Personal Communications Networks ("PCN"). PCS and PCN are variants of 
cellular services operating in higher frequency ranges, but providing similar 
services.

     The cellular technologies currently used in the Operating Companies are:

     AMPS. AMPS is a North American analog standard currently used by Star 
Digitel in the Star Digitel Provinces. The AMPS system operates in the 800 
MHz frequency band, typically using 333 channels per operator in a 10+10 MHz 
allocation of spectrum.

     DAMPS. DAMPS was developed as a digital upgrade for operators of AMPS 
systems and uses time division multiple access ("TDMA"), with three times the 
number of conversations carried in each radio channel as compared to AMPS. 
DAMPS is not currently used by the Company in cellular projects. It is, 
however, used by Prismanet in its wireless local loop network.

     GSM. GSM, used by Mobilink, is a digital cellular standard initially 
developed in Europe and now widely deployed throughout the world. GSM uses 
TDMA technology in which each radio channel is divided into eight timeslots, 
and therefore supports eight simultaneous conversations. One important 
feature of GSM is automatic global roaming (subject to certain regulatory and 
other approvals), whereby a subscriber can automatically obtain service in 
any GSM country, with inward calls routed to the country and network that is 
being used at the time.

     NMT 450. NMT 450 technology was developed in Scandinavia as one of the 
first cellular standards. NMT 450 is similar to AMPS, but generally operates 
at frequencies in the 400 to 500 MHz frequency band. A key advantage of the 
470 MHz spectrum compared with 800 MHz technologies such as AMPS lies in its 
superior propagation characteristics. These characteristics provide operators 
with cost and coverage advantages in providing service to highways and 
suburban and rural areas, where significantly fewer sites are required 
compared to AMPS and GSM networks. Although a mature technology, NMT has been 
enhanced recently to NMT 450-i, which provides NMT-450 networks with features 
similar to GSM, including calling number display, short message service, 
voice mail indicator and real-time clock. While NMT 450-i improvements allow 
the design of smaller handsets, such handsets are still generally larger and 
more expensive than the comparable GSM handsets. Furthermore, as with AMPS, 
NMT-450i provides limited global roaming capability. Mobisel uses NMT-450i 
technology.

     CDMA. CDMA is a technology designed to provide both high capacity and 
superior voice quality for cellular and wireless local loop operators. CDMA 
operates in the 800 MHz "AMPS" frequency band, in the 1900 MHz "PCS" 
frequency band, and is under development for several other commonly used 
frequency bands. Star Digitel currently has plans to implement CDMA in the 
networks in certain of the Star Digitel Provinces in China. In addition, CDMA 
technology is currently being used in the construction of the Beijing 
Cellular Network.

                                  32
<PAGE>

     CDMA uses "spread spectrum" radio transmission, with multiple 
simultaneous calls on each radio channel. CDMA is claimed to be able to 
deliver between six and 12 times analog AMPS capacity. CDMA can be used as a 
digital upgrade path for existing AMPS operators such as Star Digitel, as 
dual mode handsets which operate on both CDMA and AMPS networks are available 
for CDMA at 800 MHz.

SMR/ESMR

     SMR refers to a group of technologies designed to provide a combination 
of dispatch services, wireless telephone and wireless data services on a 
single system. The technology initially was used for dispatch and management 
of fleet vehicles such as trucks and taxis, but has now evolved into use as a 
tool for business communications, providing communication services to a wide 
range of mobile workgroups, including public utilities, couriers, transport 
companies, field service companies, and public safety organizations. With 
these types of users, usage is characterized by large numbers of relatively 
short voice calls, as compared with cellular traffic, which tends to be 
characterized by a lesser number of longer calls. This usage results in an 
SMR network typically being able to support a larger number of subscribers on 
each radio channel, with a lower capital cost per subscriber. Common SMR 
technologies are able to provide dispatch (group call) services, telephone 
interconnect and wireless data services. SMR networks use higher site 
elevations and higher power than cellular technologies, thereby providing 
wide coverage from each base station.

        Enhanced Specialized Mobile Radio ("ESMR") is a group of technologies 
that have resulted from the evolution of SMR to increased functionality, 
higher subscriber capacity, wide-area service and the use of digital 
technologies. ESMR networks can typically provide what is often described as 
"business cellular" services, combining cellular-like telephone calling and 
specialized services for intra-organizational use by companies that subscribe 
to the service. These services typically include group calling, mobile data 
service, 2-way alphanumeric paging and computer-aided dispatch.

     A wide range of ESMR technologies are available. This includes the 
European MPT-1327 standard, Motorola's "iDEN" product which is based on TDMA 
digital cellular technology, a down-banded version of DAMPS digital cellular 
technology from Ericsson, and a number of proprietary systems. A key 
attribute of the digital ESMR technologies is high subscriber capacity, which 
is often equivalent to or better than digital cellular technologies.

WIRELESS LOCAL LOOP

     Wireless local loop refers to a group of technologies designed to 
provide customer access to the public switched telephone network using 
wireless radio technologies rather than traditional wire or fiber optic 
lines. A wireless local loop network typically consists of a number of radio 
base stations (similar to cell sites used for cellular networks) covering the 
target market area, a switching center and fixed subscriber terminals on the 
subscriber's premises.

PAGING

     Paging is a well-established technology, with service widely available 
in most developed and developing countries. A paging system typically 
consists of a number of transmitter sites, connected to a central messaging 
center. The messaging center receives incoming messages from the public 
telephone network and prepares batches of messages for transmission to 
subscribers. Two way paging systems are now available, allowing message 
acknowledgment responses and short data messages to be sent back by the 
paging subscriber. These systems normally require multiple receiver sites in 
the network to ensure reliable reception of low power transmissions from 
pagers. Depending on the technology used, existing paging systems can be 
upgraded to incorporate this capability.

     As paging networks are essentially broadcast messaging systems 
additional applications can also be supported by the existing infrastructure, 
such as news retrieval, stock market quotes and weather forecasts. In 
developing countries where telephone penetration is low, paging often 
provides an affordable alternative to public telephone service. The high 
penetration rates of paging in China and Hong Kong are indicative of this 
phenomenon. 

                                  33
<PAGE>

When used in conjunction with public voice mail services (which are often 
provided by paging operators), a "virtual telephone" service can be provided.

VI. ACQUISITION OF RMD

     On January 23, 1998 a subsidiary of the Company merged with and into RMD 
and RMD became a wholly owned subsidiary of the Company. The purchase price 
of RMD was 5,381,009 shares of the Company's Series I Preferred Stock (the 
"Series I Preferred Stock"), with an aggregate liquidation preference of 
$73.9 million. In addition, the Company paid $4.8 million of RMD's expenses 
incurred in connection with the RMD Acquisition.

     Pursuant to the Agreement and Plan of Merger dated November 21, 1997, 
between the Company and RMD (as amended, the "RMD Merger Agreement"), 728,438 
shares of the Series I Preferred Stock issued in the RMD Acquisition are held 
in escrow for one year. The Company is entitled to make claims against the 
escrow based on, among other things, (i) decreases in RMD's subscribers 
between the number at June 30, 1997, and the closing of the RMD Acquisition, 
(ii) RMD's channels which were not "good and deliverable" and (iii) breaches 
of RMD's representations and warranties contained in the RMD Merger Agreement.

VII.  EMPLOYEES

     The Company had 37 employees as of December 31, 1997 and 32 
employees as of March 31, 1998, as a result of voluntary and involuntary 
terminations. The Company has adopted an employee retention program to retain 
key personnel. See "Management's Discussion and Analysis of Financial 
Condition and Results of Operations--Additional Factors That May Affect 
Future Results--Dependence on Key Personnel; Recent Management Changes." None 
of the Company's employees are subject to collective bargaining agreements.

VIII.  INCORPORATION HISTORY

     IWC was incorporated in Delaware in January 1992. In July 1996, the 
Registrant was formed as a holding company with no business operations of its 
own. In August 1996, through a merger transaction, IWC became a wholly-owned 
subsidiary of the Registrant, and each outstanding share of the capital stock 
of IWC was exchanged for 40 shares of the same class and series of the 
capital stock of the Registrant (the "IWC Reorganization").

ITEM 2.  PROPERTIES

     The Registrant leases approximately 8,600 square feet of space in a 
facility located in San Mateo, California. The lease provides for current 
annual rent, including expenses, of approximately $219,000 per year. Lease 
payments are subject to adjustment in the event of increases in property 
taxes and other events.

ITEM 3.  LEGAL PROCEEDINGS

     The Registrant is not a party to any material legal proceedings at the 
present time.

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

     The following matters were submitted to a vote of the security holders 
of the Registrant during the fourth quarter of 1997: On December 13, 1997, 
the stockholders voted in favor of the merger of a subsidiary of the 
Registrant with and into RMD. See "--Acquisition of RMD."

     In addition, on March 9, 1998, the stockholders approved the Series J 
Preferred Stock Financing. See "Certain Relationships and Related 
Transactions--Series J Preferred Stock Financing."

                                  34
<PAGE>

                                 PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

I.  TRADING MARKET.

     There is no established trading market for the Registrant's capital 
stock. As of March 31, 1998, there were 1,310,230 shares of the Registrant's 
Common Stock outstanding held of record by nine stockholders, and 23,085,351 
shares of the Registrant's Preferred Stock outstanding held of record by 135 
stockholders. The Registrant's outstanding shares of Preferred Stock 
consisted of 933,200 shares of Series A Preferred Stock, 1,229,240 shares of 
Series B Preferred Stock, 1,762,280 shares of Series C Preferred Stock, 
3,661,636 shares of Series D Preferred Stock, 3,972,240 shares of Series E 
Preferred Stock and 5,356,480 shares of Series F Preferred Stock, 5,381,009 
shares of Series I Preferred Stock and 789,266 shares of Series J Preferred 
Stock.

II.  RECENT SALES OF UNREGISTERED SECURITIES.

     The Company has completed the following unregistered sales of securities 
since January 1, 1997:

     (i) The Company granted stock options to purchase an aggregate of 
936,296 shares of its Common Stock at exercise prices ranging from $9.375 to 
$12.375 per share to employees, consultants and directors.

     (ii) On May 5, 1997, the Company issued a warrant to purchase 249,970 
shares of its Common Stock at a price of $0.25 per share and a warrant to 
purchase 554,750 shares of its Common Stock at an exercise price of $9.375 
per share to Vanguard in exchange for warrants to purchase 323,880 shares of 
its Series C Preferred Stock, 416,720 shares of its Series D Preferred Stock 
and 64,120 shares of its Series F Preferred Stock.

     (iii) On August 18, 1997, PWH issued $22.0 million principal amount of 
its PWH Pakistan Notes to 31 Pakistan Lenders. The PWH Pakistan Notes may be 
exchanged for the Company's Series H Preferred Stock (consisting of voting 
Series H-1 Preferred Stock and non-voting Series H-2 Preferred Stock) on one 
occasion (i) on or after February 17, 1999 or (ii) upon the occurrence of 
specified events of default.

     (iv) On August 18, 1997, the Company issued to 31 Pakistan Lenders 
warrants currently exercisable to purchase 889,594 shares of the Company's 
Common Stock. The warrants have a 10-year term and an exercise price of $0.01 
per share of Common Stock.

     (v) On September 17, 1997, the Company issued Y.F. Severn a warrant to 
purchase 81,982 shares of its Common Stock pursuant to a Payment Agreement 
dated as of September 16, 1997, by and among the Company, Y.F. Severn, Asian 
Infrastructure Fund Advisers Limited, Vanguard Pakistan, Inc., Pakistan 
Wireless Holdings Limited, South Asia Wireless Communications (Maritius) 
Limited, and Asia Pacific Cellphone Co., Inc. The warrant has a seven-year 
term and an exercise price of $0.01 per share.

     (vi) On September 18, 1997, the Company issued Vanguard a warrant 
currently exercisable to purchase 172,763 shares of its Common Stock pursuant 
to the Reimbursement Agreement. The warrant has a seven year term and an 
exercise price of $0.01 per share.

     (vii) On October 20, 1997 and December 12, 1997, the Company issued an 
aggregate of $7.0 million principle amount of its IWCH Pakistan Notes to 31 
Pakistan Lenders. The IWCH Pakistan Notes may be exchanged for the Company's 
Series G Preferred Stock (consisting of voting Series G-1 Preferred Stock and 
non-voting Series G-2 Preferred Stock) on one occasion (i) in full, at any 
time upon the request of holders of at least 75% of the unpaid principal 
amount of the IWCH Pakistan Notes or (ii) in certain circumstances, at the 
request of individual IWCH Pakistan Note holders.

                                  35
<PAGE>

     (viii) On January 23, 1998, the Company issued BTFIC three warrants 
currently exercisable to purchase an aggregate of 155,840 shares of its 
Common Stock pursuant to the BT Purchase Agreement. The warrants have a 
10-year term and an exercise price of $0.01 per share.

     (ix) On March 10, 1998, the Company issued Vanguard 789,266 shares of 
its Series J Preferred Stock and a related warrant currently exercisable to 
purchase 173,639 shares of its Common Stock (with the number of shares 
issuable upon exercise of the warrant increasing if the Company does not 
achieve certain specified milestones) for an aggregate of $10 million in cash.

     (x) On March 10, 1998, the Company issued Vanguard a warrant currently 
exercisable to purchase up to 323,408 shares of its Common Stock pursuant to 
the Support Services Agreement (as defined herein). The warrant has a 10-year 
term and an exercise price of $0.01 per share.

     The issuances described in clauses (i) were deemed exempt from 
registration under the Securities Act of 1933, as amended (the "Securities 
Act"), in reliance on Rule 701 thereunder or Section 4(1) thereof. The 
issuances of Company's Common Stock, Series J Preferred Stock and warrants to 
purchase the Company's Common Stock described in clauses (ii) through (x) 
above were deemed exempt from registration under the Securities Act in 
reliance upon Section 4(1) thereof. The recipients of the securities issued 
in the transactions described in clauses (ii) to (x) above represented their 
intentions to acquire the securities for investment only and not with a view 
to or in connection with any distribution thereof and appropriate legends 
were affixed to the share certificates and warrants issued in such 
transactions. All recipients had adequate access, through the relationships 
with the Company or otherwise, to inform themselves about the Company.

III.  DIVIDENDS

     The Registrant has never paid cash dividends on its capital stock. The 
Registrant currently intends to retain its available funds from earnings for 
future growth and, therefore, does not anticipate paying any cash dividends 
on its capital stock in the foreseeable future. In addition, the indenture 
agreement governing the Notes (the "Indenture") prohibits the Registrant from 
paying dividends while the Notes are outstanding.

                                  36
<PAGE>

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The following selected consolidated financial data as of and for the 
years ended December 31, 1993, 1994, 1995, 1996 and 1997 have been derived 
from, and are qualified by reference to, the Company's consolidated financial 
statements, which have been audited by KPMG Peat Marwick LLP, independent 
certified public accountants, whose report indicated a reliance on other 
auditors relative to certain amounts relating to the Company's investment in 
RHP as of and for the year ended December 31, 1996 and to the Company's 
investment in Star Digitel as of and for the year ended December 31, 1997. 
The data set forth below should be read in conjunction with "Management's 
Discussion and Analysis of Financial Condition and Results of Operations" and 
the Company's consolidated financial statements and the notes thereto 
included elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                                  YEARS ENDED DECEMBER 31,
                                           ------------------------------------------------------------------------
                                                1993          1994          1995            1996          1997
                                           ------------- ------------- -------------- ------------- ---------------
                                                                      (IN THOUSANDS)
<S>                                        <C>           <C>           <C>            <C>           <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues........................  $          -             -              -           869           3,275
Cost of revenues..........................             -             -              -         1,948           3,471
                                           ------------- ------------- -------------- ------------- ---------------
                                                                                               (196)         (1,079)
Operating expenses:
   Selling, general and administrative
   expenses...............................           809         2,481          6,365        17,333          31,174
   Equity in losses of affiliates.........             -             -          3,756        11,258          42,584
   Impairment in Asset Value..............             -             -              -           525          24,000
                                           ------------- ------------- -------------- ------------- ---------------
   Minority interests in losses of
   consolidated subsidiaries..............             -             -              -          (275)         (1,148)
                                           ------------- ------------- -------------- ------------- ---------------
   Loss from operations...................          (809)       (2,481)       (10,121)      (29,920)        (96,806)
Other income (expense):
   Interest income........................             2           106            232         1,823           1,599
   Interest expense.......................           (33)         (115)        (1,354)       (6,790)        (27,524)
   Other expense..........................            (1)          (13)           (28)       (1,021)           (919)
                                           ------------- ------------- -------------- ------------- ---------------
   Net loss...............................  $       (841)       (2,503)       (11,271)      (35,908)       (123,650)
                                           ------------- ------------- -------------- ------------- ---------------
                                           ------------- ------------- -------------- ------------- ---------------

                                                                        DECEMBER 31,
                                           ------------------------------------------------------------------------
                                                1993         1994            1995           1996          1997
                                           ------------- -------------  ------------- -------------- --------------
                                                                       (IN THOUSANDS)
BALANCE SHEET DATA:
Total current assets......................  $        701        12,580         26,851          54,408        16,816
Long-term debt, net.......................             -             -              -          75,466       123,072
Redeemable convertible preferred stock....             -        19,578         98,845         103,021       105,306
Total stockholders' equity (deficit)......           425        (3,154)       (14,759)        (22,127)     (129,696)
Working capital...........................        (1,514)       10,580         15,294          47,095           804
</TABLE>

                                  37
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

     THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH 
"SELECTED CONSOLIDATED FINANCIAL DATA" AND THE COMPANY'S CONSOLIDATED 
FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS ANNUAL 
REPORT ON FORM 10-K. THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS AND OTHER PARTS OF THIS ANNUAL REPORT ON 
FORM 10-K CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND 
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE 
RESULTS DISCUSSED HEREIN. FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, 
BUT ARE NOT LIMITED TO, THOSE DISCUSSED UNDER "--ADDITIONAL FACTORS THAT MAY 
AFFECT FUTURE RESULTS" AND ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

INTRODUCTION

     The Company, through the Operating Companies, constructs cellular 
networks in China, provides cellular services in Pakistan and Indonesia, and 
is developing an ESMR network in Brazil. As of December 31, 1997, the 
Operating Companies had licenses or, in the case of China, cooperative 
arrangements, covering an estimated 752 million POPs which, based on the 
Company's equity interests in the Operating Companies, represented an 
estimated 218 million equity POPs. As of December 31, 1997, the Operating 
Companies, which are generally in the early stages of operations and 
expansion, served an aggregate subscriber base of approximately 144,000.

     The Company has reported net losses for each fiscal year since the date 
of its organization. The Company anticipates that its net losses will 
continue for the foreseeable future. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Additional Factors 
That May Affect Future Results--Continuing Losses; Limited Operating History."

     Following the recent review of its investment and operating strategy, 
the Company decided to focus its resources on developing its larger cellular 
and SMR investments. As part of this realignment and in order to raise 
additional capital, the Company proposes to sell all or a portion of its 
interests in certain smaller scale projects, including interests in TeamTalk, 
Mobilkom, UTS and its non-Brazilian Latin American wireless businesses 
acquired primarily through its acquisition of RMD. The Company anticipates 
that the sale of these investments will occur in 1998. However, in part 
because there exists no public market for the Company's ownership interests 
in these investments, there can be no assurance that any of these investments 
will be sold upon terms acceptable to the Company within such time period or 
at all. Moreover, even if such sales are consummated on acceptable terms, 
there can be no assurance that the Company will be able to utilize the entire 
proceeds from such sales as a result of restrictions contained in the BT Loan 
and the Indenture.  See "--Additional Factors That May Affect Future 
Results--Risks Associated With Indebtedness."

     See "Business--Recent Developments" for a summary of recent developments 
of the Company.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996 AND 1997

     The Company recognized $869,000 of operating revenues, offset by cost of 
revenues of $1.9 million for 1996 as compared to $3.3 million in operating 
revenues, offset by cost of revenues of $3.5 million, for the corresponding 
period in 1997. Operating results are represented by the consolidated 
commercial operations of TeamTalk, SRC, STOL and Uniworld.

     The Company's selling, general and administrative expenses increased 
from $17.3 million for 1996 to $31.2 million for the corresponding period in 
1997, an increase of 80%. This increase was primarily due to an increase in 
selling, general and administrative expenses associated with the Company's 
consolidated operations, consisting principally of TeamTalk, SRC, STOL and 
Uniworld, as well as an increase in its corporate overhead. The Company's own 
general and administrative expenses increased from $12.5 million for 1996 to 
$16.8 million for the corresponding period in 1997, an increase of 34%, as 
the Company expanded its corporate and regional operations to manage the 
growth in its wireless projects and recognized a management advisory expense 
of $2.5

                                  38
<PAGE>

million in connection with the Vanguard Warrant Exchange (as defined herein). 
The selling, general and administrative expenses of the Company's 
consolidated operations increased from $4.8 million for 1996 to $14.3 million 
for the corresponding period in 1997, an increase of 198%. These entities 
continued to develop their operations and expand their services resulting in 
the increase in the Company's selling, general and administrative expenses.

     The Company's equity in losses of affiliates increased from $11.3 
million for 1996 to $42.6 million for the corresponding period in 1997, an 
increase of 278%. This increase was attributable primarily to the increase in 
the underlying operating losses of Prismanet, Mobisel and Star Digitel, and a 
moderate increase of equity in losses of affiliates attributable to the 
amortization of telecommunication licenses.

     During 1997, the Company's equity in losses of affiliates attributable 
to Prismanet increased from $3.6 million in 1996 to $4.3 million in 1997, an 
increase of 22%. However, the Company believes that a significant impairment 
in value of its investment in Prismanet has occurred due to its recent 
determination that there are diminished prospects for the grant of additional 
spectrum at a different frequency band to Prismanet by the government of 
Malaysia in the forseeable future. Thus, the Company recorded a significant 
write-down in its investment in Prismanet as discussed further below. See 
"Business-Other Operating Companies".

     The Company's equity in losses of affiliates attributable to its 19.8% 
indirect interest in Mobisel, through RHP, increased from $3.5 million for 
1996 to $25.3 million for the corresponding period in 1997, an increase of 
628%.  Mobisel continued to expand its operations and build-out its 
nationwide cellular network, and as part of this expansion effort, Mobisel 
experienced significant growth in its promotional selling expenses and its 
general and administrative expense base increased in order to meet the 
anticipated growth in its operations. Mobisel's interest expense increased 
for the year ended December 31, 1997, as Mobisel had fully drawn down the 
$60.0 million credit facility arranged in October 1996 to finance the 
construction of its nationwide network. In addition, in order to finance this 
expansion effort, Mobisel entered into, and utilized the majority of, a 
syndicated short-term notes facility arranged in January 1997. These funds 
enabled Mobisel to continue to build-out its nationwide cellular network and 
were also utilized for general corporate purposes. Mobisel also recognized 
significant foreign exchange translation losses associated with the 
remeasurement of its U.S. dollar-denominated credit facility due to the 
devaluation of the Indonesian Rupiah during the year ended December 31, 1997. 
Due to the continuing economic crisis in Indonesia, the Company further 
wrote-down its investment in Mobisel as discussed further below. See 
"Business--Operating Companies--Indonesia-Mobisel."

     The Company's equity in losses of affiliates attributable to its 40% 
indirect interest in Star Digitel, which the Company acquired in November 
1996, increased from $1.0 million in 1996 to $7.8 million for the year ended 
December 31, 1997. Star Digitel's operating losses are anticipated to 
increase for the foreseeable future as Star Digitel continues to expand its 
operations in China. See "Business--Operating Companies--Chine-Great Wall 
Cellular."

     The Company's increase in equity in losses of affiliates also reflects a 
$1.5 million increase in losses attributable to its 20% indirect interest in 
Mobilink, through IWCPL, which the Company acquired in August 1997. The 
Company anticipates that the equity in losses of affiliates attributable to 
Mobilink will diminish as Mobilink approaches operating profitability. See 
"Business-Operating Companies-Pakistan-Mobilink".

     The Company recognized a subtantial charge for impairment in asset value 
during 1997. The impairment in assets charge increased from $525,000 in 1996 
to $24.0 million in 1997, a significant increase due to its recognition of 
impairment in value attributed to its investments in Prismanet, Mobisel and 
Mobilkom. In addition, the Company recognized a partial write-off of its 
intangible assets attributed to telecommunication licenses and other 
intangibles and its right to an equity interest in an ECTR project in 
Pakistan. As discussed above, the Company believes that a significant, other 
than temporary, impairment in value has occurred in Prismanet and has 
accordingly written-off its remaining investment in Prismanet of $11.7 
million. Furthermore, the Company recorded a $5.0 million general reserve 
attributed to the Prismanet "keep well" covenant. Also, due to the continuing 
economic uncertainty in Indonesia, the Company wrote off its remaining 
investments in Mobisel and Mobilkom of $1.1 million and $1.5 million, 
respectively. Lastly, consistent with the recent realignment of its business 
strategy, the Company wrote off intangible assets totaling

                                  39
<PAGE>

$4.7 million associated with the right to participate in a Pakistan ECTR 
business.

     The Company's minority interests in losses of consolidated subsidiaries 
increased from $275,000 in 1996 to $1.1 million in 1997, an increase of 317%. 
The increase in minority interests in losses of consolidated subsidiaries is 
primarily due to a decrease in the Company's ownership interest in STOL. 
During 1997, the Company's ownership interest decreased from 70% to 56% 
thereby increasing the amount of minority interest in losses of consolidated 
subsidiaries recognized.

     The Company's interest expense increased from $6.8 million for 1996 to 
$27.5 million for the corresponding period in 1997, an increase of 305%. The 
increase in interest expense was primarily due to interest expense associated 
with the Unit Offering, which occurred in August 1996, and the Pakistan 
Facility, which occurred in August 1997.

     The Company's interest income and other expense experienced only minor 
decreases from 1996 to 1997.

YEARS ENDED DECEMBER 31, 1995 AND 1996

     The Company recorded no operating revenues or cost of revenues in 1995 
as compared to $869,000 in operating revenues, offset by $1.9 million in cost 
of revenues, in 1996 attributable to TeamTalk. The majority of operating 
revenues and cost of revenues in 1996 resulted from the acquisition, 
effective April 30, 1996, of the remaining 50% equity interest in TeamTalk, 
which increased the Company's equity ownership in TeamTalk to 100%.

     The Company's selling, general and administrative expenses increased 
from $6.4 million in 1995 to $17.3 million in 1996, an increase of 172%. This 
increase was primarily due to continued growth in the Company's corporate 
overhead and the selling, general and administrative expenses associated with 
the Company's consolidated SMR operations. The Company experienced continued 
growth in its own general and administrative expenses as the Company 
increased the development of its corporate and regional operations to manage 
the growth in its wireless projects. The Company's own general and 
administrative expenses reflected an increase in salaries and benefits from 
$2.1 million in 1995 to $4.0 million in 1996, an increase in professional 
fees from $463,000 in 1995 to $1.9 million in 1996 and an increase in outside 
consulting expense from $1.2 million in 1995 to $1.9 million in 1996. The 
selling, general and administrative expenses of the Company's consolidated 
SMR operations increased from $528,000 in 1995 to $3.4 million in 1996, an 
increase of 544%. These entities continued to develop their SMR operations 
and expand their services resulting in the increase in selling, general and 
administrative expenses.

     The Company's equity in losses of affiliates increased from $3.8 million 
in 1995 to $11.3 million in 1996, an increase of 214%. This increase in 
equity in losses of affiliates is attributable primarily to the increase in 
the underlying operating losses of Prismanet, Mobisel and Star Digitel.

     During 1996, Prismanet incurred operating losses as it continued to 
expand its wireless local loop operations. The Company's equity in losses of 
affiliates attributable to Prismanet increased from $1.3 million in 1995 to 
$3.6 million in 1996, an increase of 176%. Although Prismanet's operating 
revenue increased from $749,000 in 1995 to $1.9 million in 1996, an increase 
of 149%, such increase was offset by the increase in Prismanet's costs of 
revenues from $593,000 in 1995 to $1.8 million in 1996, an increase of 209%. 
The majority of Prismanet's operating losses was generated by an increase in 
interest expense from $663,000 in 1995 to $3.8 million in 1996, an increase 
of 479%, resulting from the draw down of substantially all of Prismanet's 
Malaysian ringgit 91 million secured loan facility during 1996. As previously 
discussed, the Company recorded a write-down of its investment in Prismanet 
during 1997.

     During 1996, Mobisel, incurred increased operating losses due primarily 
to the expansion of its sales and administrative operations. The Company's 
equity in losses of affiliates attributable to Mobisel increased from

                                  40
<PAGE>

$1.0 million in 1995 to $3.5 million in 1996, an increase of 250%, as Mobisel 
continued to expand its operations and roll-out its nationwide cellular 
network. During this expansion phase, Mobisel focused its efforts on network 
expansion and the development of customer care and other internal systems. 
During this time, it chose not to actively market its services, and although 
revenues increased from $7.3 million in 1995 to $10.3 million in 1996, an 
increase of 45%, Mobisel's cost of revenues increased from $3.4 million in 
1995 to $11.5 million in 1996, an increase of 248%. This increase in 
Mobisel's cost of revenues was due primarily to greater interconnection 
costs. Mobisel also incurred higher selling, general and administrative 
expenses in order to meet the anticipated growth in its operations. Mobisel's 
employee headcount increased by approximately 200% to 286 employees for the 
year ended December 31, 1996. During 1996, Mobisel implemented its own 
customer billing and collection system. These services had previously been 
performed on behalf of Mobisel by Telkom Indonesia, the national Indonesian 
telephone company. Mobisel increased its allowance for doubtful accounts as a 
result of more accurate customer data being available from the new internal 
billing system.

     The Company's increase in equity in losses of affiliates also reflects a 
$1.0 million increase in losses attributable to its 40% interest in Star 
Digitel, which the Company acquired in November 1996.

     The Company's interest income increased from $232,000 in 1995 to $1.8 
million in 1996, an increase of 686%. This increase was due primarily to 
interest earned on interest-bearing government securities in which the 
Company invested the proceeds received from the sale and issuance of shares 
of the Company's Preferred Stock in December 1995 and from the Unit Offering 
completed in August 1996.

     The Company's interest expense increased from $1.4 million in 1995 to 
$6.8 million in 1996, an increase of 401%,  primarily due to interest expense 
associated with the Unit Offering.

     The Company's other expense increased from $28,000 in 1995 to $1.0 
million in 1996, as the Company elected not to exercise, and therefore 
permitted to lapse, an option purchased for $1.0 million from the 
shareholders of Laranda, a minority shareholder of Prismanet, to acquire 50% 
of Laranda.

IMPACT OF INFLATION AND CURRENCY FLUCTUATION

     Many developing countries have experienced substantial, and in some 
cases extremely high, rates of inflation which have resulted in high interest 
rates for many years. In addition, these countries have experienced 
significant fluctuations in their exchange rates. Many of the currencies of 
developing countries have experienced steady, and in some cases substantial, 
devaluation relative to the U.S. dollar. During the latter half of 1997, a 
number of currencies of Southeast Asia countries, including Indonesia, have 
experienced dramatic declines in their exchange rates relative to the U.S 
dollar. Such inflation and foreign currency fluctuations have had, and may 
continue to have significant negative effects on the economies and securities 
markets of certain developing countries, and could have a material adverse 
effect on the Operating Companies in such countries, including an adverse 
effect on their subscriber levels and on their ability to obtain financing. 
In addition, the Company may not be able to realize the value of its 
investment in the Operating Companies due to the negative effect on the 
execution of the operating and business plans.

     To the extent that the Operating Companies commence, or have commenced, 
commercial operations, any revenues they generate will generally be received 
by the Operating Companies in the local currency. By contrast, many 
significant liabilities of the Operating Companies (such as liabilities for 
the financing of telecommunication equipment and external debt financings) 
may be payable in U.S. dollars or in currencies other than the local 
currency. Because subscriber tariffs in many of the countries in which the 
Operating Companies operate are regulated, the Operating Companies, or in the
case of China, the Great Wall Companies, may not be able to increase 
subscriber tariffs in response to the negative effects of inflation or 
currency devaluation. As a result, any devaluation in the local currency 
relative to the currencies in which such liabilities are payable could have a 
material adverse effect on the Company. For example, certain of the Operating 
Companies have U.S. dollar denominated debt financings.

                                  41
<PAGE>

     The primary foreign currency to which the Company is exposed is the 
Indonesian rupiah. As discussed in more detail later, Mobisel, the Company's 
national cellular operating company in Indonesia, has incurred U.S. dollar 
debt through its credit facility with Nissho Iwai International (Singapore) 
Pte., Ltd. ("Nissho Iwai"). In addition, it is anticipated that substantial 
additional U.S. dollar debt will be sought to fund future capital 
expenditures of Mobisel. Revenues to repay such U.S. dollar debt will be 
denominated in the Indonesian rupiah. Recently the Indonesian rupiah 
experienced a severe unfavorable fluctuation against the U.S. dollar, 
consistent with many other currencies in Southeast Asia, and as a result, the 
Nissho Iwai credit facility increased substantially on an Indonesian 
rupiah-denominated basis. As a consequence, Mobisel will either have to 
increase operating revenues, to the extent permitted by the regulatory 
authorities, to compensate for this unfavorable fluctuation, or will have to 
absorb the impact of this foreign exchange exposure in their current and 
future operations. Although the Company and its Operating Companies attempt 
to match assets and liabilities, at least to the extent possible, it is not 
always possible due to sovereign foreign capital restrictions or an 
unwillingness of the finance community to fund in a currency other than the 
U.S. dollar.

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

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 1997, the Company has funded its cash requirements 
primarily using the net proceeds from a series of Preferred Stock placements, 
bridge loans and the Unit Offering. Except for the Pakistan Bridge Facility, 
the bridge loans have generally been converted into Preferred Stock. The 
proceeds from these financings were mainly used to fund the Company's 
investments in Operating Companies and other projects, and to provide working 
capital for general corporate purposes. As of December 31, 1996 and December 
31, 1997, the Company had cash balances of $41.7 million and $4.4 million, 
respectively. As of March 31, 1998, the Company had cash balances of $1.5 
million, principally as a result of the first closing of the Series J 
Financing.

     The Company has generated negative cash flow from operations since 
inception, and its Operating Companies and other projects are not expected to 
provide any cash distributions to the Company for the foreseeable future. See 
"--Additional Factors That May Affect Future Results--Negative Operating Cash 
Flow; Critical Dependence on Additional Financing" and "--Holding Company 
Structure; Limitations on Access to Cash Flow of Operating Companies." As a 
result, the Company is and will remain dependent upon raising additional 
funds from outside sources to fund its investments in Operating Companies and 
developmental stage projects, to support its working capital needs for 
general corporate purposes, to repay the Exchange Notes and any other 
indebtedness it may incur when it becomes due and payable.

     The Company requires approximately $53,000,000 in additional financing 
during 1998 to meet its contractual obligations to the Operating Companies 
and other wireless projects and fund its working capital requirements for 
general corporate purposes.  The Company has and proposes to raise a portion 
of these funds through an interim equity financing and sale of its interests 
in certain of its smaller wireless communications businesses in Asia and 
Latin America. In addition, in March 1998 the Company retained financial 
advisors to assist it in its evaluation of various strategic alternatives for 
raising the remaining financing required to fund its operations in 1998.

     On March 2, 1998, the Company entered into a non-binding letter of intent
to sell its interests in certain SMR wireless projects in Peru, Chile and
Ecuador. On March 17, 1998, the Company entered into a letter agreement to sell
its Venezuelan SMR operations. The consummation of these sales are subject to
numerous conditions, and there can be no assurance that these sales will close.

                                  42
<PAGE>

     On March 10, 1998, Vanguard purchased shares of the Company's Series J
Preferred Stock and a related Warrant to Purchase Common Stock for $10 million
in the first tranche the Series J Financing.  Pursuant to the purchase agreement
executed by the Company and Vanguard in connection with the Series J Financing,
the second tranche of the Series J Financing must close on or before April 24,
1998. The Company has offered its remaining stockholders the right to
participate in the second tranche of the Series J Financing and is currently in
discussions with various stockholders regarding their participation. Although
the Company has received indications of interest from various stockholders,
there can be no assurance that the Company will receive commitments for the
entire amount of the second tranche of the Series J Financing.

     As of March 31, 1998 the Company had approximately $1.5 million in cash and
cash equivalents, of which $1.0 million was restricted pursuant to the IWCH
Pakistan Facility (as defined below).  See "Certain Relationships and Related
Transactions--Pakistan Facilities."  The Company estimates that these cash
resources should be sufficient to allow it to continue operations at anticipated
levels through approximately May 31, 1998, assuming that the Company obtains a
waiver of a minimum cash reserve covenant contained in the IWCH Pakistan
Facility and without giving effect to any proceeds that might be available to
the Company from the sale of its interests in certain smaller wireless
communications businesses or the second tranche of the Series J Financing (as
defined below).  However, there can be no assurance that the Company will not
require additional debt or equity financing before such time.

     In addition, on April 6, 1998, the Company entered into the Prismanet Sale
Agreement which provides for the sale of the Company's 22.5% interest in
Prismanet to Shubila for an aggregate purchase price of $4 million payable on or
before October 1, 1999.  Conditions precedent to the closing of the Prismanet
Sale Agreement include the release by a syndicate of Malaysian banks of the
Company's shares in Prismanet and the release of the Company from any liability
under the Prismanet Collateral Agreement. In addition, it is a condition
precedent to the closing of the Prismanet Sale Agreement that Shubila indemnify
the Company for any liability under the Prismanet Collateral Agreement and the
other loan documents executed in connection with the credit facility.  There
can be no assurance that the sale of the Company's interest in Prismanet will
close on the terms set forth in the Prismanet Sale Agreement or at all.  See
"--Additional Factors that May Affect Future Results--Risks Associated with
Indebtedness."

     Except for the non-binding letter of intent for the sale of the Company's
SMR projects in Peru, Chile and Ecuador, the letter agreement for the sale of
the Company's Venezuelan SMR operations, the Prismanet Sale Agreement and the
indications of interest from various stockholders regarding the second tranche
of the Series J Financing, the Company has no commitments to sell any of its
other assets or to obtain any additional debt or equity financing. If adequate
sources of additional financing are not available, the Company will have to
significantly curtail its operations (which may result in the loss or revocation
of licenses held by Operating Companies, the delay, scale back or elimination of
one or more of its projects or the merger, sale, liquidation or dilution in one
or more of its investments), may be unable to repay its liabilities (including
the Unit Notes (as defined below)) as they become due, and may be unable to meet
its working capital and other cash requirements.  For example, if the Company
does not make a required $19.0 million capital contribution to Star Digitel by
June 17, 1998, its 40% equity interest in Star Digitel could be reduced to an
approximately 15% equity interest, and the Company could be forced to sell its
equity interest in Star Digitel.  In addition, if the Company does not make a
required $2.1 million shareholder loan to Mobilink by the end of 1998, its
equity interest in Mobilink could be subject to significant dilution or a forced
sale.  Any of such events would have a material adverse affect on the Company.

     Moreover, even if the Company is successful in raising funds by selling one
or more of its wireless projects, the Company may not be able to utilize all or
a portion of the proceeds from such sales due to restrictions on the use of such
proceeds contained in the BT Purchase Agreement and the Indenture.  Under the BT
Purchase Agreement and the related BT Loan documentation, subject to a
$3,000,000 basket for investments in Brazil, 50% of the net proceeds from the
sale of the Company's non-Brazilian Latin American wireless projects must be
used to prepay the BT Loan until the total amount outstanding under the BT Loan
is decreased to $20,000,000.  Thereafter, 30% of the net proceeds from the sale
of such projects must be used to prepay the BT Loan.  Further, under the
Indenture, the Company may not use the proceeds from the sale of its wireless
projects for working capital and is significantly limited in the amount of net
proceeds from the sale of its wireless projects that it can currently invest in
Mobilink, Mobisel and Star Digitel. Although the Company believes that there are
various alternative financing strategies that would permit it to raise funds for
its working capital needs and fund its commitments to its Operating Companies in
compliance with the restrictions set forth in the Indenture, there can be no
assurance that any of such financing strategies will be successful, which could
have a material adverse effect on the Company.  See "--Additional Factors that
May Affect Future Results--Risks Associated with Indebtedness."

     Historically, the Company and its partners typically fund initial 
investments in the Operating Companies using capital contributions either in 
the form of equity or shareholder loans. When Operating Companies have become 
operational, the Company has sought to fund the ongoing development of the 
Operating Companies using third-party financing, preferably on a non-recourse 
basis to the Company.

     Star Digitel has funded a significant portion of its expenditures with 
shareholder capital contributions, including shareholder loans, and 
short-term borrowings under its Bank Bira $7 million credit facility, and its 
Toronto Dominion $8 million and $20 million bridge loans. Borrowings under 
the Bank Bira credit facility bear interest at LIBOR plus 2.75% and have been 
guaranteed by the shareholders of Star Digitel. Currently, Star Digitel has 
borrowed the full amount available under the Bank Bira credit facility, which 
will mature in July 1998. Borrowings under the two Toronto Dominion bridge 
loans bear interest at LIBOR plus 2.25%, or 2.50% if the bridge loans are 
extended. The two Toronto Dominion bridge loans are guaranteed by each 
shareholder of Star Digitel up to its pro rata share, except that the 
Company's share of the guarantee has been guaranteed by Vanguard. Currently, 
Star Digitel has borrowed the full amounts available under the two Toronto 
Dominion bridge loans, which will mature in May 1998. See "Certain 
Relationships and Related Transactions--TD Bridge Loans to Star Digitel." In 
addition, in January 1998, ING Barings provided Star Digitel with a $1 
million short term debt facility, which is currently fully drawn and has been 
cash collateralized by the shareholders.

     Star Digitel has budgeted capital expenditures of approximately $139.0 
million through 1998, primarily to fund network expansion, including a 
capital contribution of $20 million to fund construction of the Beijing 
Cellular Network. Star Digitel does not currently have commitments for most 
of the funds necessary to finance such capital expenditures. Star Digitel is 
currently in negotiations to finance its operations and capital expenditures 
through vendor financing and other credit facilities and borrowings. There 
can be no assurance that Star Digitel will be successful in obtaining such 
financing. The failure of Star Digitel to obtain such financing would have a 
material adverse effect on the ability of Star Digitel to continue to conduct 
its business. In addition, Star Digitel will in the future require 
substantial additional financing to continue the expansion of its networks as 
well as for other corporate purposes. In particular, substantial funding will 
be required to upgrade the networks in the Star Digitel Provinces using CDMA 
technology. There can be no assurance that Star Digitel will be able to 
obtain any such financing. See "Management's Discussion and Analysis of 
Financial Condition and Results of Operations--Additional Factors That May 
Affect Future Results--Negative Operating Cash Flow; Critical Dependence on 
Additional Financing."

                                  43
<PAGE>

     Via 1 has funded its operational expenditures through the Company's 
capital contributions approximating $20.7 million. The Combined Company has 
budgeted capital expenditures of approximately $18.0 million for 1998 
primarily to fund network expansion and for the subscriber terminals. The 
Combined Company will seek to fund its capital expenditures through a 
combination of external financing and additional equity or debt investments 
by the Company and the other shareholders of Via 1. The Combined Company's 
inability to obtain necessary financing in order to make such additional 
investments on a timely basis may delay its planned capital expenditures and 
could have a material adverse effect on the Combined Company and the Company. 
See "Management's Discussion and Analysis of Financial Condition and Results 
of Operations--Additional Factors That May Affect Future 
Results--Competition."

     In January 1998, in connection with the RMD Acquisition, RMD entered 
into the BT Loan Agreement, pursuant to which it refinanced $15 million of 
existing indebtedness to BTFIC and borrowed an additional $10 million. A 
significant portion of the amount borrowed pursuant to the BT Loan has been 
used to finance the operations of RMD-Brasil and Via 1. The Company has 
pledged its shares in Via 1, SRC and RMD-Brasil as well as the assets of 
RMD-Brasil and SRC to BTFIC to secure repayment by RMD of the BT Loan. 
Subject to receipt of RBS' consent and in connection with the completion of 
the capitalization of Via 1, it is anticipated that the Company will also 
pledge the assets of Via 1 to BTFIC to secure the BT Loan. See "--Project 
Background; Corporate Governance" and "Management's Discussion and Analysis 
of Financial Condition and Results of Operations--Liquidity and Capital 
Resources."

     Mobilink has financed a significant portion of its past capital 
expenditures through a combination of shareholder capital contributions, 
shareholder loans and short- and long-term debt facilities from Citibank N.A.
(Citibank) and Sanwa Bank Limited (Sanwa Bank). As of December 31, 1997, 
Mobilink had outstanding an aggregate of approximately $11.8 million in 
shareholder loans, which accrue interest at a rate of Euro U.S.$ LIBOR plus 
1.5% for foreign currency loans and 15% for local currency loans. Such 
shareholder loans are repayable in seven installments commencing September 
1999. Mobilink has also obtained a $15 million long-term finance facility 
from Citibank which accrues interest at a rate of LIBOR plus 0.25% to 0.50% 
based upon the amount of time borrowings under the facility remain 
outstanding. Such facility is repayable in eleven semi-annual installments, 
which commenced in March 1997, and, as of December 31, 1997, approximately 
$12.1 million was outstanding under such facility. Mobilink has also borrowed 
$20 million from Sanwa Bank. Interest on such amount accrues at a rate of 
Euro U.S.$ LIBOR plus 0.30%, and is payable semi-annually.  The Citibank loan 
and the Sanwa loan, prior to it being repaid in full, have been guaranteed by 
Motorola, a shareholder of Mobilink. Subsequent to December 31, 1997 the 
Sanwa Bank loan was replaced by an ABN Amro $20 million local currency loan 
facility. This facility is currently guaranteed by Motorola and has a term of 
three years. Pursuant to the Mobilink Side Letter, IWCPL has agreed that if 
the guarantees of indebtedness of Mobilink issued by Motorola in connection 
with the foregoing indebtedness of Mobilink are not terminated on or before 
August 26, 1998, then IWCPL will forfeit to Motorola shares in Mobilink 
corresponding to up to a 4% equity interest in Mobilink. In addition, in 
March 1998, Mobilink entered into a $32 million vendor financing agreement 
with Motorola Credit Corporation ("Motorola Credit"), an affiliate of 
Motorola, for the purchase of certain infrastructure equipment (the "Motorola 
Vendor Financing"). Amounts borrowed under such agreement accrue interest at 
a rate of LIBOR plus 1.5% and are secured by a lien on such equipment. IWCPL 
has also pledged shares in Mobilink representing an 8.5% equity interest in 
Mobilink to Motorola Credit to secure the indebtedness of Mobilink under such 
agreement. 

     Mobilink has budgeted capital expenditures of $40.2 million in 1998, 
primarily to fund the continued buildout of the network. Mobilink expects to 
fund these capital expenditures through a combination of shareholder loans, 
the Motorola Vendor Financing and additional vendor and other financing. 
There can be no assurance that Mobilink will be able to obtain any such 
financing. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations--Additional Factors That May Affect Future 
Results--Negative Operating Cash Flow; Critical Dependence on Additional 
Financing."

     The Company had expended approximately $26.1 million to acquire its 
19.09% indirect equity interest in, and to make capital contributions and 
shareholder loans to, Mobilink. The Company financed $22 million of such 
amount through the PWH Pakistan Facility. See "Certain Relationships 
and Related Transactions--Private Placement Transactions--Pakistan 
Facilities." In February 1998, the Company entered into an agreement with 
Vanguard Pakistan, pursuant to which Vanguard Pakistan agreed to contribute 
the Company's pro-rata share of a $3,639,588 capital call by IWCPL, which 
pro-rata share currently represents a 1.54% equity interest in IWCPL in 
exchange for an $18,600 fee. Vanguard Pakistan also granted the Company the 
Vanguard Pakistan Option to purchase this equity interest for $1,240,371. The 
Vanguard Pakistan Option will expire on May 16, 1998, unless sooner 
exercised. In addition, pursuant to the Mobilink Side Letter dated August 18, 
1997, among the Company, the shareholders of Mobilink, and the other 
shareholders of IWCPL, the Company has agreed to contribute an additional 
$2.1 million in shareholder loans to Mobilink through the end of 1998. If the 
Company fails to provide such loans, then the Company's interest in IWCPL 
shall be converted into a direct equity interest in Mobilink, and the other 
shareholders of Mobilink shall have a pro-rata right to purchase all of the 
Company's equity interest in Mobilink at a purchase price equal to 50% of the 
then fair market value of such equity interest. See "Management's Discussion 
and Analysis of Financial Condition and Results of Operations--Additional 
Factors that May Affect Future Results--Negative Operating Cash Flow; 
Critical Dependence on Additional Financing."

                                  44
<PAGE>

     In August 1997, the Company completed the Pakistan Facilities (as 
defined herein) with TDI (as defined herein) and Vanguard Cellular Financial 
Corp ("VCFC") and certain other stockholders of the Company for an aggregate 
amount of $29 million in exchangeable bridge loans. The Pakistan Facilities 
are comprised of: (i) a $22 million PWH Pakistan Facility (as defined herein) 
for a wholly owned subsidiary of the Company, which was fully drawn in August 
1997 for the specific purpose of funding the cash portion of the purchase 
price of the Company's investment in Mobilink and the Company's pro rata 
share of the shareholder capital calls and shareholder loans required to 
finance the operations of Mobilink, and (ii) a $7 million IWCH Pakistan 
Facility (as defined herein) for IWCH, which was fully drawn down as of 
December 31, 1997, and was available to IWCH for general corporate and other 
purposes. The Pakistan Facilities contain significant restrictions on the 
Company's ability to raise additional debt or equity financing until all 
amounts outstanding under the Pakistan Facilities are repaid in full. See 
"Certain Relationships and Related Transactions--Private Placement 
Transactions--Pakistan Facilities."

     Mobisel obtained a $60.0 million credit facility from Nissho Iwai. This 
facility, which is fully drawn, is secured by all of the assets of Mobisel. 
Also, RHP has pledged all of its stock in Mobisel and guaranteed the credit 
facility. Borrowings under the Nissho Iwai credit facility were used for the 
implementation and construction of Mobisel's network. Borrowings outstanding 
under this credit facility are to be repaid in six equal semi-annual 
installments commencing in May 1998 although the management of RHP and 
Mobisel are currently in discussions with Nissho Iwai to reschedule current 
and upcoming principal and interest payments. These negotiations form part of 
a more substantial restructuring plan being created to address Mobisel's 
short-term cash contraints and the current economic crisis in Indonesia. As 
part of this financing initiative, Mobisel's management have embarked on an 
aggressive cost-cutting initiative to reduce short-term cash needs, and are 
actively working with all shareholders to create a suitable financing 
strategy to meet the Mobisel operating needs for 1998. Mobisel will require 
minimal additional financing to complete its planned capital expenditures 
through 1998 and working capital needs. Accordingly, Mobisel has commenced 
discussions with a number of potential financing sources, including the 
existing shareholders, in order to obtain additional financing. Also, Mobisel 
entered into a syndicated short-term notes facility agreement in January 1997 
with PT Bank Umum Servitia, as arranger, whereby the banks agreed to purchase 
Indonesian rupiah ("Rp") 60,000,000,000 of short-term notes and interest 
notes of Rp15,000,000,000 (in the aggregate approximately $17.1 million as at 
December 31, 1997). These short-term notes will have a repayment priority to 
the existing loans outstanding. Mobisel management have successfully 
negotiated the rescheduling of the short term notes to 1999. Lastly, the RHP 
shareholders have contributed $1.1 million in shareholder loans and it is 
anticipated that the shareholders will be required to provide additional 
financial support in the short-term permitting Mobisel to address its short 
term cash constraints. See "--Additional Factors That May Affect Future 
Results--Negative Operating Cash Flow; Critical Dependence on Additional 
Financing."

     During 1997, the Company, consistent with its write-down in its 
investment in Prismanet, decided it would not participate in a RM20.0 million 
capital contribution. The Company and Shubila Holding Sdn. Bhd. ("Shubila") 
entered into a side agreement whereby Shubila funded the Company's pro rata 
capital contribution amount, and accordingly, the Company's equity ownership 
interest in Prismanet was reduced from 30% to 22.5%. See "Business--Operating 
Companies" and Notes to Consolidated Financial Statements for additional 
information regarding the credit facilities of Prismanet.

     Prismanet arranged a Malaysian Ringgit 91.0 million (approximately $24.6 
million as of March 31, 1998) credit facility through a syndicate of 
Malaysian banks. This facility, which is fully drawn, is secured by 
substantially all of Prismanet's assets and a pledge of all of the capital 
stock of Prismanet held by the Company and Prismanet's other shareholders, 
and has been guaranteed by Shubila, the 60% shareholder of Prismanet, and 
certain directors of Prismanet (including a former officer of the Company). 
Also, Prismanet has agreed to assign to and deposit with the banks all of its 
cash, including revenues, loan drawings and shareholder advances. In addition 
to pledging their capital stock in Prismanet, the Company, the Malaysian bank 
syndicate and the other Prismanet shareholders entered into the Prismanet 
Collateral Agreement. The principal amount borrowed under the facility must 
be repaid in eleven semi-annual installments beginning in October 1997, and 
accrued interest is payable monthly. Prismanet has failed to make interest 
payments under this facility, and the banks have declared the entire amount 
of the facility to be due and payable. See "--Additional Factors that May 
Affect Future Results--Risks Associated With Indebtedness. The Company and 
its partners are seeking an extension of Prismanet's payment obligations 
under such facility as well as additional debt or equity financing to 
refinance outstanding indebtedness under the credit facility and to fund 
Prismanet's capital expenditures.  There can be no assurance that Prismanet 
will be able to secure an extension under the credit facility or refinance 
the credit facility, which would have a material adverse effect on the 
Company. The Company has recorded a general reserve of $5.0 million, 
approximating the Company's pro rata share of the Malaysian ringgit 91.0 
million credit facility, plus accrued interest, with respect to its potential 
exposure under the Prismanet Collateral Agreement.

     The businesses of the Operating Companies and the Company's other 
projects are capital intensive and will generally require continuing sources 
of outside financing to fund working capital needs, capital expenditures and 
other cash requirements. In particular, Star Digitel, Mobilink and Mobisel 
will require substantial additional financing in order to complete planned 
capital expenditures. However, there can be no assurance that the Operating 
Companies and the other projects will be able to obtain required additional 
financing on acceptable terms or at all, which could have a material adverse 
effect on the Company. In addition, there can be no assurance that the 
Operating Companies will be able to pay their indebtedness or other 
liabilities when due. See "--Additional Factors That May Affect Future 
Results That May Affect Future Results--Negative Operating Cash Flow; 
Critical Dependence on Additional Financing."

                                  45
<PAGE>

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

NEGATIVE OPERATING CASH FLOW; CRITICAL DEPENDENCE ON ADDITIONAL FINANCING

     The Company used cash in operating and investing activities of $73.2 
million and $57.3 million, respectively, for the years ended December 31, 
1996 and 1997, respectively, and expects such negative cash flows to continue 
in the foreseeable future. See "--Holding Company Structure; Limitation on 
Access to Cash Flow of Operating Companies." Because of such negative cash 
flow and negative working capital and the capital intensive nature of the 
Company's business, the Company will require continuing sources of outside 
debt and equity financing to fund its working capital needs, investments and 
other cash requirements.

     In recent months, the Company and certain of its Operating Companies and 
other subsidiaries and affiliates have experienced difficulties in obtaining 
financing to fund their operations. In December 1997, the Company initial 
public offering of its common stock and began efforts to raise additional 
capital through an interim equity financing and the sale of its interests in 
certain of its smaller wireless communications businesses in Asia and Latin 
America. On March 10, 1998, Vanguard purchased shares of the Company's Series 
J Preferred Stock and a related warrant to purchase Common Stock for $10 
million as the first tranche of an $18 million interim financing (the "Series 
J Financing"). On March 17, 1998, the Company entered into a letter agreement 
to sell its SMR Business in Venezuela. The purchase price will be based upon 
the number of qualified channels held in the business, which has not been 
determined. The closing is subject to numerous conditions, and there can be 
no assurance that the sale will close. Pursuant to the BT Purchase Agreement, 
100% of the net proceeds from the sale must be deposited in escrow until 
certain conditions in the BT Purchase Agreement are satisfied, and thereafter 
50% of the net proceeds must be applied to repay indebtedness under the BT 
Loan until the unpaid principal amount of the BT Loan is $20 million and 
thereafter 30% of the net proceeds must be applied to repay the indebtedness 
under the BT Loan. There can be no assurance that the conditions to release 
of the purchase price from escrow will be satisfied.

     As of March 31, 1998 the Company had approximately $1.5 million in cash 
and cash equivalents of which $1.0 million is restricted pursuant to the IWCH 
Pakistan Facility (as defined below). See "Certain Relationships and Related 
Transactions--Pakistan Facilities." The Company estimates that these cash 
resources should be sufficient to allow it to continue operations through 
approximately May 31, 1998, without giving effect to any proceeds that might 
be available to the Company from the sale of its interests in certain smaller 
wireless communications businesses or the second closing of the Series J 
Financing. However, there can be no assurance that the Company will not 
require additional debt or equity financing before then.

     Except for the letter agreement for the sale of its Venezuelan SMR 
operations, and the non-binding letter of intent of the sale of its interests 
in development stage SMR projects in Peru, Chile and Ecuador, the Company has 
no commitments to sell any of its assets or to obtain any additional debt or 
equity financing. There can be no assurance that any of the Company's 
interests in certain of its smaller wireless communications businesses can be 
sold or that the Company can obtain any additional debt or equity financing 
on acceptable terms, or at all. If adequate sources of additional financing 
are not available, the Company will be forced to curtail its operations 
(which may result in the loss or revocation of licenses held by Operating 
Companies, the delay, scale back or elimination one or more of its projects 
or the merger, sale, liquidation or dilution in one or more of its 
investments), may be unable to repay its liabilities (including the Unit 
Notes, (as defined herein)) as they become due, and may be unable to meet its 
working capital and other cash requirements. For example, if the Company does 
not make a required $19.0 million capital contribution to Star Digital by 
June 17, 1998 its 40% equity interest in Star Digitel could be reduced to an 
approximately 15% equity interest and the Company could be forced to sell its 
equity interest in Star Digitel. In addition, if the Company does not make 
its pro rata share of a required $2.1 million shareholder loan to Mobilink, 
its equity interest in Mobilink could be subject to significant dilution or a 
forced sale. Any of such events would have a material adverse effect on the 
Company. To the extent the Company raises additional funds through debt 
financing, the Company's leverage will increase. See "--Risks Associated with 
Indebtedness." To the extent the Company raises additional funds through 
equity issuances, the interests of its existing stockholders will be diluted. 
In order to secure financing for the Operating Companies, Vanguard has in the 
past provided certain guarantees on behalf of the Company. However, Vanguard 
is not obligated to provide such guarantees and there can be no assurance 
that Vanguard will continue to provide such guarantees in the future, which 
could have a material adverse effect on the Company.

     The businesses of the Operating Companies and the Company's other 
projects are capital intensive and will require substantial additional 
financing in order to fund working capital needs, capital expenditures and 
other cash requirements. In the past, each of the Operating Companies has 
generated negative cash flow from operations, and the Company expects that 
certain of the Operating Companies will continue to generate negative cash 
flow from operations for the foreseeable future. As a result, the Operating 
Companies will require continuing sources of external financing, including in 
particular, Star Digitel, Mobilink and Mobisel. The Company's strategy is to 
seek such additional financing for the Operating Companies primarily from 
third parties where possible and not from the Company or its partners. 
However, there can be no assurance that the Operating Companies will be able 
to obtain the financing required to make planned capital expenditures, 
provide working capital or meet other cash needs. In addition, in many cases 
the Company and its partners may be contractually required to make additional 
equity investments in Operating Companies, and the Company's or such 
partners' inability or unwillingness to do so could result in the dilution of 
such party's equity interest or a significant impairment or loss of the value 
of the Company's investment.  See "--Liquidity and Capital Resources."

     The failure of the Operating Companies to obtain adequate additional 
financing would have a material adverse effect on the Company and, among 
other things, could result in the loss or revocation of licenses held by 
certain of the Operating Companies, require that certain planned projects be 
delayed, scaled back or abandoned, delay or prevent growth in subscriber 
levels, harm relationships with the Operating Companies' local partners 
and/or require the Company to raise substantial additional financing. For 
example, Star Digitel currently requires substantial additional capital to 
build out its network and make required payments. The failure to obtain such 
capital would likely delay growth in adding subscribers and result in the 
loss of Star Digitel's right to cooperate with its local partners in one or 
more of the Star Digitel Provinces or in the Beijing municipality. Moreover, 
Mobisel currently lacks sufficient financing to continue its existing 
operations. The failure to obtain such financing could result in the merger, 
sale or liquidation of Mobisel. See "Business--Operating Companies--China-Great 
Wall Cellular" and "--Indonesia-Mobisel."

GOING CONCERN ASSUMPTION

     The Company's independent accountant's report on the Company's financial 
statements for the year ended December 31, 1997 contains an explanatory 
paragraph indicating that the Company has suffered recurring losses from 
operations and has a net capital deficiency at December 31 1997 that raises 
substantial doubt about its ability to continue as a going concern. See 
"--Negative Operating Cash Flow; Critical Dependence on Additional Financing; 
Proposed Sale of Company." The existence of the explanatory paragraph may 
have a material adverse effect on the Company's relationship with lenders, 
strategic and local partners and suppliers, and therefore could have a 
material adverse effect on the Company's business, financial condition and 
results of operations.

CONTINUING LOSSES; LIMITED OPERATING HISTORY

     The Company has incurred net losses since its inception and had an 
accumulated stockholders' deficit of approximately $179.3 million as of 
December 31, 1997. The Company anticipates that its net losses will continue 
for the foreseeable future, and there can be no assurance as to whether or 
when the Company's operations will become profitable. See "Management's 
Discussion and Analysis of Financial Condition and Results of Operations." 
Since its inception in January 1992, the Company's activities have been 
concentrated primarily on the initial 

                                  46
<PAGE>

development of its wireless projects, including the selection of local 
partners, the formation of Operating Companies and the pursuit of operating 
licenses. Thus, the Company has a limited operating history.

     Although the Operating Companies currently provide wireless 
communications services on a commercial basis, they are in the early stage of 
operations, have a limited number of subscribers and are expected to incur 
losses for a substantial period of time. The successful development and 
commercialization of each Operating Company will depend on a number of 
significant financial, logistical, technical, engineering, marketing, 
administrative, regulatory and other factors, the outcomes of which cannot be 
predicted. See "--Negative Operating Cash Flow; Critical Dependence on 
Additional Financing," "--Risks Inherent in Foreign Investment," "--Risks 
Associated with Indebtedness," "--Dependence on Local Economics; Inflation; 
Currency Devaluations and Fluctuations," "--Risks Associated with Licenses," 
"--Competition," "--Regulation," "--Dependence on Other Telecommunications 
Providers," "--Technological Risks; Risks of Obsolescence," "--Construction 
and Operating Risks," "--Customer Risks; Subscriber Fraud," and "--Radio 
Frequency Emission Concerns."

RISKS INHERENT IN FOREIGN INVESTMENT

     The Company has invested substantially all of its resources outside of 
the U.S. and plans to continue to invest substantially all of its resources 
outside of the U.S. in the future. Governments of many developing countries 
have exercised and continue to exercise substantial influence over many 
aspects of the sector. In some cases, the government owns or controls (i) 
companies that are or may in the future become competitors of the Company or 
(ii) companies (such as national telephone companies) upon which the 
Operating Companies may depend for required interconnections to wireline 
telephone networks and other essential services, such as the leasing of 
lines. In many developing countries, foreign ownership of telecommunication 
enterprises is limited or prohibited.

     In China, the ownership or operation of telecommunications enterprises 
by foreigners is prohibited.  The Company believes that the CJV Model 
implemented by Star Digitel in three Star Digitel Provinces is consistent 
with this ownership prohibition.  However, there can be no assurance that the 
Chinese government will not determine that the CJV Model violates the Chinese 
foreign ownership prohibition. Any such determination by the Chinese 
government would have a material adverse effect on Star Digitel and the 
Company. In four of the Star Digitel Provinces and in portions of a fifth 
Star Digitel Province, Star Digitel has not yet begun implementation of the 
CJV Model and is currently operating under cooperative arrangements with its 
local partners that are not likely to be enforceable under Chinese law. The 
failure of Star Digitel's local partners to honor these cooperative 
arrangements would have a material adverse effect on Star Digitel and the 
Company. See "Business--Operating Companies--China-Great Wall 
Cellular--Operating Company Overview-Structure in Star Digitel Provinces."

     Government actions in the future could have a significant adverse effect 
on economic conditions in a foreign country or may otherwise have a material 
adverse effect on the Company and the Operating Companies. The Company does 
not have political risk insurance in the countries in which it currently 
conducts business. Expropriation, confiscatory taxation, nationalization, 
political, economic or social unrest or instability or other developments in 
foreign countries could materially adversely affect the value of the 
Company's interests in the Operating Companies and other investments in 
particular developing countries. For example, from January 1995 to January 
1997, the government of Pakistan shut down all cellular services in the city 
of Karachi, which forced Mobilink to cease its operations in that city. The 
shutdown ordered by the Pakistani government contributed to significantly 
slower growth in Mobilink's subscriber base during the two-year shut down. 
See "Business--Operating Companies--Pakistan-Mobilink." In addition, in 
China, there can be no assurance that the CESEC Notice will not be 
interpreted or enforced by the relevant governmental authorities to require 
Star Digitel to terminate the construction of its existing AMPS networks or 
to require the renegotiation by Star Digitel of the CJV Model as currently 
implemented and Star Digitel's other existing agreements in connection with 
the proposed transition from AMPS to CDMA. The interpretation or enforcement 
of the CESEC Notice in such a manner would have a material adverse effect on 
Star Digitel and the Company. See "Business--Operating Companies--China-Great 
Wall Cellular--Regulatory Overview." There can be no assurance that other 
countries where the Company has Operating Companies will not impose similar 
restrictions in the future. The imposition of any such restriction could have 
a material adverse effect on the Company. In addition, although there are no 
laws, regulations or binding 

                                  47
<PAGE>

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

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

RISKS ASSOCIATED WITH INDEBTEDNESS

     The Company has indebtedness that is substantial in relation to its 
stockholders' equity. As of December 31, 1997, the Company's (i) long term 
debt was $123.1 million, including approximately $92.8 million in notes (the 
"Unit Notes") issued under the Indenture, which was entered into by the 
Company in August 1996 in connection with a unit offering (the "Unit 
Offering") consisting of the Unit Notes and related warrants (the "Unit 
Warrants"), and (ii) total stockholders' deficit was $129.7 million. The high 
level of the Company's indebtedness will have important consequences to the 
Company, including that (i) the Company may be restricted in the future from 
obtaining additional financing, whether for future working capital, 
additional capital expenditures or other general corporate purposes, and (ii) 
the Company's level of indebtedness could limit its flexibility in planning 
for or reacting to changes in its business, and general economic and industry 
conditions.

     Because the Company does not expect to generate positive cash flow 
through dividends or other distributions from the Operating Companies for the 
foreseeable future, its ability to repay the Unit Notes and any other 
indebtedness which it may incur from time to time will be dependent on 
developing one or more sources of financing prior to the repayment of such 
indebtedness. The Company may, among other things, (i) seek to refinance all 
or a portion of such indebtedness through issuance of additional debt or 
equity securities of the Company or other borrowings, (ii) seek to sell all 
or a portion of its interests in one or more of the Operating Companies or 
its other investments (subject to the restrictions described below under 
"--Restrictions on Transfer of Ownership Interests") or (iii) negotiate with 
its financial and strategic partners to permit the cash, if any, produced by 
the Operating Companies to be distributed to the Company and other equity 
holders. There can be no assurance that the Company will be successful in 
taking any of these steps. Any failure by the Company to repay the Unit Notes 
or other indebtedness when due would have a material adverse effect on the 
Company.

     The Indenture and other loan agreements to which the Company is a party 
or by which it is bound impose significant restrictions on the Company. For 
example, the Indenture significantly restricts the ability of the Company to 
make investments in, or guarantee the indebtedness of, the Operating 
Companies, which may further restrict the Company in providing adequate 
financing for the Operating Companies. The Indenture also imposes certain 
requirements with respect to sales or other dispositions of assets (including 
capital stock in Operating Companies) with a fair market value in excess of 
$500,000 by the Company and certain of its subsidiaries ("Asset Sales"), 
particularly with respect to the uses to which the net proceeds from such 
Asset Sales may be put. These restrictions also apply to Asset Sales 
compelled by governmental action, including confiscation or expropriation of 
assets by governmental authorities. To the extent that any such expropriation 
or confiscation fails to satisfy such requirements, such a violation will be 
deemed an event of default under the Indenture. Any default under the 
Indenture would entitle holders of the Unit Notes to demand immediate 
repayment thereof and to proceed against their collateral. A default under 
the Unit Notes or such other indebtedness which the Company may incur in the 

                                  48
<PAGE>

future could also permit lenders at the Operating Company level to declare 
borrowings outstanding thereunder to be due and payable pursuant to 
cross-default clauses, permitting the lenders under such debt instruments to 
proceed against any capital stock or other collateral pledged as security 
therefor.

     Each of the Operating Companies and certain of the Company's other 
subsidiaries have substantial indebtedness and, to the extent that additional 
debt financing is available, may in the future incur substantial additional 
indebtedness, in relation to its base of equity capital. Such indebtedness 
has important consequences to the future operations of the Operating 
Companies and such subsidiaries, including that: (i) such entities have 
significant, and in some cases escalating, cash requirements to service debt, 
reducing funds available for operations and future business opportunities and 
increasing the vulnerability of the Operating Companies to adverse general 
economic and industry conditions; (ii) such entities may be restricted in the 
future from obtaining additional financing, whether for future working 
capital, additional capital expenditures or other general corporate purposes; 
(iii) such entities' high level of indebtedness may adversely impact their 
flexibility in planning for, or reacting to, changes to their businesses and 
market conditions and their ability to compete with less highly leveraged 
competitors; (iv) such entities may be restricted in their ability to pay 
dividends or make other distributions to the Company; and (v) a default in 
the indebtedness of such entities may result in an event of default under the 
Indenture. There can be no assurance that the Operating Companies will be 
able to pay their indebtedness or other liabilities when due. Any failure to 
pay such indebtedness or other liabilities when due could have a material 
adverse effect on the Operating Companies and the Company, including 
resulting in a default under the Unit Notes. See "--Negative Operating Cash 
Flow; Critical Dependence on Additional Financing." 

     For example, the Company entered into the Prismanet Collateral Agreement in
connection with Prismanet's ringgit 91 million credit facility.  Prismanet has
failed to make payments required under this credit facility, and, in February
1998, the banks declared the entire amount of the facility, including accrued
interest, to be due and payable. Pursuant to the Prismanet Collateral Agreement,
the Company and such other shareholders would be jointly and severally liable
for amounts due under the credit facility. There can be no assurance that the
banks will not commence legal proceedings against the Company to enforce the
Prismanet Collateral Agreement or, if such proceedings are commenced, that such
proceedings would not have a material adverse effect on the Company.  Among
other things, Prismanet's default under its credit facility or a default under
the Prismanet Collateral Agreement may be deemed events of default under the
Indenture, which would have a material adverse effect on the Company.

     The Company has in the past been required, and in the future likely will 
be required, to guarantee and/or pledge its equity interests to secure 
certain indebtedness of the Operating Companies and otherwise to provide 
certain assurances to lenders. At the present time, the stock held by the 
Company in each Operating Company is pledged to secure outstanding 
indebtedness or guarantees of such indebtedness. In the event the Operating 
Companies are unable to make payments under such indebtedness when due, the 
lenders under such indebtedness would have the right to foreclose on such 
stock. See "Management's Discussion and Analysis of Financial Condition and 
Results of Operation--Liquidity and Capital Resources" and 
"Business--Operating Companies." Moreover, to date, most of the debt 
financing obtained by the Operating Companies has been secured by assets of 
the respective Operating Companies, and it is likely that any debt financing 
the Operating Companies obtain in the foreseeable future will also be 
similarly secured. The pledge of assets to secure debt financing may limit 
the operations of the Operating Companies and make it substantially more 
difficult to obtain additional financing.

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

     The Company is a holding company with no business operations of its own. 
The Operating Companies and other subsidiaries and affiliates of the Company 
are separate and distinct legal entities and have no obligation, contingent 
or otherwise, to make any funds available to the Company to enable it to make 
investments in Operating Companies, meet working capital needs or other 
liabilities of the Company, or for any other reason. To the extent that any 
of the Operating Companies generates positive cash flow, the Company may be 
unable to access such cash flow because: (i) it owns 50% or less of the 
equity of most of such entities and, therefore, does not have the requisite 
control to cause such entities to pay dividends to their equity holders; (ii) 
certain of such entities are currently or may become parties to credit or 
other borrowing agreements that restrict or prohibit the payment of 
dividends, and such entities are likely to continue to be subject to such 
restrictions and prohibitions for the foreseeable future; (iii) the Company 
expects that the Operating Companies will generally reinvest all of their 
cash flow in their respective operations for the foreseeable future; and/or 
(iv) some of the countries in which such entities conduct business tax, or 
may in the future tax, the payment and repatriation of dividends or otherwise 
restrict the repatriation of funds. As a result, the Company does not expect 
that it will be able to generate any cash flow through dividends or other 
distributions from the Operating Companies in the foreseeable future, and 
there can be no assurance that the Company will be able to generate any 
significant cash flow from the Operating Companies at any time in the future.

                                  49
<PAGE>

RESTRICTIONS ON TRANSFER OF OWNERSHIP INTERESTS

     The Company's ability to sell or transfer its ownership interests in the 
Operating Companies and its other projects (i) is generally subject to 
limitations contained in the agreements between the Company and its local 
partners including, in certain cases, restrictions on sales or transfers, 
co-sale rights and/or rights of first refusal and (ii) may be subject to 
provisions in local operating licenses and local governmental regulations 
that, in certain cases, prohibit or restrict the transfer of the Company's 
ownership interests without prior governmental consent. For example, the 
consent of the Comision Nacional de Telecomunicaciones (CONATEL) is required 
for the sale of the controlling interests in the Company's SMR business in 
Venezuela. Moreover, the Company has pledged all or a portion of its capital 
stock in each Operating Company and in certain other projects to secure 
credit facilities obtained by such Operating Companies and projects, and the 
Company may be prohibited from transferring or otherwise disposing of such 
capital stock so long as it is pledged as collateral for such credit 
facilities. See "--Risks Associated with Indebtedness." In addition, none of 
the Operating Companies or the Company's other investments currently has any 
publicly traded securities and there can be no assurance that in the future 
there will be a public or private market for the securities of these 
investments. As a result, the Company's ability to liquidate any or all of 
its investments may be substantially limited and there can be no assurance 
that the Company will be able to do so in a timely manner, or at all, in the 
event that the Company is required to do so in order to satisfy its cash 
needs, including to make necessary capital expenditures or to repay 
indebtedness.

RISKS ASSOCIATED WITH INTEGRATION OF RMD-BRASIL AND VIA 1

     Successful integration of RMD-Brasil and Via 1 will, among other things, 
require that the Company combine two distinct wireless communications 
networks, coordinate sales and marketing efforts, combine management 
information, billing and collections systems, integrate personnel with 
different business backgrounds, blend two different corporate cultures and 
comply with certain applicable regulatory requirements. There can be no 
assurance that the Company can successfully integrate RMD-Brasil and Via 1 
and realize any of the anticipated benefits of the RMD Acquisition. Moreover, 
unanticipated contingencies could significantly increase the costs of 
combining Via 1 and RMD. See "Summary--Recent Developments" and 
"Business--Operating Companies--Brazil-Via 1 and RMD" and 
"Business--Acquisition of RMD."

DEPENDENCE ON LOCAL ECONOMIES; SIGNIFICANT ECONOMIC DOWNTURN; INFLATION; 
CURRENCY DEVALUATIONS AND FLUCTUATIONS

     The Operating Companies are dependent, in large part, on the economies 
of the developing countries in which they have operations. The economies of 
many developing countries, particularly those in Asia, have recently 
experienced significant economic downturns. In addition, many developing 
countries have experienced extremely high rates of inflation and resulting 
high interest rates for many years, as well as significant fluctuations in 
their exchange rates. For example, several Latin American countries, 
including Brazil, experienced extremely high rates of inflation in 1993 and 
1994. See "Business--Operating Companies--Brazil-Via 1 and RMD." Recently, 
many developing countries have experienced devaluations of their currencies 
relative to the U.S. dollar. For example, since mid-1997, a number of 
currencies of Southeast Asian countries, including Indonesia, have 
experienced dramatic declines in their exchange rates relative to the U.S. 
dollar. Such inflation, fluctuations and devaluations have had, and may 
continue to have, significant negative effects on the economies and 
securities markets of developing countries, including rapid increases in 
interest rates, which occurred recently in Brazil, limited credit 
availability and solvency problems experienced by many companies and banks 
with dollar-denominated loans. Developments such as these could result in 
higher unemployment and slower economic growth in the Markets, which in turn 
could have a material adverse effect on the Operating Companies in such 
countries, including an adverse effect on their subscriber levels and on 
their ability to obtain financing. Revenues generated by the Operating 
Companies are generally paid to the Operating Companies in the local 
currency. By contrast, many significant liabilities of the Operating 
Companies (such as liabilities for the financing of telecommunications 
equipment) are payable in U.S. dollars. Because tariffs in many of the 
countries in which the Operating Companies operate are regulated, certain 
Operating Companies may often be unable to increase tariffs in response to 
inflation or currency devaluations. As a result, any devaluation in the local 
currency relative to the U.S dollar could have a material adverse effect on 
the Operating Companies and the Company. For example, in Indonesia, a 
substantial part 

                                  50
<PAGE>

of Mobisel's debt is U.S. dollar denominated. Unless the Indonesian 
government permits a tariff increase, Mobisel could experience difficulties 
in servicing such debt, which could have a material adverse effect on Mobisel 
and the Company. For the year ended December 31, 1997, Mobisel recognized 
significant foreign exchange translation losses associated with the 
remeasurement of its U.S. dollar denominated credit facility due to the 
devaluation of the Indonesian Rupiah.

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

RISKS ASSOCIATED WITH LICENSES

     Each Operating Company's or, in the case of Star Digitel, each PLA 
Partner's ability to retain and utilize its telecommunications licenses, to 
renew such licenses when they expire and to obtain new licenses in the future 
is essential to the Company's operations. However, there can be no assurance 
that governmental agencies will not seek to unilaterally limit, revoke or 
otherwise adversely modify the terms of these licenses in the future, any of 
which could have a material adverse effect on the Company. The Company may 
have limited or no legal recourse if any of these events were to occur. See 
"--Risks Inherent in Foreign Investment." In the future, additional licenses 
may be sought to expand operations, and no assurance can be given that any 
such licenses will be obtained. In addition, certain of the licenses will 
automatically revert back to the government after a specified period of time, 
and there can be no assurance that renewals to licenses will be granted or, 
if renewed, that the renewal terms will not be substantially less favorable 
to the Operating Companies than the original license terms, any of which 
could have a material adverse effect on the Company.

     Moreover, the transfer of licenses often requires the approval of 
governmental entities. For example, the Brazilian government must approve the 
transfer to Via 1 of licenses contributed or to be contributed to it by its 
current and proposed shareholders, and there can be no assurance that such 
approvals will be obtained. The failure to obtain such approvals, and other 
approvals, licenses and/or renewals could have a material adverse effect on 
Via 1, the Combined Company and the Company. See "Business--Operating 
Companies--Brazil-Via 1 and RMD."

     Because foreign ownership of telecommunications ventures is prohibited 
in China, Star Digitel is not itself the holder of any telecommunications 
licenses, and is therefore dependent on its local partners, including the 
PLA, to obtain, retain and renew the licenses necessary for the commercial 
operations of Star Digitel's cellular networks. In addition, the cooperative 
joint ventures being formed between Star Digitel and Star Digitel's local 
partners pursuant to the CJV Model to build local cellular networks will 
generally have a term of 20 years, at the end of which the cooperative joint 
ventures will be terminated. See "Business--Operating Companies--China-Great 
Wall Cellular." Any failure by Star Digitel's local partners to retain such 
licenses or to extend the term of such cooperative joint ventures would have 
a material adverse effect on Star Digitel and the Company. It is currently 
expected that the networks being constructed in the Star Digitel Provinces 
may ultimately be required to upgrade to CDMA technology. However, in certain 
of the Star Digitel Provinces, Star Digitel does not currently have 
agreements granting to it the right to construct networks using CDMA 
technology. The failure of Star Digitel to obtain such rights could have a 
material adverse effect on Star Digitel and the Company.  See 
"Business--Operating Companies--China--Great Wall Cellular."

     To the extent the Operating Companies require additional licenses to 
expand their respective businesses, they may be forced to participate in 
competitive bidding processes or to purchase licenses from other license 
holders at higher prices than may have historically been paid. Furthermore, 
relevant governmental authorities may grant additional telecommunications 
licenses to third parties, possibly on better terms, covering the same 
geographical areas as the Operating Companies' or their local partners' 
licenses or otherwise grant licenses which allow other companies to compete 
directly with the Operating Companies for wireless subscribers. Although the 
inherent 

                                  51
<PAGE>

limitation on suitable spectrum may provide some protection against the 
issuance of competing licenses, there can be no assurance that such 
competitive licenses will not be granted. The issuance of competing licenses 
could have a material adverse effect on the Company. See "--Competition." 
For example, the Pakistan Telecommunications Authority (the "PTA"), which 
regulates the provision of telecommunications services, has the authority to 
grant a GSM license to Pakistan Telecommunications Company Limited, the 
current provider of national wireline services.

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

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

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

LIMITS ON CONTROL OF OPERATING COMPANIES

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

COMPETITION

     Although the implementation of advanced wireless technologies is in the 
early stages of deployment in many of the Markets, the Company believes that, 
just as in the U.S., the Operating Companies will face increasing 
competition. A number of large American, Japanese and European companies, 
including U.S.-based regional Bell operating companies ("RBOCs") and large 
international telecommunications companies, are actively engaged in programs 
to develop and commercialize wireless technologies in emerging markets which 
will compete with the Operating Companies. In some of the Markets, the 
Company will also compete with local wireline carriers, 

                                  52
<PAGE>

including government-owned telephone companies. Most of these companies have 
substantially greater financial and other resources than the Company, 
including research and development staffs and technical and marketing 
capabilities. Subject to the availability of additional spectrum, the Company 
anticipates that there will be increasing competition for additional licenses 
and increased competition in the Markets to the extent such licenses are 
obtained by others. In view of the continuing development of the 
telecommunications industry, it is anticipated that there will be a 
continuing competitive threat from new technologies which may render the 
technologies employed by the Company obsolete or place the Company at a cost 
disadvantage.

RISK OF REGISTRATION UNDER INVESTMENT COMPANY ACT OF 1940

     Because the Company currently owns minority interests in all of the 
Operating Companies and in many of its other investments, there is a risk 
that these ownership positions could be deemed to be investment securities 
and that the Company could be characterized as an investment company under 
the Investment Company Act of 1940 (the "Investment Company Act"). Due to the 
Company's active role in developing and managing the Operating Companies and 
its contractual rights as an equity holder, the Company believes that its 
interests in the Operating Companies are the equivalent of joint venture 
interests rather than investment securities. Therefore, the Company believes 
that it is not an investment company and intends to continue its business and 
conduct its operations so as not to become subject to the Investment Company 
Act. If the Commission or its staff were to take the position, or if it were 
otherwise asserted, that the Company is an investment company, the Company 
could be required either (i) to liquidate its investments in one or more 
Operating Companies and change the manner in which it conducts its operations 
to avoid registration as an investment company or (ii) to register as an 
investment company. If the Company were required to register under the 
Investment Company Act, it would be subject to substantive and restrictive 
regulations with respect to capital structure, operations, transactions with 
affiliates and other matters. In addition, a determination that the Company 
is subject to the Investment Company Act would constitute an event of default 
under the Indenture and permit acceleration of the Unit Notes. If the Company 
were found to be an investment company but was not registered under the 
Investment Company Act, the Company would be prohibited from, among other 
things, conducting public offerings in the U.S. or engaging in interstate 
commerce in the U.S., the Company would be subject to monetary penalties and 
injunctive relief in an action brought by the Commission, and certain 
contracts to which the Company is a party (including the Indenture and the 
Unit Notes) might be rendered unenforceable or subject to rescission by any 
party thereto. As a result, any determination that the Company is an 
investment company would have a material adverse effect on the Company and 
would likely require that the Company cease operations.

REGULATION

     The Operating Companies are generally subject to a high degree of 
regulation by the governments in the countries in which they operate. Such 
regulations are constantly evolving and may change significantly over time. 
Many of the countries in which the Operating Companies are located have only 
recently adopted laws and regulations pertaining to telecommunications 
services, and in many cases these laws and regulations are undergoing 
significant revision and re-evaluation. There can be no assurance that 
material and adverse changes in the regulation of the Operating Companies 
will not occur in the future. For example, in China the MPT is preparing an 
initial draft of a telecommunications law which, if adopted, is expected to 
become the basic telecommunications statute in China. The nature and scope of 
the regulation contemplated by such law is not fully known, and there can be 
no assurance that the law, if adopted, would not have a material adverse 
effect on Star Digitel's business.

     To date, certain Operating Companies have been subject to regulations in 
many areas, including with respect to restrictions on foreign ownership or 
operation, service requirements, foreign debt registration and approval 
requirements, restrictions on interconnection of wireless systems to 
government-owned or telephone networks, subscriber rate-setting, technology 
and construction requirements. As in the U.S., these regulations can impose 
significant restrictions on operations. An Operating Company's failure to 
comply with applicable governmental regulations or operating requirements 
could result in the loss of licenses, limit the ability of the Operating 
Company to add subscribers or otherwise have a material adverse effect on the 
Company. In addition, delays caused by governmental approval or licensing 
procedures could have a material adverse effect on the Operating Companies 
and the Company. See "--Risks Inherent in Foreign Investment."

                                  53
<PAGE>

     Moreover, to the extent that any of the Operating Companies seeks to 
make a dividend or other distribution to the Company, or to the extent that 
the Company seeks to liquidate its investment in an Operating Company and 
repatriate monies from a relevant country, local taxes, foreign exchange 
controls or other restrictions may effectively prevent the transfer of funds 
to the Company or the exchange of local currency for U.S. dollars.

DEPENDENCE ON OTHER TELECOMMUNICATIONS PROVIDERS

     Just as is the case with cellular operators in the U.S., the success of 
the Company's wireless networks will in many cases depend upon services 
provided by other telecommunications providers, some of which are competitors 
of the Company or the Operating Companies. For example, the Operating 
Companies generally require interconnection arrangements with national or 
regional telephone companies in order for their wireless networks to 
interconnect with wireline telephone networks, and may require the use of 
microwave, fiber optic or other lines belonging to other parties to link 
their wireless networks. The revocation, loss or modification of any of these 
existing agreements or arrangements or the failure to obtain necessary 
agreements and/or arrangements in the future on reasonable terms, could have 
a material adverse effect on the Operating Companies and the Company. In 
Brazil, however, neither Via 1 nor RMD has entered into a written agreement 
providing for interconnection to the PSTN. As the Combined Company expands 
its operations and transitions selected markets from SMR to ESMR services, it 
will become increasingly important for the Combined Company to enter into 
agreements with local exchange carriers providing for interconnection to the 
PSTN at acceptable rates. The failure of the Combined Company to enter into 
such agreements or its inability to interconnect to the PSTN at acceptable 
rates would have a material adverse effect on the Combined Company and the 
Company. The terms under which the Operating Companies are currently 
permitted to interconnect with certain other networks, or may be permitted to 
do so in the future, may restrict their ability to exploit significant 
opportunities, or to otherwise manage their respective businesses 
efficiently. Similarly, in China, although the PTA in each Star Digitel 
Province provides interconnection to the local wireline network, Star Digitel 
currently has no formal interconnection agreements in place. The loss of 
interconnection between a Star Digitel Province and the local PTA would have 
a material adverse effect on Star Digitel and the Company. Further, the 
support of the MPT is required for Star Digitel to continue to construct its 
cellular networks. Although the Company believes that the MPT supports the 
construction of such networks, there can be no assurance that such support 
will continue. Any decision by the MPT not to support the development by Star 
Digitel and its local partners of cellular networks would have a material 
adverse effect on Star Digitel and the Company. See "Business--Operating 
Companies--China-Great Wall Cellular."

TECHNOLOGICAL RISK; RISK OF OBSOLESCENCE

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

CONSTRUCTION AND OPERATING RISKS

     The Operating Companies typically require substantial construction of 
new wireless networks and additions to existing wireless networks. 
Construction activity requires the Operating Companies to obtain qualified 
subcontractors and necessary equipment on a timely basis, the availability of 
which varies significantly from country to country. Construction projects are 
subject to cost overruns and delays not within the control of the Operating 
Company or its subcontractors, such as those caused by acts of governmental 
entities, financing delays and catastrophic occurrences. Delays can also 
arise from design changes, material and equipment shortages, delays in 
delivery and the inability to obtain required financing. Accordingly, there 
can be no assurance that the Operating Companies will be able to complete 
current or future construction projects for the amount budgeted or within the 

                                  54
<PAGE>

time periods projected, or at all. Failure to complete construction for the 
amount budgeted or on a timely basis could jeopardize predicted subscriber 
growth, contracts, franchises or licenses and could have a material adverse 
effect on the Operating Company and the Company.

     In addition, the success of the Operating Companies will depend on 
effective and cost-efficient management information, billing and collection 
systems and procedures that allow the Operating Companies to send bills and 
collect payments on a timely basis. The failure by the Operating Companies to 
implement such systems and procedures could result, among other things, in 
substantial amounts of uncollectible accounts receivable and inaccurate 
subscriber records. For example, in 1997, Mobisel installed a new billing and 
collection system which created a more accurate subscriber database. As a 
result, Mobisel was required to write down a portion of its subscriber base.

CUSTOMER RISKS; SUBSCRIBER FRAUD

     Customer attrition (commonly referred to in the telecommunications 
industry as "churn") results in the loss of future revenue from subscribers 
whose service is disconnected and the inability to recoup any unrecovered 
costs incurred in acquiring the subscriber, typically equipment subsidies and 
dealer commissions. Churn occurs for several reasons, including primarily 
disconnection by a company for non-payment of bills and to a lesser extent 
disconnection by the subscriber who chooses to switch to a competing service 
or terminate service, particularly when two or more vendors offer the same 
wireless service in a single market. The Company expects that as the 
subscriber bases of the Operating Companies grow and the industry matures, 
the churn rates of the Operating Companies may increase. The inability of the 
Operating Companies to maintain their churn at a relatively low level could 
have a material adverse effect on the Operating Companies and the Company. In 
addition, because it may be more difficult for Operating Companies to 
ascertain the creditworthiness of potential customers as a result of the 
early stage of development of the Markets, the Operating Companies may 
experience a higher level of bad debt expense than otherwise would be the 
case. The failure of the Operating Companies to effectively manage customer 
credit risk would have a material adverse effect on the Company.

     All cellular networks are subject to fraud. Fraud can take many forms, 
including subscribers misrepresenting their backgrounds or financial 
capabilities to obtain cellular service ("subscription fraud"), persons using 
sophisticated technology to steal subscriber identification codes for use on 
stolen cellular phones ("cloning") and users employing false identification 
to roam into a network ("roaming fraud"). All types of cellular fraud are 
found in developing countries. In the Markets, it is often more difficult to 
ascertain the creditworthiness of potential customers than in the U.S., and 
as a result, subscription fraud can be particularly wide spread. While the 
Company believes it is taking reasonable steps to forestall fraud in its 
networks, there can be no assurance that fraud will not substantially effect 
the revenues or profits of one or more Operating Companies.

CONTROL OF THE COMPANY

     As of March 15, 1998, Vanguard beneficially owned approximately 24.2% of 
the Company's equity on a fully diluted basis. Vanguard has made available to 
the Company its expertise in the formation, development and operation of 
wireless communications businesses, including the identification and 
evaluation of wireless communications opportunities, the review of business 
and technical plans, the training of operating company personnel and the 
obtaining of project-level financing. Vanguard has the right to elect three 
of the ten members of the Company's Board of Directors and currently has two 
representatives on such Board, including Haynes G. Griffin, Chairman of the 
Board of Directors (but excluding Van E. Snowdon, who ceased serving as 
President of Vanguard Communications, Inc., a subsidiary of Vanguard, in 
connection with being elected President and Chief Executive Officer of the 
Company in March 1998). As a result, Vanguard may have the ability to control 
the Company effectively and to direct its business and affairs. See 
"--Conflicts of Interest," "Management--Arrangements Concerning Election of 
Directors" and "--Certain Relationships and Related 
Transactions--Transactions with Vanguard." In addition, such concentration of 
ownership may have the effect of delaying or preventing a change in control 
of the Company and could have an adverse effect on the market price of the 
Class A Common Stock.

                                  55
<PAGE>

CONFLICTS OF INTEREST

     Vanguard is not precluded from competing with the Company by itself or 
through affiliates by developing, owning and/or operating international 
wireless communications businesses, including businesses that use the same or 
similar technologies or provide the same services as do the Operating 
Companies. Further, Vanguard is not precluded from investing separately from 
the Company in its joint ventures. For example, in April 1997, Vanguard 
purchased a 7% equity interest in Star Digitel directly from the Company's 
local partner in Star Digitel, and, in August 1997, Vanguard invested with 
the Company in Mobilink and acquired a 6% indirect interest therein. 
See "Business--Operating Companies--China-Great Wall Cellular" and 
"--Pakistan-Mobilink."

     Vanguard has from time to time engaged in transactions with the Company 
or its subsidiaries, including debt and equity financing with the Company and 
guarantees of debt financing at the Operating Company level. In addition, 
until his election as the Company's President and Chief Executive Officer in 
March 1998, Van E. Snowdon served as the President of Vanguard 
Communications, Inc., a subsidiary of Vanguard. See also 
"Management--Arrangements Concerning Elections of Directors" regarding 
Vanguards' right to elect three of the ten members of the Company's Board of 
Directors and "--Certain Relationships and Related Transactions" (including 
"--Transactions with Vanguard"). Although the directors designated by 
Vanguard may abstain from voting on matters in which the interests of the 
Company and Vanguard are in conflict, they are not obligated to do so, and 
the Company has not adopted any formal policies or procedures designed to 
prevent actual conflicts of interest from occurring. As a result, the 
presence of potential or actual conflicts could affect the process or outcome 
of deliberations of the Board of Directors. There can be no assurance that 
such conflicts of interest will not have a material adverse effect on the 
financial condition and results of operations of the Company.

     Other stockholders of the Company and their affiliates have engaged, or 
may engage, in transactions with the Company or its subsidiaries and 
participate in wireless communications businesses that are competitive with 
those of the Company. See "Certain Relationships and Related Transactions."

DEPENDENCE ON KEY PERSONNEL; RECENT MANAGEMENT CHANGES

     The success of the Company and its growth strategy depends in large part 
on the ability of the Company to attract and retain key management, marketing 
and operating personnel at the Company and the Operating Companies. Since 
December 31, 1997, the Company has undergone a series of personnel changes, 
including the departure from the Company of various former management 
personnel as a result of voluntary and involuntary terminations. The Company 
believes that these management changes will not have a material adverse 
effect on the Company, particularly in light of the recent hiring of Van E. 
Snowdon as President and Chief Executive Officer and Steven D. Overly as 
Senior Vice President and General Counsel of the Company and the continuing 
involvement of John D. Lockton in the operations of the Company in his 
capacity as Vice Chairman of the Board. See "Business--Recent 
Developments--Management Changes."  The Company has also adopted an employee 
retention program to retain its key employees. However, there can be no 
assurance that such employee retention program will be successful or that the 
recent personnel changes will not have a material adverse effect on the 
Company.

RISKS INHERENT IN GROWTH STRATEGY

     The Company has grown rapidly since its inception and, as of December 
31, 1997, had Operating Companies or other investments in 15 foreign 
countries. Subject to the availability of additional financing and other 
factors, the Company may make additional investments in wireless projects in 
other foreign countries. This strategy entails risks inherent in assessing 
the value, strengths and weaknesses of development opportunities, in 
evaluating the costs and uncertain returns of building and expanding the 
facilities for operating systems and in integrating and managing the 
operations of additional operating systems. The Company's growth strategy 
will place significant demands on the Company's operational, financial and 
marketing resources and on its management. Any failure to manage the Company 
effectively could have a material adverse effect on the Company.

                                  56
<PAGE>

FOREIGN CORRUPT PRACTICES ACT

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

NO CASH DIVIDENDS ON COMMON STOCK

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

IMPORT DUTIES ON NETWORK EQUIPMENT AND HANDSETS

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

RADIO FREQUENCY EMISSION CONCERNS

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

YEAR 2000 COMPLIANCE

     Many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field. Beginning in 
the year 2000, these date code fields will need to accept four digit entries 
to distinguish 21st century dates from 20th century dates. As a result, in 
less than two years, computer systems and software used by many companies, 
including the billing systems used by the Operating Companies, may need to be 
upgraded to comply with such "Year 2000" requirements. The Operating 
Companies are in the process of evaluating and, in some cases, their 
potential Year 2000 problems. The Company does not believe that resolution of 
Year 2000 problems at Mobisel, Via 1 or RMD will require significant 
financial or personnel resources. However, the Company has not yet completed 
its review of potential Year 2000 problems at Star Digitel or Mobilink, and 
accordingly the amount of financial and personnel resources that will be 
required to address such problems remains uncertain.

TAX RISKS

     The Company's operating subsidiaries and affiliates (including the 
Operating Companies) will be subject to tax in the jurisdictions in which 
they operate. The complexity of the tax rules, the application of the rules 
to the

                                  57
<PAGE>

Company's business model and the sophistication of the administration of the 
tax rules varies across jurisdictions and could lead to differing effective 
tax rates in various jurisdictions.

     Distributions of earnings and other payments received by the Company 
from such operating subsidiaries and affiliates are likely to be subject to 
local jurisdiction withholding taxes. In addition, such distributions and 
payments will be subject to U.S. income taxes. In general a U.S. corporation 
may claim a foreign tax credit against its federal income tax expense for 
foreign withholding taxes and foreign taxes paid directly by corporate 
entities in which the Company owns 10% or more of the voting stock. The 
ability to claim foreign tax credits is subject to numerous limitations, and 
the Company may incur incremental U.S. tax costs as a result of these 
limitations.

     Some of the Company's foreign subsidiaries may be classified as 
controlled foreign corporations or foreign personal holding companies. In 
certain cases the Company may be required to include in its income for U.S. 
tax purposes a proportionate share of earnings of these subsidiaries prior to 
receiving distributions or payments from these subsidiaries.

     Some of the Company's foreign subsidiaries may be classified as passive 
foreign investment companies (PFICs). In such case, the effective U.S. tax 
rate, on earnings distributions received by the Company from a PFIC, could 
increase above the U.S. tax rate otherwise applicable. Similarly, the 
effective U.S. tax rate, on gains recognized from the disposal of shares in 
the PFIC, could increase above the U.S. tax rate otherwise applicable. 
Alternatively, the Company may elect to include in its income for U.S. tax 
purposes a proportionate share of earnings of these PFIC subsidiaries prior 
to receiving distributions or payments from these subsidiaries.

                              58
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

     INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                                                                          PAGE
                                                                                                                         --------
<S>                                                                                                                      <C>
International Wireless Communications Holdings, Inc. and Subsidiary
  Independent Auditors' Reports...................................................................................         F-2
  Consolidated Balance Sheets as of December 31, 1996 and 1997....................................................         F-5
  Consolidated Statements of Operations for the years ended December 31, 1995, 1996 and 1997......................         F-6
  Consolidated Statements of Stockholders' Deficit for the years ended December 31, 1995, 1996 and 1997...........         F-7
  Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1996 and 1997......................         F-8
  Notes to Consolidated Financial Statements......................................................................        F-10
</TABLE>

           International Wireless Communications Holdings, Inc. ("IWC 
Holdings") is a holding company which conducts all of its operations through 
its sole direct subsidiary, International Wireless Communications, Inc. and 
its subsidiaries ("IWC"). IWC Holdings had no assets, liabilities or 
operations other than its investment in IWC as of December 31, 1995. Separate 
consolidated financial statements of IWC would be identical to the 
consolidated financial statements of IWC Holdings as of December 31, 1995. As 
of December 31, 1996, the financial statements of IWC Holdings and IWC are 
identical except for the Debt Offering (as defined herein), related warrants 
and debt issuance costs (collectively the "1996 Adjustments") which are 
recorded at the IWC Holdings level. IWC has executed an intercompany note to 
IWC Holdings in a principal amount equal to the net proceeds of the Debt 
Offering. As of December 31, 1997, the financial statements of IWC Holdings 
and IWC are identical except for the 1996 Adjustments and the IWCH Pakistan 
Facility (as defined herein), which are recorded at the IWC Holdings level. 
IWC has executed an intercompany note to IWC Holdings in a principal amount 
equal to the net proceeds of the IWCH Pakistan facility and the value of the 
Common Stock issued in connection with the purchase of an equity interest in 
International Wireless Communications Pakistan Limited. Although separate 
financial statements of IWC are required by Regulation S-X, they are not 
included as management believes they would not be meaningful due to the 
separately identifiable differences described above.

                                     F-1

<PAGE>


                     INDEPENDENT AUDITORS' REPORT

The Board of Directors

International Wireless Communications Holdings, Inc.:

           We have audited the accompanying consolidated balance sheets of 
International Wireless Communications Holdings, Inc. and subsidiary ("IWC 
Holdings" or the "Company") as of December 31, 1996 and 1997, and the related 
consolidated statements of operations, stockholders' deficit, and cash flows 
for each of the years in the three-year period ended December 31, 1997. These 
consolidated financial statements are the responsibility of IWC Holdings' 
management. Our responsibility is to express an opinion on these consolidated 
financial statements based on our audits. We did not audit the financial 
statements of PT Rajasa Hazanah Perkasa ("RHP"), an investment which is 
reflected in the accompanying consolidated financial statements using the 
equity method of accounting as of and for the year ended December 31, 1996 
(see Note 5). The Company's investment in RHP as of December 31, 1996 was 
$28,030,000 and its equity in losses of RHP was $4,746,000 for the year ended 
December 31, 1996. In addition, we did not audit the financial statements of 
Star Digitel Limited ("Star Digitel"), an investment which is reflected in 
the accompanying consolidated financial statements using the equity method of 
accounting as of and for the year ended December 31, 1997 (See Note 5). The 
Company's investment in Star Digitel as of December 31, 1997 was $19,122,000 
and its equity in losses of Star Digitel was $8,531,000 for the year ended 
December 31, 1997. These statements were audited by other auditors whose 
reports have been furnished to us and our opinion, insofar as it relates to 
the amounts included for RHP as of and for the year ended December 31, 1996 
and Star Digitel as of and for the year ended December 31, 1997, is based on 
the reports of other auditors.

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

           In our opinion, based on our audit and the reports of other 
auditors for 1996 and 1997, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position of IWC 
Holdings as of December 31, 1996 and 1997, and the results of their 
operations and their cash flows for each of the years in the three-year 
period ended December 31, 1997, in conformity with generally accepted 
accounting principles.

           The accompanying consolidated financial statements have been 
prepared assuming that the Company will continue as a going concern. As 
discussed in Note 1 to the consolidated financial statements, the Company has 
suffered recurring losses from operations and has a net capital deficiency 
that raise substantial doubt about its ability to continue as a going 
concern. Management's plans in regard to these matters are also described in 
Note 1. The consolidated financial statements do not include any adjustments 
that might result from the outcome of this uncertainty.

                                             KPMG Peat Marwick LLP

Mountain View, California
April 10, 1998


                                        F-2

<PAGE>



                        INDEPENDENT AUDITORS' REPORT

REPORT NO. 27181S

The Board of Directors and Stockholders
PT RAJASA HAZANAH PERKASA AND SUBSIDIARY


           We have audited the consolidated balance sheets of PT Rajasa 
Hazanah Perkasa and Subsidiary as of December 31, 1996 and the related 
consolidated statements of income and deficit and cash flows for the year 
then ended (not presented separately herein). These financial statements are 
the responsibility of the Company's management. Our responsibility is to 
express an opinion on these financial statements based on our audits.

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

           In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position of PT 
Rajasa Hazanah Perkasa and its subsidiary as of December 31, 1996 and the 
results of their operations and their cash flows for the year then ended in 
conformity with generally accepted accounting principles in the Republic of 
Indonesia.

           Generally accepted accounting principles in Indonesia vary in 
certain respects with those in the United States of America. A description of 
the significant differences between those two generally accepted accounting 
principles and the approximate effects of those differences on net income and 
stockholders' equity are set forth in Notes 22 and 23 to the consolidated 
financial statements (not presented separately herein).

PRASETIO, UTOMO & CO.


Drs M.P. Sibarani
License No. SI.570/MK.17/1993

March 24, 1997

                                     F-3

<PAGE>




                         INDEPENDENT AUDITORS' REPORT

To the shareholders of Star Digitel Limited

           We have audited the consolidated balance sheets of Star Digitel 
Limited and subsidiaries as of December 31, 1997, and the related 
consolidated profit and loss account and cash flow statement for the year 
then ended (not presented separately herein). These financial statements are 
the responsibility of the Company's management. Our responsibility is to 
express an opinion on these financial statements based on our audit.

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

           In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position of 
Star Digitel Limited and subsidiaries as of December 31, 1997, and the 
results of their operations and their cash flows for the year then ended in 
conformity with generally accepted accounting principles in Hong Kong.

           Generally accepted accounting principles in Hong Kong vary in 
certain respects with those in the United States of America. A description of 
the significant differences between those two generally accepted accounting 
principles and the approximate effects of those differences on net loss and 
shareholders' deficit are set forth in Note 23 to the consolidated financial 
statements (not presented separately herein).




Hong Kong,                                   Arthur Andersen & Co.
April 13, 1998.







                                     F-4

<PAGE>




     INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 1996 AND 1997
                      (In thousands, except share data)

<TABLE>
<CAPTION>
                                         ASSETS                                                   1996                  1997
                                                                                              --------------        --------------
<S>                                                                                           <C>                   <C>
Current assets:
   Cash and cash equivalents (including restricted cash of $1,500 in 1997)...................   $  41,657                 4,410
   Investments in affiliates held for sale...................................................       2,062                 1,873
   Other current assets......................................................................      10,689                10,533
                                                                                              --------------        --------------
     Total current assets....................................................................      54,408                16,816
Property and equipment, net..................................................................      18,426                22,406
Notes receivable from affiliate..............................................................          --                 4,583
Investments in affiliates....................................................................      68,394                57,432
Telecommunication licenses and other intangibles, net........................................      18,484                12,521
Debt issuance costs, net.....................................................................       6,431                 7,961
License deposit and other assets ............................................................       3,215                 1,650
                                                                                              --------------        --------------
      Total assets..........................................................................    $ 169,358               123,369
                                                                                              --------------        --------------
                                                                                              --------------        --------------

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

Current liabilities:
   Accounts payable and accrued expenses..................................................      $   7,313                11,012
   Bank liability..........................................................................            --                 5,000
                                                                                              --------------        --------------
      Total current liabilities............................................................         7,313                16,012
  Long-term debt, net......................................................................        75,466               123,072
                                                                                              --------------        --------------
      Total liabilities....................................................................        82,779               139,084
  Commitments and contingencies (Note 13)
  Minority interests in consolidated subsidiaries..........................................         5,685                 8,675
  Redeemable convertible preferred stock, $.01 par value per share;
      21,541,480 and 33,231,480 shares designated in 1996 and 1997,
      respectively; 15,973,200 and 15,981,876 shares issued and
      outstanding in 1996 and 1997, respectively; net of note receivable from
      stockholder of $26 in 1996 and 1997; liquidation and minimum
      redemption value of $107,459.........................................................       103,021               105,306
  Stockholders' deficit:
      Preferred stock, $.01 par value per share;
        6,768,520 shares designated; 933,200 shares issued and
        outstanding in 1996 and 1997; liquidation value of $793............................             9                     9
      Common stock, $.01 par value per share; 26,000,000 and 66,000,000
        shares authorized in 1996 and 1997, respectively; 636,720 and 1,310,230
        shares issued and outstanding in 1996 and 1997, respectively.......................             6                    13
Additional paid-in capital.................................................................        31,060                52,937
Note receivable from stockholder...........................................................          (152)                 (152)
Deferred compensation......................................................................            --                (1,209)
Unrealized gain on investments.............................................................            68                    --
Cumulative translation adjustment..........................................................           271                (1,970)
Accumulated deficit........................................................................       (53,389)             (179,324)
                                                                                              --------------        --------------
      Total stockholders' deficit..........................................................       (22,127)             (129,696)
                                                                                              --------------        --------------
      Total liabilities, minority interests, redeemable
        convertible preferred stock and stockholders' deficit..............................     $ 169,358               123,369
                                                                                              --------------        --------------
                                                                                              --------------        --------------
</TABLE>
                 SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                          F-5

<PAGE>

      INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                   (In thousands)

<TABLE>
<CAPTION>
                                                                                      1995            1996            1997
                                                                                   ------------    ------------   -------------
<S>                                                                                <C>             <C>            <C>
Operating revenues.........................................................        $        --             869           3,275
Cost of revenues...........................................................                 --           1,948           3,471
                                                                                   ------------    ------------   -------------
                                                                                            --          (1,079)           (196)

Operating expenses:
   Selling, general and administrative expenses............................              6,365          17,333          31,174
   Equity in losses of affiliates..........................................              3,756          11,258          42,584
   Impairment in asset value...............................................                 --             525          24,000
   Minority interests in losses of consolidated subsidiaries...............                 --            (275)         (1,148)
                                                                                   ------------    ------------   -------------
     Loss from operations..................................................            (10,121)        (29,920)        (96,806)
Other income (expense):
   Interest income.........................................................                232           1,823           1,599
   Interest expense........................................................             (1,354)         (6,790)        (27,524)
   Other...................................................................                (28)         (1,021)           (919)
                                                                                   ------------    ------------   -------------

Net loss...................................................................        $   (11,271)        (35,908)       (123,650)
                                                                                   ------------    ------------   -------------
                                                                                   ------------    ------------   -------------
</TABLE>

      SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                     F-6

<PAGE>


       INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                  YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                (In thousands)

<TABLE>
<CAPTION>
                                         PREFERRED STOCK           COMMON STOCK          ADDITIONAL  NOTE RECEIVABLE
                                      ---------------------    ---------------------       PAID-IN        FROM 
                                        SHARES       AMOUNT        SHARES      AMOUNT      CAPITAL    STOCKHOLDER
                                        ------       ------        ------      -------     -------   -------------
<S>                                   <C>            <C>          <C>          <C>         <C>       <C>
Balances as of December 31, 1994...   1,200,000      $   12         76,080      $   1          625            (152)
Issuance of common stock...........          --          --        251,920          2          124              --
Accretion of redeemable
  convertible preferred stock......          --          --             --         --           --              --
Foreign currency translation.......          --          --             --         --           --              --
Net loss...........................          --          --             --         --           --              --
                                      ---------     -------    -----------    -------   ----------   -------------

Balances as of December 31, 1995...   1,200,000          12        328,000          3          749            (152)
Conversion of Series A
  preferred stock to common stock..    (266,800)         (3)       266,800          3           --              --
Exercise of stock options..........          --          --         41,920         --           11              --
Issuance of common stock warrants..          --          --             --         --       30,300              --
Unrealized gain on investments.....          --          --             --         --           --              --
Foreign currency translation.......          --          --             --         --           --              --
Accretion of redeemable
  convertible preferred stock......          --          --             --         --           --              --
Net loss...........................          --          --             --         --           --              --
                                      ---------     -------    -----------    -------   ----------   -------------

Balances as of December 31, 1996...     933,200           9        636,720          6       31,060            (152)
Exercise of stock options..........          --          --        180,000          2           43              --

Issuance of common stock warrants..          --          --             --         --       11,701              --
Issuance of common stock...........          --          --        493,510          5        6,154              --
Value assigned to Debt
  Conversion Feature of IWCH
  Pakistan Facility................          --          --             --         --        3,979              --
Deferred compensation..............          --          --             --         --           --              --

Amortization of deferred 
    compensation...................
Net warrant exercises of
    redeemable convertible                   --          --             --         --           --              --
    preferred stock................
Accretion of redeemable
    convertible preferred stock....          --          --             --         --           --              --
Unrealized loss on investments.....          --          --             --         --           --              --
Foreign currency translation.......          --          --             --         --           --              --
Net loss...........................          --          --             --         --           --              --
                                      ---------     -------    -----------    -------   ----------   -------------
Balances as of December 31, 1997...     933,200     $     9      1,310,230      $  13       52,937            (152)
                                      ---------     -------    -----------    -------   ----------   -------------
                                      ---------     -------    -----------    -------   ----------   -------------


<CAPTION>
                                                          UNREALIZED       CUMULATIVE                          TOTAL
                                          DEFERRED      GAIN (LOSS) ON    TRANSLATION       ACCUMULATED    STOCKHOLDERS'
                                        COMPENSATION      INVESTMENTS      ADJUSTMENT         DEFICIT         DEFICIT
                                       -------------    --------------    ------------      -----------    -------------
<S>                                     <C>             <C>               <C>               <C>             <C>
Balances as of December 31, 1994...               --               --              --          (3,640)          (3,154)
Issuance of common stock...........               --               --              --              --              126
Accretion of redeemable
  convertible preferred stock......               --               --              --            (459)            (459)
Foreign currency translation.......               --               --              (1)             --               (1)
Net loss...........................               --               --              --         (11,271)         (11,271)
                                       -------------    -------------   -------------    ------------   --------------
                                                                                                                         
Balances as of December 31, 1995...               --               --              (1)        (15,370)         (14,759)
Conversion of Series A                                                                                                   
  preferred stock to common stock..               --               --              --              --               --
Exercise of stock options..........               --               --              --              --               11
Issuance of common stock warrants..               --               --              --              --           30,300
Unrealized gain on investments.....               --               68              --              --               68
Foreign currency translation.......               --               --             272              --              272
Accretion of redeemable                                                                                                  
  convertible preferred stock......               --               --              --          (2,111)          (2,111)
Net loss...........................               --               --              --         (35,908)         (35,908)
                                       -------------    -------------   -------------    ------------   --------------
                                                                                                                         
Balances as of December 31, 1996...               --               68             271         (53,389)         (22,127)
Exercise of stock options..........               --               --              --              --               45
                                                                                                                         
Issuance of common stock warrants..               --               --              --              --           11,701
Issuance of common stock...........               --               --              --              --            6,159
Value assigned to Debt                                                                                                   
  Conversion Feature of IWCH                                                                                             
  Pakistan Facility................               --               --              --              --            3,979
Deferred compensation..............          (1,453)               --              --              --           (1,453)
Amortization of deferred 
    compensation...................              244               --              --              --              244
Net warrant exercises of
    redeemable convertible                        --               --              --             (81)             (81)
    preferred stock................                                                                                      
Accretion of redeemable                                                                                                  
    convertible preferred stock....               --               --              --          (2,204)          (2,204)
Unrealized loss on investments.....               --             (68)              --              --              (68)
Foreign currency translation.......               --               --          (2,241)             --           (2,241)
Net loss...........................               --               --              --        (123,650)        (123,650)
                                       -------------    -------------   -------------    ------------   --------------
Balances as of December 31, 1997...           (1,209)              --          (1,970)       (179,324)        (129,696)
                                       -------------    -------------   -------------    ------------   --------------
                                       -------------    -------------   -------------    ------------   --------------
</TABLE>

           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                     F-7

<PAGE>


        INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                            1995             1996         1997
                                                                                            ----             ----         ----
<S>                                                                                      <C>               <C>          <C>
Cash flows from operating activities:
   Net loss.............................................................................. $(11,271)        (35,908)     (123,650)
   Adjustments to reconcile net loss to net cash used in operating activities:
        Depreciation.....................................................................       37             732         1,885
        Amortization of telecommunication licenses and other intangibles.................      294           1,103         1,249
        Amortization of debt issuance costs..............................................       --             369         9,196
        Amortization of long-term debt discount..........................................       --           5,764        17,319
        Amortization of deferred compensation............................................       --              --           244
        Equity in losses of affiliates...................................................    3,756          11,258        42,584
        Gain on sale of affiliate........................................................       --              --       (1,156)
        Accrual of interest on long-term debt............................................       --              --         1,287
        Minority interests in losses of consolidated subsidiaries........................       --             275         1,148
        Issuance of common stock warrants................................................       --              --        10,248
        Impairment in asset value........................................................       --             525        24,000
        Unrealized gain (loss) on investments............................................       --              68          (68)
        Changes in operating assets and liabilities:
          Other current assets...........................................................     (350)         (2,480)       (6,377)
          Accounts payable and accrued expenses..........................................    5,557           1,246         3,699
            Net cash used in operating activities........................................   (1,977)        (17,048)      (18,392)

Cash flows from investing activities:
   Issuance of notes receivable from affiliates                                                 --          (1,058)       (4,873)
   Repayment of notes receivable from affiliates.........................................     (113)            583           635
   Issuance of notes receivable..........................................................       --          (3,231)         (563)
   Repayment of notes receivable.........................................................       --           1,800         1,496
   Advances to affiliate.................................................................     (728)         (1,921)           --
   Investments in affiliates held for sale...............................................       --              --          (211)
   Proceeds from sale of affiliate.......................................................       --              --         3,218
   Purchases of property and equipment...................................................   (4,218)         (8,657)       (5,865)
   Purchase of subsidiary................................................................       --          (3,198)           --
   Investments in affiliates.............................................................  (19,589)        (31,943)      (41,411)
   Minority interest in consolidated subsidiaries........................................       --           5,410         1,842
   Purchase of telecommunication licenses and other intangibles..........................  (12,153)         (5,772)           --
   License deposits and other assets.....................................................       70          (8,197)        6,820
            Net cash used in investing activities........................................  (36,731)        (56,184)      (38,912)

Cash flows from financing activities:
   Proceeds from issuance of notes payable...............................................   28,138              --            --
   Repayment of notes payable............................................................   (2,050)         (4,000)           --
   Proceeds from revolving credit facility...............................................       --           7,000            --
   Repayment of revolving credit facility................................................       --          (7,000)           --
   Net proceeds from issuance of stock and warrants......................................   27,720          30,300            --
   Exercise of stock options.............................................................       --              11            45
   Debt issuance costs...................................................................       --          (6,800)       (6,747)
   Proceeds from issuance of long-term debt..............................................       --          69,702        29,000
            Net cash provided by financing activities ...................................   53,808          89,213        22,298

Effect of foreign currency exchange rates on cash and cash equivalents...................       --             278        (2,241)

Net increase (decrease)  in cash and cash equivalents....................................   15,100          16,259       (37,247)
Cash and cash equivalents at beginning of year ..........................................   10,298          25,398        41,657
Cash and cash equivalents at end of year ................................................ $ 25,398          41,657         4,410
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------
Supplemental cash flow information
     Cash paid for interest ............................................................. $    949             662           --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------
</TABLE>
                                             F-8

<PAGE>


       INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                          (In thousands)





<TABLE>
<S>                                                                                      <C>            <C>             <C>
Noncash financing and investing activities:

   Conversion of loans to equity...................................................      $   24,307           2,052            --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Conversion of note receivable to investment in affiliate........................      $    2,020              --            --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Net warrant exercises of redeemable convertible preferred stock ................      $       --              --            81
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Issuance of common stock warrants in connection with Pakistan Bridge Facility, 
   Mobilink Finder's Fee and Vanguard/Star Digitel Guarantee..........................   $      --               --         7,967
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Value assigned to Debt Conversion Feature of IWCH Pakistan Facility.............      $      --               --         3,979
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Exchange of redeemable convertible preferred stock for investments in 
   affiliates and telecommunication licenses and other intangibles................       $   25,000              --            --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Exchange of common stock for investment in subsidiary/affiliate.................      $      125              --         6,159
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Note payable assumed in connection with an affiliate............................      $    4,000              --            --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Effect of net assets of subsidiary previously accounted for by the 
   equity method...................................................................      $       --           4,395            --
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Accretion of redeemable convertible preferred stock.............................      $      459           2,111         2,204
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Vanguard Warrant/Option Exchange................................................      $       --              --         3,734
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------

   Bank liability assumed in connection with an affiliate..........................      $       --              --         5,000
                                                                                         ----------      ----------     ---------
                                                                                         ----------      ----------     ---------
</TABLE>
           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                        F-9

<PAGE>


      INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARY
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

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

NATURE OF BUSINESS

     International Wireless Communications Holdings, Inc. ("IWC Holdings") 
was incorporated in Delaware in July 1996 as a holding company whose primary 
assets are all of the issued and outstanding capital stock of International 
Wireless Communications, Inc. ("IWC") and notes receivable from IWC (IWC 
Holdings and IWC are collectively referred to herein as the "Company"). IWC 
was incorporated in Delaware in January 1992 and develops, owns and operates 
wireless communications companies in major emerging markets in Asia and Latin 
America. The Company, together with its strategic partners, provides cellular 
services in China, Pakistan and Indonesia, and is developing a digital 
enhanced specialized mobile radio ("ESMR") network in Brazil.

     The Company has suffered significant recurring losses from operations 
and has a capital deficiency that raise substantial doubt about its ability 
to continue as a going concern. To date, the Company has invested principally 
in local wireless businesses ("LWBs") that are in their early stages of 
development, have a limited number of subscribers and are expected to incur 
losses for a substantial period of time. The Company's losses have been 
funded from cash previously raised through the sale of debt and equity 
securities. The losses of the LWBs in which the Company is a significant 
shareholder have been funded principally from equity infusions and advances 
from the Company or other shareholders of the LWB. Pursuant to their business 
strategies, all of the Company's subsidiaries and affiliates expect to 
continue making expenditures to build-out their telecommunications networks 
and fund operating losses which will require substantial amounts of cash. 
Each of the Company's LWBs intends to raise the required level of cash 
through combinations of capital infusions from existing or new shareholders, 
equipment financing from equipment vendors or lending banks and/or debt 
financing. The Company is committed to participate in such financings, when 
necessary, for its core investments in China, Pakistan, Indonesia and Brazil 
in order to maintain its current level of ownership, and in certain cases, to 
increase its level of ownership. In order to obtain the additional funds it 
needs to continue operating at planned levels, the Company will need 
substantial funds from additional debt and/or equity financings. The 
Company's plans with respect to obtaining additional capital include 
additional shareholder investment of which $10,000,000 was obtained in March 
1998, (see Note 16) and sale of non-strategic wireless investments. In recent 
months, the Company and its LWBs have experienced significant difficulties in 
obtaining adequate financing to fund operations. As a result, the majority of 
the LWB's business plans have been delayed. Additional delays may negatively 
affect the ability of the Company to realize the full value of the Company's 
investments. The Company has further retained a financial advisor for the 
purpose of evaluating its strategic and financial alternatives. There can be 
no assurance that the Company or any of its interests in any of its LWBs can 
be sold or that the Company or its LWBs can obtain any additional debt or 
equity financing. If the Company cannot obtain additional financing, the 
Company will have to significantly curtail its operations including delaying, 
scaling back or eliminating one or more of its projects or merging, selling, 
liquidating or suffering dilution in one or more of its investments. The 
failure of the Company to participate in capital calls for Star Digitel 
Limited ("Star Digitel") and International Wireless Communications Pakistan 
Limited ("IWCPL") in particular will result in substantial dilution. The 
curtailment of operations could result in the loss or revocation of 
telecommunication licenses held by the LWBs.

     In connection with the Debt Offering (see Note 9), IWC Holdings and IWC 
completed a reorganization in which IWC became a wholly owned subsidiary of 
IWC Holdings through the conversion of each share of the then-outstanding 
capital stock of IWC into 40 shares of the corresponding class and series of 
stock of IWC Holdings (the "Stock Conversion"). All data related to shares 
and per share amounts for all periods presented have been adjusted to reflect 
the effect of the reorganization and the Stock Conversion.

     Consistent with industry practice, the Company considers itself to be 
operating in one business segment.

                              F-10

<PAGE>

BASIS OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts 
of IWC, its wholly owned subsidiary, Servicos de Radio Comunicacoes Ltda. 
("SRC"), various offshore holding companies, and a majority owned subsidiary, 
PeruTel S.A. ("PeruTel"). The consolidated financial statements for the years 
ended December 31, 1996 and 1997 also include the accounts of TeamTalk 
Limited ("TeamTalk"), a wholly-owned subsidiary, since April 30, 1996, the 
effective date of the acquisition (see Note 5); Wireless Data Services, Ltd. 
("WDS") since February 1996 (64% interest as of December 31, 1997); Star 
Telecom Overseas (Cayman Islands) Limited ("STOL") since August 1996 (56% 
interest as of December 31, 1997) and Uniworld S.A. (formerly Promociones 
Telefonicas S.A. ("Protelsa")) ("Uniworld") since December 1996 (66% interest 
as of December 31, 1997). All significant intercompany accounts and 
transactions have been eliminated in consolidation.

FOREIGN CURRENCY TRANSLATION

     The functional currency for the Company's foreign operating entities is 
the applicable local currency, except for those entities located in highly 
inflationary countries. Translation from the applicable foreign currencies to 
U.S. dollars is performed for monetary assets and liabilities using current 
exchange rates in effect at the balance sheet date and for revenue and 
expense accounts using a weighted average exchange rate during the period. 
The gains or losses, net of applicable deferred income taxes, resulting from 
such translation, if material, are included in stockholders' deficit. Gains 
or losses resulting from foreign currency transactions are included in other 
income. Foreign currency gains or losses associated with transactions of 
investments accounted for under the equity method of accounting are reflected 
as a component of equity in gains or losses from affiliates. For 
non-operating foreign investees and for the Company's investee in Brazil, a 
highly inflationary country, the functional currency is the U.S. dollar. 
Remeasurement adjustments for foreign entities, where the U.S. dollar is the 
functional currency, and exchange gains and losses arising from transactions 
denominated in a currency other than the functional currency, are included in 
other income and are not material in any of the years presented.

REVENUE RECOGNITION

     Revenue includes primarily access and usage charges for subscriber units 
under service agreements with the Company's consolidated subsidiaries that 
have commenced operations. The terms of these service agreements range from 
monthly to 36 month periods.

CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid instruments with a maturity of 
90 days or less at the time of acquisition to be cash equivalents.

     The Company has classified its investments in certain debt and equity 
securities as "available for sale". Such investments are recorded at fair 
value, with unrealized gains and losses reported as a separate component of 
stockholders' deficit. The cost of securities sold is based upon the specific 
identification method.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at original cost. Depreciation is 
computed using the straight-line method over the estimated useful lives of 
the respective assets, generally three to five years for 
non-telecommunication equipment and ten years for telecommunication equipment.

INVESTMENTS IN AFFILIATED COMPANIES

     Investments in affiliated companies consist of interests in entities 
that have been awarded telecommunication licenses to provide various wireless 
telecommunication services.

     The cost method of accounting is used for the Company's investments in 
affiliated companies where the Company's voting interest is generally less 
than 20% and the Company does not exert significant influence. Under the cost 
method, the investment is recorded at cost, and income is recognized only to 
the extent distributed by the investee as dividends. No such dividends were 
declared or distributed for any of the years presented. Write-downs to the 

                              F-11

<PAGE>

recorded historical cost are recognized when the Company believes that an 
other than temporary decline in value of the investment has occurred.

     Where the Company's voting interest is 20% to 50% and the Company does 
not exercise control, the equity method of accounting is used. Under this 
method, the investment, originally recorded at cost, is adjusted to recognize 
the Company's share of net earnings or losses of the investee, limited, in 
the case of losses, to the extent of the Company's investment therein (except 
where the Company has extended guarantees of debt of the affiliate) and the 
amortization of telecommunication licenses and other intangibles, if any. 
Write-downs from the adjusted historical cost are made when the Company 
believes an impairment in value has occurred. The amount of the purchase 
price that exceeded the fair value of the Company's percentage ownership of 
the equity investee's tangible assets at the date of acquisition reflects the 
existence of intangible assets of the equity investee. The primary intangible 
asset of each equity investee consists of the equity investee's 
telecommunication licenses or rights to participate in such licenses. Amounts 
attributable to other intangibles, such as workforce, customer lists, and 
agreements with local companies for transmitter and antenna locations, are 
not material. Accordingly, the Company has accounted for the excess purchase 
price as attributable primarily to telecommunication licenses and 
participation rights and amortizes such intangibles generally over a period 
of up to 20 years commencing upon the date of completion of the acquisition 
or commencement of project operations in the case of Star Digitel. To the 
extent that goodwill exists, the Company believes that the difference in 
amortization lives between telecommunication licenses and goodwill would not 
have a material effect on the accompanying consolidated financial statements. 
In some cases, the terms of the licenses held by the equity investees are 
less than twenty years. However, the Company believes that it will be able to 
renew the licenses indefinitely if it builds out the infrastructure and 
establishes commercial service. The costs of license renewal are expected to 
be nominal.

     The Company consolidates entities it controls, generally through greater 
than 50% ownership interest.

TELECOMMUNICATION LICENSES AND OTHER INTANGIBLES

     The Company has acquired majority ownership interest in various LWBs. 
These acquisitions have been accounted for under the purchase method and are 
included in the accompanying consolidated financial statements. The amount of 
the purchase price that exceeded the underlying fair value of the Company's 
pro rata ownership in the LWB's net tangible assets at the date of 
acquisition represents the level of intangible assets of the LWB. The primary 
intangible asset of each LWB consists of the LWB's telecommunication licenses 
or rights to participate in such licenses. Given the early stage nature of 
the acquired entities, amounts attributable to other intangibles, such as 
workforce, customer lists, and agreements with local companies for 
transmitter and antenna locations, are not material. Accordingly, the Company 
has accounted for the excess purchase price as attributable primarily to 
telecommunication licenses and participation rights. To the extent that 
goodwill exists, the Company believes that the difference in amortization 
lives between licenses and goodwill would not have a material effect on the 
accompanying consolidated financial statements. Licenses are amortized 
generally over a period of 20 years, commencing upon the date of completion 
of the acquisition. In some cases, the terms of the licenses held by the 
LWB's are less than twenty years. However, the Company believes that it will 
be able to renew the licenses indefinitely if it builds out the 
infrastructure and establishes commercial service. The costs of license 
renewal are expected to be nominal. Amortization expense was approximately 
$294,000, $1,103,000, and $1,249,000 for the years ended December 31, 1995, 
1996 and 1997, respectively.

STOCK-BASED COMPENSATION

     The Company uses the intrinsic value-based method of Accounting 
Principles Board ("APB") Opinion No. 25 to account for its employee 
stock-based compensation plans.

INCOME TAXES

     Income taxes are accounted for under the asset and liability method. 
Deferred tax assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective tax 
bases and operating loss and tax credit carryforwards. Deferred tax assets 
and liabilities are measured using enacted tax rates expected to apply to 
taxable income in the years in which those temporary differences are expected 
to be recovered or settled. The effect on deferred tax assets and liabilities 
of a change in tax rates is recognized in income in the period that includes 
the enactment date.

                              F-12

<PAGE>

USE OF ESTIMATES

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during the 
reporting period. Actual results could differ from these estimates.

BUSINESS AND CREDIT CONCENTRATIONS AND RISK FACTORS

     Financial instruments, which potentially subject the Company to 
concentrations of credit risk, consist of cash and cash equivalents. The 
Company's cash equivalents are comprised of investment grade short-term debt 
instruments. Management believes that the financial risks associated with 
such deposits are minimal.

     Included in the Company's  consolidated balance sheet as of December 31, 
1996 and 1997, are long-term  investments in various LWBs in such developing 
countries as Brazil,  China, India, Indonesia, Malaysia, Pakistan, New 
Zealand and Peru.

     Each IWC subsidiary and affiliate has a unique and distinct market, 
operating and regulatory environment, and local economy with different 
subscription rates and costs to build and operate the systems. Achieving each 
operating plan is dependent upon successfully contending not only with normal 
risks associated with constructing and operating wireless properties, but 
also risks unique to operating in foreign emerging countries, such as 
regulatory compliance, contractual restrictions, labor laws, expropriation, 
nationalization, political, economic or social instability, and confiscatory 
taxation.

     The Company anticipates that it will often have a minority interest in 
operating companies, in part because applicable laws often limit foreign 
investors to minority equity positions. As such, the Company may be unable to 
access the cash flow, if any, of its operating companies. Additionally, the 
Company's ability to sell or transfer its ownership interest in its operating 
companies is generally subject to limitations based on agreements with its 
strategic and financial partners, as well as provisions in local operating 
licenses and local government regulations that may prohibit or restrict the 
transfer of the Company's ownership interest in such operating companies.

     The U.S. dollar-denominated value of the Company's investment in its 
operating companies and other wireless projects is partially a function of 
the currency exchange rate between the U.S. dollar and the applicable local 
currency. In addition, such operating companies and other wireless projects 
will report their results of operations in the local currency and, 
accordingly, the Company's results of operations may be adversely affected by 
changes in currency exchange rate risks. As a result, the Company may 
experience economic loss with respect to its investments and fluctuations in 
its results of operations solely as a result of currency exchange rate 
fluctuations. During the latter half of 1997, the Company experienced 
significant equity losses relating to its investments in Asia, particularly 
in PT Rajasa Hazanah Perkasa ("RHP"), the Company's cellular affiliate in 
Indonesia, due in large part to the significant devaluation of the Indonesian 
rupiah and the related remeasurement of its U.S. dollar-denominated credit 
facility. The Company expects to experience continued foreign currency 
translation losses in Asia, particularly where U.S. dollar-denominated debt 
exists. This may also impact the Company's ability to raise debt at the 
operating company level in Asia in the foreseeable future. The company does 
not carry currency convertibility risk insurance or engage in foreign 
currency hedge transactions.

     The Company's ability to retain and exploit its existing 
telecommunication licenses, and to obtain new licenses in the future, is 
essential to the Company's operations. However, these licenses are typically 
granted by governmental agencies in developing countries, and there can be no 
assurance that these governmental agencies will not seek to unilaterally 
limit, revoke, or otherwise adversely modify the terms of these licenses in 
the future, any of which could have a material adverse effect on the Company, 
and the Company may have limited or no legal recourse if any of these events 
were to occur. In addition, licenses typically require renewal from time to 
time and there can be no assurance that renewals to these licenses will be 
granted.

     Most of the LWBs currently operating have incurred operating losses and 
negative cash flow from operations since inception, and the Company expects 
that most of its operating companies will continue to generate operating 

                              F-13

<PAGE>

losses and negative cash flow from operations for the foreseeable future and 
accordingly, the Company expects its losses to increase. Most of these 
operating companies have only recently initiated providing commercial 
services and have a limited subscriber base. This is not uncommon in the 
wireless telecommunications industry, which requires significant capital 
investments in the initial years prior to obtaining a sufficient subscriber 
revenue base to support operations. Achievement of positive cash flow from 
operations will depend on successful execution of management's business 
plans. Those plans assume significant additional capital investment, in some 
cases, to expand the wireless network. There can be no assurance that such 
funding capacity will be available in the future.

RECOVERABILITY OF LONG-LIVED ASSETS

     The Company reviews for the impairment of long-lived assets and certain 
identifiable intangibles whenever events or changes in circumstances indicate 
that the carrying amount of an asset may not be recoverable. An impairment 
loss would be recognized when estimated future cash flows expected to result 
from the use of the asset and its eventual disposition is less than its 
carrying amount.

     The recoverability of property and equipment, investments in equity and 
cost investee companies, and the value attributed to telecommunications 
licenses, is dependent upon the successful build-out of system 
infrastructure, obtaining additional licenses by investee companies, and 
successful development of systems in each of the respective markets in which 
the Company's investees operate or through the sale of such assets. In 1996, 
the Company wrote off its investments in HFCL Mobile Radio, Ltd. ("HFCL") and 
PT Binamolti Visvalindo ("PTBV") of $320,000 and $205,000, respectively, 
based on management's decision to no longer pursue such projects. In 1997, 
the Company wrote off its investments in M/S Mobilcom (Pte) Ltd. ("Mobilcom 
Pakistan") and PT Mobilkom Telekomindo ("Mobilkom") of $4,714,000 and 
$1,500,000, respectively, and wrote down its investment in Prismanet (M) Sdn. 
Bhd. (formerly STW) ("Prismanet") by $11,683,000 ($7,683,000 as an equity 
investment and $4,000,000 as a cost investment) and RHP by $1,103,000 based 
on management's decision to no longer pursue the Mobilcom Pakistan project 
and significant other than temporary impairments in the Company's estimate of 
the net realizable value in both Mobilkom, Prismanet and RHP (see Notes 4 and 
5). In addition, the Company recorded its pro rata share of reserves 
associated with the Prismanet "keep well" of $5,000,000 (see Note 13). All 
such impairment write-offs and write-downs are classified as impairment in 
asset value on the accompanying consolidated statements of operations for the 
years ended December 31, 1996 and 1997.

RECLASSIFICATIONS

     Certain amounts in the accompanying 1995 and 1996 consolidated financial 
statements have been reclassified to conform with the 1997 consolidated 
financial statement presentation.

RECENT ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board recently issued Statement of 
Financial Accounting Standards ("SFAS") No. 130, REPORTING  COMPREHENSIVE  
INCOME. This statement  establishes standards for reporting and display of 
comprehensive income and its components in a full set of general purpose 
financial statements. The Company will adopt SFAS No. 130 in fiscal 1998.

     The Financial Accounting Standards Board recently issued SFAS No. 131, 
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. This 
statement establishes standards for the way public business enterprises are 
to report information about operating segments in annual financial statements 
and requires those enterprises to report selected information about operating 
segments in interim financial reports. The Company will adopt SFAS No. 131 in 
fiscal 1998. The Company has determined that it does not have any separately 
reportable business segments.

(2)  CASH AND CASH EQUIVALENTS

     The Company has invested in a variety of short-term, highly liquid 
investments all with original maturities of 90 days or less. As of December 
31, 1996, the Company had cash of $11,811,000, and cash equivalents 
consisting of money market mutual funds and U.S. government and agency 
obligations totaling $3,009,000 and 

                              F-14

<PAGE>

$26,837,000, respectively. Unrealized gains on U.S. government and agency 
obligations of $68,000 is included as a component of stockholders' deficit on 
the accompanying consolidated balance sheet as of December 31, 1996. As of 
December 31, 1997, the Company had cash of $669,000 and cash equivalents 
consisting of money market mutual funds and seven day fixed term deposits 
totaling $2,141,000 and $1,600,000, respectively.

                              F-15

<PAGE>

(3)  BALANCE SHEET COMPONENTS

     Balance sheet components as of December 31 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                 1996               1997
                                                                                             --------------    ---------------
<S>                                                                                          <C>               <C>
Other current assets
  Employee receivables...............................................................        $         179                272
  Taxes receivables..................................................................                  820                805
  Accounts receivable................................................................                  348              1,797
  Other receivables..................................................................                1,373              5,487
  License deposit....................................................................                5,255                 --
  Notes receivable...................................................................                1,431                776
  Notes receivable from affiliates...................................................                  813                290
  Prepaid expenses and other.........................................................                  470              1,106
                                                                                             --------------    ---------------
                                                                                             $      10,689             10,533
                                                                                             --------------    ---------------
                                                                                             --------------    ---------------

Property and equipment
  Furniture and fixtures.............................................................        $         320                296
  Computer and office equipment......................................................                  935              1,412
  Automobiles........................................................................                  197                248
  Leasehold improvements.............................................................                  276                545
  Telecommunication equipment........................................................                9,930             17,854
  Construction in process............................................................                7,620              4,788
                                                                                             --------------    ---------------
                                                                                                    19,278             25,143
Less accumulated depreciation........................................................                  852              2,737
                                                                                             --------------    ---------------
     Property and equipment, net.....................................................        $      18,426             22,406
                                                                                             --------------    ---------------
                                                                                             --------------    ---------------

Telecommunication licenses and other intangibles
  SRC/Via 1 project..................................................................        $       6,680              6,680
  Mobilcom Pakistan..................................................................                5,439                725
  TeamTalk...........................................................................                1,760              1,760
  STOL...............................................................................                3,965              3,965
  Protelsa...........................................................................                1,557              1,557
  WDS................................................................................                  221                221
  Other..............................................................................                  200                200
                                                                                             --------------    ---------------
                                                                                                    19,822             15,108
  Less accumulated amortization......................................................                1,338              2,587
                                                                                             --------------    ---------------
         Telecommunication licenses and other intangibles, net.......................        $      18,484             12,521
                                                                                             --------------    ---------------
                                                                                             --------------    ---------------

Accounts payable and accrued expenses
  Accounts payable..................................................................         $       5,163              4,187
  Professional services.............................................................                   718              1,237
  Employee compensation and benefits................................................                   619                886
  Equipment purchases...............................................................                    27              3,393
  Interest..........................................................................                    --                525
  Other.............................................................................                   786                784
                                                                                             --------------    ---------------
                                                                                             $       7,313             11,012
                                                                                             --------------    ---------------
                                                                                             --------------    ---------------
</TABLE>

                                       F-16

<PAGE>

(4)  INVESTMENTS IN AFFILIATES HELD FOR SALE

     In June 1997, the Company sold its 1.56% equity interest in Corporation 
Mobilcom S.A. de C.V. ("Mobilcom Mexico") for $3,218,000 to a third party 
affiliated with an existing shareholder in Mobilcom Mexico. The Company 
carried this investment in Mobilcom Mexico at its historical cost basis of 
$2,062,000. As a result, the Company reported a gain of $1,156,000 in other 
income as of December 31, 1997. In compliance with the Indenture (see Note 
9), proceeds from the disposition of the Company's interest in Mobilcom 
Mexico were used for Permitted Investments (as defined) within 270 days after 
the date of disposition.

     In June 1997, the Company initiated the disposition of three additional 
enhanced capacity trunked radio ("ECTR") investments as the Company re-aligns 
its investment strategy and re-distributes its resources to its larger 
cellular and ESMR investments. The investments held for sale include 
TeamTalk, the Company's wholly owned New Zealand subsidiary; Universal 
Telecommunications Service, Inc. ("UTS") in the Philippines and Mobilkom in 
Indonesia. In December 1997, the Company wrote off its investment in Mobilkom 
of $1,500,000 (see Note 1) as it does not expect to receive any proceeds from 
a sale of this interest as a result of Mobilkom's delay in the execution of 
its business plan and the effects of the Asian economic crisis on this 
investment. The Company expects that the sale of Team Talk and UTS may occur 
in 1998. The Company anticipates that the proceeds from disposition of Team 
Talk and UTS will not materially differ from the Company's historical cost 
basis.

     Investments in affiliates held for sale as of December 31 are as follows 
(in thousands):

<TABLE>
<CAPTION>
                                                              1996                  1997
                                                        -----------------     ------------------
<S>                                                     <C>                   <C>
Mobilcom Mexico.....................................    $           2,062                    --
UTS.................................................                   --                  1,873
                                                        -----------------     ------------------
                                                        $           2,062                  1,873
                                                        -----------------     ------------------
                                                        -----------------     ------------------
</TABLE>

    In July 1997, the Company changed its method of accounting for its 
investment in UTS from the equity method to the cost method since its 
ownership interest was reduced from 19.04% to 15.41% as the Company elected 
not to participate in a recent capital call. The Company has not changed the 
basis of accounting for the remaining investments held for sale. The Company 
continues to consolidate TeamTalk and has not reclassified this investment as 
an asset held for sale. The Company's investment in, and advances to, 
TeamTalk amounted to $17,979,000 as of December 31, 1997. Selected audited 
financial information for TeamTalk is as follows as of and for the year ended 
December 31, 1997 (in thousands):

<TABLE>
<S>                                                                                   <C>
Current assets....................................................................    $     803
Noncurrent assets.................................................................       12,913
Current liabilities...............................................................        3,889
Noncurrent liabilities ...........................................................        9,427
Net revenues......................................................................        1,811
Net loss..........................................................................       (3,235)
</TABLE>

(5)  INVESTMENTS IN AFFILIATES

     Investments in affiliates represent interests in various LWBs in several 
developing countries. These investments are accounted for under the equity or 
cost methods of accounting.

EQUITY INVESTMENTS

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

                                  F-17

<PAGE>


<TABLE>
<CAPTION>
                                                                              AS OF AND FOR THE YEAR ENDED 
                                                                                    DECEMBER 31, 1995
                                                         --------------------------------------------------------------------------
                                                          MALAYSIA    INDONESIA   NEW ZEALAND    INDIA     INDONESIA
                                                         ---------    ----------  ----------     ------    ---------
                                                         PRISMANET       RHP        TEAMTALK      HFCL        PTBV         TOTALS
                                                         ---------    ---------   -----------    ------    ---------    ----------
<S>                                                      <C>          <C>         <C>            <C>       <C>           <C>
Percentage of ownership...............................          30%(1)      25%         50%        49%        49%
Investments in affiliated companies as of
    December 31, 1994.................................   $   1,400          --         284         --         --           1,684
Additional investment.................................      20,770      25,530       2,569        243        206          49,318
Amortization..........................................        (638)       (319)         (7)        (1)        (1)           (966)
Losses................................................      (1,291)       (991)       (508)        --         --          (2,790)
                                                         ---------    --------    --------     ------      -----        --------
Equity in losses of affiliates........................      (1,929)     (1,310)       (515)        (1)        (1)         (3,756)
                                                         ---------    --------    --------     ------      -----        --------
Investments in affiliated companies as of
    December 31, 1995.................................   $  20,241      24,220       2,338        242        205          47,246
                                                         ---------    --------    --------     ------      -----        --------
                                                         ---------    --------    --------     ------      -----        --------
Portion of investment exceeding the Company's share
    of the underlying historical net assets as of
    December 31, 1995.................................   $  16,821      23,361       1,526        242        205          42,155
                                                         ---------    --------    --------     ------      -----        --------
                                                         ---------    --------    --------     ------      -----        --------
</TABLE>

(1)  The Company, along with the other Prismanet shareholders, agreed to 
     provide certain support in connection with a Malaysian Ringgit 91,000,000
     (approximately  $23,400,000 as of December 31, 1997) senior credit facility
     obtained by Prismanet with a Malaysian bank syndicate (see Note 13).

                                   F-18

<PAGE>

<TABLE>
<CAPTION>
                                                           AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1996
                                        -------------------------------------------------------------------------------------------
                                        MALAYSIA    INDONESIA     CHINA       PHILIPPINES  NEW ZEALAND   INDIA  INDONESIA
                                        ---------   ----------  ------------  -----------  -----------  ------  ---------
                                        PRISMANET       RHP     STAR DIGITEL      UTS        TEAMTALK    HFCL     PTBV       TOTALS
                                        ---------   ----------  ------------  -----------  -----------  ------  ----------  -------
<S>                                     <C>         <C>         <C>           <C>          <C>          <C>     <C>         <C>
Percentage of ownership.................       30%(1)     28%        40%           19%(2)       100%(3)     49%(4)   49%(4)

Investments in affiliated companies as
of December 31, 1995.................... $ 20,241     24,220         --            --         2,338        242      205     47,246
                                                

Additional investment (reclassification)    1,201      8,556     20,000         1,906        (1,736)        78       --     30,005

Impairment in asset value...............       --         --         --            --            --       (320)    (205)      (525)

Amortization............................     (969)    (1,278)      (347)          (51)           --         --       --     (2,645)
(Losses) gains..........................   (3,563)    (3,468)    (1,000)           20          (602)        --       --     (8,613)
                                        ---------  ---------   --------       -------       -------     ------  -------    -------
Equity in losses of affiliates..........   (4,532)    (4,746)    (1,347)          (31)         (602)        --       --    (11,258)
                                        ---------  ---------   --------       -------       -------     ------  -------    -------

Investments in affiliated companies as
of December 31, 1996....................$  16,910     28,030     18,653         1,875            --         --       --     65,468

Portion of investment exceeding the
Company's share of the underlying
historical net assets as of     
December 31, 1996.......................$  15,852     28,030     10,653           882            --         --       --     55,417
</TABLE>

(1)  The Company,  along with the other Prismanet  shareholders,  agreed to 
     provide certain support in connection with a Malaysian Ringgit 
     91,000,000  (approximately  $23,400,000 as of December 31, 1997) senior 
     credit facility obtained by Prismanet with a Malaysian bank syndicate 
     (see Note 13).

(2)  Reflects an additional  investment of $532,000, of which $354,000 was 
     paid in 1996 and the remainder was paid in January 1997,  pursuant to an 
     agreement dated September 25,  1996. This investment was previously 
     accounted for as a cost investment.

(3)  Reflects acquisition of the remaining 50% of TeamTalk, effective April 
     30, 1996, pursuant to an agreement dated June 24, 1996. 

(4)  HFCL and PTBV were fully written off during 1996 based on management's 
     decision to no longer pursue these projects.

                                        F-19

<PAGE>

<TABLE>
<CAPTION>
                                                                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997
                                            --------------------------------------------------------------------------------------
                                            MALAYSIA    INDONESIA    CHINA  PHILIPPINES    PAKISTAN      THAILAND
                                            ---------   ---------  -------- -----------   -----------  -------------
                                                                                                         WORLDPAGE 
                                                                     STAR                             COMPANY LIMITED
                                            PRISMANET       RHP     DIGITEL     UTS          IWCPL    ("WORLDPAGE")        TOTALS
                                            ---------   ---------  -------- -----------   ----------- ---------------      ------
<S>                                         <C>         <C>        <C>      <C>           <C>         <C>                  <C>
Percentage of ownership.....................    22.5%(1)     28%       40%          15%(2)        34%          11%

Investments in affiliated companies as of
December 31, 1996...........................$ 16,910     28,030    18,653        1,875            --           --          65,468

Additional investment (reclassification)....  (4,000)        --     9,000       (1,662)       26,127        4,500          33,965

Impairment in asset value...................  (7,683)    (1,103)       --           --            --           --          (8,786)

Amortization................................    (885)    (1,676)     (731)         (23)           --          (37)         (3,352)
Losses .....................................  (4,342)   (25,251)   (7,800)        (190)       (1,518)        (131)        (39,232)
                                            --------   --------   --------     -------      --------      -------        --------
Equity in losses of affiliates..............  (5,227)   (26,927)   (8,531)        (213)       (1,518)        (168)        (42,584)
                                            --------   --------   --------     -------      --------      -------        --------

Investments in affiliated companies as of
December 31, 1997...........................$     --         --     19,122          --        24,609        4,332          48,063
                                            --------   --------   --------     -------      --------      -------        --------
                                            --------   --------   --------     -------      --------      -------        --------

Portion of investment exceeding the
Company's share of the underlying
historical net assets as of 
December 31, 1997...........................$     --         --     18,922          --            --        2,764          21,197
                                            --------   --------   --------     -------      --------      -------        --------
                                            --------   --------   --------     -------      --------      -------        --------
</TABLE>

(1)  The Company, along with the other Prismanet shareholders, agreed to 
     provide certain support in connection with a Malaysian Ringgit 
     91,000,000 (approximately $23,400,000 as of December 31, 1997) senior 
     credit facility obtained by Prismanet with a Malaysian bank syndicate 
     (see Note 13). The Company's ownership interest in Prismanet was reduced 
     from 30% to 22.5% during 1997 as the Company elected not to participate in
     a recent capital call. Additionally, during 1997 the Company changed its 
     method of accounting for its investment in Prismanet from the equity 
     method to the cost method as the company believes it no longer exerts 
     significant influence.

(2)  During 1997, the Company decided to offer UTS for sale and has 
     reclassified this investment to investments in affiliates held for sale 
     (see Note 4).

                                     F-20

<PAGE>



     In June 1996, the Company entered into an agreement with the other 50% 
owner of TeamTalk to acquire their 1,700,000 shares of TeamTalk's common 
stock, as well as to assume TeamTalk's indebtedness to the shareholder 
totaling $3,022,000, for a total purchase price of approximately $3,198,000. 
The transaction was accounted for by the purchase method effective April 30, 
1996, with the majority of the purchase price paid in July 1996. As of 
December 31, 1996, TeamTalk was consolidated into the financial statements of 
the Company as a wholly owned subsidiary. In connection with the incremental 
investment, the Company reclassified the associated unamortized portion of 
investment exceeding the Company's share of underlying historical net assets 
to telecommunication licenses and other intangibles. The fair value of the 
assets acquired and the liabilities assumed in connection with the 
acquisition were $8,327,000 and $3,584,000, respectively.

     In September 1996, IWC entered into a subscription agreement (the "Star 
Digitel Subscription Agreement") with Star Telecom Holding Limited ("STHL"), 
the Company's partner in STOL, to purchase a 40% equity interest in Star 
Digitel for an aggregate purchase price of $20,000,000 and accounted for by 
the purchase method. Pursuant to the Subscription Agreement, in September 
1996, IWC also entered into an escrow agreement (the "Star Digitel Escrow 
Agreement") and deposited, in escrow, $9,000,000 of the $20,000,000 purchase 
price. In November 1996, in connection with the closing of the Company's 
acquisition of an equity interest in Star Digitel, the $9,000,000 held in 
escrow was released to STHL, and the Company funded an additional $11,000,000 
to acquire its 40% interest in Star Digitel for an aggregate purchase price 
of $20,000,000 and assigned $11,000,000 to participation rights in Star 
Digitel's underlying projects, representing the amount of the purchase price 
that exceeded the fair value of the Company's percentage ownership of Star 
Digitel's tangible net assets.

     In October 1996, the Company paid $8,556,000 to increase its interest in 
RHP to 29.2% and accounted for this additional acquisition using the purchase 
method. The Company assigned the entire amount of the purchase price to the 
telecommunication license as the purchase price exceeded the fair value of 
the Company's percentage ownership of RHP's tangible net assets in full at 
the date of purchase. In December 1996, Nissho Iwai International (Singapore) 
Pte. Ltd. purchased 3% of RHP, diluting the Company's ownership interest in 
RHP down to 28.3%.

     In October 1996, the Company paid $1,000,000 for an option to purchase 
50% of Laranda Sdn. Bhd., a 10% shareholder of Prismanet, for an exercise 
price of $7,200,000 and certain other contractual rights. The Company, at its 
discretion, allowed the option to lapse on November 6, 1996 and subsequently 
expensed the entire $1,000,000, which is classified as other expense in the 
accompanying consolidated statement of operations.

     In June 1997, the Company, including the designated assignee of IWC, IWC 
China Limited ("IWC China"), amended the Star Digitel Subscription Agreement. 
The Amendment to Subscription Agreement and Waiver ("Amendment and Waiver") 
modified certain provisions in the Star Digitel Subscription Agreement, 
including waiving the fulfillment of the conditions precedent to its 
obligations to enter into and complete a second subscription of Star Digitel 
shares for an aggregate subscription price of $19,000,000 and pay and deliver 
to STHL the second $9,000,000 premium in June 1997. The Company funded the 
$9,000,000 premium in June 1997. The Company assigned the entire amount of 
the premium to the participation rights in Star Digitel's underlying projects.

     In August 1997, the Company through its wholly owned subsidiary, 
Pakistan Wireless Holdings Limited ("PWH"), acquired a 43.48% indirect equity 
interest in IWCPL for an aggregate purchase price of $22,000,000 (see note 
9), of which $15,841,000 was paid in cash and $6,159,000 of which was paid 
with 493,510 shares of IWCH's common stock. IWCPL used these funds and the 
proceeds from the sale of the remaining equity of IWCPL to an unrelated party 
and to Vanguard Pakistan, Inc., a wholly owned indirect subsidiary of 
Vanguard Cellular Systems, Inc., a significant stockholder of the Company 
("Vanguard"), to acquire a 46% equity interest in Pakistan Mobile 
Communications (Pvt) Limited ("Mobilink"), a cellular telephone service 
provider in Pakistan, for an aggregate purchase price of $50,600,000. In 
September 1997, IWCPL consummated the sale of newly issued shares in IWCPL to 
an unrelated third party for $13,959,000 and used the proceeds to purchase an 
additional 12.69% equity interest in Mobilink, thereby increasing its equity 
interest in Mobilink to 58.69%. The Company's indirect equity interest in 
Mobilink and IWCPL was 20% and 34.08%, respectively, after the consummation 
of the foregoing transactions. During 1997, the Company also funded an 
aggregate of $4,127,000 to IWCPL, which amount represents the Company's pro 
rata share of various capital calls declared by IWCPL. This additional 
funding brought the Company's investment in IWCPL to $26,127,000, as of 
December 31, 1997. The Company accounted for its investment in IWCPL using 
the purchase method of accounting and subsequently has reported this 
investment under the equity method of accounting.

                               F-21

<PAGE>

     In September 1997, the Company paid its pro rata share of a finder's fee 
to an unrelated third party in connection with its indirect investment in 
Mobilink primarily through the issuance of a warrant to purchase 81,982 
shares of the Company's common stock at an exercise price of $0.01 per share 
(the "Mobilink Finder's Fee"). The Company recognized a total fee of 
$1,022,000 million related to the Mobilink Finder's Fee which is included as 
a component of the cost basis of IWCPL's investment in Mobilink.

     In September 1997, STOL, a company that holds interests in various 
paging projects in Asia and in which the Company holds a 56% indirect equity 
interest, invested $4,500,000 for a 20% equity interest in WorldPage, a Thai 
paging operator. The Company's corresponding indirect equity interest in 
WorldPage is 11.2%. STOL recorded its investment in WorldPage using the 
purchase method of accounting and assigned $2,801,000 of its investment to 
telecommunication licenses and other intangibles, representing the amount of 
the purchase price that exceeded the fair value of STOL's percentage 
ownership of WorldPage's tangible net assets.

     In September 1997, the Company recorded a write-down of $7,683,000 in 
the Company's equity investment in Prismanet based on the Company's estimate 
of the net realizable value of this investment using a discounted cash flow 
analysis of Prismanet's revised business plan. The Company believes that a 
significant other than temporary impairment in the value had occurred due to 
then recently diminished prospects for the allocation of additional spectrum 
at a different frequency band to Prismanet by the government of Malaysia in 
the then foreseeable future. This allocation of additional spectrum is 
believed by the Company to be critical to support the value of Prismanet's 
business as proposed to be conducted. In December 1997, the Company changed 
its method of accounting for its investment in Prismanet from the equity 
method to the cost method since its ownership interest was reduced from 30% 
to 24% as the Company elected not to participate in a recent capital call and 
the Company is no longer able to exercise significant influence over this 
investment. In December 1997, the Company further wrote down the investment 
by $4,000,000 and recorded a $5,000,000 reserve associated with the Prismanet
"keep well" (see Note13). The remaining investment in Prismanet is zero as of 
December 31, 1997.

     In December 1997, the Company wrote off its remaining investment in RHP 
of $1,103,000. As a result of the economic crisis in Asia, the inability of 
PT Mobile Selular Indonesia ("Mobisel") (the operating company and subsidiary 
of RHP) to extend bank financing with Nissho Iwai International (Singapore) 
Pte. Ltd. ("Nissho Iwai"), the negative net equity of RHP and the 
postponement in the execution of Mobisels' business plan, the Company 
believes the impairment in the RHP investment is other than temporary. As a 
result the Company wrote off the remaining equity investment balance. The 
Company has no further obligations with respect to guarantees or commitments 
pertaining to RHP or Mobisel.

     Condensed  financial  statement data,  presented in accordance with U.S. 
generally accepted accounting  principles and stated in U.S. dollars for 
significant  affiliated  companies accounted for by the equity method follows 
(in thousands):

                               F-22

<PAGE>

<TABLE>
<CAPTION>
                                                                          AS OF AND FOR THE YEAR ENDED
                                                                                 DECEMBER 31, 1995
                                                               ------------------------------------------------------
                                                                 PRISMANET         RHP (A)            TEAM TALK
                                                               --------------   --------------    -------------------
<S>                                                            <C>              <C>               <C>
Current assets............................................     $       2,611            5,316                    213
Noncurrent assets.........................................            33,299           21,336                  6,307
Current liabilities.......................................             2,988           17,496                  3,933
Noncurrent liabilities....................................            21,925            6,257                  1,492
Net revenues..............................................               749            5,463                    348
Net loss..................................................            (5,898)          (3,186)                (1,490)


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



<TABLE>
<CAPTION>
                                                           AS OF AND FOR THE YEAR ENDED
                                                                 DECEMBER 31, 1997
                           ----------------------------------------------------------------------------------------
                                 RHP               STAR DIGITEL              IWCPL (C)             WORLDPAGE (D)
                           -----------------   ---------------------    ---------------------   --------------------
                                                                                                    (unaudited)
<S>                        <C>                  <C>                     <C>                     <C>
Current assets.........    $          5,176               12,543                      15,710                 1,865
Noncurrent assets......              56,105              114,748                     118,071                 7,651
Current liabilities....             118,475               77,520                      45,794                 3,324
Noncurrent liabilities.               1,126               49,727                      17,981                   298
Net revenues...........               8,300                5,372                       8,580                 1,016
Net loss...............             (89,151)             (17,149)                     (4,453)                 (504)
</TABLE>

------------
(A)  For the period March 28, 1995 through  December 31, 1995.  Net  revenues 
     and net loss for the period from January 1, 1995 through  March 27, 
     1995 were  $1,821,000  and  $387,000, respectively.

(B)  Effective  April 30, 1996,  TeamTalk  became a wholly owned  subsidiary  
     of the Company.  Net revenues and net loss for the period from January 
     1, 1996 through April 30, 1996 were $282,000 and $645,000, respectively.

(C)  Net revenues and net loss are from August 18, 1997,  the date of the 
     acquisition.  IWCPL had no revenues and net loss prior to this date.

(D) Net revenues and net loss are from September 25, 1997, the date of  
     acquisition.  WorldPage had net revenues and net loss  (unaudited) of 
     $3,263,000 and $3,383,000  respectively, for the year ended December 31, 
     1997.

                                    F-23

<PAGE>



COST INVESTMENTS

     The Company uses the cost method of accounting for four other long-term 
investments as of December 31, 1997. These are Prismanet, RPG Paging Services 
Limited ("RPSL"), First International Telecommunication Company, Limited 
("FIT") and Telecomunicaciones Globales, S.A. de C.V. ("Global Telecom"). In 
December 1997, the Company began to account for its investment in Prismanet 
as a cost investment (see above). As of December 31, 1997, the Company's 
equity interest in Prismanet was 22.5% and the Company's investment in 
Prismanet has been reduced to zero. The Company holds its interest in RPSL 
and FIT indirectly through STOL. In January 1997, STOL purchased an 
additional 9% of RSPL for $2,100,000, thereby increasing its equity interest 
in RPSL from 10% to 19%, and correspondingly increasing the Company's 
indirect interest in RPSL to 10.64% as of December 31, 1997. In September 
1997, STOL invested $5,781,000 for a 12% equity interest in FIT, a Taiwanese 
paging operator, which corresponds to a 6.72% indirect equity interest in FIT 
held by the Company as of December 31, 1997. In January 1997, the Company 
acquired a 1.56% equity interest in Global Telecom, a Mexican long distance 
company, for $62,000.

     The Company's carrying value of these investments as of December 31 are 
as follows (in thousands):

<TABLE>
<CAPTION>
                                                            1996                 1997
                                                      -----------------     ---------------
<S>                                                   <C>                   <C>
Mobilkom........................................      $          1,500                  --
RPSL............................................                 1,426               3,526
FIT.............................................                    --               5,781
Global Telecom..................................                    --                  62
                                                      -----------------     ---------------
                                                      $          2,926               9,369
                                                      -----------------     ---------------
                                                      -----------------     ---------------
</TABLE>

     During 1997, the Company reclassified Mobilkom to investments in 
affiliates held for sale (see Note 4). The investment was subsequently 
written off.

PRO FORMA SUMMARY

     The following unaudited pro forma summary combines the consolidated 
results of operations of the Company as if (i) TeamTalk had been a wholly 
owned consolidated subsidiary as of January 1, 1996, (ii) ownership in RHP 
had been 28.3% as of January 1, 1996 and (iii) the acquisitions of STOL, Star 
Digitel, Uniworld and IWCPL had occurred as of January 1, 1996.

     This pro forma summary does not necessarily reflect the results of 
operations as they would have been if the Company had acquired the entities 
as of January 1, 1996.

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

<TABLE>
<CAPTION>
                                                                                       FOR THE YEARS ENDED DECEMBER 31,
                                                                                    -----------------------------------
                                                                                         1996                1997
                                                                                    ----------------     --------------
<S>                                                                                 <C>                  <C>
Revenues.........................................................................    $          1,161              3,275
Net loss.........................................................................            (46,408)          (127,063)
</TABLE>

                                     F-24


<PAGE>



(6)  RELATED PARTY TRANSACTIONS

NOTES RECEIVABLE FROM AFFILIATES

     Notes receivable from affiliates as of December 31, 1996, consisted 
primarily of the note due from Mobilcom Mexico for $158,000, plus cumulative 
accrued interest of $20,000; and a series of interest-free promissory notes 
loaned to Mobisel, an entity which the Company indirectly owns 19.8% through 
its investment in RHP, totaling $635,000. In April 1997, the Company 
collected the $635,000 note receivable from Mobisel. Concurrent with the sale 
of Mobilcom Mexico in June 1997, the Company reclassified the Mobilcom Mexico 
note from notes receivable from affiliates to notes receivable (see Note 7).

     In March 1997, the Company loaned $3,500,000 to Star Digitel. This loan, 
which is evidenced by a promissory note, accrues interest at 9% per annum and 
is due upon written demand by the Company. In September 1997, the Company, 
through its wholly owned subsidiary, IWC China, loaned $800,000 to Star 
Digitel. This loan accrues interest at 9% per annum and is due upon written 
demand by the Company. These loans have been classified as non-current as 
repayment is not expected within the next 12 months.

VANGUARD MERGER

     On December 18, 1995, the Company merged with Vanguard International 
Telecommunications, Inc. ("VIT") (See Note 11), a wholly owned subsidiary of 
Vanguard. Prior to this merger, Vanguard owned 10.46% of the Company and 
provided a variety of services relating to the formation, development and 
operation of the Company's wireless communication businesses. In exchange for 
3,972,240 shares of Series E Redeemable Convertible Preferred Stock with a 
liquidation preference of $6.29 per share, the Company acquired VIT's 
interests in TeamTalk and VIT's rights to acquire an interest in various 
international LWBs. The liquidation value was equal to the fair market value 
of the Series E preferred stock on the date of the merger. The resulting 
total value of $25,000,000, was allocated to the various LWBs based on their 
respective stage of development and an independent valuation study of the 
LWBs. As a result of this merger, Vanguard increased its ownership position 
to approximately 36% and continues to provide the services described above. 
The original cost to Vanguard of the net assets acquired by IWC in the merger 
was approximately $550,000. The value of these assets, however, appreciated 
significantly over time as licenses were subsequently granted, joint ventures 
and other strategic alliances formed and business plans developed.

     The excess of the allocated portion of the merger value to TeamTalk over 
the net book value of TeamTalk was attributed to telecommunication licenses 
and other intangibles. This excess amounted to $1,712,000 and is amortized on 
a straight-line basis over 20 years.

     The Company also acquired VIT's rights to participate in RHP, SRC, 
Mobilcom Pakistan, HFCL and PTBV and other yet to be developed projects. 
Approximately $23,288,000 was allocated to telecommunication licenses and 
other intangibles in the LWBs based on their relative stage of development. 
These amounts are amortized on a straight-line basis over 20 years. 
Subsequently, Mobilcom Pakistan, HFCL and PTBV have been written off.

VANGUARD WARRANT/OPTION EXCHANGE

     On May 5, 1997, the Company entered into an agreement with Vanguard, 
pursuant to which Vanguard surrendered then-outstanding warrants to purchase 
323,880 shares of Series C preferred stock, 416,720 shares of Series D 
preferred stock and 64,120 shares of Series F preferred stock in exchange for 
the issuance by the Company of a warrant to acquire 249,970 shares of common 
stock at a purchase price of $0.25 per share and a second warrant to purchase 
554,750 shares of common stock at an exercise price of $9.375 per share. This 
second warrant was subsequently surrendered by Vanguard in exchange for the 
issuance to certain officers and employees of Vanguard of an option to 
purchase 53,330 shares of common stock at an exercise price of $9.375 per 
share under International Wireless Communications Holdings, Inc.'s 1996 Stock 
Option/Stock Issuance Plan (the "1996 SO/SIP") and options to purchase an 
aggregate of 501,420 shares of common stock at a purchase price of $9.375 per 
share outside the 

                                 F-25

<PAGE>

1996 SO/SIP (see Note 11) (The foregoing transaction is hereinafter referred 
to as the "Vanguard Warrant/Option Exchange"). Vanguard agreed to guarantee 
from time to time, as part of the management advisory services in connection 
with the Vanguard Warrant/Option Exchange, up to an aggregate of $3.2 million 
of indebtedness incurred by the Company or its wholly owned subsidiaries 
until the Company receives at least $3.2 million in alternative debt 
financing or consummates an initial public offering ("IPO") of its common 
stock, but in no event later than February 3, 1999. In addition, certain 
Vanguard employees agreed to perform management advisory services over a four 
year period. The Company recognized management advisory service expense of 
$2.3 million related to the Vanguard Warrant/Option Exchange, which is 
classified in selling, general and administrative expenses in the 
accompanying consolidated statement of operations, and deferred compensation 
of $1.5 million, which is presented net of amortization of $244,000, on the 
accompanying balance sheet as of December 31, 1997. Pursuant to an $8 million 
bridge loan agreement dated May 19, 1997 between Star Digitel and The 
Toronto-Dominion Bank, each shareholder of Star Digitel agreed to guarantee 
its pro rata share of the bridge loan. Pursuant to the guarantee facility 
provided by it in connection with the Vanguard Warrant/Option Exchange, 
Vanguard guaranteed the Company's $3.2 million pro rata share of the 
guarantee.

VANGUARD STAR DIGITEL GUARANTEE

     In September 1997, at the request of IWC China, Vanguard guaranteed 
$8,000,000 of indebtedness to be incurred by Star Digitel (the "Vanguard Star 
Digitel Guarantee"). Pursuant to a reimbursement agreement (the 
"Reimbursement Agreement"), IWC China agreed to pay Vanguard (i) an up-front 
guarantee fee of $240,000 in cash, (ii) a quarterly in-kind guarantee fee at 
an initial rate of 6.75% that increases over time to 17.75% and (iii) an 
additional guarantee fee payable in shares of Star Digitel owned by IWC China 
if Vanguard is required to make any payments under the guarantee. In 
addition, the Company granted Vanguard a ten-year warrant to purchase shares 
of its common stock at an exercise price of $0.01 per share. The number of 
shares issuable upon exercise of the warrant is initially set at 68,819 and 
increases in quarterly increments thereafter until Vanguard's obligations 
under the guarantee have been permanently released and discharged. In 
December 1997, under this arrangement, the number of additional shares of the 
Company's common stock issuable upon exercise of this warrant increased by 
51,864 to an aggregate of 120,683 shares as of December 31, 1997 (see Note 
11). The Company recognized an expense of $1,755,000 related to the Vanguard 
Star Digitel Guarantee through December 31, 1997. The Company has recorded 
this expense in other expense in the accompanying consolidated statement of 
operations. The Company recognized additional expense related to incremental 
quarterly warrant grants associated with this Vanguard Star Digitel Guarantee 
in 1998 (see Note 16). Pursuant to a Pledge Agreement dated September 18, 
1997, IWC China pledged all of its Star Digitel Shares to secure performance 
of its obligations under the Reimbursement Agreement (and certain related 
agreements).

(7)  NOTE RECEIVABLE

     On June 6, 1996, the Company loaned $3,080,000 to a co-shareholder of 
Mobilcom Mexico, a trunked radio services operator in Mexico. The loan, in 
the form of a promissory note, accrues interest at 13% per annum and was due 
upon written demand by the Company. The Company's belief was that this loan 
may facilitate future strategic investments in projects in which this 
co-shareholder is involved. As of December 31, 1996, the co-shareholder had 
repaid $1,800,000 of the total amount loaned, bringing the remaining 
principal plus interest owed to $1,431,000. During 1997, this note, including
accrued interest, totaling $1,496,000 was repaid in full.

     In March 1997, the Company loaned $500,000 to an unrelated third party. 
This loan, which has a one year term, accrues interest at the rate of 15% per 
annum and is guaranteed by another unrelated third party. In March 1998, the 
Company agreed on a repayment plan with such party (see Note 16). Concurrent 
with the sale of Mobilcom Mexico, the Company reclassified its note 
receivable with Mobilcom Mexico from notes receivable with 

                                 F-26

<PAGE>

affiliates to notes receivable (see Note 6). Consequently, as of December 31, 
1997, principal plus interest on this note of $213,000 in the aggregate, is 
included in notes receivable on the accompanying consolidated balance sheet.

(8)  LICENSE DEPOSITS

     In June 1996, the Company deposited $3,042,000 for a 20% interest in a 
consortium pursuing ECTR licenses in Taiwan, which the Company classified as 
license deposit and other assets in the accompanying consolidated balance 
sheet as of December 31, 1996. The consortium was successful in winning four 
of twelve license applications. In August 1997, the Company received a refund 
of $1,933,000, which represents its pro rata portion of the deposit applied 
to the unsuccessful applications, net of the Company's pro rata share of 
application expenses and foreign currency loss of $105,000. The remaining 
deposit of $1,004,000 was to represent the Company's initial capital 
contribution to the ECTR venture to be formed; however, in September 1997, 
the Company sold this interest to a third party for $1,153,000.

     In August 1996, STOL and the Company deposited $3,005,000 and 
$2,250,000, respectively, representing a combined 30% equity interest in a 
proposed Taiwan paging project. In early February 1997, it was announced that 
the respective bid applications were unsuccessful and the Company 
reclassified the deposits to other current assets in the accompanying 
consolidated balance sheet as of December 31, 1996. In 1997, STOL received a 
refund of $1,881,000 of its deposit, net of its pro rata share of application 
expenses of $347,000. In order to mitigate its transactional foreign currency 
exposure, the remaining balance of $777,000, which was denominated in New 
Taiwanese dollars, was used to pay fees associated with STOL's investment in 
FIT. In 1997, the Company received a refund of $2,030,000, net of its pro 
rata share of application expenses of $230,000.

(9)  LONG-TERM DEBT AND DEBT ISSUANCE COSTS

     DEBT OFFERING

     In August 1996, the Company issued 196,720 units, each consisting of a 
$1,000 principal amount 14% Senior Secured Discount Note due 2001 (a "Note" 
and, collectively, the "Notes") and one warrant to purchase 11.638 shares 
(for an aggregate of 2,289,421 shares) of common stock (the "Unit Warrants"), 
$0.01 par value, for total gross proceeds of $100.0 million (the "Debt 
Offering") (see note 11). Net proceeds, after repayment of $7.4 million, 
including interest and fees, borrowed under a 1996 revolving credit agreement 
with Toronto Dominion Capital (U.S.A.), Inc., an affiliate of Toronto 
Dominion Bank, a stockholder of the Company, and other offering expenses, 
totaled $86,602,000. Of the $100.0 million gross proceeds, $30.3 million was 
allocated to additional paid-in capital related to the fair value of the 
warrants issued in the Debt Offering. The Debt Offering is governed by the 
Indenture dated as of August 15, 1996 between the Company, as issuer, and 
Marine Midland Bank, as trustee (the "Indenture"). In November 1996, the 
Company exchanged new 14% Senior Secured Discount Notes due 2001 (the 
"Exchange Notes") which were registered under the Securities Act of 1933, as 
amended (the "1933 Act"), for its outstanding Notes that were issued and sold 
in a transaction exempt from registration under the 1933 Act. The terms of 
the Exchange Notes are substantially identical (including principal amount, 
interest rate, maturity, security and ranking) to the terms of the Notes. 
Long-term debt associated with the Notes, net of unamortized discount, is 
$92,785,000 on the accompanying consolidated balance sheet as of December 31, 
1997.

     The aggregate principal amount of the Notes is $196,720,000. The Notes 
are due on August 15, 2001 and bear interest at an effective interest rate of 
23.06%, compounded semi-annually. There are no scheduled cash interest 
payments on the Notes. The Notes are senior secured obligations of the 
Company and will rank pari passu in right of payment with all existing and 
future senior indebtedness of the Company and senior to all subordinated 
indebtedness of the Company. The Notes are effectively subordinated to all 
indebtedness and other liabilities (including trade payables) of the 
Company's subsidiaries and affiliated companies. The collateral securing the 
Notes consists of a pledge of all of the capital stock of the Company.

     There are no sinking fund requirements with respect to the principal of, 
or the interest on, the Notes. Upon the occurrence of a change of control (as 
defined in the indenture governing the Notes), each holder of the Notes will 
have the option to require the Company to repurchase all or a portion of such 
holder's Notes at 101% of the accreted value thereof to the date of 
repurchase.

                                 F-27

<PAGE>

     In connection with the Debt Offering, the Company entered into the 
Indenture, which contains certain covenants that, among other things, limits 
the ability of the Company and its subsidiaries and affiliates to incur 
additional indebtedness, limits the ability of the Company to merge, 
consolidate or sell substantially all of its assets; and limits the ability 
to make investments. In addition, the Indenture prohibits making restricted 
payments (as defined) and creating certain liens (as defined).

     The Indenture also contained a provision that in the event the Company 
did not complete an IPO of common stock on or prior to May 15, 1997, each 
unexercised Unit Warrant issued in connection with the Debt Offering, would 
entitle the holder thereof to purchase an additional 2.645 shares (for an 
aggregate of 520,324 shares) of common stock. The Company issued such 
additional warrants on May 15, 1997 (see Note 11).

     The warrants are supported by a warrant agreement (the "Warrant 
Agreement"). The Warrant Agreement includes a provision that if the Company 
issues any options, warrants, or other securities convertible into or 
exchangeable or exercisable for common stock, for a consideration per share 
of common stock less than the current market value per share on the date of 
issuance of such securities, the warrant number for each Note holder shall be 
adjusted in accordance with the formula provided in the Warrant Agreement. 
Such additional Unit Warrants have been issued (see Notes 11 and 16).

     The costs related to the issuance of the Notes were capitalized and are 
being amortized to interest expense using the effective interest method over 
the life of the debt. Debt issuance costs are presented, net of amortization, 
as $5,369,000 on the accompanying consolidated balance sheet as of December 
31, 1997.

PAKISTAN BRIDGE FACILITY

     In August 1997, the Company closed a bridge financing facility (the 
"Pakistan Bridge Facility"), with Toronto Dominion Investments, Inc. ("TDI"), 
Vanguard and other stockholders, whereby the Company received written 
commitments for an aggregate amount of $29,000,000 in exchangeable bridge 
loans. The Pakistan Bridge Facility is structured as a two-tier facility, 
with $7,000,000 available to IWCH for general corporate and other purposes 
(the "IWCH Pakistan Facility") and $22,000,000 loaned to PWH for the specific 
purpose of financing the cash portion of the purchase price of the Company's 
indirect investment in Mobilink and the Company's pro rata share of the 
shareholder capital calls and shareholder loans required to finance the 
operations of Mobilink (the "PWH Pakistan Facility"). The Pakistan Bridge 
Facility contains significant restrictions on the Company's ability to raise 
additional debt or equity financing until all amounts outstanding under the 
Pakistan Bridge Facility are repaid in full. The Pakistan Bridge Facility 
bears interest payable in-kind on a quarterly basis beginning at 14% and 
increases over time to 25% (14% as of December 31, 1997). There are no 
scheduled cash interest payments on the Pakistan Bridge Facility. Principal 
plus accrued but unpaid interest on the Pakistan Bridge Facility matures in 
August 2002. Principal plus accrued but unpaid interest on the Pakistan 
Bridge Facility may be exchanged for the Company's Series G and H redeemable 
convertible preferred stock upon certain occasions (as defined). As of 
December 31, 1997, the $7,000,000 IWCH Pakistan Facility had been fully drawn 
down. Accrued but unpaid interest on the Pakistan Bridge Facility as of 
December 31, 1997 totaled $1,287,000.

     Warrants to purchase shares of the Company's common stock at an exercise 
price of $0.01 per share were also issued in connection with the IWCH 
Pakistan Facility (the "Initial Pakistan Warrants"). The number of shares 
issuable of the Company's common stock at the closing of the Pakistan Bridge 
Facility upon exercise of the Initial Pakistan Warrants was initially set at 
247,737 and increases upon the occurrence of certain events. During 1997, the 
number of shares of the Company's common stock issuable upon exercise of the 
Initial Pakistan Warrants increased by 445,839 to an aggregate of 
693,576. The number of shares of the Company's common stock issuable upon 
exercise of the Initial Pakistan Warrants subsequently increased (see Note 
16). The Company also agreed to grant to the lenders under the Pakistan 
Bridge Facility, upon the occurrence of a specified liquidity event (as 
defined), additional warrants (the "Pakistan Liquidity Warrants"; together 
with the Initial Pakistan Warrants, including its subsequent increases, the 
"Pakistan Warrants") to purchase a number of shares of the Company's common 
stock equal to the quotient of (i) 35% of the greater of (A) $2.0 million and 
(B) the unpaid principal amount of and unpaid accrued interest in the IWCH 
Pakistan Facility and (ii) the value of the Company's common stock with 
respect to such liquidity event. As of December 31, 1997, no Pakistan 
Liquidity warrants have been issued.

     The costs related to the issuance of the Notes, which include all 
warrants expected to be earned through December 1997 in accordance with the 
terms of the IWCH Pakistan Facility and certain fees paid to TDI, were

                                 F-28

<PAGE>

capitalized and are being amortized to interest expense using the effective 
interest method over the estimated term of the debt. In addition, the IWCH 
Pakistan Facility contains a conversion feature whereby debt can be converted 
to Series G redeemable convertible preferred stock at a price less than fair 
value (the "Debt Conversion Feature"). The difference between fair value and 
the conversion price (as defined) at the date of drawdown of the IWCH 
Pakistan Facility, amounting to $3,979,000, was also capitalized and is being 
amortized to interest expense using the effective interest method over the 
estimated term of the debt. Debt issuance costs related to the Pakistan 
Bridge Facility are presented, net of amortization, as $2,592,000 on the 
accompanying consolidated balance sheet as of December 31, 1997.

(10)  MINORITY INTEREST

     In February 1996, the Company formed WDS, a joint venture, to develop, 
install and support mobile data systems throughout the Pacific Rim. The 
Company initially had a 50% equity interest in WDS, and funded its operations 
on a pro rata basis for total funding during 1996 of $433,000. The Company 
increased its equity interest in WDS to 64% during 1997 through the 
conversion of shareholder advances into equity.

     In August 1996, the Company acquired a 70% equity interest in STOL for 
an aggregate purchase price of $13,500,000 which has been accounted for using 
the purchase method. STOL holds a minority interest in RPSL, FIT and World 
Page and is currently pursuing additional paging opportunities in Asia. The 
Company's partner in STOL is STHL, the Company's partner in Star Digitel. The 
Company allocated $3,965,000 of the purchase price to participation rights. 
In July 1997, the Company, STOL and STHL entered into an agreement with a 
third party providing for the issuance and sale to such third party of new 
shares equivalent to up to a 20% interest in STOL, subject to STOL entering 
into valid and binding agreements to invest in certain specified paging 
companies. In September 30, 1997, STOL entered into such agreements with 
these specified paging companies and, as a result, the third party paid STOL 
$4,160,000 for a 20% interest in STOL, thereby diluting the Company's 
interest in STOL to 56%.

     In December 1996, the Company paid $1,600,000 to acquire a 66% equity 
interest in Uniworld, which has been awarded a national license to provide 
paging services in Peru and accounted for the acquisition using the purchase 
method. The Company allocated $1,557,000 of the purchase price to the 
telecommunication license.

     Minority shareholders' interests is principally related to STOL and was 
$5,315,000 and $8,675,000 as of December 31, 1996 and 1997, respectively.

(11)  REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

     The Company is authorized to issue 40,000,000 shares of preferred stock, 
of which 33,231,480 are designated redeemable convertible preferred stock, 
1,200,000 are designated nonredeemable convertible preferred stock, 5,568,520 
are undesignated, and 66,000,000 shares of common stock, of which 60,000,000 
are designated class 1 and 6,000,000 are designated class 2. All shares have 
a par value of $0.01 per share.

     Nonredeemable convertible preferred stock as of December 31, 1996 and 
1997, was comprised of 933,200 issued and outstanding shares of Series A 
preferred stock. In August 1996, a stockholder of the Company converted 
266,800 shares of Series A preferred stock into 266,800 shares of common 
stock. Series A preferred stock has a liquidation value per share of $.85 and 
an aggregate liquidation value of $793,000.

                                 F-29

<PAGE>

     Redeemable convertible preferred stock as of December 31, 1997, was 
comprised of the following (in thousands except share and per share amounts):

<TABLE>
<CAPTION>
                                                                                       LIQUIDATION          AGGREGATE
REDEEMABLE CONVERTIBLE PREFERRED STOCK:        SHARES         SHARES ISSUED AND         VALUE PER          LIQUIDATION
                                             DESIGNATED          OUTSTANDING              SHARE               VALUE
----------------------------------------   ---------------   ---------------------    ---------------    ----------------
<S>                                        <C>               <C>                      <C>                <C>
Series B..............................          1,229,240               1,229,240              .9652     $         1,186
Series C..............................          2,460,000               1,762,280             2.3343               4,114
Series D..............................          5,800,000               3,652,960             6.8775              25,183
Series E..............................          3,972,240               3,972,240             6.7365              26,759
Series F-1............................          7,000,000               7,000,000             9.3750              43,505
Series F-2............................          1,080,000               1,080,000             9.3750               6,712
Series G-1............................          1,928,000                      --          see below                  --
Series G-2............................          1,292,000                      --          see below                  --
Series H-1............................          5,072,000                      --          see below                  --
Series H-2............................          3,398,000                      --          see below                  --
                                           ---------------   ---------------------                       ----------------
                                               33,231,480              15,981,876                        $       107,459
                                           ---------------   ---------------------                       ----------------
                                           ---------------   ---------------------                       ----------------
</TABLE>

     Each series of redeemable preferred stock is being accreted to its 
respective minimum redemption amount, which is equal to the liquidation value.

     The rights, preferences, and privileges of the holders of preferred 
stock are as follows:

     -  LIQUIDATION

     In the event of Company liquidation, the holders of Series G
     preferred stock shall be entitled to receive, prior and in preference
     to the holders of Series A, B, C, D, E, F and H preferred stock and
     common stock an amount equal to the sum of (i) the IWCH Note Exchange
     Price (as defined in the Company's Form 8-K as filed with the
     Securities and Exchange Commission on September 12, 1997) and (ii) an
     amount equal to declared but unpaid dividends on such share. The IWCH
     Note Exchange Price is the lesser of (A) the conversion price
     applicable to Series F preferred stock as of the date of the exchange
     and (B) 65% of the share value applicable to the liquidity event (as
     defined) or 65% of the appraised value if no liquidity event (as
     defined) has occurred.

     Then, the holders of Series H preferred stock shall be entitled to
     receive an amount per share equal to the sum of (i) the PWH Note
     Exchange Price (as defined in the Company's Form 8-K as filed with
     the Securities and Exchange Commission on September 12, 1997) and
     (ii) an amount equal to declared but unpaid dividends on such share.
     The PWH Note Exchange Price is the net cash price per share used when
     determining the number of shares of Series H preferred stock to issue
     in order to equal the aggregate amount of the unpaid principal and
     accrued interest on the PWH Pakistan Facility at the date of the
     exchange.

     Then, the holders of Series F preferred stock shall be entitled to
     receive an amount per share equal to the sum of (i) the product of
     (A) .50 multiplied by (B) the liquidation value per share specified
     above, as adjusted, and (ii) any declared but unpaid dividends
     thereon. Holders of Series B, C, D and E preferred stock ("Junior
     preferred stock") shall next be entitled to receive an amount per
     share equal to the sum of (i) the product of (A) .55 multiplied by
     (B) an amount per share of .9193, 2.223, 6.55 and 6.2938,
     respectively, as adjusted and (ii) any declared but unpaid dividends
     thereon. Holders of Series B, C, D, E and F preferred stock shall
     next be entitled to receive the product of (1) .50 multiplied by (2)
     an amount per share of .9193, 2.223, 6.55, 6.55 and 9.375,
     respectively, as adjusted.

     Upon the completion of the distribution to the holders of the Series
     B, C, D, E, F, G and H preferred stock, holders of the Series A
     preferred stock shall be entitled to receive an amount per share
     equal to .85, as adjusted, plus any declared but unpaid dividends
     thereon. After the distributions described above, and after 

                                      F-30

<PAGE>


     the distribution related to common stock described below, the remaining
     assets of the Company shall be distributed among the holders of the
     preferred stock and common stock pro rata assuming full conversion of
     preferred stock into common stock.

     - DISTRIBUTIONS

     The holders of preferred stock are entitled to receive noncumulative
     dividends at the same time and on the same basis as holders of common
     stock when, and if, declared by the Board of Directors. No dividends
     had been declared through December 31, 1997.

     -  REDEMPTION

     Each share of Series B, C, D, E, F, G and H preferred stock is
     redeemable at any time on or after December 31, 1998, but within 45
     days after the receipt by the Company of a written request from the
     holders of a majority of the then outstanding shares of Series B, C,
     D, E, F, G and H preferred stock. The Company shall redeem all such
     shares by paying in cash a sum per share equal to the greater of (1)
     the then fair market value of such share of preferred stock on an
     as-converted basis, or (2) the redemption value of such share of
     preferred stock (hereinafter referred to as the redemption price). In
     the event the assets of the Company are insufficient to effect such
     redemption in full, the shares of preferred stock not redeemed shall
     remain outstanding and entitled to all the rights and preferences
     provided herein.

     In addition to the above redemption, at any time on or after December
     31, 2000, but within 45 days after the receipt by the Company of a
     written request from the majority of the holders of Series F
     preferred stock, the Company shall redeem all outstanding shares of
     such stock by paying, in cash, an amount per share equal to the
     redemption price of such stock.

     Upon the occurrence of a change of control of the Company that is not
     approved by certain directors designated by the holders of Series F
     preferred stock, the holders of a majority of the shares of Series F
     preferred stock then outstanding shall have the right, by written
     demand to the Company, to require the Company to redeem immediately
     all the shares of Series F preferred stock then outstanding at a
     price per share equal to the redemption price of the Series F
     preferred stock.

     In addition, at any time on or after the later of (i) the Pakistan
     Bridge Facility Payment Date (as defined), (ii) the Series G or
     Series H Exchange Date (as defined), (iii) December 31, 1998 or (iv)
     a Series F Redemption (as defined), but within 45 days after the
     receipt by the Company of a written request from the majority of the
     Series G or Series H preferred stock, the Company shall redeem all
     outstanding shares of such stock by paying, in cash, an amount per
     share equal to the redemption price of such stock.

     In addition, in the case of any redemption request made by the
     holders of a majority of the Series F, G or H redeemable convertible
     preferred stock, the holders of a majority of such other series of
     preferred stock will be deemed to have made a redemption request
     unless they decline such redemption by giving the Company written
     notice to that effect within 10 days after delivery of the related
     redemption notice.

     -  CONVERSION AND VOTING RIGHTS

     Each share of preferred stock is convertible, at the option of the
     holder, into such number of fully paid and nonassessable shares of
     common stock as is determined by dividing the original preferred
     stock issue price by the conversion price applicable to such
     preferred share. Series A, B, C, D, E, F-1, G-1 and H-1 preferred
     stock is convertible into Class 1 common stock, while Series F-2, G-2
     and H-2 preferred stock is convertible into Class 2 common stock. In
     addition each share of Series F-2, G-2 and H-2 preferred stock can be
     converted into Series F-1, G-1 and H-1 preferred stock, respectively,
     at any time. The conversion price per share for each series of
     preferred stock is equal to the preferred stock issue price of the
     respective series of preferred stock, subject to adjustment under
     certain circumstances. An automatic conversion into common stock will
     occur in the event of a firm commitment underwritten public offering
     of at least $13.10 per share, as adjusted, and $8,000,000 in the
     aggregate. However, the Series F preferred stock shall not
     automatically be converted in Common Stock unless: (i) the
     underwritten public offering is consummated 

                                  F-31

<PAGE>

     on or prior to December 31, 1998, (ii) the public offering per share is at
     least $18.75, as adjusted, and (iii) the aggregate offering price is not 
     less than $25,000,000.

     Each share of preferred stock has voting rights equal to that of
     common stock on an "as if converted" basis. The holder of Series E
     preferred stock is entitled to elect three directors to the Company's
     Board of Directors, and, for so long as 20% of the shares of Series F
     preferred stock remain outstanding, the holders of Series F preferred
     stock are entitled to elect three directors. The holders of the
     Series G-1 and H-1 preferred stock are entitled to elect one
     director. However, if the holders of more than 10% of Series G and H
     stock are entitled to elect a director by virtue of holding any other
     Series of preferred stock, such right to elect a director may not be
     exercised. As of December 31, 1997, the Company had 16,915,076 shares
     of common stock reserved for the conversion of preferred stock.

      PREFERRED STOCK TRANSACTIONS

     -  THE SERIES D FINANCING

     In connection with the issuance of bridge notes on April 6, 1995, the
     Company issued warrants (the "April Bridge Warrants") to purchase
     10,760 shares, of which 5,960 related to Vanguard, of Series D
     preferred stock at $6.55 per share. The warrants issued to Vanguard
     were included in the May 1997 Vanguard Warrant/Option Exchange (see
     Note 6). The remaining warrants are outstanding and are exercisable
     until April 6, 1998.

     In July 1995,  convertible secured bridge financing notes issued on 
     April 24,  1995 were converted into 1,147,600 shares of Series D 
     preferred stock for an aggregate purchase price of $7,517,000 (a 
     purchase price of $6.55 per share).

     In connection with the Series D Financing, Vanguard loaned $1.8
     million to the Company in exchange for two convertible notes in the
     amount of $900,000 each. Each note was due upon the earlier of April
     26, 1996 or the occurrence of certain events which did not occur
     prior to that date. On April 26, 1996, Vanguard converted both notes
     including accrued interest into an aggregate of 274,800 shares of
     Series D redeemable convertible preferred stock.

     In July 1995, the Company entered into a merger agreement with
     Vanguard and VIT, a wholly-owned subsidiary of Vanguard, whereby VIT
     would merge their international interests in a number of
     international wireless projects into the Company in exchange for
     3,972,240 shares of Series E preferred stock. This merger was
     completed on December 18, 1995, concurrent with the issuance of
     Series F preferred stock (see Note 6).

     In connection with the Vanguard Merger, the Company entered into an
     agreement with an investor to amend previously existing warrant
     agreements granted in connection with the Series C Financing. The
     investor's original warrant to purchase 50,440 shares of Series C
     preferred stock was amended to extend the warrant through December
     18, 1997. The investor's original warrant to purchase 222,200 shares
     of preferred stock was amended to increase the number of shares to
     393,120 and to define the preferred stock as Series D preferred stock
     at $6.55 per share. The warrant was exercisable until December 18,
     1997. The investor's original warrant to purchase 444,360 shares of
     preferred stock was amended to decrease the number of shares to
     273,440 and to define the preferred stock as Series C preferred stock
     at $2.22 per share. The warrant was exercisable until May 15, 1997.
     In May 1997, the Series C and D Vanguard Merger warrants were
     exchanged in the Vanguard Warrant/Option Exchange (see Note 6).

     -  THE SERIES F FINANCING

     In connection with the issuance of a note payable to Vanguard in July
     1995, the Company issued for a purchase price of $15,000, a warrant
     to purchase 32,000 shares of Series F preferred stock at an exercise
     price of $9.38 per share. The number of shares and the exercise price
     are subject to adjustment in certain circumstances. The warrant is
     exercisable until December 18, 1998.

                                  F-32

<PAGE>

     Concurrent with the July 1995 Financing, for an aggregate purchase
     price of $72,000, the Company issued warrants to purchase an
     aggregate of 153,800, of which 32,120 related to Vanguard, shares of
     Series F preferred stock (not including the warrant issued to
     Vanguard in connection with the first July 1995 note) at an exercise
     price of $9.38 per share. All share amounts and the exercise price
     are subject to adjustment in certain circumstances. The warrants are
     exercisable until December 18, 1998. In May 1997, all of Vanguard's
     Series F Warrants were exchanged in the Vanguard Warrant/Option
     Exchange (see Note 6).

     On August 15, 1995 pursuant to a Note and Warrant Purchase Agreement
     dated as of August 14, 1995, the Company issued for a purchase price
     of $50,000 a warrant (the "First Warrant") to purchase 106,680 shares
     of Series F preferred stock at an exercise price of $9.38 per share,
     with the number of shares and exercise price subject to adjustment in
     certain circumstances. The First Warrant is exercisable until
     December 18, 1998.

     Pursuant to a Loan Agreement dated August 14, 1995 between the
     Company and an investor, the Company issued a second warrant (the
     "Second Warrant") to purchase 106,680 shares of Series F preferred
     stock at an exercise price of $9.38 per share, with the number of
     shares and the exercise price subject to adjustment in certain
     circumstances. The Second Warrant is exercisable until December 18,
     1998, with the date being subject to change in the same
     circumstances.

     On December 18, 1995, the Company sold and issued 5,356,480 shares of
     Series F preferred stock for $50,217,000. Prior to the share issuance
     of the Series F preferred stock, the Company entered into bridge
     financing agreements with certain existing shareholders. Certain
     bridge loans were repaid with proceeds from the issuance of shares of
     Series F preferred stock, while the remaining bridge loans were
     converted into 1,147,600 shares of Series D preferred stock.

WARRANTS

           On or prior to June 12, 1997 holders of warrants to purchase an 
aggregate of 28,800 shares of Series D redeemable convertible preferred stock 
exercised such warrants pursuant to the cashless "net-exercise" provisions 
thereof. Upon such exercises, such warrantholders received an aggregate of 
8,676 shares of Series D redeemable convertible preferred stock.

           During 1997, pursuant to the terms of the Unit Warrants, the 
number of additional shares of the Company's common stock issuable upon 
exercise of the Unit Warrants increased by an aggregate of 92,987 shares to 
an aggregate of 2,902,732 shares as a result of the issuance by the Company 
of warrants to purchase the Company's common stock in connection with the 
Pakistan Bridge Facility and the Vanguard Star Digitel Guarantee.


                                  F-33

<PAGE>

The Company had the following warrants outstanding as of December 31, 1997:

<TABLE>
<CAPTION>
           PREFERRED AND                    WARRANTS           EXERCISE
           COMMON STOCK                    OUTSTANDING           PRICE                EXPIRATION
------------------------------------    ------------------   --------------   ---------------------------
<S>                                     <C>                  <C>              <C>
Series D preferred.................                 4,800    $        6.55    April 6, 1998(1)
Series F preferred.................               335,040             9.38    December 18, 1998(1)
Unit Warrants......................             2,902,732             0.01    August 15, 2001
Pakistan Warrants..................               693,576             0.01    August 18, 2007
Mobilink Finder's Fee Warrant......                81,982             0.01    September 17, 2007
Vanguard Star Digitel Guarantee
   warrant.........................               120,683             0.01    September 18, 2007
Vanguard Warrant/Option Exchange
   options.........................               501,420             9.38    May 5, 2007
Vanguard Warrant/Option Exchange
   Warrant.........................               249,970              .25    May 5, 2007(1)
                                        ------------------
                                                4,890,203
                                        ------------------
                                        ------------------
</TABLE>
-----------
(1)   Warrants expire in the event of an IPO.


COMMON STOCK

     In the event of a liquidation,  holders of common stock will be entitled 
to receive an amount equal to $.50 per share, as adjusted,  plus any declared 
and unpaid  dividends,  after completion of distributions to the holders of 
preferred stock.

     The remaining assets of the Company, after satisfaction of the 
stipulated distribution requirements related to the various preferred stock 
and common stock liquidation preferences, will be distributed on a pro rata 
basis among all of the holders of common stock and all of the holders of the 
preferred stock, assuming full conversion of the preferred stock into common 
stock.

STOCK OPTION/STOCK ISSUANCE PLAN

     Under the Company's 1994 Stock Option/Stock Issuance Plan (the "Plan") 
incentive stock options may be granted to employees and officers, and 
non-qualified (supplemental) stock options may be granted to employees, 
officers, directors, and consultants to purchase shares of the Company's 
common stock. Accordingly, the Company, as of December 31, 1995, had reserved 
a total of 1,000,000 shares of the Company's common stock for issuance upon 
the exercise of options granted pursuant to the Plan. Options granted under 
the Plan generally expire 10 years following the date of grant and are 
subject to limitations on transfer. During 1996, the Board of Directors 
approved the amendment to and restatement of the Plan, the 1996 SO/SIP, and 
authorized this issuance of an additional 1,400,000 shares of common stock 
thereunder. In May 1997, the stockholders of the Company approved a further 
amendment to the 1996 SO/SIP increasing the aggregate number of shares of 
Common Stock available for issuance over the term of the plan by 411,526 
shares to a total of 2,811,526 shares.

     Option grants under the 1996 SO/SIP are subject to various vesting 
provisions, all of which are contingent upon the continuous service of the 
optionee and may not impose vesting criterion more restrictive than 20% per 
year. The exercise price of options granted under the 1996 SO/SIP must equal 
or exceed the fair market value of the Company's common stock on the date of 
grant. Unless otherwise terminated by the Board of Directors, the 1996 SO/SIP 
automatically terminates in January 2004.

     The Company has elected to use the intrinsic value-based method of APB 
Opinion No. 25 to account for stock options issued to employees. Accordingly, 
no compensation cost has been recognized in the accompanying consolidated 
financial statements for the 1996 SO/SIP because the exercise price of each 
option equaled or exceeded the fair value of the underlying common stock as 
of the grant date for each option. The Company has 

                                   F-34

<PAGE>

adopted the pro forma disclosure provisions of SFAS No. 123. Pro forma 
results may not be representative of the effects on reported net loss for 
future years. Had compensation cost for the Company's stock-based 
compensation plans been determined in a manner consistent with the fair value 
approach described in SFAS No. 123, the Company's net loss would be increased 
to the pro forma amounts indicated below (in thousands):

<TABLE>
<CAPTION>
                                                      FOR THE YEARS ENDED DECEMBER 31,
                                                    --------------------------------------
                                                       1995          1996           1997
                                                    ---------     ---------      ---------
<S>                                                 <C>           <C>            <C>

Net loss          As reported.....................  $   (11,271)   (35,908)     (123,650)
                  Pro forma.......................      (11,290)   (36,110)     (124,029)
</TABLE>

     Pro forma net loss reflects only options granted in 1995, 1996 and 1997. 
Therefore, the full impact of calculating compensation cost for stock options 
under SFAS No. 123 is not reflected in the pro forma net income amounts above 
because compensation cost is reflected over the options' vesting period of 
four to five years and compensation cost for options granted prior to January 
1, 1995 is not considered.

     The fair value of each option is estimated on the date of grant using 
the Black-Scholes option-pricing model with the following weighted-average 
assumptions used for granted options in 1995, 1996 and 1997, respectively: 
zero dividend yield; zero expected volatility; risk-free interest rates of 
5.91%, 5.88% and 6.14%; and weighted average expected lives of 2.65 years, 
2.04 years and 2.87 years.

     A summary of the status of the Company's Plan as of December 31, is as 
follows:

                                   F-35
<PAGE>


<TABLE>
<CAPTION>
                                          1995                                1996                               1997
                              -------------------------------    --------------------------------    ------------------------------
                                                 WEIGHTED                            WEIGHTED                             WEIGHTED
                                                  AVERAGE                             AVERAGE                             AVERAGE
                                                 EXERCISE                            EXERCISE                             EXERCISE
                                  SHARES           PRICE            SHARES             PRICE             SHARES            PRICE
                                -----------    --------------    --------------    --------------    ---------------     ----------
<S>                             <C>            <C>               <C>               <C>               <C>                 <C>
Outstanding at
beginning of year......          761,920       $       0.41           881,920      $       1.51         1,982,000        $     5.52
Granted................          160,000               6.41         1,142,000              8.43           936,296             10.00
Exercised..............               --                 --           (41,920)             0.25          (180,000)             0.25
Canceled...............          (40,000)              0.25                --                --         (237,239)              9.15
                                -----------                      --------------                      ---------------
Outstanding at 
end of year............          881,920               1.51         1,982,000              5.52         2,501,057              7.23
                                -----------                      --------------                      ---------------
                                -----------                      --------------                      ---------------

Options exercisable at
end of year............          433,001                              568,080                             950,184
Shares available for 
grant..................
                                 118,080                              376,080                              88,549
Weighted average fair 
value of options 
granted during the 
year...................
                                $   0.90                           $     0.93                           $    1.56
</TABLE>

     The following table summarizes information about fixed stock options 
outstanding at December 31, 1997:

<TABLE>
<CAPTION>
                                            OPTIONS OUTSTANDING                                       OPTIONS EXERCISABLE
                                     ----------------------------------                       ----------------------------------
                                                           WEIGHTED
                                                           AVERAGE            WEIGHTED                              WEIGHTED
                                        NUMBER OF         REMAINING           AVERAGE            NUMBER OF          AVERAGE
                                       OUTSTANDING       CONTRACTUAL       EXERCISE PRICE       OUTSTANDING          EXERCISE
EXERCISE PRICES                          OPTIONS             LIFE                                 OPTIONS             PRICE
                                     ----------------   ---------------   -----------------   ----------------   ---------------
<S>                                  <C>                <C>               <C>                 <C>                <C>
$0.25.........................              432,000              6.50     $          0.25            384,998     $         0.25
From $0.25 to $2.50...........               68,000              6.83                2.09             56,750               2.08
From $2.51 to $8.13...........              979,916              8.08                7.87            463,401               7.77
From $8.14 to $9.38 ..........              845,457              9.14                9.38             45,035               9.38
From $9.39 to $12.48..........              175,684              9.77               12.48                 --                 --
                                     ----------------                                         ----------------
From $0.25 to $12.48..........            2,501,057              8.25                7.23            950,184               4.46
                                     ----------------                                         ----------------
                                     ----------------                                         ----------------
</TABLE>

(12)  INCOME TAXES

     The Company has incurred net losses since inception and has not recorded 
any provision for income taxes. The reconciliation between the amount 
computed by applying the U.S. federal statutory tax rate of 34% to net loss 
before income taxes and the actual provision for income taxes as of December 
31 follows (in thousands):

<TABLE>
<CAPTION>
                                                                          1995              1996              1997
                                                                        ----------       ------------      -----------
<S>                                                                     <C>              <C>               <C>
Income tax (benefit) at statutory rate................................  $  (3,832)           (12,208)          (36,244)
License amortization..................................................        341                302                --
Other.................................................................         --                 18                35
Net operating loss and temporary differences for which no tax benefit
   was recognized.....................................................      3,791             11,888            36,209
                                                                        ----------       ------------      -----------
                                                                        $       --                 --               --
                                                                        ----------       ------------      -----------
                                                                        ----------       ------------      -----------
</TABLE>

                                       F-36

<PAGE>

     The tax effects of temporary differences that give rise to significant 
portions of the deferred tax assets and liabilities as of December 31 are as 
follows (in thousands):

<TABLE>
<CAPTION>
                                                                                  1996                1997
                                                                             ----------------    ---------------
<S>                                                                          <C>                 <C>
Deferred tax assets:
  Loss carryovers and deferred start-up expenditures....................             $12,788             31,953
  Equity in foreign investments.........................................                 501             23,618
  Debt issuance costs...................................................                  --              2,497
                                                                             ----------------    ---------------
   Total gross deferred tax assets......................................              13,289             58,068
   Less valuation allowance............................................               (9,948)           (55,614)
                                                                             ----------------    ---------------

     Total deferred tax assets..........................................               3,341              2,454




Deferred tax liabilities:
  Fixed assets..........................................................                (153)              (266)
  Equity in foreign investments.........................................                  --                 --
  License fees..........................................................              (3,103)            (2,188)
  Debt issuance costs...................................................                 (85)                 --
                                                                             ----------------    ---------------
       Total deferred tax liabilities...................................              (3,341)            (2,454)
                                                                             ----------------    ---------------

     Net deferred tax assets............................................     $            --                 --
                                                                             ----------------    ---------------
                                                                             ----------------    ---------------
</TABLE>

     Management has established a valuation allowance for the portion of 
deferred tax assets for which realization is uncertain. The valuation 
allowances as of December 31, 1996 and 1997 were $9,948,000 and $55,614,000, 
respectively. The net changes in valuation allowance during 1996 and 1997 was 
an increase of $9,293,000 for 1996 and an increase of $45,666,000 for 1997.

     As of December 31, 1997, the Company has cumulative U.S. federal net 
operating losses of approximately $64,631,000, which can be used to offset 
future income subject to federal income taxes. The federal tax loss 
carryforwards will expire from 2008 through 2012. The Company has cumulative 
California net operating losses of approximately $37,400,000, which can be 
used to offset future income subject to California income taxes. The 
California tax loss carryforwards will expire from 1998 through 2002.

     The Tax Reform Act of 1986 imposes substantial restrictions on the 
utilization of net operating losses and tax credits in the event of an 
"ownership change" as defined. Most of the U.S. federal and California net 
operating loss carryforwards are subject to limitation as a result of these 
restrictions. The ownership change restrictions are not expected to impair 
the Company's ability to utilize the affected carryforward items. If there 
should be a subsequent ownership change, as defined, of the Company, its 
ability to utilize its carryforwards could be reduced.

     The Company's  foreign  subsidiaries  have aggregate net operating 
losses of approximately  $22,456,768.  The foreign loss carryovers  expire 
over periods varying from six years to indefinitely.

(13)  COMMITMENTS AND CONTINGENCIES

LEASE AND OTHER COMMITMENTS

     The Company and its consolidated subsidiaries lease their facilities and 
certain equipment under noncancelable operating lease agreements expiring 
through 2001. Future minimum lease payments due under noncancelable operating 
leases total approximately $1,752,000, $1,227,000, $667,000, $406,000 and 
$129,000 in 1998 through 2002, respectively.

     Total rent expense was approximately $60,000, $324,000 and $1,341,000 
for the years ended December 31, 1995, 1996, and 1997, respectively.

     In October 1996, SRC entered into a contract with Nokia 
Telecommunications Oy to acquire approximately $12.3 million of trunking 
equipment and related services in six phases. It is anticipated that this 
contract will be 

                              F-37

<PAGE>

assigned to Via 1 upon the legal formation of the joint venture, which is 
anticipated to occur during 1998. In the event the Company is unable to fund 
this subscription, the Company will suffer significant dilution in its 
ownership interest.

CAPITAL CONTRIBUTIONS

     The Company, indirectly through its wholly owned subsidiary, IWC China, 
owns a 40% equity interest in Star Digitel. The Company, including the 
Designated Assignee of IWC, IWC China, amended the Subscription Agreement, 
dated as of September 23, 1996, among Star Digitel and STHL. The Amendment 
and Waiver modified certain provisions in the Star Digitel Subscription 
Agreement, including waiving the fulfillment of the conditions precedent to 
its obligations to enter into and complete a second subscription of Star 
Digitel shares for an aggregate subscription price of $19,000,000. Pursuant 
to the Amendment and Waiver, IWC China is required to fund the second 
subscription of Star Digitel shares no later than June 17, 1998. In the event 
the Company is unable to fund this subscription, the Company will suffer 
significant dilution in its ownership interest.

     In order to protect the Company's investments in affiliates from 
ownership dilution, the Company has committed to make additional capital 
contributions to the LWBs as needed besides the second subscription of shares 
in Star Digitel.  Subject to the availability of necessary additional 
financing, for the year ended December 31, 1998, the Company anticipates 
making additional investments in various operating and nonoperating companies 
totaling approximately $38,500,000.

NOTE PAYABLE

     The Company was jointly and severally liable on a $16,000,000 note 
payable to an unrelated party in connection with its RHP investment. The note 
bore interest at 6.95% with principal and interest due October 10, 1996. The 
Company had recorded its pro rata share of this note on the accompanying 
consolidated balance sheet. In October 1996, the Company paid its $4,000,000 
pro rata share of this note, plus $278,000 of accrued interest and the other 
shareholders of RHP paid their pro rata share.

 GUARANTEE OF DEBT OF EQUITY INVESTEE

     In connection with a Malaysian Ringgit 91,000,000 (approximately 
$23,393,000 as translated using effective exchange rates at December 31, 
1997) senior credit facility with a Malaysian bank obtained by the Company's 
22.5% cost investee, Prismanet, the Company along with other Prismanet 
shareholders, executed a financial "keep well" covenant pursuant to which 
they have agreed (i) to ensure that Prismanet will remain solvent and be able 
to meet its financial liabilities when due and (ii) to ensure that the 
project is timely completed and to make additional debt and equity 
investments in Prismanet to meet cost overruns. The loan is repayable by 
Prismanet in eleven semi-annual installments beginning October 8, 1997. The 
Company and other Prismanet shareholders have separately executed an 
agreement, whereby each shareholder has agreed to share in the liability on a 
pro rata basis in relation to their interest in Prismanet. In the event that 
the bank were to seek repayment from the Prismanet shareholders and the other 
shareholders were unable to honor their pro rata share in the liability, the 
Company might be liable for the full amount of the outstanding amount of the 
loan. As of December 31, 1997, this facility has been fully drawn down. In 
December 1997, the Company recorded its pro rata share of this facility 
associated with the "keep well" covenant totaling $5,000,000 due to the 
likelihood of the bank enforcing the "keep well". This is reflected as bank 
liability on the accompanying consolidated balance sheet as of December 31, 
1997.

     The Company indirectly owns a 19.8% equity interest in Mobisel, a 
provider of cellular services in Indonesia through its 28.3% ownership in 
RHP. Mobisel has obtained a six-year $60 million credit facility from Nissho 
Iwai to finance the construction of its network. Borrowings under the credit 
facility bear interest at a floating rate based on LIBOR and are secured by 
all of Mobisel's assets and a pledge of all the capital stock held by RHP and 
Mobisel's other shareholders. RHP has also guaranteed the credit facility. As 
of December 31, 1997, this facility has been fully drawn down.

     The Company, through its subsidiary, IWC China, owns 40% of Star 
Digitel. Star Digitel has obtained a $7 million credit facility from Bank 
Bira, which it has used to continue the roll-out of its network. Borrowings 
under this facility are secured by substantially all of Star Digitel's assets 
and guarantees from its shareholders, including IWC China, on a pro rata 
basis. The guarantee by IWC China is non-recourse to the Company. As of 
December 31, 1997, this facility has been fully drawn down.

                                  F-38

<PAGE>

     In September 1997, at the request of IWC China, Vanguard guaranteed 
$8,000,000 of indebtedness to be reimbursed by Star Digitel (see Note 6). On 
the occurrence of certain events, including an IPO of equity securities by 
the Company or certain related entities and the receipt of a specified amount 
of cash proceeds from private equity issuances or asset sales by the Company 
or certain related entities, IWC China will be required to pay an additional 
guarantee fee equal to 4.0% of the outstanding Star Digitel Shares as of the 
date of such event unless Vanguard's obligations under the guarantee are 
permanently released and discharged.

LICENSES AND INTERCONNECTION

     Mobilink holds a non-exclusive nationwide license to provide cellular 
services in Pakistan. The license has a term of 15 years, and expires in 
2007, at which time Mobilink will be required to seek governmental approval 
to renew the license. The license by its terms contains certain conditions on 
construction and operation of the network. Mobilink may not be in technical 
compliance with certain requirements of the license.

MOBILINK OPTION

     As of December 31, 1997, the Company had expended approximately $26.1 
million to acquire its 20% indirect equity interest in, and to make capital 
contributions and shareholder loans to, Mobilink. Pursuant to the 
Shareholder's Agreement dated August 18, 1997, among the shareholders of 
Mobilink, the Company holds an option (the "Mobilink Put-Call Option") to 
purchase an additional 5.71% interest in IWCPL from APC for an aggregate 
purchase price of approximately $6.0 million, which amount is subject to 
adjustment based upon the capital contributions and shareholder loans made by 
APC in respect of such 5.71% interest and the period of time elapsed between 
the date APC originally purchased such 5.71% and the date that the option is 
exercised. APC has a corresponding right to put such interest to the Company 
at the same purchase price at any time during the term of the option. The 
Mobilink Put-Call may be exercised only once by the Company or APC and will 
expire on December 31, 1998, unless sooner exercised. Upon exercise of the 
Mobilink Put-Call Option in its entirety, the Company's indirect equity 
interest in IWCPL would increase to 39.79%, and its corresponding indirect 
equity interest in Mobilink would increase to 23.35%.

                                      F-39

<PAGE>


(14)  GEOGRAPHIC INFORMATION

     Information about the Company's consolidated operations in different 
geographic areas as of and for the years ended December 31 is as follows (in 
thousands):

<TABLE>
<CAPTION>
                                                                1995                1996               1997
                                                           ----------------     --------------     --------------
<S>                                                        <C>                  <C>                <C>
Revenues:
  Latin America......................................      $            --                 --                 26
  Southeast Asia.....................................                   --                 --                 --
  Pacific and Far East...............................                   --                869              3,249
  United States......................................                   --                 --                 --
                                                           ----------------     --------------     --------------
                                                           $            --                869              3,275
                                                           ----------------     --------------     --------------
                                                           ----------------     --------------     --------------
Operating loss:
  Latin America......................................      $         (154)            (3,844)            (7,301)
  Southeast Asia.....................................                   --              (692)            (7,090)
  Pacific and Far East...............................              (3,756)           (13,717)           (66,413)
  United States......................................              (6,211)           (11,667)           (16,002)
                                                           ----------------     --------------     --------------
                                                           $      (10,121)           (29,920)           (96,806)
                                                           ----------------     --------------     --------------
                                                           ----------------     --------------     --------------


Identifiable assets:
  Latin America......................................      $        13,017             19,712             22,937
  Southeast Asia.....................................                5,658              6,541             29,316
  Pacific and Far East...............................               50,017            104,966             60,026
  United States......................................               26,951             38,139             11,090
                                                           ----------------     --------------     --------------
                                                           $        95,643            169,358            123,369
                                                           ----------------     --------------     --------------
                                                           ----------------     --------------     --------------
</TABLE>

     The Company's consolidated operations in Latin America are in Brazil and 
Peru. The Company's consolidated operations in Southeast Asia are in 
Pakistan. The Company's consolidated operations in Pacific and Far East are 
in New Zealand. The Company's equity method and cost investees are included 
in the geographic areas in which principal operations exist or will exist 
(see Note 5).

(15)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of the Company's cash and cash equivalents, notes 
receivable from and advances to affiliates, accounts payable and accrued 
expenses, notes payable to related party and note payable approximates the 
fair market value due to the relatively short maturity of these instruments. 
The fair value of other financial instruments is described below.

     The following methods and assumptions were used to estimate the fair 
value of each category of financial instruments for which it is practicable 
to estimate that value:

     INVESTMENT IN AFFILIATE HELD FOR SALE -- The fair value of this 
instrument is determined by management to be the same as its carrying amount.

     INVESTMENTS IN AFFILIATES CARRIED ON THE COST METHOD -- The fair value 
of these instruments is estimated based upon recent transactions in this 
portfolio (see Note 5).

     LONG-TERM DEBT, NET -- The fair value of the Exchange Notes was based on 
recent trading prices of the related debt. The fair value of the Pakistan 
Bridge Facility was estimated by management to be the same as the carrying 
amount as no significant change in prevailing interest rates had occurred 
since the issuance of the debt facility.

     The estimated fair values of the Company's financial assets 
(liabilities) as of December 31 are summarized as follows (in thousands):

                                  F-40

<PAGE>

<TABLE>
<CAPTION>
                                                              1997
                                                -------------------------------------
                                                  CARRYING AMOUNT        ESTIMATED
                                                                         FAIR VALUE
                                                ------------------    ---------------
<S>                                             <C>                   <C>
Investment in affiliate held for sale......      $           1,873              1,873
Investment in affiliates carried on the
   cost method.............................                  9,369             10,383

Long-term debt, net........................                 75,466             74,754
</TABLE>


(16)  SUBSEQUENT EVENTS

     In January 1998, the Board of Directors granted options to an employee 
to purchase 165,000 shares of common stock at an exercise price of $9.60 per 
share under the 1996 SO/SIP.

     In January 1998, pursuant to an Agreement and Plan of Merger (the 
"Merger Agreement"), a wholly owned subsidiary of IWC merged with and into 
Radio Movil Digital Americas, Inc. ("RMDA"). RMDA is a company engaged in the 
acquisition and operation of ESMR wireless dispatch communications services 
and the sale, lease and servicing of related equipment in certain countries 
of South America, particularly Brazil, Venezuela and Argentina. The aggregate 
consideration paid by IWC pursuant to the Merger Agreement, after giving 
effect to various purchase price adjustments set forth in the Merger 
Agreement, consisted of 5,381,009 shares of the Company's Series I redeemable 
convertible preferred stock with an aggregate liquidation preference of 
$73,871,000 and $4,800,000 in cash (collectively, the "Consideration"). Of 
the shares of Series I redeemable convertible preferred stock issued pursuant 
to the Merger Agreement, 4,652,608 shares were issued to the former security 
holders of RMDA, and the remaining 728,438 shares were deposited in escrow, 
pending future release to the former security holders of RMDA or to the 
Company in accordance with the Merger Agreement. All outstanding capital 
stock of RMDA as of January 23, 1998, was surrendered and the RMDA 
shareholders received their pro rata share of the equity portion of the 
Consideration paid by the Company, net of the escrowed shares. After closing 
of the merger, RMDA became a wholly-owned subsidiary of IWC. In the event of 
Company liquidation, the holders of Series I redeemable convertible preferred 
stock will be subordinate to Series G, H, J and F shareholders and PARI PASSU 
with the rights of Series B, C, D and E shareholders. Series I redeemable 
convertible preferred stock is redeemable at any time on or after the later 
of (i) such date as all of the Company's Exchange Notes and the Pakistan 
Bridge Facility have been repaid in full and (ii) December 31, 1998.

     The cash portion of the Consideration paid by the Company was financed 
using funds borrowed pursuant to an Amended and Restated Senior Secured Note 
and Warrant Purchase Agreement (the "RMDA Loan Agreement"), dated January 23, 
1998, among the Company, RMDA and BT Foreign Investment Corporation. The RMDA 
Loan Agreement, which provides up to $35.0 million, works as a three-tiered 
facility, with (i) the first $15.0 million being a refinancing of existing 
RMDA Subordinated Convertible Notes, (ii) the next $10.0 million issued 
immediately upon closing of the Merger (the "Initial Closing", and together 
with the Subordinated Convertible Notes, the "Senior Secured Note") and (iii) 
another $10.0 million being available at such place and on such date in the 
future as may be mutually agreeable by the parties involved. The $25.0 
million Senior Secured Note has a stated interest rate of 14.5% per annum 
with interest paid quarterly beginning May 23, 1998 (with the first payment 
including any accrued but unpaid interest on the previously existing 
Subordinated Convertible Notes) and principal due the earlier of August 23, 
1999 or an Event of Default (as defined). The Senior Secured Note is 
collateralized by certain Brazilian assets of the Company. A warrant to 
purchase 155,840 shares of IWC's common stock at an exercise price of $0.01 
per share was also issued in connection with the RMDA Loan Agreement (the 
"RMDA Loan Agreement Warrant").

     In January 1998, as a result of the RMDA Loan Agreement Warrant and 
pursuant to the terms of the Unit Warrants, the number of shares of the 
Company's common stock issuable upon exercise of the Unit Warrants increased 
by 14,594 shares to an aggregate of 2,917,326 shares.

     In February 1998, pursuant to the terms of the IWCH Pakistan Facility, 
the number of shares of the Company's common stock issuable upon exercise of 
the Initial Pakistan Warrants increased by 196,018 shares to an

                                  F-41

<PAGE>

aggregate of 889,594. As a result, pursuant to the terms of the Unit 
Warrants, the number of shares of the Company's common stock issuable upon 
exercise of the Unit Warrants increased by 18,334 shares to an aggregate of 
2,935,660 shares.

     In February 1998, the Company signed a binding letter of intent with an 
unrelated third party to sell PeruTel and RMDA's interests in Ecuador and 
Chile for total cash consideration of $3,125,000 subject to adjustments as 
outlined in the letter of intent.

     In March 1998, the Company signed a letter agreement with an unrelated  
third party to sell RMDA's  interests in Venezuela for total cash  
consideration  of  $19,500,000, subject to adjustments as outlined in the 
letter of intent.

     In March 1998, the Company agreed on a repayment plan for its $500,000 
note receivable to an unrelated third party that was issued in March 1997 and 
received the first  installment of $100,000.  The Company expects to collect 
the remainder of the note during 1998.

     In March 1998, the Company completed the first closing (the "First 
Closing") of its Series J Preferred Stock and Warrant financing (the "Series 
J Financing") with a $10.0 million investment from Vanguard by issuing 
789,266 shares of its Series J redeemable convertible preferred stock (the 
"Vanguard Series J Preferred Stock and Warrant Purchase Agreement"). The 
Company expects to raise up to a total of $18.0 million (the "Face Amount") 
from the Series J Financing. Vanguard committed to and funded $10.0 million 
of the facility with all existing IWC shareholders having the option to 
participate at their pro rata share of the $18.0 million Face Amount to raise 
up to an additional $8.0 million (the "Second Closing"). The Second Closing 
is expected to close 45 days after the First Closing. In the event of Company 
liquidation, the holders of Series J redeemable convertible preferred stock 
will be subordinate to Series G and H shareholders and be superior to the 
rights of all other shareholders. Series J redeemable convertible preferred 
stock is redeemable at any time on or after the later of (i) such date as all 
of the Company's Exchange Notes and the Pakistan Bridge Facility have been 
repaid in full and (ii) December 31, 1998. In connection with the Series J 
Financing, the Company issued a warrant to purchase shares of the Company's 
common stock at an exercise price of $0.01 per share (the "Series J Financing 
Warrant"). The number of shares issuable of the Company's common stock at the 
First Closing upon exercise of such warrant is initially set at 173,638 and 
increases upon the occurrence of certain events. Additional warrants will be 
issued upon the Second Closing.

     As part of the Vanguard Series J Preferred Stock and Warrant Purchase 
Agreement, Vanguard shall have the right to exchange (the "Exchange Right"), 
upon the closing of an IPO, its direct or indirect equity interests in Star 
Digitel and Mobilink and any other of the Company's core investments (as 
defined) that Vanguard may acquire an interest in (collectively, the 
"Vanguard Assets"), into the Company's common stock. Such Exchange Right is 
contingent upon, but shall occur prior to an IPO, to allow the Company to 
include the Vanguard Assets in the offering document. The conversion of the 
Vanguard Assets shall be valued on a per share basis at the midpoint of the 
underwriter's valuation for the Vanguard Assets entities which form the basis 
of the IPO pricing, net of any discounts applicable to the Company's 
interests.

     Concurrent with the Series J Financing, the Company entered into a 
Support Services Agreement with Vanguard (the "Vanguard Support Services 
Agreement") whereby Vanguard will assist Star Digitel for a period of up to 
one year in (i) completing its proposed unit offering of notes and warrants 
or alternative financing, and (ii) entering into an equipment financing 
agreement with a vendor in exchange for a warrant to purchase 323,408 shares 
of common stock at an exercise price of $0.01 per share (the "Vanguard 
Support Services Agreement Warrant"). Such warrant will vest (i) 50% upon 
Star Digitel raising $50.0 million in the proposed unit offering or 
alternative financing and (ii) 50% upon Star Digitel entering into an 
equipment supply agreement with a vendor with financing up to $150.0 million 
for such equipment.

     In March 1998, as a result of the Series J Financing Warrant and the 
Vanguard Support Services Agreement Warrant pursuant to the terms of the Unit 
Warrants, the number of shares of the Company's common stock issuable upon 
exercise of the Unit Warrants increased by 45,339 shares to 2,980,999 shares.

     In March 1998, pursuant to the terms of the Vanguard Star Digitel 
Guarantee, the number of shares of the 

                                   F-42

<PAGE>

Company's common stock issuable upon exercise of the Vanguard Star Digitel 
Guarantee warrant increased by 52,080 shares to an aggregate of 172,763. As a 
result, pursuant to the terms of the Unit Warrants, the number of shares of 
the Company's common stock issuable upon exercise of the Unit Warrants 
increased by 4,825 shares to an aggregate of 2,985,824 shares.

                                   F-43
<PAGE>


ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
           FINANCIAL DISCLOSURE

           Not applicable.


                                      60
<PAGE>


                                                               PART III

ITEM 10.   DIRECTORS AND OFFICERS OF THE REGISTRANT

           The directors, executive officers and key employees of the Company as
of March 31, 1998 were as follows:

<TABLE>
<CAPTION>
NAME                                                            AGE                                POSITION
----                                                            ---                                --------
<S>                                                             <C>    <C>
Haynes G. Griffin(1)(4).................................         50    Chairman of the Board
John D. Lockton.........................................         60    Vice Chairman of the Board
Hugh B. L. McClung......................................         55    Vice Chairman of the Board
Van E. Snowdon(4).......................................         41    Director, President and Chief Executive Officer
Clarence "Sam" Endy.....................................         59    Executive Vice President and Chief Operating Officer
Robin M.G. Maule........................................         56    Senior Vice President, Business Development--Asia
Roger Quayle............................................         43    Senior Vice President, Technology
Steven D. Overly........................................         39    Senior Vice President, General Counsel
David T. Venn...........................................         38    Senior Vice President, Operations--Asia
Keith D. Taylor.........................................         36    Vice President and Controller
Sanford L. Antignas(4)..................................         36    Director
Carl C. Cordova III(1)(2)(3)(4).........................         36    Director
Stephen R. Leeolou......................................         42    Director
John S. McCarthy(2)(4)..................................         49    Director
Brian Rich(4)...........................................         36    Director
</TABLE>
___________________

(1)   Member of Compensation Committee.
(2)   Member of Audit Committee.
(3)   Member of Option Committee.
(4)   Member of Finance Subcommittee.

           MR. GRIFFIN has served as Chairman of the Board of Directors of 
the Company since June 1996. Mr. Griffin is a co-founder of Vanguard, and 
has served as Chairman of the Board and Co-Chief Executive Officer of 
Vanguard since November 1996. From July 1984 to November 1996, he was 
President and Chief Executive Officer of Vanguard. Mr. Griffin also 
serves as a director of Lexington Global Asset Managers, Inc. and Geotek 
Communications, Inc. Mr. Griffin holds a B.A. from Princeton University.

           MR. LOCKTON is a co-founder of the Company and has served as Vice
Chairman of the Board of Directors since March 1998. From January 1992 to 
March 1998, he served as President, Chief Executive Officer and a director of 
the Company. From May 1990 to August 1991, he was Managing Partner of 
Corporate Technology Partners ("CTP"), a partnership formed to pursue 
wireless communications licenses and form local wireless communications 
businesses in developing countries, which was the predecessor to the Company. 
In August 1988, he founded Cellular Data, Inc., a wireless company, and Star 
Associates, Inc., a cellular radio RSA company. From December 1983 to 
July 1986, Mr. Lockton was Executive Vice President for Pacific Bell Company, 
with responsibility for more than 20,000 employees and $10 billion in 
revenues including the Pacific Bell wireless business. From November 1980 to 
September 1983, Mr. Lockton was President of Warner Amex (now Time Warner) 
Cable Television, Inc. From 1968 to 1980, he served in various positions with 
Dun and Bradstreet Corporation, including President of Dun and Bradstreet 
International and President of Moody's Investor Services, Inc. Mr. Lockton 
was a director of Interactive Network, Inc., a wireless based interactive 
television company, from December 1987 to April 1996 and was Chairman of the 
Board of Directors until December 1994. He was also a director of Centex 
Telemanagement, Inc., a shared access telephone service provider from May 
1992 until the company was acquired by MFS, Inc. in July 1994. Mr. Lockton 
holds a B.A. in Economics from Yale 

                                      61
<PAGE>

University, an L.L.B. from Harvard Law School and an Executive M.B.A. from 
the Columbia University Business School.

           MR. MCCLUNG is a co-founder of the Company and has served as a
director of the Company since its inception in January 1992 and as Vice Chairman
of the Board of Directors since December 1995. Mr. McClung served as Chairman of
the Board of Directors of the Company from January 1992 to December 1995, and
served as Chief Financial Officer of the Company from January 1992 until April
1995. From 1986 to 1991, he was a general partner of CTP, which he co-founded to
pursue wireless communications licenses and form local wireless communications
businesses in developing countries. Mr. McClung holds a B.A. in Economics and an
M.B.A. from the University of Washington.

           MR. SNOWDON has served as a director of the Company since March 
1996 and as President and Chief Executive Officer since March 1998. From 
August 1995 to March 1998, Mr. Snowdon had served as President and Vice 
President of Vanguard Communications, Inc., a subsidiary of Vanguard. From 
January 1992 to August 1995, he was Vice President of Vanguard International 
Telecommunications, Inc., a subsidiary of Vanguard. Mr. Snowdon also serves 
on the Board of Directors of Cellular Telecommunications Services, Ltd., and 
Digitel Telecommunications Services Ltd. Mr. Snowdon holds a B.S. in 
Management, a B.S. in Marketing and an M.B.A. from James Madison University.

           MR. ENDY has served as Chief Operating Officer of the Company since
June 1996 and has served as Executive Vice President of the Company since August
1994. In addition, since August 1997, Mr. Endy has responsibility for the
Company's Asian operations. From July 1988 to May 1994, Mr. Endy held the
positions of Senior Vice President, Sales and Service, Senior Vice President,
Sales and Marketing, and Chief Service Officer at Centex Telemanagement, Inc., a
telecommunications management company. From 1982 to 1988, Mr. Endy was with
Sprint Communications, Inc., most recently as Corporate Vice President for
Operations, where he was responsible for the management and operation of the
national and international network optical fiber and switching network. From
1977 to 1982, Mr. Endy served as a tenured professor and Deputy Head, Department
of Electrical Engineering at the U.S. Military Academy at West Point, N.Y. 
Mr. Endy holds a B.S. in Military Science from the U.S. Military Academy, West
Point, an M.S. in Electrical Engineering from Purdue University and a Ph.D. in
Electrical Engineering from Purdue University.

           MR. MAULE has served as Senior Vice President, Business
Development-Asia, of the Company since January 1997. From 1994 to October 1996,
Mr. Maule served as Chief Operating Officer of Mobisel. From 1993 to 1994 Mr.
Maule served as a consultant for Islacom, a Philippine telecommunications
network operator, where he was responsible for the design and construction of a
fixed telephone network, international gateway and nationwide GSM network. From
July 1987 to 1993, Mr. Maule served as Group Director of Strategic Planning of
Hutchison Telecom, a Hong Kong telecommunications network operator. From 1972 to
July 1987, Mr. Maule held various positions with Motorola in Asia. Mr. Maule
holds a B.S. in Math and Physics from St. Andrews University and an HNC in
Electronics and Business Studies from Reading Technical College.

           MR. OVERLY has served as Senior Vice President and General Counsel of
the Company since February 2, 1998. From 1992 to January 1998, Mr. Overly was
Vice President and General Counsel of Lockheed Martin Telecommunications
(including its predecessors, Martin Marietta Astro Space and GE Astro Space), a
major satellite manufacturer and telecommunications service provider. From 1990
to 1992, Mr. Overly was Division Counsel, Aircraft Electronics & Defense Systems
Division, General Electric Company. Mr. Overly holds a B.A. in Political Science
from Gettysburg College, an M.P.A. from Pennsylvania State University, a J.D.
from Stetson University College of Law and a Master of Laws in International and
Comparative Law from Georgetown University.

           MR. QUAYLE has served as Senior Vice President, Technology of the
Company since May 1996. From May 1995 to April 1996, he served as the Company's
Vice President, Technology, and from August 1994 to May 1995, he served as the
Company's Vice President, Asian Operations. From July 1991 to August 1996, 
Mr. Quayle held various management positions with Broadcast Communications 
Ltd., a New Zealand broadcasting and telecommunications network and engineering
company, most recently as General Manager of Technology and 


                                      62
<PAGE>

Business Development, in which he was responsible for developing wireless 
communications and media strategies and for developing international 
businesses. From 1989 to 1991, Mr. Quayle was Senior Consultant and Principal 
of Amos Aked Swift, an Australian telecommunications consulting company, 
engaged primarily in assisting clients to develop new wireless businesses. 
Prior to that time, he was the founder and Managing Director of Datacomm 
Equipment Ltd., a New Zealand data communications products and services 
company.

           MR. VENN has served as Senior Vice President, Operations-Asia of the
Company since May 1997. From May 1994 to May 1997, Mr. Venn was Managing
Director of London Interconnect, Ltd., a telecommunications and multimedia
company in London, where he was responsible for building and managing a new high
speed networking operation, an advertising sales operation and a pay-per-view TV
service. From May 1992 to May 1994, Mr. Venn served as a director of Focus
Business Services, Ltd., a management consulting company. From December 1989 to
July 1991, Mr. Venn served as International Product Development Manager for Hong
Kong Telephone Co., Ltd. From 1983 to December 1989, Mr. Venn held various
positions with Mercury Communications, Ltd., a telecommunications company in the
United Kingdom. Mr. Venn holds a B.S. in Telecommunications from University
SouthWest and an M.B.A. from Ashridge Management College.

           MR. TAYLOR has served as a Vice President of the Company since
October 1997 and Controller of the Company since February 1996. From March 1994
to February 1996, Mr. Taylor served as Senior Sector Analyst of Becton Dickinson
& Company, a medical device manufacturer. From October 1989 to March 1994, 
Mr. Taylor served as Manager, Financial Reporting of Becton Dickinson Canada, 
Inc. Mr. Taylor holds a B.B.A. in Accounting from Bishop's University and is a
member of the Ontario Institute of Chartered Accountants.

           MR. ANTIGNAS has served as a director of the Company since December
1996. Mr. Antignas is a Principal of Bassini Playfair + Associates LLC, an
emerging markets equity investment firm, which he joined in April 1996. From
August 1994 to April 1996, he was Director of International Direct Investments
for a unit of American International Group, Inc., and from September 1987 to
August 1994, he held various positions with GE Capital Corporation. Mr. Antignas
is a Certified Public Accountant, having previously been employed by Deloitte
Haskins & Sells. Mr. Antignas holds a B.S. in Business Administration from the
University of California, Berkeley and an M.B.A. from New York University.

           MR. CORDOVA has served as a director of the Company since  
December 1995. Mr. Cordova is a Principal of Electra Fleming Inc., an 
affiliate of Electra Investment Trust PLC ("Electra"), which he joined in 
1993. He serves on the Boards of Directors of a number of companies. Prior 
to joining Electra Fleming Inc., he was a Vice President of Columbia Capital 
Group. Mr. Cordova received a B.A. from Gettysburg College and an M.B.A. 
from The Wharton School of the University of Pennsylvania.

           MR. LEEOLOU has served as a director of the Company since February
1994 and served as Chairman of the Board of Directors of the Company from
December 1995 to June 1996. Mr. Leeolou is a co-founder of Vanguard and has
served as its President and Co-Chief Executive Officer since November 1996. From
July 1984 to November 1996, he was Executive Vice President and Chief Operating
Officer of Vanguard. Mr. Leeolou holds a B.A. in Communications from James
Madison University.

           MR. MCCARTHY has served as a director of the Company since May 1993.
Since December 1984, Mr. McCarthy has been a General Partner of Gateway
Associates, a venture capital firm which he co-founded ("Gateway Associates").
Mr. McCarthy serves on the Board of Directors of Transaction Network Services,
Inc., a publicly held electronic data telecommunications company. Mr. McCarthy
also serves on the boards of directors of Tek Now, Inc., a paging networks
system company, NetSolve, Inc., a data communications network company, Savvis
Communications Corp., a ATM network provider, and Omnilink Communication Corp.,
an ISDN terminal products manufacturer. Mr. McCarthy holds a B.S. in Business
from Washington University and an M.B.A. from St. Louis University.

           MR. RICH has served as a director of the Company since December 1995.
Since July 1995, Mr. Rich has served as Managing Director and Group Head of
Toronto-Dominion Capital, the U.S. merchant bank affiliate of The
Toronto-Dominion Bank. From September 1990 to July 1995 he served as Managing
Director of the 


                                      63
<PAGE>

Communications Finance Group of The Toronto-Dominion Bank where he focused on 
transactions in the wireless communications, cable and broadcast industries. 
Mr. Rich also serves as a member of the Board of Directors of Teletrac, Inc., 
a vehicle location company, and InterAct, Inc., an electronic couponing and 
brand promotion company. Mr. Rich holds a B.S. in Engineering from the State 
University of New York at Buffalo and an M.B.A. from Columbia University.

           The Company currently has authorized eleven directors with nine
directors currently serving and two vacancies. Each director holds office until
the next annual meeting of stockholders or until his successor is duly elected
and qualified. The Officers serve at the discretion of the Board of directors of
the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

           The Board of Directors currently has four standing committees: (i) an
Audit Committee (the "Audit Committee"); (ii) a Compensation Committee (the
"Compensation Committee"); (iii) an Option Committee (the "Option Committee")
and (iv) a Finance Subcommittee (the "Finance Subcommittee"). The Board of
Directors has from time to time established other committees to assist in the
discharge of its responsibilities.

           The duties of the Audit Committee include recommending independent
auditors to the Board of Directors, reviewing the intended scope of the annual
audit, the audit methods and principles being applied by the independent
auditors and the fees charged by the independent auditors, reviewing and
discussing the results of the audit, reviewing the Company's significant
accounting principles, policies and practices and undertaking related matters.
KPMG Peat Marwick LLP presently serves as the independent auditors of the
Company. The Audit Committee is currently comprised of Messrs. Cordova and
McCarthy.

           The duties of the Compensation Committee include providing guidance
and periodic monitoring for all corporate compensation, benefit, perquisite and
employee equity programs, including those for all corporate officers, and
succession planning for corporate officers, other than the 1996 Stock Incentive
Plan (as defined herein). The Compensation Committee is currently comprised of
Messrs. Cordova and Griffin. The duties of the Option Committee include
administering the 1996 Stock Incentive Plan. The Option Committee is currently 
comprised of Mr. Cordova.

           The duties of the Finance Subcommittee consist of such matters as are
delegated to it from time to time by the Board of Directors. The Finance
Subcommittee is currently comprised of Messrs. Antignas, Cordova, Griffin,
McCarthy, Rich and Snowdon.

ARRANGEMENTS CONCERNING ELECTION OF DIRECTORS

           Pursuant to the Company's Amended and Restated Certificate of
Incorporation (the "Certificate"), (i) Vanguard, as the holder of Series E
Preferred Stock (as defined herein), is entitled to elect three directors to the
Company's Board of Directors and (ii) for so long as 20% of the shares of Series
F Preferred Stock (as defined herein) remain outstanding, the holders of Series
F-1 Preferred Stock (as defined herein) are entitled to elect three directors,
one of whom Electra has the right to elect, one of whom Central Investment
Holdings, Inc. ("CIH") has the right to elect and one of whom Toronto-Dominion
Investments Inc. ("TDI") has the right, subject to the conversion of its Series
F-2 Preferred Stock (as defined herein) into Series F-1 Preferred Stock, to
elect (subject, in each case, to minimum stock ownership requirements). Pursuant
to the Investor Rights Agreement ("IRA", as defined herein), upon termination of
the rights referred to in clause (ii) of the preceding sentence, for so long as
20% of the Series F Preferred Stock or the Common Stock issued or issuable upon
conversion thereof (the "Series F Conversion Shares") are held by Series F
Holders (as defined in the IRA), holders of Preferred Stock and certain
transferees thereof have agreed to vote for three directors designated by a
majority of the Series F Conversion Shares, one of whom Electra has the right to
designate, one of whom CIH has the right to designate and one of whom TDI has
the right to designate (subject, in each case, to minimum stock ownership
requirements). The holders of Series F-1 Preferred Stock have certain additional
rights with respect to the election of one additional director 


                                      64
<PAGE>

upon the occurrence of certain events specified in the Series F Purchase 
Agreement (as defined herein). In satisfaction of such provisions, the 
Company's Board of Directors presently includes: Messrs. Griffin, Leeolou and 
Snowdon, who are representatives of Vanguard; Mr. Cordova, who is a 
representative of Electra; and Mr. Rich, who is a representative of TDI. CIH 
has the right to elect a director to fill the one existing vacancy on the 
Board of Directors.

           Pursuant to a Memorandum of Understanding entered into in August 1997
among Vanguard, Electra and certain funds managed by BEA Associates or entities
affiliated with BEA Associates (collectively, the "BEA Funds"), each of the
parties agreed that until the Company completes an initial public offering or is
sold or merges with another entity, it will not take any actions that would
result in a representative of BEA Associates from being removed from the Board
of Directors of the Company, so long as the BEA Funds retain their current level
of ownership. As of November 15, 1997, the BEA Funds beneficially owned
approximately 8.45% of the Company's Common Stock. Bassini Playfair+ Associates
LLC is a consultant to BEA Associates and provides services to the BEA Funds
with respect to their investment in the Company. Mr. Antignas, a Principal of
Bassini Playfair+ Associates LLC, currently serves as the representative of the
BEA Funds on the Company's Board of Directors.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

           The Certificate limits the liability of the Company's directors for
monetary damages arising from a breach of their fiduciary duty as directors, to
the maximum extent permitted by the DGCL. Such limitation of liability does not
affect the availability of equitable remedies such as injunctive relief or
rescission. The Company's Bylaws provide that the Company shall indemnify its
officers and directors to the fullest extent permitted by the DGCL. The Company
has also entered into indemnification agreements with its officers, directors,
and certain other employees containing provisions that may require the Company,
among other things, to indemnify such persons against certain liabilities that
may arise by reason of their status or service as officers, directors or
employees of the Company (other than liabilities arising from willful misconduct
of a culpable nature) and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified.

ITEM 11.   EXECUTIVE COMPENSATION

           The following table sets forth the compensation earned by the
Company's Chief Executive Officer and four other most highly compensated
executive officers, each of whom earned salary and bonus for the fiscal year
ended December 31, 1997 in excess of $100,000 (collectively, the "Named
Officers"), for services rendered in all capacities to the Company during its
previous fiscal year.


                                      65
<PAGE>


                                                    SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                                    LONG-TERM
                                                                                                  COMPENSATION
                                                                   ANNUAL COMPENSATION               AWARDS
                                                        ----------------------------------------  ------------
                                                                                                   SECURITIES       ALL OTHER
                                                                                                   UNDERLYING      COMPENSATION
           NAME AND PRINCIPAL POSITION(1)                YEAR          SALARY($)       BONUS($)    OPTIONS(#)         ($)(2)
-----------------------------------------------------  --------     --------------    ----------  -------------   -------------
<S>                                                      <C>           <C>             <C>         <C>             <C>
John D. Lockton                                          1997          180,000         70,200         51,573          2,327
      Former President and Chief Executive Officer,      1996          157,500         50,000        200,000          2,327
      Vice Chairman of the Board(3)                      1995          120,000         50,000              0          2,327

Hugh B.L. McClung                                        1997          180,000         70,200         51,573          2,695
      Vice Chairman of the Board                         1996          157,500         50,000        200,000          4,115
                                                         1995          120,000         50,000              0          2,574

Clarence Endy                                            1997          205,000         61,500         33,154          3,973
      Executive Vice President                           1996          195,000         45,000         40,000          3,804
      Operations and Chief Operating Officer             1995          195,000         20,000              0          3,804

Douglas S. Sinclair(4)                                   1997          165,000         38,775         28,733         47,745(5)
      Former Executive Vice President and                1996          155,000         38,000         36,000         48,383(5)
      Chief Financial Officer                            1995          100,104         15,000        120,000        116,122(5)

James M. Dixon(6)                                        1997          147,126         60,000        120,000             --
      Former Executive Vice President
</TABLE>

________________________

(1)   Table does not include Van E. Snowdon, President and Chief Executive
      Officer of the Company, who joined the Company in March 1998 and whose 
      annualized base salary for 1998 is $250,000, and Steven D. Overly, 
      Senior Vice President and General Counsel, who joined the Company in 
      February 1998 and whose annualized base salary for 1998 is $230,000.

(2)   Represents premium for life insurance paid by the Company, unless 
      otherwise noted.

(3)   Mr. Lockton resigned as President and Chief Executive Officer and was 
      elected Vice Chairman of the Board in March 1998.

(4)   Mr. Sinclair ceased serving as Executive Vice President and 
      Chief Financial Officer in March 1998.

(5)   Includes a cost of living adjustment of $47,745 paid by the Company in
      1997, a cost of living adjustment of $47,745 and life insurance premiums
      in the amount of $638 paid by the Company in 1996 and a cost of living
      adjustment of $47,480 and reimbursement for relocation expenses of $68,642
      in 1995. 

(6)   Mr. Dixon ceased serving as an Executive Vice President of the Company in
      February 1998.


                                      66
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

           The following table contains information concerning the stock option
grants made to each of the Named Officers for the fiscal year ended December 31,
1997.

                                             OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
                                                                                                      POTENTIAL REALIZABLE
                                                                                                        VALUE AT ASSUMED
                                                                                                      ANNUAL RATES OF STOCK
                                                                                                       PRICE APPRECIATION
                                       INDIVIDUAL GRANTS                                               FOR OPTION TERM(3)
                             ---------------------------------------                               --------------------------
                                   NUMBER OF          % OF TOTAL
                                   SHARES OF            OPTIONS
                                 COMMON STOCK         GRANTED TO      EXERCISE
                              UNDERLYING OPTIONS     EMPLOYEES IN       PRICE         EXPIRATION
            NAME                GRANTED (#)(1)        FISCAL YEAR     ($/SH)(2)          DATE         5% ($)       10%($)
------------------------------------------------- ---------------- --------------- --------------- ------------ ------------
<S>                           <C>                  <C>             <C>             <C>             <C>           <C>
John D. Lockton............          51,573               6%           $9.375           2/3/07        304,067       770,567
Hugh B.L. McClung..........          51,573               6%            9.375           2/3/07        304,067       770,567
Clarence Endy..............          33,154               4%            9.375           2/3/07        195,472       495,365
Douglas S. Sinclair........          28,733               3%            9.375           2/3/07        169,405       429,307
James M. Dixon.............         120,000              13%            9.375           2/3/07        707,506     1,792,960
</TABLE>

____________

(1)     Each option is immediately exercisable. The shares purchased thereunder
        are subject to repurchase by the Company at the original exercise price
        paid per share upon the optionee's cessation of service prior to vesting
        in such shares. The repurchase right lapses and the optionee vests as to
        25% of the option shares upon completion of one year of service from the
        date of grant and the balance in a series of equal monthly installments
        over the next 36 months of service thereafter. The option shares will
        vest upon an acquisition of the Company by merger or asset sale, unless
        the Company's repurchase right with respect to the unvested option
        shares is transferred to the acquiring entity. The options have a
        maximum term of ten years, subject to earlier termination in the event
        of the optionee's cessation of employment with the Company.

(2)     The exercise price may be paid in cash, in shares of the Company's
        Common Stock valued at fair market value on the exercise date or through
        a cashless exercise procedure involving a same-day sale of the purchased
        shares. The Company may also, at its discretion, finance the option
        exercise by lending the optionee sufficient funds to pay the exercise
        price for the purchased shares, together with any federal and state
        income tax liability incurred by the optionee in connection with such
        exercise.

(3)     The 5% and 10% assumed annual rates of compounded stock price
        appreciation are provided for informational purposes only based on rules
        of the Commission. The Company is unable to predict whether the stock
        price will increase or decrease and, if it does increase, there can be
        no assurance that the actual stock price appreciation over the ten-year
        option term will be at the assumed 5% and 10% levels or at any other
        defined level. Unless the market price of the Common Stock appreciates
        over the option term, no value will be realized from the option grants
        made to the executive officers.


                                      67
<PAGE>

OPTION EXERCISES AND FISCAL YEAR-END VALUES

           The following table sets forth information concerning option holdings
for the fiscal year ended December 31, 1997 with respect to each of the Named
Officers. No options were exercised during the fiscal year ended December 31,
1997, and no stock appreciation rights were exercised during such year or were
outstanding at the end of that year.

                                                 FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
                                                                  NUMBER OF SHARES OF
                                                                      COMMON STOCK                     VALUE OF UNEXERCISED
                                                                 UNDERLYING UNEXERCISED                    IN-THE-MONEY
                                                                     OPTIONS AS OF                         OPTIONS AS OF
                                                                 DECEMBER 31, 1997 (#)                 DECEMBER 31, 1997 ($)
                                                                 ---------------------                 ---------------------
          NAME                                              EXERCISABLE       UNEXERCISABLE        EXERCISABLE      UNEXERCISABLE
          ----                                              -----------       -------------        -----------      -------------
          <S>                                               <C>               <C>                  <C>              <C>
          John D. Lockton..........................           331,573               0               $1,054,604           0
          Hugh B. L. McClung.......................           331,573               0               $1,054,604           0
          Clarence Endy............................           213,154               0               $1,375,460           0
          Douglas S. Sinclair......................           184,733               0                 $461,565           0
          James M. Dixon...........................           120,000               0                  $27,000           0
</TABLE>

______________

(1)     Based on the estimated fair market value of Common Stock as of 
        December 31, 1997 ($9.60 per share) less the exercise price payable 
        for such shares.

(2)     The options are immediately exercisable for all the option shares, but
        any shares of Common Stock purchased under the options will be subject
        to repurchase by the Company at the original exercise price per share
        upon the optionee's cessation of service prior to vesting in such
        shares. The repurchase right had lapsed as to the following number of
        shares as of December 31, 1997: Mr. Lockton--154,165 shares; Mr.
        McClung--167,499 shares; Mr. Endy--134,165 shares; Mr. Sinclair--94,998
        shares; and Mr. Dixon--0 shares.

DIRECTOR COMPENSATION

           Directors other than Haynes G. Griffin do not receive any cash
compensation for their service as members of the Board of Directors, although
they are reimbursed for their expenses in attending Board and Committee
meetings. Mr. Griffin receives compensation in the amount of $50,000 per year
for his services as an employee and Chairman of the Board. Further, certain
outside directors have been granted options to purchase shares of Common Stock
in connection with their service as directors of the Company as follows: Van E.
Snowdon-14,735 shares at an exercise price of $9.375 per share granted in
February 1997 and 65,250 shares at an exercise price of $9.375 granted in May
1997; Stephen R. Leeolou-80,000 shares at an exercise price of $8.125 per share
granted in March 1996; and John S. McCarthy-12,000 shares at an exercise price
of $2.00 per share granted in October 1994. The foregoing option grants exclude
options to purchase an aggregate of 465,250 shares of Common Stock at an
exercise price of $9.375 per share granted to Messrs. Griffin and Snowdon
pursuant to the Vanguard Warrant Exchange (as defined herein). See "Certain
Relationships and Related Transactions--Vanguard Warrant Exchange."

EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS

           The Company does not currently have employment contracts with the
Named Officers, except as described below.

           In April 1997, the Company entered into an employment agreement with
Mr. Dixon pursuant to which he became an Executive Vice President of the
Company. The agreement provided for an annual salary of $200,000 plus a target
bonus (guaranteed for 1997) equal to 30% of salary and a performance-based bonus
payable in cash or 


                                      68
<PAGE>

Common Stock based on the achievement of certain targets relating to the 
valuation of the Company's Latin American operations. Mr. Dixon's employment 
agreement also provided that if Mr. Dixon's severance payments from his prior 
employer ceased or were reduced for any reason prior to the end of 1997, the 
Company would make payments to Mr. Dixon in an amount equal to such 
reduction, up to a maximum of $150,000. In addition, the agreement provided 
that the Company would pay Mr. Dixon certain relocation expenses if he moved 
to a location closer to Latin America at the Company's request. Further, 
pursuant to the agreement the Company granted Mr. Dixon an option to purchase 
120,000 shares of Common Stock at $9.375 per share. The agreement also 
provided for payment of one-half year of salary plus any accrued bonus up to 
the date of termination if Mr. Dixon were terminated for any reason other 
than for cause. In February 1998, the Company entered into a settlement 
agreement with Mr. Dixon pursuant to which the employment agreement was 
terminated and Mr. Dixon resigned as Executive Vice President of the Company. 
The agreement provides a cash bonus to Mr. Dixon in the amount of $60,000, 
payable in four equal installments commencing April 1, 1998. The agreement 
also provides that the Company will make four additional payments to 
Mr. Dixon in the amount of $23,000 each commencing on April 1, 1998.

           In March 1998, the Company entered into an agreement with John D.
Lockton concerning the terms of Mr. Lockton's resignation as President and Chief
Executive Officer of the Company. The agreement guarantees Mr. Lockton
employment or pay in lieu of employment for one year as the Vice Chairman of the
Company with a salary of $180,000. The agreement also provides guaranteed
bonuses for 1997 and 1998 in the sum of $70,200 for each year. In addition, 
Mr. Lockton's stock options will continue to vest regardless of his employment 
with the Company. Further, pursuant to the agreement, Mr. Lockton has agreed not
to compete with the Company for a period of three years in the wireless industry
in any country in which the Company is doing business, or commences doing 
business within 90 days of March 2, 1999.

           In February 1998, the Company entered into a settlement agreement
with Douglas S. Sinclair pursuant to which Mr. Sinclair resigned as Executive
Vice President and Chief Financial Officer of the Company. The agreement
provides a cash bonus to Mr. Sinclair in the amount of $38,750 payable on 
July 1, 1998. The agreement also provides that the Company will pay a monthly
severance payment to Mr. Sinclair of $13,750 per month over a nine month period
commencing on March 6, 1998.

           The Option Committee has the authority to provide for accelerated
vesting of Common Stock subject to outstanding options, in connection with
certain changes in control in the Company or termination of employment following
such change in control.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

           The Compensation Committee consists of Messrs. Griffin and Cordova.
Mr. Griffin serves as its Chairman. Mr. Griffin is Chairman of the Board of 
Directors and an employee of the Company and Chairman of the Board and 
Co-Chief Executive Officer of Vanguard. Mr. Cordova is a principal of Electra 
Fleming, Inc., an affiliate of Electra. As of December 31, 1997, Vanguard and 
Electra each held more than 5% of a class of outstanding voting equity 
securities of the Company.

           In May 1994, the Company issued May 1994 Bridge Notes (as defined
herein) in a principal amount of $770,234 to Vanguard. In connection with such
financing, the Company issued warrants exercisable for shares of Series D
Preferred Stock (as defined herein), including warrants to purchase 17,640
shares issued to Vanguard.

           In the Series D Financing (as defined herein), the Company sold
445,400 shares of Series D Preferred Stock to Vanguard for an aggregate purchase
price of $2,917,370, including cancellation of a May 1994 Bridge Note in the
principal amount of $770,234. In connection with the Series D Financing,
Vanguard loaned $1.8 million to the Company in exchange for two convertible
notes in the amount of $900,000 each. On April 26, 1996, Vanguard converted both
notes, as amended, into an aggregate of 274,800 shares of Series D Preferred
Stock.

           On April 6, 1995, the Company issued April 6, 1995 Bridge Notes (as
defined herein) in the principal amount of $390,000 to Vanguard, which were
canceled in a subsequent financing. In connection with issuing such 


                                      69
<PAGE>

notes, the Company issued warrants exercisable for shares of Series D 
Preferred Stock, including warrants to purchase 5,960 shares issued to 
Vanguard.

           On April 24, April 25, and June 27, 1995, the Company issued the
April 24, 1995 Bridge Notes (as defined herein) in principal amounts of
$1,541,070 to Vanguard. Of the $1,541,070 loaned by Vanguard, $390,000 was in
the form of cancellation of the April 6, 1995 Bridge Note held by Vanguard.

           On July 31, 1995, the Company issued the First July 1995 Vanguard
Note (as defined herein) in the principal amount of $1,485,000 to Vanguard. The
Company paid Vanguard a $20,000 fee in connection with the transaction. The
First July 1995 Vanguard Note was canceled in the Series F Financing (as defined
herein). The Company also issued Vanguard, for a purchase price of $15,000,
warrants to purchase 32,000 shares of Series F-1 Preferred Stock at an exercise
price of $9.375 per share.

           In the July 1995 Financing (as defined herein), the Company issued
additional notes in the principal amount of $1,490,013 to Vanguard. The Company
also issued (i) 380,880 shares of Series D Preferred Stock to Vanguard and 
(ii) warrants to purchase shares of Series F-1 Preferred Stock (not including 
the warrant issued to Vanguard in connection with the First July 1995 Vanguard
Note) at an exercise price of $9.375 per share, including warrants to purchase
32,120 shares issued to Vanguard. Certain notes previously issued by the 
Company were canceled in the July 1995 Financing.

           In November and December 1995, the Company borrowed $1,000,000 from
Vanguard and issued the Winter 1995 Notes (as defined herein) that bore interest
at 10% per annum. In connection with these transactions, the Company paid loan
fees of $30,000 to Vanguard.

           In the Series F Financing, the Company sold Series F-1 Preferred
Stock to Electra (1,066,640 shares for an aggregate purchase price of
$9,999,750) and Vanguard (424,000 shares for an aggregate purchase price of
$3,975,000, including the conversion of certain outstanding notes). In
connection with Series F Financing, the Company paid fees of $265,000 to
Vanguard.

           In April 1997, Vanguard purchased a 7% equity interest in Star
Digitel directly from STHL, a shareholder in Star Digitel. In September 1997, at
the request of IWC China Limited (as defined herein), Vanguard guaranteed $4.0
million of indebtedness incurred by Star Digitel. Pursuant to a Reimbursement
Agreement, IWC China Limited agreed to pay Vanguard (i) an up-front fee of
$240,000 in cash, (ii) a quarterly in-kind guarantee fee at an initial rate of
6.75% that increases over time to 17.75% (iii) a guarantee fee payable in Star
Digitel Shares (as defined herein) owned by IWC China Limited if Vanguard is
required to make any payments under the guarantee and (iv) a guarantee fee equal
to 40% of the outstanding Star Digitel Shares if the guarantee is not
permanently released and discharged within a specified period after the
occurrence of certain financings and asset sales by the Company and certain
related entities. In addition, the Company granted Vanguard a ten-year warrant
to purchase shares of its Common Stock at an exercise price of $.01 per share.
The number of shares issuable upon exercise of the warrant is initially set at
68,817 and increases in quarterly increments thereafter until Vanguard's
obligations under the guarantee have been permanently released and discharged.

           In August 1997, Vanguard Pakistan, Inc., a wholly owned subsidiary of
Vanguard ("VPI"), acquired an indirect 6% interest in Mobilink by acquiring 
an equity interest in International Wireless Communications Pakistan, Limited 
("IWCPL"). In addition, pursuant to the Pakistan Facilities entered into by 
the Company and PWH in August 1997, (i) PWH issued the PWH Pakistan Notes to 
Vanguard in the principal amount of $3,034,483 and (ii) the Company obtained 
commitments to receive $965,517 of additional debt financing from Vanguard. 
Pursuant to such commitments, in October and December 1997, the Company issued 
the IWCH Pakistan Notes to Vanguard in the aggregate principal amount of 
$965,517. In addition, pursuant to the Pakistan Facilities, (i) Vanguard 
received, or are eligible to receive certain commitment and issuance fees, 
(ii) Vanguard received Pakistan Initial Warrants (as defined herein) 
currently exercisable to purchase 122,704 shares of Common Stock at an 
exercise price of $0.01 per share (with the number of shares issuable upon 
exercise of such warrants increasing over time) and (iii) Vanguard will 
receive certain Pakistan 

                                      70
<PAGE>

Liquidity Warrants (as defined herein) upon the repayment of the IWCH Pakinstan
Facility.

           In August 1997, Vanguard Pakistan, Inc., a wholly owned subsidiary of
Vanguard ("VPI"), acquired an indirect 6% equity interest in Mobilink by
acquiring an equity interest in IWCPL. Pursuant to the IWC Group Agreement 
entered into between PWH and VPI in August 1997 (the "IWC Group Agreement"), 
(i) PWH and VPI agreed that each party could exercise certain rights and 
perform certain duties of the other party under the IWCPL shareholders 
agreement, if such other party was unable or unwilling to do so, and (ii) VPI 
entered into a voting trust agreement whereby it granted an officer of PWH 
the right to vote all voting securities of IWCPL now owned or hereafter 
acquired by VPI during the term of the voting trust. Pursuant to a letter 
agreement between PWH and VPI in February 1998, VPI exercised its right under 
Section 2.5 of the IWC Group Agreement to make a capital contribution to 
IWCPL on behalf of PWH by purchasing 1,240,275 redeemable preference shares 
of IWCPL for $1,240,275. Pursuant to the letter agreement, PWH has the right 
to purchase the shares at any time on or before May 16, 1998 for a purchase 
price of $1.00 per share and VPI has the right to put the shares to PWH at 
any time on or before May 16, 1998 for a purchase price of $1.00 per share. 
In addition, PWH has agreed to pay VPI a fee of $18,600 pursuant to the 
letter agreement.

           Pursuant to the Vanguard Project Exchange, the Company acquired the
interests or rights to acquire interests of Vanguard Sub (as defined herein) in
ten wireless projects in Indonesia, New Zealand, Brazil, India and Pakistan in
exchange for 3,972,240 shares of Series E Preferred Stock. Vanguard's cost of
acquiring such projects was in excess of approximately $550,000.

           Pursuant to the Vanguard Warrant Exchange, Vanguard surrendered
then-outstanding warrants to purchase 323,880 shares of the Company's Series C
Preferred Stock (as defined herein), 416,720 shares of its Series D Preferred
Stock and 64,120 shares of its Series F Preferred Stock in exchange for the
issuance by the Company of a warrant to acquire 249,970 shares of Common Stock
at a purchase price of $0.25 per share and second warrant to purchase 554,750
shares of Common Stock at an exercise price of $9.375 per share. The second
warrant was subsequently surrendered by Vanguard in exchange for the issuance to
certain officers and employees of Vanguard of an option to purchase 53,330
shares of Common Stock at an exercise price of $9.375 per share under the 1996
Stock Incentive Plan and options to purchase an aggregate of 501,420 shares of
Common Stock at a purchase price of $9.375 per share outside the Prior Stock
Plan, including options granted to the following directors of the Company:
Haynes G. Griffin-400,000 shares; and Van E. Snowdon-65,250 shares. Pursuant to
the Vanguard Warrant Exchange, Vanguard agreed to guarantee from time to time up
to an aggregate of $3.2 million of indebtedness incurred by the Company or its
wholly owned subsidiaries until the Company receives at least $3.2 million in
alternative debt financing or consummates an initial public offering of its
Common Stock, but in no event later than February 3, 1999.

           On March 10, 1998, Vanguard purchased 789,266 shares of the Company's
Series J Preferred Stock ("Series J Preferred Stock") and a related warrant to
purchase the Company's Common Stock (a "Series J Warrant") for $10 million (the
"Series J Financing"). The Series J Warrant has a ten-year term and an exercise
price of $0.01 per share of Common Stock. The Series J Warrant is initially
exercisable for 173,638 shares of Common Stock. The total number of shares
issuable upon exercise of the Series J Warrant will increase to 299,921 shares
on September 10, 1998 and 457,774 shares on December 10, 1998, unless on or
before each such respective date the Company (i) raises at least $50 million
through a combination of equity issuances (including equity issued in the Series
J Financing) and/or qualifying asset sales or (ii) completes a Corporation
Transaction (as defined).

           Pursuant to the Series J Preferred Stock and Warrant Purchase 
Agreement dated March 10, 1998 (the "Series J Agreement") between the Company 
and Vanguard, the Company, among other things: (i) agreed to certain 
restrictions on the use of net proceeds from the Series J Financing, 
(ii) granted Vanguard certain rights to exchange its equity interest in Star 
Digitel, Mobilink and certain other qualifying operating companies of the 
Company (collectively, "Core Operating Companies") for shares of the 
Company's Common Stock, (iii) granted Vanguard certain co-sale rights if the 
Company transferred its equity interest in a Core Operating Company, 
(iv) agreed to give all holders of the Company's capital stock and options 
and warrants to acquire such capital stock (other than holders of the Unit 
Warrants) a right of first offer to purchase a pro rata share of the Series J 
Preferred 


                                      71
<PAGE>

Stock and related Series J Warrants offered for sale in the Series J 
Financing and (v) in certain circumstances, agreed to allow holders of Series 
J Preferred Stock and Series J Warrants purchased pursuant to the Series J 
Agreement to exchange such securities for securities issued by the Company 
and subsequent qualifying private placement of its equity securities. The 
SJPS Agreement contains certain other customary representations, warranties 
and covenants.

           In connection with the Series J Financing, the Company entered into
the Eighth Amended and Restated Investor Rights Agreement dated as of March 10,
1998 with certain other investors and an Amended and Restated Registration
Rights Agreement dated as of March 10, 1998 with certain holders of its
securities. These agreements provide, among other things, for certain
registration, first offer, co-sale, board observer, board representation and
voting rights.

           In March 1998, the Company entered into a Support Services Agreement
(the "Support Services Agreement") with Vanguard China, Inc. ("VCI"). Pursuant
to the Support Services Agreement, the Company granted Vanguard a warrant to
purchase up to 323,408 shares of its Common Stock (the "SSA Warrant Shares") in
exchange for VCI agreeing to provide certain services relating to the financing
of Star Digitel. One-half of the SSA Warrant Shares become exercisable upon Star
Digitel executing definitive financing documents relating to a $50 million
financing acceptable to Star Digitel's board of directors, and one-half of the
SSA Warrant Shares become exercisable upon Star Digitel entering into an
agreement for vendor financing acceptable to Star Digitel's board of directors.
The SSA Warrant has a ten-year term and an exercise price of $0.01 per share of
Common Stock.

           Van E. Snowdon was elected President and Chief Executive 
Officer of the Company in March 1998. Prior to such time, he had served as 
President of Vanguard Communications, Inc., a subsidiary of Vanguard. See 
"Item 11. Executive Compensation."

           For additional information regarding the above transactions, see
"Certain Relationships and Related Transactions." For a description of
compensation of executive officers and directors of the Company and the
eligibility of executive officers and directors to participate in the 1996 Stock
Incentive Plan, see other parts of this "Executive Compensation."

1996 STOCK INCENTIVE PLAN

           The 1996 Stock Option/Stock Issuance Plan (the "1996 Stock Incentive
Plan") was initially adopted by the Board of Directors of the Company and
approved by its stockholders on August 7, 1996. The 1996 Stock Incentive Plan is
the successor to the International Wireless Communications, Inc. 1994 Stock
Option/Stock Issuance Plan (the "1994 Plan"), and no additional options will be
granted under the 1994 Plan. A total of 2,811,526 shares of Common Stock have
been authorized for issuance under the 1996 Stock Incentive Plan. January 1998,
the Board of Directors approved the reservation of an additional 2,000,000
shares of Common Stock for issuance pursuant to the 1996 Stock Incentive Plan,
subject to stockholder approval.

           The individuals eligible to receive option grants or share issuances
under the 1996 Stock Incentive Plan are employees (including officers and
directors), non-employee members of the Board of Directors and consultants of
the Company or any parent or subsidiary corporation. As of December 31, 1997
options to purchase a total of 2,501,057 shares of Common Stock were outstanding
under the 1996 Stock Incentive Plan. In addition, the Board of Directors of the
Company granted options to purchase an additional 165,000 shares pursuant to the
1996 Stock Incentive Plan subsequent to December 31, 1997.

           The 1996 Stock Incentive Plan is divided into two separate programs:
the option grant program and the stock issuance program. Under the option grant
program, eligible individuals may be granted options to purchase shares of
Common Stock at a discount of up to 15% of the fair market value of such shares
on the grant date, and options may be structured as installment options that
become exercisable for vested shares over the optionee's period of service or as
immediately exercisable options for unvested shares that may be subject to
repurchase upon the optionee's termination of employment. The stock issuance
program allows eligible individuals to purchase 


                                      72
<PAGE>

shares of Common Stock at fair market value or at discounts of up to 15% of 
the fair market value of the shares on the grant date. Such shares may be 
fully vested when issued or may vest over time. In addition, shares of Common 
Stock may be issued as bonus awards in recognition of services rendered to 
the Company.

           The 1996 Stock Incentive Plan is administered by the Board of
Directors of the Company or a committee thereof. The Board or such committee
will select the individuals to receive option grants or share issuances and the
number of shares subject to each such grant or issuance; determine the exercise
or vesting schedule for each granted option or share issuance; and determine
whether a granted option is to be an incentive stock option affording favorable
tax treatment to the optionee at the loss of a deduction to the Company or a
non-statutory option entitling the Company to a deduction upon exercise. Each
granted option will have a maximum term of ten years, subject to earlier
termination following the optionee's cessation of service with the Company.

           In the event the Company is acquired by merger or asset sale, each
outstanding option under the 1996 Stock Incentive Plan that is not to be assumed
or replaced with a comparable option from the successor corporation will
automatically terminate. The Company's outstanding repurchase rights under the
1996 Stock Incentive Plan will also terminate, and the shares subject to those
repurchase rights will become fully vested, upon the merger or asset sale,
unless such repurchase rights are assigned to the successor corporation.

           The Board has the authority to effect the cancellation of outstanding
options under the 1996 Stock Incentive Plan in return for the grant of new
options for the same or different number of option shares with an exercise price
per share based upon the lower fair market value of the Common Stock on the new
grant date. The Board may also amend or modify the 1996 Stock Incentive Plan at
any time, provided that no such amendment may adversely affect the rights and
obligations of the participants with respect to their outstanding options
without their consent. The 1996 Stock Incentive Plan will terminate on 
January 6, 2006, unless sooner terminated upon the occurrence of certain 
events.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The following table sets forth certain information known to the
Company with respect to the beneficial ownership of the Company's Common Stock
and Preferred Stock as of March 31, 1998 by (i) each person (or group of
affiliated persons) who is known by the Company to beneficially own more than
five percent of any class of the Company's capital stock, (ii) each of the
Company's directors, (iii) each Named Officer and (iv) the Company's directors
and executive officers as a group.


                                      73
<PAGE>
<TABLE>
<CAPTION>
                                                                                        SHARES BENEFICIALLY OWNED
                                                                     -------------------------------------------------------------
                                                                              COMMON STOCK                   PREFERRED STOCK      
                                                                     -----------------------------   -----------------------------
     5% STOCKHOLDERS,                                                                                                             
     DIRECTORS, NAMED OFFICERS AND                                                                                                
     OFFICERS AND DIRECTORS AS A GROUP                                 NUMBER(1)       PERCENT(2)      NUMBER(1)        PERCENT(3)
     ---------------------------------                                                                                            
                                                                     -------------   -------------   ------------      -----------
     <S>                                                             <C>             <C>             <C>               <C>
     Vanguard Cellular Operating Corp.(4)
     c/o Vanguard Cellular Systems, Inc.
     2002 Pisgah Church Road, Suite 300
     Greensboro, NC 27455.....................................          545,437           5.87%        7,298,105         31.15%
     BEA Funds(5)
     c/o BEA Associates
     153 East 53rd Street
     New York, NY 10022.......................................           59,983               *        1,504,960          6.42%
     Gateway Venture Partners III, L.P.(6)
     8000 Maryland Ave., Suite 1190
     St. Louis, MO 63105......................................               --              --        1,148,727          4.90%
     Electra Investment Trust PLC(7)
     70 East 55th Street
     New York, NY 10022.......................................               --              --        1,018,000          4.35%
     Toronto Dominion Investments, Inc.(8)
     31 West 52nd Street
     New York, NY 10019-6101..................................          593,958           6.39%        1,061,360          4.53%
     Central Investment Holding, Inc.
     KMT Business Management Committee
     9F. 6 Chung Hsing W. Road, Section 1
     Taipei, Taiwan ROC(9)....................................           30,676               *        1,066,640          4.55%
     Haynes G. Griffin(10)....................................          945,437          10.16%        7,298,105         31.15%
     John D. Lockton(11)......................................          437,337           4.70%          510,000          2.18%
     Hugh B. L. McClung(12)...................................          701,653           7.54%          167,000              *
     Clarence "Sam" Endy(13)..................................          213,154           2.29%               --             --
     Carl C. Cordova III(14)..................................                -              --        1,018,000          4.35%
     Sanford L. Antignas(15)..................................              613               *               --             --
     Stephen R. Leeolou(16)...................................          625,437           6.72%        7,298,105         31.15%
     John S. McCarthy(17).....................................           12,000               *        1,148,727          4.90%
     Brian Rich(18)...........................................          593,958           6.39%        1,061,360          4.53%
     Van E. Snowdon(19).......................................          702,268           7.55%        7,302,025         31.17%
     All directors and executive officers as a group
         (15 persons).........................................        3,641,152          39.15%       11,215,112         47.88%
</TABLE>
________________________

*          Less than 1%

(1)        Except as indicated in the other footnotes to this table, based on
           information provided by such persons to the Company. Subject to
           applicable community property laws, the persons named in the table
           have sole voting and investment power with respect to all of the
           shares of Common Stock shown as beneficially owned by them.

(2)        Percentage ownership is based on 1,310,230 shares of Common Stock
           outstanding on March 31, 1998. The number of shares of Common Stock
           beneficially owned includes the shares issuable pursuant to stock
           options and warrants that are exercisable within 60 days of March 31,
           1998. Shares issuable pursuant to stock options or warrants are
           deemed outstanding for computing the percentage owned by the person


                                      74
<PAGE>

           holding such options or warrants but are not deemed outstanding for
           computing the percentage of any other person.

(3)        Percentage ownership is based on 23,085,351 shares of Preferred Stock
           outstanding on March 31, 1998. The number of shares of Preferred
           Stock beneficially owned includes the shares issuable pursuant to
           warrants exercisable within 60 days of March 31, 1998. Shares
           issuable pursuant to warrants are deemed outstanding for computing
           the percentage owned by the person holding such warrants but are not
           deemed outstanding for computing the percentage of any other person.

(4)        Includes (i) 837,880 shares of Series C Preferred Stock, 1,101,080
           shares of Series D Preferred Stock, 3,972,240 shares of Series E
           Preferred Stock, 424,000 shares of Series F Preferred Stock and
           789,266 shares of Series J Preferred Stock, (ii) 173,639 shares of
           Series J Preferred Stock issuable upon the exercise of warrants to
           purchase such shares and (iii) 545,437 shares of Common Stock
           issuable upon the exercise of warrants to purchase such shares held
           by Vanguard Cellular Operating Corp. See "Certain Relationships and
           Related Transactions" and "--Transactions with Vanguard." Mr.
           Griffin, Chairman of the Board of the Company, is Chairman of the
           Board and Co-Chief Executive Officer of Vanguard, the sole
           stockholder of Vanguard Cellular Operating Corp., Mr. Leeolou, a
           director of the Company, is President and Co-Chief Executive Officer
           of Vanguard, and Mr. Snowdon, President, Chief Executive Officer and
           a director of the Company, is Vice President of Vanguard
           Communications, Inc., a subsidiary of Vanguard. See notes 10, 16 and
           19 below. Excludes options to purchase shares of Common Stock held by
           Messrs. Griffin, Leeolou and Snowdon in their individual capacities.
           The capital stock of the Company held by Vanguard has been pledged to
           secure certain indebtedness of Vanguard. In the event of a default by
           Vanguard in respect of such indebtedness, the pledgee of such capital
           stock would be entitled to exercise voting and investment power in
           respect of such shares.

(5)        Includes (i) 1,423,760 shares of Series D Preferred Stock and 77,440
           shares of Series F Preferred Stock, (ii) 3,760 shares of Series F
           Preferred Stock issuable upon the exercise of warrants to purchase
           such shares and (iii) 59,983 shares of Common Stock issuable upon the
           exercise of warrants to purchase such shares held by The Emerging
           Markets Telecommunications Fund, Inc., The Emerging Markets
           Infrastructure Fund, Inc., CUC & Co. F/B/O Latin America Investment
           Fund, Inc., Latin America Equity Fund, Inc., Latin America Capital
           Partners and Argentina Equity Investments Partnership,
           (as previously defined, the "BEA Funds"), all of which are affiliated
           with and/or managed by BEA Associates.

(6)        Includes (i) 707,080 shares of Series B Preferred Stock, 224,920
           shares of Series C Preferred Stock, 111,007 shares of Series D
           Preferred Stock and 94,200 shares of Series F Preferred Stock, 
           (ii) 8,440 shares of Series F Preferred Stock issuable upon the 
           exercise of warrants to purchase such shares and (iii) 3,080 shares 
           of Series D Preferred Stock issuable upon the exercise of warrants 
           to purchase such shares held by Gateway. Mr. McCarthy, a director 
           of the Company, is a General Partner of Gateway Associates, the 
           general partner of Gateway. See note 17 below.

(7)        Includes an aggregate of 58,000 shares of Series A Preferred Stock
           and an aggregate of 960,000 shares of Series F Preferred Stock held
           by Electra Investment Trust, P.L.C. Mr. Cordova, a director of the
           Company, is a principal of Electra Fleming Inc., an affiliate of 
           Electra. See note 14 below.

(8)        Includes (i) 848,000 shares of Series F Preferred Stock, (ii) 213,360
           shares of Series F Preferred Stock issuable upon the exercise of
           warrants to purchase such shares and (iii) 593,958 shares of Common
           Stock issuable upon exercise of warrants to purchase such shares held
           by TDI. Mr. Rich, a director of the Company, is Managing Director and
           Group Head of Toronto Dominion Capital, an affiliate of TDI. See note
           18 below.

(9)        Includes 30,676 shares of Common Stock issuable upon the exercise 
           of warrants to purchase such shares.


                                      75
<PAGE>

(10)       Includes 7,843,542 shares beneficially owned by Vanguard Cellular
           Operating Corp., 346,670 shares of Common Stock issuable upon the
           exercise of warrants to purchase such shares and an option to
           purchase 53,330 shares of Common Stock granted to Mr. Griffin. 
           Mr. Griffin is the Chairman of the Board and Co-Chief Executive 
           Officer of Vanguard, the sole stockholder of Vanguard Cellular 
           Operating Corp., and disclaims beneficial ownership of the shares 
           held by this entity. See note 4 above.

(11)       Includes options to purchase 331,573 shares that are immediately
           exercisable, subject to certain rights of repurchase held by the
           Company and an aggregate of 2,484 shares issuable upon exercise of
           warrants. In addition, the number of shares beneficially owned
           includes 103,280 shares issued to Mr. Lockton pursuant to the CTP
           Exchange on December 18, 1995. Excludes 45,360 shares deposited in
           escrow pursuant to the CTP Exchange in which Mr. Lockton may have a
           beneficial interest. See "Certain Relationships and Related
           Transactions."

(12)       Includes options to purchase 331,573 shares that are immediately
           exercisable, subject to certain rights of repurchase held by the
           Company. In addition, the number of shares beneficially owned
           includes 103,280 shares issued to Mr. McClung pursuant to the CTP
           Exchange on December 18, 1995. Excludes 45,360 shares deposited in
           escrow pursuant to the CTP Exchange in which Mr. McClung may have a
           beneficial interest. See "Certain Relationships and Related
           Transactions--Transactions with Founders."

(13)       Represents options to purchase 213,154 shares that are immediately
           exercisable, subject to certain rights of repurchase held by the 
           Company.

(14)       Includes 1,018,000 shares beneficially owned by Electra. Mr. Cordova,
           a principal of Electra Fleming Inc., an affiliate of Electra, 
           disclaims beneficial ownership of shares held by Electra Investment 
           Trust PLC and Electra Associates, Inc., except to the extent of his 
           pecuniary interest therein.

(15)       Includes 613 shares of Common Stock issuable upon the exercise of
           warrants to purchase such shares. Does not include shares of capital
           stock beneficially owned by the BEA Funds. Mr. Antignas, a Principal
           of Bassini Playfair + Associates LLC, which is a consultant to BEA
           Associates, disclaims beneficial ownership of shares held by the BEA
           Funds.

(16)       Includes an option to purchase 80,000 shares that is immediately
           exercisable, subject to repurchase by the Company, as well as
           7,843,542 shares beneficially owned by Vanguard Cellular Operating
           Corp. Mr. Leeolou is the President and Co-Chief Executive Officer of
           Vanguard, the sole stockholder of Vanguard Cellular Operating Corp.,
           and disclaims beneficial ownership of shares held by Vanguard
           Cellular Operating Corp.

(17)       Includes an option to purchase 12,000 shares that is immediately
           exercisable, subject to repurchase by the Company, as well as
           1,148,727 shares beneficially owned by Gateway. Mr. McCarthy is a
           general partner of Gateway Associates, a general partner of Gateway,
           and disclaims beneficial ownership of shares held by Gateway except
           to the extent of his pecuniary interest therein.

(18)       Includes 1,655,318 shares beneficially owned by TDI. Mr. Rich,
           Managing Director and Group Head of Toronto Dominion Capital, an
           affiliate of TDI, disclaims beneficial ownership of shares held by
           TDI.

(19)       Includes (i) 76,080 shares of Common Stock and 3,920 shares of Series
           D Preferred Stock held by Mr. Snowdon and (ii) 7,843,542 shares
           beneficially owned by Vanguard Cellular Operating Corp. Mr. Snowdon,
           Vice President of Vanguard Communications, Inc., a subsidiary of
           Vanguard, the sole stockholder of Vanguard Cellular Operating Corp.,
           disclaims beneficial ownership of shares held by Vanguard Cellular
           Operating Corp. Also includes options to purchase 14,735 shares which
           options are immediately exercisable and warrants to purchase 66,016
           shares.


                                      76
<PAGE>

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PRIVATE PLACEMENT TRANSACTIONS

SERIES D FINANCING

           In May 1994, the Company issued convertible notes (the "May 1994
Bridge Notes") in an aggregate principal amount of $2,028,993, including
$500,000 to Gateway and $770,234 to Vanguard. The May 1994 Bridge Notes were due
in 180 days and bore interest at prime plus 1% per annum. The purchasers also
received warrants exercisable for an aggregate of 46,440 shares of Series D
Preferred Stock, including warrants to purchase 11,440 shares issued to Gateway;
and warrants to purchase 17,640 shares issued to Vanguard. The warrants have an
exercise price of $6.55 per share and were exercisable until May 6, 1997, or, in
the case of the warrants issued to certain of the other lenders, May 23, 1997 or
June 12, 1997. The warrants issued to Vanguard were included in the Vanguard
Warrant Exchange. See "--Transactions with Vanguard." The remaining warrants
were exercised on a net basis in 1997.

           In September and October 1994, the Company sold an aggregate of
2,226,640 shares of Series D Preferred Stock for an aggregate purchase price of
$14,584,492 or $6.55 per share (the "Series D Financing"), including (i) 106,880
shares sold to Gateway for an aggregate purchase price of $700,064, including
cancellation of May 1994 Bridge Notes in the principal amount of $500,000, and
(ii) 445,400 shares sold to Vanguard for an aggregate purchase price of
$2,917,370, including cancellation of May 1994 Bridge Notes in the principal
amount of $770,234. In addition, the BEA Funds purchased an aggregate of
1,221,440 shares of Series D Preferred Stock for an aggregate purchase price of
$8,000,432. The Company also entered into an agreement with the BEA Funds
providing that, where feasible, appropriate and mutually advantageous, the
Company and the BEA Funds will bring to the attention of each other trunked
radio, wireless local loop, PCS and other existing and future wireless projects.

           In connection with the Series D Financing, Vanguard loaned $1.8
million to the Company in exchange for two convertible notes in the amount of
$900,000 each. Each note was due upon the earlier of April 26, 1996, on which
date Vanguard converted both notes, as amended, pursuant to the Vanguard Project
Exchange, into an aggregate of 274,800 shares of Series D Preferred Stock.

APRIL 1995 FINANCINGS

           On April 6, 1995, the Company issued convertible notes (the "April 6,
1995 Bridge Notes") in an aggregate principal amount of $696,700, including
notes in principal amounts of $390,000 to Vanguard and $200,000 to Gateway. The
April 6, 1995 Bridge Notes bore interest at prime plus 1%, were due in 150 days,
and were automatically convertible into equity securities, subsequently
determined to be Series D Preferred Stock, upon the closing of the Company's
next equity financing in which at least $5 million was raised. The April 6, 1995
Bridge Notes were canceled in connection with the July 1995 Financing (as
defined herein) of the Company.

           In connection with the issuance of the April 6, 1995 Bridge Notes,
the Company issued warrants (the "April Bridge Warrants") exercisable for an
aggregate of 10,720 shares of Series D Preferred Stock, including warrants to
purchase 5,960 shares issued to Vanguard and 3,080 shares issued to Gateway. The
warrants have an exercise price of $6.55 per share and are exercisable until
April 6, 1998, provided that the warrants shall no longer be exercisable upon
the occurrence of a Termination Event. In May 1997, Vanguard's warrants were
exchanged in the Vanguard Warrant Exchange. See "--Transactions with Vanguard."

           On April 24, April 25, and June 27, 1995, the Company issued 
convertible secured notes (the "April 24, 1995 Bridge Notes" and, together 
with the April 6, 1995 Bridge Notes, the "April 1995 Bridge Notes") in an 
aggregate principal amount of $6,144,070, including notes in principal 
amounts of $1,541,070 to Vanguard, $4,000,000 to the BEA Funds and $200,000 
to Gateway. Of the $1,541,070 loaned by Vanguard, $390,000 was in the form of 
cancellation of the April 6, 1995 Bridge Note held by Vanguard. The April 24, 
1995 Bridge Notes bore interest at prime plus 1% per annum, were due 45 days 
after their respective issue dates and were secured by a lien on 
substantially all of the Company's assets. The April 24, 1995 Bridge Notes 
provided that principal thereon was 

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to be automatically converted on the respective due dates into Series D 
Preferred Stock at a price of $6.55 per share, provided that no holder was 
required to convert to the extent that conversion would result in the holder 
owning 20% or more of the Company's capital stock.

JULY 1995 FINANCING

           On July 31, 1995, the Company issued a convertible unsecured note
(the "First July 1995 Vanguard Note") in the principal amount of $1,485,000 to
Vanguard (such issuance, together with the July 1995 Notes, as described herein,
the "July 1995 Financing"). The note bore interest at prime plus 1% per annum
and was due 180 days after the issue date or, at the Company's option, 270 days
after the issue date. The note provided that the principal balance thereof was
automatically convertible into the Company's equity securities upon the closing
of the Company's next equity financing meeting certain conditions (at a
conversion price per share equal to the share price in such equity financing,
but not to exceed $10.40). The Company paid Vanguard a $20,000 fee in connection
with the note transaction. The First July 1995 Vanguard Note was canceled in the
Series F Financing.

           In connection with the issuance of the First July 1995 Vanguard Note,
the Company issued to Vanguard, for a purchase price of $15,000, a warrant to
purchase 32,000 shares of Series F-1 Preferred Stock at an exercise price of
$9.375 per share. The warrant is exercisable until December 18, 1998, provided
that the warrants shall no longer be exercisable upon the occurrence of a
Termination Event.

           In the July 1995 Financing, the Company issued additional notes in an
aggregate principal amount of $7,118,025 (the "July 1995 Notes"), including
notes in the amount of $1,490,013 to Vanguard, $460,116 to the BEA Funds,
$199,066 to Northwood and $391,576 to Gateway. The July 1995 Notes were
unsecured and contained terms substantially identical to those contained in the
First July 1995 Vanguard Note. The July 1995 Notes were canceled in the Series F
Financing.

           In the July 1995 Financing, the Company issued an aggregate of
1,147,600 shares of Series D Preferred Stock for an aggregate purchase price of
$7,516,780, or $6.55 per share, including 380,880 shares to Vanguard, 539,600
shares to the BEA Funds and 680 shares to Gateway. All of the remaining April
1995 Bridge Notes were canceled in the July 1995 Financing.

           In the July 1995 Financing, for an aggregate purchase price of
$71,901, the Company issued warrants to purchase an aggregate of 153,760 shares
of Series F-1 Preferred Stock (not including the warrant issued to Vanguard in
connection with the First July 1995 Vanguard Note) at an exercise price of
$9.375 per share, including warrants to purchase 32,120 shares issued to
Vanguard, 8,440 shares issued to Gateway and 9,920 shares issued to the BEA
Funds. All share amounts and the exercise price are subject to adjustment in
certain circumstances. The warrants are exercisable until December 18, 1998,
provided that the warrants shall no longer be exercisable upon the occurrence of
a Termination Event. In May 1997, Vanguard's warrants were exchanged in the
Vanguard Warrant Exchange. See "--Transactions with Vanguard."

           In connection with the July 1995 Financing, Messrs. Lockton and
McClung agreed, pursuant to letter agreements dated July 28 and July 31, 1995,
respectively, to vote their shares of the Company's capital stock in favor of
the election to the Company's Board of Directors of a person designated by the
BEA Funds. This obligation terminated on July 31, 1996.

1995 TDI FINANCING

           On August 15, 1995, the Company borrowed $4,950,000 from TDI and 
issued to TDI an unsecured convertible note in the principal amount of 
$4,950,000 (the "TDI Unsecured Note"). The TDI Unsecured Note bore interest 
at 9.75% per annum and was due on January 27, 1996, subject to extension to 
April 26, 1996 at the Company's option. The principal balance of the TDI 
Unsecured Note was automatically convertible into shares of the Company's 
equity securities upon the closing of the Company's next equity financing in 
which the gross proceeds to the Company exceeded $15,000,000, provided that 
such equity financing closed on or before 

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January 27, 1996. The July 1995 Notes and the First July 1995 Vanguard Note 
were amended at the time of the financing to provide that such notes were 
pari passu with the TDI Unsecured Note and with each other.

           On August 15, 1995, for a purchase price of $50,000, the Company also
issued TDI a warrant (the "First TDI Warrant") to purchase 106,680 shares of
Series F-2 Preferred Stock at an exercise price of $9.375 per share. The First
TDI Warrant is exercisable until December 18, 1998, provided that the warrants
shall no longer be exercisable upon the occurrence of a Termination Event.

           Pursuant to a Loan Agreement dated as of August 14, 1995, between the
Company and TDI (the "1995 TDI Loan Agreement"), the Company borrowed $5,000,000
from TDI and issued a note in the principal amount of $5,000,000 (the "TDI
Secured Note"). The TDI Secured Note was due on the earlier of (i) 180 days from
its issue date or (ii) the closing of the Company's next equity financing in
which the Company received net proceeds of at least $5,000,000, and bore
interest at 11% per annum for the first 90 days and 13% per annum thereafter.
Pursuant to the 1995 TDI Loan Agreement, the Company paid TDI a fee of $125,000.
The Company's obligations under the 1995 TDI Loan Agreement were secured by
substantially all of the Company's assets and a pledge of the stock of certain
wireless projects owned by the Company. At the closing of the Series F
Financing, the Company repaid the TDI Secured Note in full through the issuance
to TDI of $3,000,000 in Series F-2 Preferred Stock (320,000 shares at $9.375 per
share), and cash in the amount of $2,000,000, plus accrued interest. Upon such
repayment, TDI released its security interest and returned the pledged stock to
the Company.

           Pursuant to the 1995 TDI Loan Agreement, the Company issued to TDI a
warrant (the "Second TDI Warrant") to purchase 106,680 shares of Series F-2
Preferred Stock at an exercise price of $9.375 per share. The Second TDI Warrant
is exercisable pursuant to the same terms as the First TDI Warrant.

THE SERIES F FINANCING

           In November and December 1995, the Company borrowed a total of
$1,797,415, including $1,000,000 from Vanguard and $450,000 from Gateway and
issued 90-day convertible unsecured notes (the "Winter 1995 Notes") that bore
interest at 10% per annum. In connection with these transactions, the Company
paid the lenders an aggregate of $53,925 in loan fees, including $30,000 to
Vanguard and $13,500 to Gateway.

           On December 18, 1995, the Company sold an aggregate of 4,508,480
shares of Series F-1 Preferred Stock and sold 848,000 shares of Series F-2
Preferred Stock, for an aggregate purchase price of $50,217,000, or $9.375 per
share (the "Series F Financing"). The purchasers of Series F-1 Preferred Stock
included Vanguard (424,000 shares for $3,975,000, including the conversion of
certain outstanding notes), the BEA Funds (123,560 shares for $1,158,375,
including the conversion of certain outstanding notes), Gateway (94,200 shares
for $883,125, including the conversion of certain outstanding notes), CIH
(1,066,640 shares for $9,999,750) and Electra (1,066,640 shares for $9,999,750).
TDI purchased 848,000 shares of non-voting Series F-2 Preferred Stock for
$7,950,000, all of which was paid for by conversion of the TDI Unsecured Note
and conversion of $3,000,000 in principal amount of the TDI Secured Note. In
addition, the Company paid Electra financing fees of $265,000 and paid TDI fees
for services performed as placement agent.

           Pursuant to the Series F Purchase Agreement, the Company agreed to
covenants customary in financing transactions of such type, including limits on
incurring debt and granting liens and pledges and other negative covenants
including limitations on payments, dividends, investments, mergers, asset sales,
amendments of its Certificate or Bylaws that would adversely impact the rights
of the Series F-1 Preferred Stock and Series F-2 Preferred Stock, changes to its
business, changes in control and sales of equity securities. Upon the occurrence
of certain events in the nature of defaults by the Company under the Series F
Purchase Agreement, the holders of Series F-1 Preferred Stock have the right to
(i) cause the Company to increase the size of its Board of Directors and (ii)
elect one additional director.

           In connection with the Series F Financing, the Company entered 
into the Fifth Amended and Restated Investor Rights Agreement dated as of 
December 18, 1995 (as subsequently amended and restated, the "IRA"), with 
certain investors, including holders of its Series B, C, D, E and F Preferred 
Stock, and the Registration Rights 

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Agreement dated as of December 18, 1995 (the "Registration Rights Agreement") 
with holders of its Series F Preferred Stock. The IRA and Registration Rights 
Agreement provided, among other things, for certain registration, first 
offer, co-sale, board observer, board representation and voting rights. See 
"Management--Arrangements Concerning Election of Directors" and "Description 
of Capital Stock--Registration Rights."

1996 TD LOAN AGREEMENT

           In July 1996, the Company entered into a Loan Agreement with Toronto
Dominion (Texas), Inc., an affiliate of Toronto Dominion (the "1996 TD Loan
Agreement"), providing for a $10.0 million revolving credit facility. Under the
terms and conditions of the 1996 TD Loan Agreement, the Company was able to
borrow funds in an initial amount of at least $2.0 million and additional
amounts in integral multiples of at least $1.0 million. All borrowings were
evidenced by a promissory note bearing interest at a specified base rate plus a
margin increasing from 2.25% to 3.75% over the term of the facility, or a
specified LIBOR rate plus a margin increasing from 3.5% to 5.0% over the term of
the facility, and were due in July 1997, subject to mandatory repayment, without
premium, from the net proceeds of any public or sale of debt or equity
securities (including the net proceeds of the Unit Offering), the net proceeds
from certain asset sales by the Company or its subsidiaries, or certain other
events. The obligations of the Company under the 1996 TD Loan Agreement and the
note issued pursuant thereto were secured by pledge of all of the Company's
capital stock in certain of the Company's subsidiaries and affiliates. Under the
1996 TD Loan Agreement, Toronto Dominion (Texas), Inc. received a facility fee
of $300,000 and was reimbursed for certain costs and expenses. In addition, the
Company agreed to pay Toronto Dominion (Texas), Inc. a commitment fee of 0.5% of
the average unused available portion of such facility, payable quarterly in
arrears. On August 15, 1996, the Company used $7.4 million of the net proceeds
of the Unit Offering to repay in full all outstanding borrowings under the 1996
TD Loan Agreement.

UNIT OFFERING

           On August 15, 1996, the Company sold in the Unit Offering 196,720
Units (the "Units"), each consisting of a $1,000 principal amount 14% Senior
Secured Discount Note due 2001 (collectively, the "Old Notes") and one Unit
Warrant to purchase 11.638 shares of Common Stock to BT Securities Corporation,
Toronto Dominion Securities (USA) Inc. and Salomon Brothers Inc. (the "Initial
Purchasers") at 35.43% of the principal amount thereof. The Units were resold by
the Initial Purchasers in a placement. Each Unit Warrant provides that if the
Company does not complete an initial public offering of Common Stock that
results in net cash proceeds to the Company of at least $50 million (a
"Threshold Initial Public Offering") or a Qualified Reorganization (which is
defined as being any reorganization that (a) occurs simultaneously with or
following a change of control and (b) results in there being deliverable upon
exercise of any Unit Warrant, cash and/or securities registered under Section 12
of the Exchange Act that are freely tradeable and listed on a national
securities exchange or traded on a national quotation service) on or prior to
May 15, 1997, each unexercised Unit Warrant will entitle the holder thereof to
purchase an additional 2.645 shares of Common Stock. Because the Company did not
complete a Threshold Initial Public Offering or Qualified Reorganization by May
15, 1997, each unexercised Unit Warrant entitled the holder thereof to purchase
an aggregate of 14.283 shares of Common Stock.

           Under the terms of the Unit Offering, the Company filed a
registration statement with the Commission registering Unit Notes that were on
terms substantially identical (including principal amount, interest rate,
maturity, exchange and ranking) to the Old Notes which were offered in exchange
for the Old Notes (the "Exchange Offer"). This Registration Statement was
declared effective by the Commission on November 21, 1996, and the Exchange
Offer was completed on December 27, 1996.

           The Old Notes and the Unit Warrants became separately transferable on
November 15, 1996.

           The Old Notes were issued pursuant to the Indenture and were 
secured pursuant to a pledge agreement by a first priority pledge of all of 
the capital stock of IWC and the intercompany note due to the Company by IWC. 
Under the terms of the Indenture, the Company is subject to certain covenants 
including, but not limited to, (i) restrictions on certain payments by the 
Company and certain subsidiaries and affiliates of the Company including 
restrictions on the payment of dividends, and the redemption and/or 
repurchase of equity interests, (ii) restrictions 

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on the issuance of additional indebtedness or the issuance of preferred 
stock, (iii) limitations on heirs, (iv) limitations on lines of business, (v) 
restrictions on transactions with affiliates, (vi) limitations on the 
structure of the Company and its subsidiaries, and (vii) reporting 
requirements.

TD BRIDGE LOANS TO STAR DIGITEL

           Pursuant to a Bridge Loan Agreement dated May 16, 1997 (the "Star
Digitel Bridge Loan Agreement") between Star Digitel Limited ("Star Digitel")
and The Toronto-Dominion Bank, an affiliate of TDI ("TD Bank"), TD Bank agreed
to provide up to $8.0 million of bridge financing to Star Digitel. IWC China
Limited, an indirect wholly owned subsidiary of the Company ("IWC China
Limited"), currently owns a 40% equity interest in Star Digitel. See
"Business--Operating Companies--China-Great Wall Cellular." On May 16, 1997,
Star Digitel borrowed $4.0 million under the Star Digitel Bridge Loan Agreement
and on May 27, 1997, Star Digitel borrowed the remaining $4.0 million available
under the Star Digitel Bridge Loan Agreement. The notes issued under the Star
Digitel Bridge Loan Agreement (i) were originally due on November 22, 1997,
provided that, upon Star Digitel's request and on payment of an extension fee,
TD Bank agreed to extend the maturity to May 11, 1998, (ii) bear interest at
LIBOR plus 2.25% until November 22, 1992 and plus 2.5% thereafter, (iii) may be
prepaid at Star Digitel's discretion without penalty in minimum prepayments of
$2.0 million and (iv) must be prepaid in whole upon the occurrence of certain
events. Under the Star Digitel Bridge Loan Agreement, Star Digitel must pay TD
Bank a commitment fee of 0.5% of the unused portion of the facility.

           Pursuant to the Star Digitel Bridge Loan Agreement, each shareholder
of Star Digitel agreed to guarantee its pro rata share of the bridge loan. IWC
China Limited's pro rata share of the bridge loan, $3.2 million, was guaranteed
by Vanguard pursuant to the guarantee facility provided by it in connection with
the Vanguard Warrant Exchange. See "--Transactions with Vanguard."

           Pursuant to a Bridge Loan Agreement Supplement No. 1 dated September
18, 1997 (the "Star Digitel First Bridge Loan Supplement") between Star Digitel
and TD Bank, which amended and supplemented the Star Digitel First Bridge Loan
Agreement, TD Bank agreed to provide an additional $10 million in supplemental
bridge financing to Star Digitel. On September 18, 1997, Star Digitel borrowed
the full $10 million available under the Star Digitel First Bridge Loan
Supplement. The notes issued under the Star Digitel First Bridge Loan Supplement
(i) are due May 11, 1998, (ii) bear interest at LIBOR plus 2.25% until November
22, 1998 and 2.5% thereafter, (iii) may be prepaid at Star Digitel's discretion
without penalty in minimum prepayments of $2.0 million and (iv) must be prepaid
in whole upon the occurrence of certain events. Under the Star Digitel First
Bridge Loan Supplement, (i) Star Digitel paid TD Bank an up-front fee of
$125,000 and must pay to TD Bank a commitment fee of 0.5% of the unused portion
of the facility and (ii) the amount of the extension fee was increased from
$100,000 to $225,000.

           Pursuant to the Star Digitel First Bridge Loan Supplement, each 
shareholder agreed to guarantee its pro rata share of the supplemental bridge 
financing to Star Digitel. IWC China Limited's pro rata share of the 
guarantee, $4.0 million, was guaranteed by Vanguard pursuant to a 
Reimbursement Agreement dated September 18, 1997 (the "Reimbursement 
Agreement") between Vanguard Cellular Financial Corp. ("VCFC"), a wholly 
owned subsidiary of Vanguard, and IWC China Limited. As consideration to VCFC 
for providing the guarantee, IWC China Limited agreed to pay VCFC (i) an 
up-front fee of $240,000, payable in cash, and (ii) a quarterly in-kind 
guarantee fee while the Reimbursement Agreement is in effect, payable in kind 
in the Company's Common Stock (valued at $12.48 per share) based on an 
initial annual rate of 6.75% that increases in increments to 17.75% on and 
after December 18, 1998. IWC China Limited also agreed to pay VCFC an 
additional guarantee fee if VCFC is required to make any payments under the 
guarantee, payable in ordinary shares of Star Digitel ("Star Digitel 
Shares"). The amount of the Star Digitel Shares payable by IWC China Limited 
equals the sum of (i) 0.205% of the outstanding Star Digitel Shares on the 
date VCFC makes its initial payment under the guarantee multiplied by the 
number of months from September 18, 1997 to the date of such payment, (ii) 
0.41% of the outstanding Star Digitel Shares on the date of any subsequent 
payment under the guarantee multiplied by the number of months from the date 
immediately preceding payment to the date of such payment and (iii) 0.41% of 
the outstanding Star Digitel Shares on the date that IWC China Limited 
satisfies in full its obligations to VCFC under the Reimbursement Agreement 
(and certain related agreements) multiplied by the number of months since the 
immediately preceding payment by VCFC under the guarantee to the date of such 
satisfaction. Pursuant to a Pledge Agreement dated September 18, 1997, IWC 
China 

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Limited pledged all of its Star Digitel Shares to secure performance of its 
obligations under the Reimbursement Agreement (and certain related 
agreements). On the occurrence of certain events, including the initial 
public offering of equity securities by the Company or certain related 
entities and the receipt of a specified amount of cash proceeds from equity 
issuances or asset sales by the Company or certain related entities, IWC 
China Limited will be required to pay an additional guarantee fee equal to 
4.0% of the outstanding Star Digitel Shares as of the date of such event 
unless Vanguard's obligations under the guarantee are permanently released 
and discharged.

           Pursuant to the Reimbursement Agreement, the Company granted VCFC a
10-year warrant to purchase shares of its Common Stock at an exercise price of
$.01 per share. The number of shares issuable upon exercise of the warrant
currently equals .69% of the Company's fully diluted equity on September 18,
1997 (or, 172,763 shares) plus, unless VCFC's obligations under the guarantee
have not been permanently released and discharged prior to such date and subject
to reduction in certain circumstances, an additional (i) 0.207% on June 18,
1998, (ii) 0.345% on September 18, 1998, (iii) 0.553% on December 18, 1998, and
(iv) 0.691% on the 18th day of each March, June, September and December
thereafter.

           Pursuant to a Bridge Loan Agreement Supplement No. 2 dated November
17, 1997 (the "Star Digitel Second Bridge Loan Supplement") between Star Digitel
and TD Bank, which further amended and supplemented the Star Digitel Bridge Loan
Agreement, TD Bank agreed to provide an additional $4.7 million in supplemental
bridge financing to Star Digitel. On November 17, 1997, Star Digitel borrowed
the full $4.7 million available under the Star Digitel Second Bridge Loan
Supplement. The notes issued under the Star Digitel Second Bridge Loan
Supplement (i) are due on May 11, 1998, (ii) bear interest at LIBOR plus 2.5%,
(iii) may be prepaid at Star Digitel's discretion without penalty in minimum
prepayments of $2.0 million and (iv) must be prepaid in whole upon the
occurrence of certain events. Under the Star Digitel Second Bridge Loan
Supplement, Star Digitel paid TD Bank an up-front fee of $117,500 and must pay
to TD Bank a commitment fee of 0.5% per annum on the unused portion of the
supplemental bridge financing facility.

           In connection with the Star Digitel Second Bridge Loan Supplement,
the Reimbursement Agreement and the Pledge Agreement were amended on January 23,
1998 to increase the amount guaranteed to TD Bank by VCFC on behalf of IWC China
Limited to US$11.2 million.

           Star Digitel is currently negotiating with TD Bank to extend the
maturity date of the bridge loan facilities to November 11, 1998. The Star
Digitel Bridge Loan Agreement, the Star Digitel First Bridge Loan Supplement and
the Star Digitel Second Bridge Loan Supplement are referred to herein as the
"Star Digitel Bridge Facilities."

PAKISTAN FACILITIES

           In August 1997, the Company closed a bridge financing facility for an
aggregate amount of $29.0 million in exchangeable bridge loans. Such bridge
financing facility is structured as a two-tier facility, with (i) a $22.0
million credit facility for the specific purpose of financing the cash portion
of the purchase price of the Company's indirect 20.0% equity interest in
Mobilink, certain related expenses and certain required capital calls to
Mobilink (the "PWH Pakistan Facility"), and (ii) a $7.0 million credit facility
available to the Company for general corporate purposes and other purposes (the
"IWCH Pakistan Facility"; and together with the PWH Pakistan Facility, the
"Pakistan Facilities"). See "Business--Operating Companies--Pakistan--Mobilink."
The lenders under the Pakistan Facilities are a group of the Company's
stockholders and/or affiliated entities led by TDI and Vanguard (each a
"Pakistan Lender" and collectively the "Pakistan Lenders").

           Pursuant to the PWH Pakistan Facility, on August 18, 1997, PWH 
issued $22.0 million principal amount of exchangeable senior secured notes 
(the "PWH Pakistan Notes"). PWH used $15.8 million of the net proceeds, 
along with certain other consideration, to acquire an equity interest in 
IWCPL which in turn acquired an equity interest in Mobilink. The PWH Pakistan 
Notes bear interest payable in-kind on a quarterly basis at the following 
rates: 14.0% for the first six months; 15.0% for the next three months; 17.0% 
for the next three months; 19.0% for the 13th month; 21.0% for the 14th 
month; 23.0% for the 15th month; and 25.0% thereafter. Principal plus accrued 
but unpaid interest on the PWH Pakistan Notes matures on August 10, 2002. The 
PWH Pakistan Notes may be called at any time by the Company for a price equal 
to principal plus accrued but unpaid interest, are senior to any 

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other indebtedness of PWH and are secured by substantially all of PWH's 
assets, including the shares of IWCPL, the entity which directly owns the 
shares of Mobilink representing the Company's indirect 20.0% equity interest 
in Mobilink, owned by PWH.

           Principal plus accrued but unpaid interest on the PWH Pakistan Notes
may be exchanged by such holder in full for the Company's Series H Preferred
Stock (which consists of voting Series H-1 Preferred Stock and non-voting Series
H-2 Preferred Stock) on one occasion (i) on or after February 17, 1999 or (ii)
upon certain specified events of default. The number of shares of Series H
Preferred Stock issuable upon such exchange shall equal the principal plus
accrued but unpaid interest on the PWH Pakistan Notes that are exchanged divided
by the price that an identified third party would pay for the Series H Preferred
Stock in a placement conducted by a nationally-recognized investment banking
firm.

           Pursuant to the PWH Pakistan Facility, (i) PWH paid TDI a commitment
fee equal to 0.5% of the principal amount of the PWH Pakistan Notes, (ii) PWH
paid each Pakistan Lender a commitment fee equal to 1.50% of the principal
amount of the PWH Pakistan Note that such lender committed to purchase and (iii)
PWH paid each Pakistan Lender an issuance fee equal to 1.0% of the principal
amount of the PWH Pakistan Note issued to such lender. The loan agreement dated
August 18, 1997 among the Company and the Pakistan Lenders contains extensive
representations, warranties and covenants of PWH.

           Pursuant to the IWCH Pakistan Facility, each Pakistan Lender agreed
to provide its pro rata share (based upon its participation in the PWH Pakistan
Facility) of up to $7.0 million principal amount of exchangeable senior notes of
the Company (the "IWCH Pakistan Notes"). On October 13, 1997, IWCH issued $3.5
million principal amount of the IWCH Pakistan Notes. The IWCH Pakistan Notes
bear interest payable in-kind on a quarterly basis at the following rates: 14.0%
for the first six months; 15.0% for the next three months; 17.0% for the next
three months; 19.0% for the 13th month; 21.0% for the 14th month; 23.0% for the
15th month; and 25.0% thereafter. Principal plus accrued but unpaid interest on
the IWCH Pakistan Notes will mature on August 10, 2002.

           The IWCH Pakistan Notes may be prepaid at the Company's discretion at
any time after payment in full of all amounts due under the PWH Pakistan
Facility. The Company must (i) use the cash proceeds of certain specified
liquidity events, including a public offering or issuance of the Company's 
equity in which it raises a specified amount of proceeds, a change in control 
of the Company (as defined in the PWH Pakistan Facility) or a sale of all or
substantially all of the Company's consolidated assets (each, a "Liquidity
Event") to repay in full the IWCH Pakistan Notes and (ii) subject to certain
terms and conditions (including payment in full of all amounts due under the PWH
Pakistan Facility), must use the cash proceeds from certain issuances of debt
and equity securities of the Company and certain asset sales by the Company to
repay principal plus accrued but unpaid interest on the IWCH Pakistan Notes. The
IWCH Pakistan Notes shall be the most senior security of the Company and shall
be pari passu with the Unit Notes.

           Principal plus accrued but unpaid interest on the IWCH Pakistan Notes
may be exchanged for the Company's Series G Preferred Stock (which consists of
voting Series G-1 Preferred Stock and non-voting Series G-2 Preferred Stock) on
one occasion (i) in full, at any time upon the request of holders of at least
70% of the unpaid principal amount of the IWCH Pakistan Notes or (ii) in certain
circumstances, at the request of individual IWCH Pakistan Note holders. The
number of shares of Series G Preferred Stock issuable upon such exchange shall
equal the principal plus accrued but unpaid interest on the IWCH Pakistan notes
that are exchanged divided by the lower of (i) the conversion price of the
Company's Series F Preferred Stock (currently $9.375 per share) and (ii) 65% of
the appraised value of the Company's equity where the share value of the
Company's Common Stock is determined in connection with a Liquidity Event in
accordance with a specified process.

           Pursuant to the IWCH Pakistan Facility, the Company (i) paid TDI a 
structuring fee equal to 0.5% of the principal amount of such facility, (ii) 
paid each Pakistan Lender a commitment fee equal to 1.5% of the principal 
amount of the IWCH Pakistan Note that such lender committed to purchase and 
(iii) paid each Pakistan Lender a drawdown fee equal to 1.0% of the principal 
amount of each IWCH Pakistan Note issued to such lender.

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<PAGE>

           As consideration for entering into the Pakistan Facilities, the 
Company (a) granted the Pakistan Lenders warrants (collectively, the 
"Pakistan Initial Warrants") to purchase a specified percentage (the "Earned 
Warrant Percentage") of the Company's fully diluted Common Stock outstanding 
on August 18, 1997 (24,499,440 shares of Common Stock), which percentage will 
increase upon the occurrence of certain events, and (b) agreed to grant to 
the Pakistan Lenders, upon the occurrence of a Liquidity Event, additional 
warrants (collectively, the "Pakistan Liquidity Warrants"; and, together with 
the Pakistan Initial Warrants, the "Pakistan Warrants") to purchase a number 
of shares of Common Stock equal to the quotient of (i) 35% of the greater of 
(A) $2.0 million and (B) the unpaid principal amount of and unpaid accrued 
interest on the IWCH Pakistan Notes and (ii) the Share Value (as defined in 
the Pakistan Facilities) with respect to such Liquidity Event. As of March 
31, 1998, the Earned Warrant Percentage was 3.51% and will increase as follows:

                     (a)       by the following  percentages  (multiplied by 
the Commitment  Percentage)  on the  corresponding  dates unless the IWCH 
Pakistan Notes have been repaid in full: May 17, 1998-0.18%; August 17, 
1998-0.30%; November 17, 1998-0.48%; and February 17, 1999-0.60%; and

                     (b)       by the following  percentages  (multiplied by 
the aggregate unpaid principal amount of the PWH Pakistan Notes divided by  
$22.0 million)  on the  corresponding  dates: May 17, 1998-0.65%; August 17, 
1998-1.09%; November 17, 1998-1.74%; and February 17, 1999-2.18%.

           The Commitment Percentage equals (A) the sum of the aggregate 
unpaid principal amount of the outstanding IWCH Pakistan Notes plus the 
aggregate additional amount which Pakistan Lenders have committed to lend 
under the IWC Pakistan Facility divided by (B) $7.0 million. The Pakistan 
Warrants have a 10-year term and an exercise price of $.01 per share of 
Common Stock. The Pakistan Initial Warrants have been, and the Pakistan 
Liquidity Warrants when granted will be, issued to each Pakistan Lender pro 
rata based on such lender's participation in the Pakistan Facilities. As of 
March 31, 1998, an aggregate of 889,594 shares of Common Stock were issuable 
upon exercise of the Pakistan Initial Warrants.

           The shares of Preferred Stock issuable upon exchange of the PWH 
Pakistan Notes and the IWCH Pakistan Notes and the Common Stock issuable upon 
exercise of the Pakistan Warrants are entitled to certain registration 
rights. See "Description of Stock--Registration Rights." The Company plans to 
repay all amounts due under the PWH Pakistan Facility and to permanently 
terminate the IWCH Pakistan Facility upon the closing of the Offering.

                                      84
<PAGE>

           The Pakistan Lenders include the following beneficial owners of 
more than 5% of the Company's Common Stock (or affiliated entities) and 
executive officers and directors of the Company, which have purchased the 
following PWH Pakistan Notes and IWCH Pakistan Notes and received the 
following Initial Warrants as of March 31, 1998:

<TABLE>
<CAPTION>

                                                                                NUMBER OF SHARES
                                                                                  COMMON STOCK
                                                                                 ISSUABLE UPON
                                       PRINCIPAL AMOUNT    PRINCIPAL AMOUNT       EXERCISE OF
                                        OF PWH PAKISTAN    OF IWCH PAKISTAN     PAKISTAN INITIAL
INDIVIDUAL OR ENTITY                       NOTE                  NOTE             WARRANT (3)
--------------------                   ----------------    ----------------     ----------------
<S>                                     <C>                 <C>                  <C>
TDI..............................          14,688,539           4,673,626             593,958
Vanguard.........................           3,034,483             965,517             122,704
BEA Funds and Affiliated                    1,468,255             467,172              59,370
    Entities(1)..................
Central Investment Holding (BVI)              758,621             241,379              30,676
    Co., Ltd.(2).................
Northwood........................             436,207             138,793              17,638
James M. Dixon...................             227,586              72,414               9,202
John D. Lockton..................              61,448              19,552               2,484
Van E. Snowdon...................              18,966               6,034                 766
Sanford L. Antignas..............              15,172               4,828                 613
Douglas S. Sinclair..............              15,172               4,828                 613
</TABLE>
------------
(1) Excludes Sanford L. Antignas and BPPA IWC LLC. See 
    "Management--Arrangements Concerning Election of Directors."
(2) Affiliated with Central Investment Holding, Inc. See "Principal 
    Stockholders." 
(3) Excludes shares of Common Stock issuable upon exercise of Pakistan 
    Liquidity Warrants.

SERIES J PREFERRED STOCK FINANCING

           On March 10, 1998, Vanguard purchased 789,266 shares of the Company's
Series J Preferred Stock ("Series J Preferred Stock") and a related warrant to
purchase the Company's Common Stock (a "Series J Warrant") for $10 million (the
"Series J Financing"). The Series J Warrant has a ten-year term and an exercise
price of $0.01 per share of Common Stock. The Series J Warrant is initially
exercisable for 173,638 shares of Common Stock. The total number of shares
issuable upon exercise of the Series J Warrant will increase to 299,921 shares
on September 10, 1998 and 457,774 shares on December 10, 1998, unless on or
before each such respective date the Company raises at least $50 million through
a combination of equity issuances (including equity issued in the Series J
Financing) and/or qualifying asset sales or completes a Corporation Transaction
(as defined).

           Pursuant to the Series J Preferred Stock and Warrant Purchase
Agreement dated March 10, 1998 (the "Series J Agreement") between the Company
and Vanguard, the Company, among other things: (i) agreed to certain
restrictions on the use of net proceeds from the Series J Financing, (ii)
granted Vanguard certain rights to exchange its equity interest in Star Digitel,
Mobilink and certain other qualifying operating companies of the Company
(collectively, "Core Operating Companies") for shares of the Company's Common
Stock, (iii) granted Vanguard certain co-sale rights if the Company transferred
its equity interest in a Core Operating Company, (iv) agreed to give all holders
of the Company's capital stock and options and warrants to acquire such capital
stock (other than holders of the Unit Warrants) a right of first offer to
purchase a pro rata share of the Series J Preferred Stock and related Series J
Warrants offered for sale in the Series J Financing and (v) in certain
circumstances, agreed to allow holders of Series J Preferred Stock and Series J
Warrants purchased pursuant to the Series J Agreement to exchange such
securities for securities issued by the Company and subsequent qualifying
private placement of its equity securities. The Series J Agreement contains
certain other customary representations, warranties and covenants.

           In connection with the Series J Financing, the Company entered 
into the Eighth Amended and Restated Investor Rights Agreement dated as of 
March 10, 1998 with certain other investors and an Amended and Restated 
Registration Rights Agreement dated as of March 10, 1998 with certain holders 
of its securities. These agreements 

                                      85
<PAGE>

provide, among other things, for certain registration, first offer, co-sale, 
board observer, board representation and voting rights.

TRANSACTIONS WITH VANGUARD

           In connection with the issuance of the April 24, 1995 Bridge Notes,
the Company and Vanguard agreed that a wholly owned subsidiary of Vanguard would
contribute its interests in ten wireless projects to the Company in exchange for
shares of Preferred Stock (as amended, the "Vanguard Project Exchange")
resulting in Vanguard owning not less than a 50% equity interest in the Company
on a fully diluted basis. On July 28, 1995, the Company, Vanguard and a wholly
owned subsidiary of Vanguard ("Vanguard Sub"), entered into an Agreement and
Plan of Reorganization (as amended, the "Vanguard Reorganization Agreement")
which specified the terms and conditions of the Vanguard Project Exchange. The
Vanguard Reorganization Agreement provided that Vanguard Sub would be merged
into the Company, with the Company as the surviving corporation, and in exchange
therefor Vanguard would receive 3,972,240 shares of Series E Preferred Stock,
subject to adjustment in certain circumstances. The Vanguard Project Exchange
occurred on December 18, 1995, concurrently with the closing of the Series F
Financing.

           Pursuant to the Vanguard Project Exchange, the Company acquired
Vanguard Sub's interests or rights to acquire interests in ten wireless projects
in Indonesia, New Zealand, Brazil, India and Pakistan. Vanguard's cost of
acquiring such projects was in excess of approximately $550,000. The terms of
the Vanguard Project Exchange were arrived at through arms-length negotiations
and were approved by a majority of disinterested directors of the Company and by
the Company's stockholders. See "Business--Other Operating Companies." In
connection with the Vanguard Project Exchange, the warrants issued to Vanguard
in connection with a previous financing were amended to, among other things,
extend the maturity of certain of these warrants.

           On May 5, 1997, the Company entered into an agreement with Vanguard
Cellular Financial Corp., a wholly owned subsidiary of Vanguard, pursuant to
which such subsidiary surrendered then-outstanding warrants to purchase 323,880
shares of the Company's Series C Preferred Stock, 416,720 shares of its Series D
Preferred Stock and 64,120 shares of its Series F Preferred Stock in exchange
for the issuance by the Company of a warrant to acquire 249,970 shares of Common
Stock at a purchase price of $0.25 per share and second warrant to purchase
554,750 shares of Common Stock at an exercise price of $9.375 per share. The
second warrant was subsequently surrendered by Vanguard in exchange for the
issuance to certain officers and employees of Vanguard of an option to purchase
53,330 shares of Common Stock at an exercise price of $9.375 per share under the
Stock Plan and options to purchase an aggregate of 501,420 shares of Common
Stock at a purchase price of $9.375 per share outside the 1996 Stock Incentive
Plan, including options granted to the following directors of the Company:
Haynes G. Griffin - 400,000 shares; and Van Snowdon - 65,250 shares. In
addition, Vanguard agreed to guarantee from time to time up to an aggregate of
$3.2 million of indebtedness incurred by the Company or its wholly owned
subsidiaries until the Company receives at least $3.2 million in alternative
debt financing or consummates an initial public offering of its Common Stock,
but in no event later than February 3, 1999. (The foregoing transactions are
hereinafter referred to as the "Vanguard Warrant Exchange.") The Vanguard
Warrant Exchange was approved by the Board of Directors of the Company on
February 28, 1997, and by the stockholders of the Company on May 5, 1997.

           In August 1997, Vanguard Pakistan, Inc., a wholly owned subsidiary 
of Vanguard ("VPI"), acquired an indirect 6% equity interest in Mobilink by 
acquiring an equity interest in IWCPL. Pursuant to the IWC Group Agreement 
entered into between PWH and VPI in August 1997 (the "IWC Group Agreement"), 
(i) PWH and VPI agreed that each party could exercise certain rights and 
perform certain duties of the other party under the IWCPL shareholders 
agreement, if such other party was unable or unwilling to do so, and (ii) VPI 
entered into a voting trust agreement whereby it granted an officer of PWH 
the right to vote all voting securities of IWCPL now owned or hereafter 
acquired by VPI during the term of the voting trust. Pursuant to a letter 
agreement between PWH and VPI in February 1998, VPI exercised its right under 
Section 2.5 of the IWC Group Agreement to make a capital contribution to 
IWCPL on behalf of PWH by purchasing 1,240,275 redeemable preference shares 
of IWCPL for $1,240,275. Pursuant to the letter agreement, PWH has the right 
to purchase the shares at any time on or before March 16, 1998 for a purchase 
price of $1.00 per share and VPI has the right to put the shares to PWH at 
any time 

                                      86
<PAGE>

on or before April 15, 1998 for a purchase price of $1.00 per share. In 
addition, PWH paid VPI a fee of $9,302 pursuant to the letter agreement.

           In September 1997, at the request of IWC China, Vanguard guaranteed
$8,000,000 of indebtedness to be incurred by Star Digitel (the "Vanguard SDL
Guarantee"). Pursuant to a reimbursement agreement (the "Reimbursement
Agreement"), IWC China Limited agreed to pay Vanguard (i) an up-front guarantee
fee of $240,000 in cash, (ii) a quarterly in-kind guarantee fee at an initial
rate of 6.75% that increases over time to 17.75% and (iii) an additional
guarantee fee payable in shares of Star Digitel owned by IWC China Limited if
Vanguard is required to make any payments under the guarantee. In addition, the
Company granted Vanguard a ten-year warrant to purchase shares of its Common
Stock at an exercise price of $0.01 per share. The number of shares issuable
upon exercise of the warrant is initially set at 68,819 and increases in
quarterly increments thereafter until Vanguard's obligations under the guarantee
have been permanently released and discharged.

           In March 1998, the Company entered into a Support Services Agreement
(the "Support Services Agreement") with Vanguard China, Inc. ("VCI"). Pursuant
to the Support Services Agreement, the Company granted Vanguard a warrant to
purchase up to 323,408 shares of its Common Stock (the "SSA Warrant Shares") in
exchange for VCI agreeing to provide certain services relating to the financing
of Star Digitel. One-half of the SSA Warrant Shares become exercisable upon Star
Digitel executing definitive financing documents relating to a $50 million
financing acceptable to Star Digitel's board of directors, and one-half of the
SSA Warrant Shares become exercisable upon Star Digitel entering into an
agreement for vendor financing acceptable to Star Digitel's board of directors.
The SSA Warrant has a ten-year term and an exercise price of $0.01 per share of
Common Stock.

           Van E.  Snowdon was elected President and Chief Executive 
Officer of the Company in March 1998.  Prior to such time, he had served as 
President of Vanguard Communications, Inc., a subsidiary of Vanguard.  See 
"Item 11.  Executive Compensation."

TRANSACTIONS WITH FOUNDERS

           In January 1992, the Company issued 1,200,000 shares of Series A 
Preferred Stock to Corporate Technology International ("CTI"), an entity 
beneficially owned by Messrs. Lockton and McClung and another individual, for 
an aggregate purchase price of $300,000. CTI subsequently distributed 510,000 
shares to each of Messrs. Lockton and McClung.

           In January 1994, the Company entered into an agreement (the "CTP 
Agreement") with Messrs. Lockton, McClung and a third party to exchange 
251,920 shares of Common Stock (the "CTP Exchange") for 70% of the then 
outstanding equity of CTP, a partnership owned by Messrs. McClung, Lockton 
and others that was formed to pursue wireless communications opportunities. 
The CTP Exchange was consummated on December 18, 1995. Pursuant to the CTP 
Exchange, the Company issued 103,280 shares of Common Stock to each of 
Messrs. Lockton and McClung and deposited an additional 45,360 shares of 
Common Stock into escrow for the benefit of certain parties, including 
Messrs. Lockton and McClung. The terms of the CTP Exchange were arrived at 
through arms' length negotiations and were approved by a majority of 
disinterested directors of the Company.

           In August 1996,  Mr. McClung  converted  266,800 shares of Series 
A  Preferred Stock into a like number of shares of Common Stock.

           In January 1997, the Company loaned $100,000 to Mr. McClung 
pursuant to an unsecured promissory note. The loan accrues interest at a rate 
of 14% per annum and is due and payable upon demand of the Company.

INDEBTEDNESS OF MANAGEMENT

           On October 19, 1994, pursuant to a Stock Purchase Agreement and a 
Compensation Agreement, the Company sold Mr. Snowdon, who is a director of 
the Company and Vice President of Vanguard Communications, Inc., a subsidiary 
of Vanguard, 76,080 shares of Common Stock at a purchase price of $2.00 per 
share and 3,920 

                                      87
<PAGE>

shares of Series D Preferred Stock at a purchase price of $6.55 per share, 
for an aggregate purchase price of $177,836. The Company loaned Mr. Snowdon 
the purchase price, which loan is evidenced by a note from Mr. Snowdon to the 
Company dated October 19, 1994. The note bears interest at 7.69% per annum. 
Principal and accrued interest are due on October 19, 2004. The note is 
secured by a pledge of the stock purchased by Mr. Snowdon and is non-recourse 
to him.

OTHER TRANSACTIONS

           In 1995 the Company paid Coriander Willow, an entity owned by Vicky
Bratten, who is Mr. McClung's wife, $90,330 for accounting services performed by
Coriander Willow for the Company. Management believes that this transaction was
upon terms substantially equivalent to or more favorable to the Company than
those that could have been obtained from unaffiliated third parties.

           TD Securities (USA) Inc., previously Toronto Dominion Securities
(USA) Inc. ("TDS"), an affiliate of TDI, in connection with the Debt Offering,
received fees and purchased Units in the Debt Offering at a discount (as an
Initial Purchaser) of $1.2 million from the price offered to other investors.
TDS received a fee of $1.25 million for serving as financial advisor to the
Company in connection with the RMD Acquisition.

           For a description of compensation of executive officers and 
directors of the Company and the eligibility of executive officers and 
directors to participate in the Stock Plan, see "Executive Compensation--1997 
Stock Incentive Plan" and "Executive Compensation--Director Compensation."

           Steven D.  Overly  was  elected  Senior  Vice  President  and  
General  Counsel  of  the  Company  in  February  1998.  See "Item 11.  
Executive Compensation."

                                      88
<PAGE>

                                    PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)        EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 EXHIBIT NO.  EXHIBIT
 -----------  -------

         2.1  Agreement and Plan of Merger among the Registrant, Radio Movil 
              Digital Americas, Inc. and a wholly owned subsidiary of the 
              Registrant dated November 22, 1997 (previously filed as Exhibit 
              2.11A to the Registrant's Current Report on Form 8-K, filed 
              with the Commission on February 6, 1998 (the "February 6, 1998 
              Form 8-K")
        2.1A  Amendment No. 1 to Agreement and Plan of Merger among the 
              Registrant, Radio Movil Digital Americas, Inc. and IWC 
              Acquisition Corporation, dated January 15, 1998 (previously 
              filed as Exhibit 2.11B to the Registrant's February 6, 1998 
              Form 8-K)
        2.1B  Amendment No. 2 to Agreement and Plan of Merger among the 
              Registrant, Radio Movil Digital Americas, Inc. and IWC 
              Acquisition Corporation, dated January 23, 1998 (previously 
              filed as Exhibit 2.11C to the Registrant's February 6, 1998 
              Form 8-K)
        2.1C  Escrow Agreement among George Billings, the Registrant and 
              Toronto Dominion Houston, Inc., dated January 23, 1998 
              (previously filed as Exhibit 2.11D to the Registrant's February 
              6, 1998 Form 8-K)
        2.1D  Consulting Agreement between Robert Dupuis and Radio Movil 
              Digital Americas, Inc., dated January 23, 1998 (previously 
              filed as Exhibit 2.11E to the Registrant's February 6, 1998 
              Form 8-K)
        2.1E  Non-Competition Agreement between the Registrant and Robert 
              Dupuis, dated January 23, 1998 (previously filed as Exhibit 
              2.11F to the Registrant's February 6, 1998 Form 8-K)
         3.1  Amended and Restated Certificate of Incorporation, filed with 
              the Delaware Secretary of State on March 10, 1998 
         3.2  Bylaws of the Registrant as currently in effect (previously 
              filed as Exhibit 3.2 to the Registrant's Registration Statement 
              on Form S-1, declared effective by the Commission on November 
              21, 1996 (Reg. No. 333-11987) (the "November 1996 Form S-1") 
        10.1  Indenture dated as of August 15, 1996 between the Registrant, 
              as issuer, and Marine Midland Bank, as Trustee (previously 
              filed as Exhibit 4.1 to the Registrant's November 1996 S-1)
       10.1A  First Supplemental Indenture dated January 23, 1998, between 
              the Registrant, as issuer, and Marine Midland Bank, as Trustee 
              (previously filed as Exhibit 4.1A to the Registrant's February 
              6, 1998 Form 8-K)
        10.2  Pledge Agreement dated as of August 15, 1996 by the Registrant 
              and International Wireless Communications, Inc. in favor of 
              Bankers Trust Company, as Collateral Agent (previously filed as 
              Exhibit 4.2 to the Registrant's November 1996 Form S-1)
        10.3  Unit Agreement dated as of August 15, 1996 among the Registrant 
              and Bankers Trust Company, as Unit Agent and Warrant Agent and 
              Marine Midland Bank, as Trustee (previously filed as Exhibit 
              4.3 to the Registrant's November 1996 Form S-1)
        10.4  Registration Rights Agreement dated as of August 15, 1996 among 
              the Registrant, BT Securities Corporation, Toronto Dominion 
              Securities (USA) Inc. and Salomon Brothers Inc (previously 
              filed as Exhibit 4.4 to the Registrant's November 1996 Form S-1)
        10.5  Warrant Agreement dated August 15, 1996 between Registrant and 
              Bankers Trust Company, as Warrant Agent (previously filed as 
              Exhibit 10.1 to the Registrant's November 1996 Form S-1)
        10.6  Assignment and Assumption Agreement dated as of August 7, 1996 
              between Registrant and International Wireless Communications, 
              Inc. (previously filed as Exhibit 10.6 to the Registrant's 
              November 1996 Form S-1)
        10.7  Consent, Waiver, Amendment, Assignment and Assumption Agreement 
              effective as of August 7, 1996 among Registrant and the other 
              parties named therein (previously filed as Exhibit 10.7 to the 
              Registrant's November 1996 Form S-1)
        10.8  Consent, Waiver, Amendment, Assignment and Assumption Agreement 
              effective as of August 7, 1996 among International Wireless 
              Communications, Inc. and the parties named therein (previously 
              filed as Exhibit 10.8 to the Registrant's November 1996 Form 
              S-1)
        10.9  Securities Purchase Agreement dated as of December 6, 1995 
              among Registrant and the parties named therein (previously 
              filed as Exhibit 10.2 to the Registrant's November 1996 Form 
              S-1)
       10.10  Stock Purchase Agreement dated as of December 18, 1995 among 
              Registrant, John D. Lockton and Hugh B.L. 

                                      89
<PAGE>

              McClung (previously filed as Exhibit 10.5 to the 
              Registrant's November 1996 Form S-1)
       10.11  1996 Stock Option/Stock Issuance Plan, amended and restated as 
              of February 3, 1997 (previously filed as Exhibit 10.9A to the 
              Registrant's Quarterly Report on Form 10-Q for the quarter 
              ended March 31, 1997 (the "March 31, 1997 Form 10-Q"))
       10.12  Form of Indemnification Agreement (previously filed as Exhibit 
              10.10 to the Registrant's November 1996 Form S-1) 
      10.13A  Real Property Lease between International Wireless 
              Communications, Inc. and PM Realty Group, dated May 5, 1994 
              (previously filed as Exhibit 10.11 to the Registrant's November 
              1996 Form S-1)
      10.13B  First Amendment to Lease between The Prudential Insurance 
              Company of America and International Wireless Communications, 
              Inc., dated September 1, 1996 (previously filed as Exhibit 
              10.11A to the Registrant's November 1996 Form S-1)
      10.15C  Second Amendment to Lease between Prudential and International 
              Wireless Communications, Inc., dated November 15, 1996 
              (previously filed as Exhibit 10.11B to the Registrant's Annual 
              Report on Form 10-K for the year ended December 31, 1997 (the 
              "December 31, 1997 Form 10-K"))
      10.16A  Agreement between Registrant and Vanguard Cellular Financial 
              Corp., dated May 5, 1997, including: 
              Exhibit A-Form of Warrant Agreement 
              Exhibit B-Form of Warrant Agreement 
              Exhibit C-Form of Incentive Stock Option 
              Exhibit D-Form of Nonstatutory Option Agreement 
              Exhibit E-Form of Guaranty 
              Exhibit F-Form of Investment Representation Letter 
              Exhibit G-Form of Vanguard Legal Opinion 
              Exhibit H-Form of IWCH Legal Opinion 
              previously filed as Exhibit 10.26 to Registrant's March 31, 1997
              Form 10-Q)
      10.16B  Side Letter regarding Guaranty between Vanguard Cellular 
              Financial Corp. and the Registrant, dated May 29, 1997 
              (previously filed as Exhibit 10.26A to the Registrant's 
              Quarterly Report on Form 10-Q for the quarter ended June 30, 
              1997 (the "June 30, 1997 Form 10-Q"))
       10.17  Memorandum of Understanding among Vanguard Cellular Systems, 
              Inc., Electra Investment Trust PLC and certain other 
              shareholders of Registrant listed therein, dated August 14, 
              1997 (previously filed as Exhibit 10.28O to the Registrant's 
              Quarterly Report on Form 10-Q for the quarter ended September 
              30, 1997 (the "September 30, 1997 Form 10-Q"))
      10.18A  Loan Agreement among Registrant, Vanguard Cellular Financial 
              Corp., Toronto Dominion Investments, Inc. and the other parties 
              listed therein, dated August 18, 1997 (previously filed as 
              Exhibit 10.28A to the Registrant's Current Report on Form 8-K 
              filed with the Commission on September 12, 1997 (the "September 
              12, 1997 Form 8-K"))
      10.18B  Exchange Agreement between Registrant, Vanguard Cellular 
              Financial Corp., Toronto Dominion Investments, Inc. and the 
              other parties listed therein, dated August 18, 1997 (previously 
              filed as Exhibit 10.28B to the Registrant's September 12, 1997 
              Form 8-K)
      10.18C  Intercreditor  and Collateral  Agency  Agreement,  dated August 
              18,  1997 (previously  filed as  Exhibit 10.28D  to the 
              Registrant's September 12, 1997 Form 8-K)
      10.18D  Tranche A Senior Exchangeable Note (previously filed as Exhibit 
              10.28E to the Registrant's September 12, 1997 Form 8-K)
      10.18E  Warrant to Purchase Common Stock (previously filed as Exhibit 
              10.28F to the Registrant's September 12, 1997 Form 8-K)
      10.18F  First Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated December 30, 1997
      10.18G  Second Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated January 15, 1998
      10.18H  Third Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated January 30, 1998
      10.18I  Fourth Amendment to Loan Agreement between Registrant 
              and Toronto Dominion Investments, Inc., dated February 5, 1998
      10.18J  Fifth Amendment to Loan Agreement between Registrant 
              and Toronto Dominion Investments, Inc., dated February 13, 1998
                       
                                      90
<PAGE>

      10.18K  Sixth Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated February 19, 1998
      10.18L  Seventh Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated February 25, 1998
      10.18M  Eighth Amendment to Loan Agreement between Registrant 
              and Toronto Dominion Investments, Inc., dated March 7, 1998
       10.19  Letter Agreement among the Registrant, Hugh McClung,
              John D. Lockton, Nezam Tolooee, dated January, 1998
       10.20  Series J Preferred  Stock and Warrant  Purchase  Agreement by 
              and among  Registrant and the Investors  listed on Schedule A 
              attached thereto, dated March 10, 1998
      10.20A  Form of Warrant to Purchase Common Stock of the Registrant
       10.21  Eighth Amended and Restated  Investor Rights Agreement among 
              Registrant and Investors listed on Schedule A attached thereto, 
              dated March 10, 1998
       10.22  Amended and Restated Registration Rights Agreement among 
              Registrant and individuals and entities listed on Schedule I 
              attached thereto, dated March 10, 1998
       10.23  Support Services Agreement, by and among Registrant and Vanguard 
              Cellular Operating Corp., dated March 10, 1998
       10.24  Compensation Plan for Van Snowdon dated March 27, 1998
       10.25  Employee Retention Bonus Plan dated March 27, 1998
    10.101A*  Shareholders Agreement by and among Shubila Holding Sdn Bhd, 
              International Wireless Communications, Inc. and Laranda Sdn 
              Bhd, dated March 26, 1996 (previously filed as Exhibit 10.12A 
              to the Registrant's November 1996 Form S-1)
    10.101B*  Loan Agreement among STW, Permata Merchant Bank Berhad and 
              certain financial institutions listed therein, dated August 18, 
              1995; Option Agreement between Permata Merchant Bank Berhad and 
              International Wireless Communications, Inc., dated October 2, 
              1995; Collateral Agreement among International Wireless 
              Communications, Inc., Shubila Holding Sdn. Bhd., Laranda Sdn. 
              Bhd, STW and Permata Merchant Bank Berhad, dated October 2, 
              1995; Agreement to Allocate Responsibility among International 
              Wireless Communications, Inc., Shubila Holding Sdn. Bhd. and 
              Laranda Sdn. Bhd, dated November 1995 (previously filed as 
              Exhibit 10.12D to the Registrant's November 1996 Form S-1)
     10.101C  Share Purchase and Sale Agreement between International Wireless 
              Communications, Inc. and Shubila Holding Sdn. Bhd., dated April 
              6, 1998
     10.102A  Shareholders' Agreement among PT Bina Reksa Perdana, 
              International Wireless Communications, Inc., PT Deltonya Satya 
              Dinamika and PT Rajasa Hazanah Perkasa, dated November 9, 1995 
              (previously filed as Exhibit 10.13C to the Registrant's 
              November 1996 Form S-1)
     10.102B  Amendment Agreement among PT Rajasa Hazanah Perkasa, Nissho 
              Iwai Corporation, PT Bina Reksa Perdana, International Wireless 
              Communications, Inc. and PT Deltonya Satya Dinamika, dated 
              October 29, 1996 (previously filed as Exhibit 10.13G to the 
              Registrant's September 30, 1997 Form 10-Q)
     10.102C  Cooperative Agreement among PT. (Persero) Telekomunikasi 
              Indonesia, Yayasan Dana Pensiun Pegawai PT Telkom and PT Rajasa 
              Hazanah Perkasa, dated November 30, 1995 (previously filed as 
              Exhibit 10.13D to the Registrant's November 1996 Form S-1)
    10.102D*  Cooperation Agreement on Network Interconnection of Mobisel 
              STBS with Telkom PSTN between PT. (Persero) Telekomunikasi 
              Indonesia and PT Mobile Selular Indonesia, dated August 21, 
              1996 (previously filed as Exhibit 10.13A to the Registrant's 
              November 1996 Form S-1)
     10.102E  Facility Agreement between PT Mobile Selular Indonesia and 
              Nissho Iwai International (Singapore) Pte., Ltd., dated March 
              12, 1996; Share Pledge Agreement between PT Rajasa Hazanah 
              Perkasa and Nissho Iwai International (Singapore) Pte., Ltd., 
              dated March 12, 1996 (previously filed as Exhibit 10.13F to the 
              Registrant's November 1996 Form S-1)
     10.102F  License granted to PT Rajasa Hazanah Perkasa, dated April 28,  
              1995 (previously filed as Exhibit 10.13E to the Registrant's 
              November 1996 Form S-1)
      10.103  Stockholder Agreement between Teleparbs Participacoes Ltda. 
              (RBS) and International Wireless Communications, Inc.,  dated 
              August 31, 1995 (previously filed as Exhibit 10.14 to the 
              Registrant's November 1996 Form S-1)
     10.104A  Subscription Agreement dated September 23, 1996, by and among 
              International Wireless Communications, Inc., Star Digitel 
              Limited, Star Telecom Holding Limited and Star Telecom 
              International Holding Limited, including: 
              Exhibit A Form of Escrow Agreement 
              Exhibit B Form of Shareholders' Agreement 

                                      91
<PAGE>

              Exhibit C Form of STHL Management Services Agreement 
              Exhibit D Form of IWC Management Services Agreement 
              Exhibit E Form of Noncompetition Agreement 
              Exhibit F Form of Loan Agreement
                (previously filed as Exhibit 2.2 to the Registrant's 
                November 1996 Form S-1)
     10.104B  Letter Agreement between International Wireless Communications, 
              Inc. and Star Telecom Holding Limited regarding the loan 
              agreement between Star Digitel Limited and Star Telecom Holding 
              Limited, dated November 7, 1996 (previously filed as Exhibit 
              2.3 to the Registrant's November 1996 Form S-1)
     10.104C  Letter Agreements between International Wireless 
              Communications, Inc. and Star Telecom Holding Limited regarding 
              indemnification, dated November 5, 1996 and November 7, 1996 
              (previously filed as Exhibit 2.4 to the Registrant's November 
              1996 Form S-1)
     10.104D  Amended and Restated Shareholders' Agreement among Star Digitel 
              Limited, Star Telecom Holding Limited, International Wireless 
              Communications, Inc. and Vanguard China, Inc., dated April 4, 
              1997 (previously filed as Exhibit 10.16B to the Registrant's 
              March 31, 1997 Form 10-Q)
     10.104E  Amended and Restated Noncompetition Agreement between Star 
              Telecom Holding Limited and International Wireless 
              Communications, Inc., dated April 4, 1997 (previously filed as 
              Exhibit 10.16C to the Registrant's March 31, 1997 Form 10-Q)
     10.104F  Amendment to Subscription Agreement and Waiver among Star 
              Digitel Limited, Star Telecom Holding Limited, International 
              Wireless Communications, Inc. and IWC China Limited, dated June 
              18, 1997 (previously filed as Exhibit 10.16D to the 
              Registrant's June 30, 1997 Form 10-Q)
     10.104G  Side Letter regarding Indemnification between IWC China Limited 
              and Star Digitel Limited, dated June 18, 1997 (previously filed 
              as Exhibit 10.16E to the Registrant's June 30, 1997 Form 10-Q)
     10.104H  Deed of Adherence between Star Digitel Limited and IWC China 
              Limited, dated June 18, 1997 (previously filed as Exhibit 
              10.16F to the Registrant's September 30, 1997 Form 10-Q)
     10.104I  Bridge Loan Agreement between Star Digitel Limited and the 
              Toronto-Dominion Bank, dated May 16, 1997 (previously filed as 
              Exhibit 10.16G to the Registrant's September 30, 1997 Form 10-Q)
     10.104J  Supplement No. 1 to Bridge Loan Agreement between Star Digitel 
              Limited and Toronto Dominion Bank dated September 18, 1997 
              (previously filed as Exhibit 10.16J to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.104K  Supplement No. 2 to Bridge Loan Agreement between Star Digitel 
              Limited and Toronto Dominion Bank dated November 17, 1997
     10.104L  Pledge  Agreement  made by  International Wireless 
              Communications, Inc. in favor of Toronto Dominion Bank, dated 
              June 5, 1997 (previously filed as Exhibit 10.16H to the 
              Registrant's September 30, 1997 Form 10-Q)
     10.104M  Reimbursement Agreement by and among Star Digitel Limited, Star 
              Telecom Holding Limited and Vanguard Cellular Financial Corp., 
              dated May 16, 1997 (previously filed as Exhibit 10.16I to the 
              Registrant's September 30, 1997 Form 10-Q)
     10.104N  Reimbursement Agreement between IWC China Limited and Vanguard 
              Cellular Financial Corp., dated September 18, 1997
     10.104O  First Amendment to Reimbursement Agreement between IWC China 
              Limited and Vanguard Cellular Financial Corp., dated January 
              23, 1998 
     10.104P  First Amendment to Pledge Agreement between IWC China Limited 
              and Vanguard Cellular Financial Corp., dated January 23, 1998 
     10.104Q  First Amendment to Warrant to Purchase Common Stock between the 
              Registrant and Vanguard Cellular Financial Corp., dated January 
              23, 1998.
     10.104R  Amended and Restated Negative Pledge Agreement made by 
              International Wireless Communications, Inc. and IWC China in 
              favor of Toronto Dominion Bank, dated September 18, 1997 
              (previously filed as Exhibit 10.16L to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.104S  Conditional  Deed of  Adherence  between Star Digitel Limited 
              and  Vanguard  Cellular  Financial  Corp. dated September 18, 
              1997 (previously filed as Exhibit 10.16M to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.105A  Share Purchase Agreement between Motorola International 
              Development Corporation and International Wireless 
              Communications Pakistan Limited, dated July 17, 1997 
              (previously filed as Exhibit 10.27A to the Registrant's June 
              30, 1997 Form 10-Q)
     10.105B  Share Purchase Agreement between Continental Communications 
              Limited and International Wireless Communications Pakistan 
              Limited, dated July 17, 1997 (previously filed as Exhibit 
              10.27B to the Registrant's June 30, 1997 Form 10-Q)

                                      92
<PAGE>

     10.105C  Supplement to Share Purchase Agreement between Registrant and 
              Continental Communications Limited, dated August 18, 1997 
              (previously filed as Exhibit 10.28L to the Registrant's 
              September 12, 1997 Form 8-K)
     10.105D  Restated and Amended Shareholders Agreement among Motorola 
              International Development Corporation, Saif Telecom (Pvt) Ltd 
              and International Wireless Communications Pakistan Limited, 
              dated August 13, 1997 (previously filed as Exhibit 10.27C to 
              the Registrant's June 30, 1997 Form 10-Q)
     10.105E  Side Letter regarding Shareholder Obligations among 
              International Wireless Communications Pakistan Limited, 
              Motorola International Development Corporation and Saif Telecom 
              (Pvt) Ltd , dated August 13, 1997 (previously filed as Exhibit 
              10.27D to the Registrant's June 30, 1997 Form 10-Q)
     10.105F  Letter Agreement amending the Restated and Amended Shareholders 
              Agreement Among Motorola International Development Corporation, 
              Saif Telecom (Pvt) Ltd and International Wireless 
              Communications Pakistan Limited, dated August 1997 (previously 
              filed as Exhibit 2.10J to the Registrant's September 12, 1997 
              Form 8-K)
     10.105G  Amended and Restated Shareholders' Agreement among 
              International Wireless Communications Pakistan Limited, 
              Pakistan Wireless Holdings Limited, Vanguard Pakistan, Inc. and 
              South Asia Wireless Communications (Mauritius) Limited, dated 
              August 13, 1997 (previously filed as Exhibit 2.10E to the 
              Registrant's September 12, 1997 Form 8-K)
     10.105H  IWC Group Agreement between Pakistan Wireless Holdings Limited 
              and Vanguard Pakistan, Inc., dated August 13, 1997; Voting 
              Trust Agreement between Pakistan Wireless Holdings Limited and 
              Vanguard Pakistan, Inc., dated August 13, 1997 (previously 
              filed as Exhibit 2.10F to the Registrant's September 12, 1997 
              Form 8-K)
     10.105I  Deed of Adherence to International Wireless Communications 
              Pakistan Limited Shareholders Agreement among International 
              Wireless Communications Pakistan Limited, Pakistan Wireless 
              Holdings Limited, Vanguard Pakistan, Inc. and South Asia 
              Wireless Communications (Mauritius) Limited, dated August 27, 
              1997 (previously filed as Exhibit 2.10G to the Registrant's 
              September 12, 1997 Form 8-K)
     10.105J  License granted to Pakistan Mobile Communications (Pvt) Ltd by 
              the Government of Pakistan, Ministry of Communications, dated 
              July 6, 1992 (previously filed as Exhibit 10.27G to the 
              Registrant's June 30, 1997 Form 10-Q)
     10.105K  Re-validation of License granted to Pakistan Mobile 
              Communications (Pvt) Ltd, dated August 9, 1997 (previously 
              filed as Exhibit 2.10I to the Registrant's September 12, 1997 
              Form 8-K)
     10.105L  Loan Agreement between Pakistan Wireless Holdings Limited, 
              Vanguard and the Toronto-Dominion Bank, dated August 18, 1997 
              (previously filed as Exhibit 10.28G to the Registrant's 
              September 12, 1997 Form 8-K)
     10.105M  Pakistan Wireless Holdings Limited Tranche A Exchangeable 
              Senior Secured Note (previously filed as Exhibit 10.28H to the 
              Registrant's September 12, 1997 Form 8-K)
     10.105N  Pledge Agreement between Pakistan Wireless Holdings Limited and 
              the Toronto-Dominion Bank, dated August 18, 1997 (previously 
              filed as Exhibit 10.28I to the Registrant's September 12, 1997 
              Form 8-K)
     10.105O  Security Agreement among Pakistan Wireless Holdings Limited and 
              the Toronto-Dominion Bank, dated August 18, 1997 (previously 
              filed as Exhibit 10.28J to the Registrant's September 12, 1997 
              Form 8-K)
     10.105P  Stock Option Agreement between Registrant and Pakistan Wireless 
              Holdings Limited, dated August 18, 1997 (previously filed as 
              Exhibit 10.28K to the Registrant's September 12, 1997 Form 8-K)
   10.105Q**  Interconnection Agreement between Pakistan Mobile 
              Communications (Pvt) Ltd. and Pakistan Telecommunications 
              Company Limited, dated December 5, 1997
     10.105R  Side Letter between Vanguard  Pakistan,  Inc. and Pakistan 
              Wireless Holdings Limited,  dated February 12, 1998; Side 
              Letter between Vanguard Pakistan, Inc. and Pakistan Wireless 
              Holdings Limited, dated March 12, 1998
     10.105S  Financing and Security Agreement among Pakistan Mobile 
              Communications (Private) Limited and Motorola Credit 
              Corporation, dated March 5, 1998; Side Letter to Share Pledge 
              Agreement between Motorola Credit Corporation and International 
              Wireless Communications Pakistan Limited, dated March 5, 1998
     10.105T  First Amendment to Letter Agreement among Motorola 
              International Development Corporation, International Wireless 
              Communications Pakistan Limited and SAIF Telecom (Pvt.) Limited, 
              dated February 25, 1998
     10.106A  Amended and Restated Senior Secured Promissory Note and Warrant 
              Purchase Agreement among the Registrant, Radio Movil Digital 
              Americas, Inc. and BT Foreign Investment Corporation, dated 
              January 23, 1998 (previously filed as Exhibit 10.30A to the 
              Registrant's February 6, 1998 Form 8-K)
     10.106B  International Wireless Communications Holdings, Inc. Stock 
              Purchase Warrants between the Registrant and BT Foreign 
              Investment Corporation, dated January 23, 1998 (previously 
              filed as Exhibit 10.30B to the Registrant's February 6, 1998 
              Form 8-K)
     10.106C  Amended and Restated Senior Secured Promissory Note between 
              Radio Movil Digital Americas, Inc. and BT Foreign Investment 
              Corporation, dated January 23, 1998 (previously filed as 
              Exhibit 10.30C to the Registrant's February 6, 1998 Form 8-K)
     10.106D  Pledge Agreement between International Wireless Communications, 
              Inc. and BT Foreign Investment Corporation, 

                                      93
<PAGE>

              dated January 23, 1998 (previously filed as Exhibit 10.30D to the
              Registrant's February 6, 1998 Form 8-K)
     10.106E  Pledge Agreement between Radio Movil Digital Americas, Inc. and 
              BT Foreign Investment Corporation, dated January 23, 1998 
              (previously filed as Exhibit 10.30E to the Registrant's 
              February 6, 1998 Form 8-K)
     10.106F  Letter Agreement among the Registrant, BT Foreign Investment 
              Corporation and Radio Movil Digital Americas, Inc., dated 
              January 23, 1998 (previously filed as Exhibit 10.30F to the 
              Registrant's February 6, 1998 Form 8-K)

    10.107**  Letter Agreement between Telcom Ventures. LLC and Registrant, 
              dated March 16, 1998

        21.1  Subsidiaries of the Registrant

        27.1  Financial Data Schedule

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

*      Confidential treatment has previously been granted as to certain 
       portions of this exhibit.
**     Confidential treatment has been requested as to certain portions 
       of this exhibit.


(b)        REPORTS ON FORM 8-K.

           On September 11, 1997, the Registrant filed a Current Report on 
Form 8-K to report the acquisition by the Registrant of an equity interest in 
IWCPL. No financial statements were required to be filed with such Report on 
Form 8-K.

                                      94
<PAGE>

           SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED 
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED 
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.


           No annual report or proxy material has been sent to security 
holders.


                                     97

<PAGE>


                         SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized, on April 14, 
1998.


                                       INTERNATIONAL WIRELESS
                                       COMMUNICATIONS HOLDINGS, INC.

                                       By: /s/ Van E. Snowdon
                                          ----------------------------
                                          Van E. Snowdon
                                          Chief Executive Officer


                        POWER OF ATTORNEY

   KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature 
appears below constitutes and appoints Van E. Snowdon, as his true and lawful 
attorneys-in-fact and agent, with full power of substitution and 
resubstitution, for him and in his name, place and stead, in any and all 
capacities, to sign any and all amendments to this Report on Form 10-K, and 
to file the same, with all exhibits thereto, and other documents in 
connection therewith, with the Securities and Exchange Commission, granting 
unto said attorney-in-fact and agent full power and authority to do and 
perform each and every act and thing requisite and necessary to be done in 
connection therewith, as fully to all intents and purposes as he might or 
could do in person, hereby ratifying and confirming all that said 
attorney-in-fact and agent or his substitute or substitutes, may lawfully do 
or cause to be done by virtue hereof.

   Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.


SIGNATURE                        TITLE                            DATE
----------                       -----                           -----


/s/ Van E. Snowdon         President, Chief Executive           April 14, 1998
-----------------------          Officer and Director
  VAN E. SNOWDON


/s/ Keith D. Taylor                   Controller                April 14, 1998
-----------------------     (Principal Accounting Officer) 
  KEITH D. TAYLOR            


/s/ Haynes G. Griffin         Chairman of the Board             April 14, 1998
-----------------------      
  HAYNES G. GRIFFIN


/s/ Sanford L. Antignas           Director                      April 14, 1998
-----------------------
  SANFORD L. ANTIGNAS


/s/ Carl C. Cordova III           Director                      April 14, 1998
------------------------
  CARL C. CORDOVA III


/s/ Stephen R. Leeolou            Director                      April 14, 1998
----------------------
  STEPHEN R. LEEOLOU


/s/ John S. McCarthy              Director                      April 14, 1998
------------------------
  JOHN S. MCCARTHY

/s/ Brian Rich                    Director                      April 14, 1998
-----------------------
  BRIAN RICH


/s/ John D. Lockton               Director                      April 14, 1998
------------------------
  JOHN D. LOCKTON


/s/ Hugh B. L. McClung            Director                      April 14, 1998
-----------------------
  HUGH B. L. MCCLUNG



<PAGE>

                                EXHIBIT INDEX


 EXHIBIT NO.  EXHIBIT
 -----------  -------
         2.1  Agreement and Plan of Merger among the Registrant, Radio Movil 
              Digital Americas, Inc. and a wholly owned subsidiary of the 
              Registrant dated November 22, 1997 (previously filed as Exhibit 
              2.11A to the Registrant's Current Report on Form 8-K, filed 
              with the Commission on February 6, 1998 (the "February 6, 1998 
              Form 8-K")
        2.1A  Amendment No. 1 to Agreement and Plan of Merger among the 
              Registrant, Radio Movil Digital Americas, Inc. and IWC 
              Acquisition Corporation, dated January 15, 1998 (previously 
              filed as Exhibit 2.11B to the Registrant's February 6, 1998 
              Form 8-K)
        2.1B  Amendment No. 2 to Agreement and Plan of Merger among the 
              Registrant, Radio Movil Digital Americas, Inc. and IWC 
              Acquisition Corporation, dated January 23, 1998 (previously 
              filed as Exhibit 2.11C to the Registrant's February 6, 1998 
              Form 8-K)
        2.1C  Escrow Agreement among George Billings, the Registrant and Toronto
              Dominion Houston, Inc., dated January 23, 1998 (previously filed 
              as Exhibit 2.11D to the Registrant's February 6, 1998 Form 8-K)
        2.1D  Consulting Agreement between Robert Dupuis and Radio Movil 
              Digital Americas, Inc., dated January 23, 1998 (previously filed
              as Exhibit 2.11E to the Registrant's February 6, 1998 Form 8-K)
        2.1E  Non-Competition Agreement between the Registrant and Robert 
              Dupuis, dated January 23, 1998 (previously filed as Exhibit 
              2.11F to the Registrant's February 6, 1998 Form 8-K)

         3.1  Amended and Restated Certificate of Incorporation, filed with 
              the Delaware Secretary of State on March 10, 1998 
         3.2  Bylaws of the Registrant as currently in effect (previously 
              filed as Exhibit 3.2 to the Registrant's Registration Statement 
              on Form S-1, declared effective by the Commission on November 
              21, 1996 (Reg. No. 333-11987) (the "November 1996 Form S-1")

        10.1  Indenture dated as of August 15, 1996 between the Registrant, 
              as issuer, and Marine Midland Bank, as Trustee (previously 
              filed as Exhibit 4.1 to the Registrant's November 1996 S-1)
       10.1A  First Supplemental Indenture dated January 23, 1998, between 
              the Registrant, as issuer, and Marine Midland Bank, as Trustee 
              (previously filed as Exhibit 4.1A to the Registrant's February 
              6, 1998 Form 8-K)
        10.2  Pledge Agreement dated as of August 15, 1996 by the Registrant 
              and International Wireless Communications, Inc. in favor of 
              Bankers Trust Company, as Collateral Agent (previously filed as 
              Exhibit 4.2 to the Registrant's November 1996 Form S-1)
        10.3  Unit Agreement dated as of August 15, 1996 among the Registrant 
              and Bankers Trust Company, as Unit Agent and Warrant Agent and 
              Marine Midland Bank, as Trustee (previously filed as Exhibit 
              4.3 to the Registrant's November 1996 Form S-1)
        10.4  Registration Rights Agreement dated as of August 15, 1996 among 
              the Registrant, BT Securities Corporation, Toronto Dominion 
              Securities (USA) Inc. and Salomon Brothers Inc (previously 
              filed as Exhibit 4.4 to the Registrant's November 1996 Form S-1)
        10.5  Warrant Agreement dated August 15, 1996 between Registrant and 
              Bankers Trust Company, as Warrant Agent (previously filed as 
              Exhibit 10.1 to the Registrant's November 1996 Form S-1)
        10.6  Assignment and Assumption Agreement dated as of August 7, 1996 
              between Registrant and International Wireless Communications, 
              Inc. (previously filed as Exhibit 10.6 to the Registrant's 
              November 1996 Form S-1)
        10.7  Consent, Waiver, Amendment, Assignment and Assumption Agreement 
              effective as of August 7, 1996 among Registrant and the other 
              parties named therein (previously filed as Exhibit 10.7 to the 
              Registrant's November 1996 Form S-1)
        10.8  Consent, Waiver, Amendment, Assignment and Assumption Agreement 
              effective as of August 7, 1996 among International Wireless 
              Communications, Inc. and the parties named therein (previously 
              filed as Exhibit 10.8 to the Registrant's November 1996 Form S-1)
        10.9  Securities Purchase Agreement dated as of December 6, 1995 
              among Registrant and the parties named therein (previously 
              filed as Exhibit 10.2 to the Registrant's November 1996 Form S-1)

                                      98
<PAGE>

       10.10  Stock Purchase Agreement dated as of December 18, 1995 among 
              Registrant, John D. Lockton and Hugh B.L. McClung (previously 
              filed as Exhibit 10.5 to the Registrant's November 1996 Form S-1)
       10.11  1996 Stock Option/Stock Issuance Plan, amended and restated as 
              of February 3, 1997 (previously filed as Exhibit 10.9A to the 
              Registrant's Quarterly Report on Form 10-Q for the quarter 
              ended March 31, 1997 (the "March 31, 1997 Form 10-Q"))
       10.12  Form of Indemnification Agreement (previously filed as Exhibit 
              10.10 to the Registrant's November 1996 Form S-1)
      10.13A  Real Property Lease between International Wireless 
              Communications, Inc. and PM Realty Group, dated May 5, 1994 
              (previously filed as Exhibit 10.11 to the Registrant's November 
              1996 Form S-1)
      10.13B  First Amendment to Lease between The Prudential Insurance 
              Company of America and International Wireless Communications, 
              Inc., dated September 1, 1996 (previously filed as Exhibit 
              10.11A to the Registrant's November 1996 Form S-1)
      10.15C  Second Amendment to Lease between Prudential and International 
              Wireless Communications, Inc., dated November 15, 1996 
              (previously filed as Exhibit 10.11B to the Registrant's Annual 
              Report on Form 10-K for the year ended December 31, 1997 (the 
              "December 31, 1997 Form 10-K"))
      10.16A  Agreement between Registrant and Vanguard Cellular Financial 
              Corp., dated May 5, 1997, including:
              Exhibit A_Form of Warrant Agreement
              Exhibit B_Form of Warrant Agreement
              Exhibit C_Form of Incentive Stock Option
              Exhibit D_Form of Nonstatutory Option Agreement
              Exhibit E_Form of Guaranty
              Exhibit F_Form of Investment Representation Letter
              Exhibit G_Form of Vanguard Legal Opinion
              Exhibit H_Form of IWCH Legal Opinion
              previously filed as Exhibit 10.26 to Registrant's March 31, 1997 
              Form 10-Q)
      10.16B  Side Letter regarding Guaranty between Vanguard Cellular 
              Financial Corp. and the Registrant, dated May 29, 1997 
              (previously filed as Exhibit 10.26A to the Registrant's 
              Quarterly Report on Form 10-Q for the quarter ended June 30, 
              1997 (the "June 30, 1997 Form 10-Q"))
       10.17  Memorandum of Understanding among Vanguard Cellular Systems, 
              Inc., Electra Investment Trust PLC and certain other 
              shareholders of Registrant listed therein, dated August 14, 
              1997 (previously filed as Exhibit 10.28O to the Registrant's 
              Quarterly Report on Form 10-Q for the quarter ended September 
              30, 1997 (the "September 30, 1997 Form 10-Q"))
      10.18A  Loan Agreement among Registrant, Vanguard Cellular Financial 
              Corp., Toronto Dominion Investments, Inc. and the other parties 
              listed therein, dated August 18, 1997 (previously filed as 
              Exhibit 10.28A to the Registrant's Current Report on Form 8-K 
              filed with the Commission on September 12, 1997 (the "September 
              12, 1997 Form 8-K"))
      10.18B  Exchange Agreement between Registrant, Vanguard Cellular Financial
              Corp., Toronto Dominion Investments, Inc. and the other parties 
              listed therein, dated August 18, 1997 (previously filed as Exhibit
              10.28B to the Registrant's September 12, 1997 Form 8-K)
      10.18C  Intercreditor and Collateral Agency Agreement, dated August 18, 
              1997 (previously filed as Exhibit 10.28D to the Registrant's 
              September 12, 1997 Form 8-K)
      10.18D  Tranche A Senior Exchangeable Note (previously filed as Exhibit 
              10.28E to the Registrant's September 12, 1997 Form 8-K)
      10.18E  Warrant to Purchase Common Stock (previously filed as Exhibit 
              10.28F to the Registrant's September 12, 1997 Form 8-K)
      10.18F  First Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated December 30, 1997
      10.18G  Second Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated January 15, 1998
      10.18H  Third Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated January 30, 1998
      10.18I  Fourth Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated February 5, 1998
      10.18J  Fifth Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated 

                                      99
<PAGE>

              February 13, 1998

      10.18K  Sixth Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated February 19, 1998
      10.18L  Seventh Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated February 25, 1998
      10.18M  Eighth Amendment to Loan Agreement between Registrant and 
              Toronto Dominion Investments, Inc., dated March 7, 1998
       10.19  Letter Agreement among the Registrant, Hugh McClung, John D. 
              Lockton, Nezam Tolooee, dated January, 1998
       10.20  Series J Preferred Stock and Warrant Purchase Agreement by and 
              among Registrant and the Investors listed on Schedule A 
              attached thereto, dated March 10, 1998
      10.20A  Form of Warrant to Purchase Common Stock of the Registrant
       10.21  Eighth Amended and Restated Investor Rights Agreement among 
              Registrant and Investors listed on Schedule A attached thereto, 
              dated March 10, 1998
       10.22  Amended and Restated Registration Rights Agreement among 
              Registrant and individuals and entities listed on Schedule I 
              attached thereto, dated March 10, 1998
       10.23  Support Services Agreement, by and among Registrant and 
              Vanguard Cellular Operating Corp., dated March 10, 1998
       10.24  Compensation Plan for Van Snowdon dated March 27, 1998
       10.25  Employee Retention Bonus Plan dated March 27, 1998
    10.101A*  Shareholders Agreement by and among Shubila Holding Sdn Bhd, 
              International Wireless Communications, Inc. and Laranda Sdn 
              Bhd, dated March 26, 1996 (previously filed as Exhibit 10.12A 
              to the Registrant's November 1996 Form S-1)
    10.101B*  Loan Agreement among STW, Permata Merchant Bank Berhad and 
              certain financial institutions listed therein, dated August 18, 
              1995; Option Agreement between Permata Merchant Bank Berhad and 
              International Wireless Communications, Inc., dated October 2, 
              1995; Collateral Agreement among International Wireless 
              Communications, Inc., Shubila Holding Sdn. Bhd., Laranda Sdn. 
              Bhd, STW and Permata Merchant Bank Berhad, dated October 2, 
              1995; Agreement to Allocate Responsibility among International 
              Wireless Communications, Inc., Shubila Holding Sdn. Bhd. and 
              Laranda Sdn. Bhd, dated November 1995 (previously filed as 
              Exhibit 10.12D to the Registrant's November 1996 Form S-1)
     10.101C  Share Purchase And Sale Agreement between International 
              Wireless Communications, Inc. and Shubila Holding Sdn Bhd, 
              dated April 3, 1998
     10.102A  Shareholders' Agreement among PT Bina Reksa Perdana, 
              International Wireless Communications, Inc., PT Deltonya Satya 
              Dinamika and PT Rajasa Hazanah Perkasa, dated November 9, 1995 
              (previously filed as Exhibit 10.13C to the Registrant's 
              November 1996 Form S-1)
     10.102B  Amendment Agreement among PT Rajasa Hazanah Perkasa, Nissho 
              Iwai Corporation, PT Bina Reksa Perdana, International Wireless 
              Communications, Inc. and PT Deltonya Satya Dinamika, dated 
              October 29, 1996 (previously filed as Exhibit 10.13G to the 
              Registrant's September 30, 1997 Form 10-Q)
     10.102C  Cooperative Agreement among PT. (Persero) Telekomunikasi 
              Indonesia, Yayasan Dana Pensiun Pegawai PT Telkom and PT Rajasa 
              Hazanah Perkasa, dated November 30, 1995 (previously filed as 
              Exhibit 10.13D to the Registrant's November 1996 Form S-1)
    10.102D*  Cooperation Agreement on Network Interconnection of Mobisel 
              STBS with Telkom PSTN between PT. (Persero) Telekomunikasi 
              Indonesia and PT Mobile Selular Indonesia, dated August 21, 
              1996 (previously filed as Exhibit 10.13A to the Registrant's 
              November 1996 Form S-1)
     10.102E  Facility Agreement between PT Mobile Selular Indonesia and 
              Nissho Iwai International (Singapore) Pte., Ltd., dated March 
              12, 1996; Share Pledge Agreement between PT Rajasa Hazanah 
              Perkasa and Nissho Iwai International (Singapore) Pte., Ltd., 
              dated March 12, 1996 (previously filed as Exhibit 10.13F to the 
              Registrant's November 1996 Form S-1)
     10.102F  License granted to PT Rajasa Hazanah Perkasa, dated April 28, 
              1995 (previously filed as Exhibit 10.13E to the Registrant's 
              November 1996 Form S-1)
      10.103  Stockholder Agreement between Teleparbs Participacoes Ltda. 
              (RBS) and International Wireless Communications, Inc., dated 
              August 31, 1995 (previously filed as Exhibit 10.14 to the 
              Registrant's November 1996 Form S-1)
     10.104A  Subscription Agreement dated September 23, 1996, by and among 
              International Wireless Communications, Inc., Star Digitel 
              Limited, Star Telecom Holding Limited and Star Telecom 
              International Holding Limited, including:
                 Exhibit A Form of Escrow Agreement 
              Exhibit B Form of Shareholders' Agreement 
              Exhibit C Form of STHL Management Services Agreement 
              Exhibit D Form of IWC Management Services Agreement 

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<PAGE>

              Exhibit E Form of Noncompetition Agreement 
              Exhibit F Form of Loan Agreement
                (previously filed as Exhibit 2.2 to the Registrant's November 
                1996 Form S-1)
     10.104B  Letter Agreement between International Wireless Communications, 
              Inc. and Star Telecom Holding Limited regarding the loan 
              agreement between Star Digitel Limited and Star Telecom Holding 
              Limited, dated November 7, 1996 (previously filed as Exhibit 
              2.3 to the Registrant's November 1996 Form S-1)
     10.104C  Letter Agreements between International Wireless 
              Communications, Inc. and Star Telecom Holding Limited regarding 
              indemnification, dated November 5, 1996 and November 7, 1996 
              (previously filed as Exhibit 2.4 to the Registrant's November 
              1996 Form S-1)
     10.104D  Amended and Restated Shareholders' Agreement among Star Digitel 
              Limited, Star Telecom Holding Limited, International Wireless 
              Communications, Inc. and Vanguard China, Inc., dated April 4, 
              1997 (previously filed as Exhibit 10.16B to the Registrant's 
              March 31, 1997 Form 10-Q)
     10.104E  Amended and Restated Noncompetition Agreement between Star 
              Telecom Holding Limited and International Wireless 
              Communications, Inc., dated April 4, 1997 (previously filed as 
              Exhibit 10.16C to the Registrant's March 31, 1997 Form 10-Q)
     10.104F  Amendment to Subscription Agreement and Waiver among Star 
              Digitel Limited, Star Telecom Holding Limited, International 
              Wireless Communications, Inc. and IWC China Limited, dated June 
              18, 1997 (previously filed as Exhibit 10.16D to the 
              Registrant's June 30, 1997 Form 10-Q)
     10.104G  Side Letter regarding Indemnification between IWC China Limited 
              and Star Digitel Limited, dated June 18, 1997 (previously filed 
              as Exhibit 10.16E to the Registrant's June 30, 1997 Form 10-Q)
     10.104H  Deed of Adherence between Star Digitel Limited and IWC China 
              Limited, dated June 18, 1997 (previously filed as Exhibit 
              10.16F to the Registrant's September 30, 1997 Form 10-Q)
     10.104I  Bridge Loan Agreement between Star Digitel Limited and the 
              Toronto-Dominion Bank, dated May 16, 1997 (previously filed as 
              Exhibit 10.16G to the Registrant's September 30, 1997 Form 10-Q)
     10.104J  Supplement No. 1 to Bridge Loan Agreement between Star Digitel 
              Limited and Toronto Dominion Bank dated September 18, 1997 
              (previously filed as Exhibit 10.16J to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.104K  Supplement No. 2 to Bridge Loan Agreement between Star Digitel 
              Limited and Toronto Dominion Bank dated November 17, 1997
     10.104L  Pledge Agreement made by International Wireless Communications, 
              Inc. in favor of Toronto Dominion Bank, dated June 5, 1997 
              (previously filed as Exhibit 10.16H to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.104M  Reimbursement Agreement by and among Star Digitel Limited, Star 
              Telecom Holding Limited and Vanguard Cellular Financial Corp., 
              dated May 16, 1997 (previously filed as Exhibit 10.16I to the 
              Registrant's September 30, 1997 Form 10-Q)
     10.104N  Reimbursement Agreement between IWC China Limited and Vanguard 
              Cellular Financial Corp., dated September 18, 1997
     10.104O  First Amendment to Reimbursement Agreement between IWC China 
              Limited and Vanguard Cellular Financial Corp., dated January 
              23, 1998 
     10.104P  First Amendment to Pledge Agreement between IWC China Limited 
              and Vanguard Cellular Financial Corp., dated January 23, 1998 
     10.104Q  First Amendment to Warrant to Purchase Common Stock between the 
              Registrant and Vanguard Cellular Financial Corp., dated January 
              23, 1998.
     10.104R  Amended and Restated Negative Pledge Agreement made by 
              International Wireless Communications, Inc. and IWC China in 
              favor of Toronto Dominion Bank, dated September 18, 1997 
              (previously filed as Exhibit 10.16L to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.104S  Conditional Deed of Adherence between Star Digitel Limited and 
              Vanguard Cellular Financial Corp. dated September 18, 1997 
              (previously filed as Exhibit 10.16M to the Registrant's 
              September 30, 1997 Form 10-Q)
     10.105A  Share Purchase Agreement between Motorola International 
              Development Corporation and International Wireless 
              Communications Pakistan Limited, dated July 17, 1997 
              (previously filed as Exhibit 10.27A to the Registrant's June 
              30, 1997 Form 10-Q)
     10.105B  Share Purchase Agreement between Continental Communications 
              Limited and International Wireless Communications Pakistan 
              Limited, dated July 17, 1997 (previously filed as Exhibit 
              10.27B to the Registrant's June 30, 1997 Form 10-Q)
     10.105C  Supplement to Share Purchase Agreement between Registrant and 
              Continental Communications Limited, dated 

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<PAGE>

              August 18, 1997 (previously filed as Exhibit 10.28L to 
              the Registrant's September 12, 1997 Form 8-K)
     10.105D  Restated and Amended Shareholders Agreement among Motorola 
              International Development Corporation, Saif Telecom (Pvt) Ltd 
              and International Wireless Communications Pakistan Limited, 
              dated August 13, 1997 (previously filed as Exhibit 10.27C to 
              the Registrant's June 30, 1997 Form 10-Q)
     10.105E  Side Letter regarding Shareholder Obligations among 
              International Wireless Communications Pakistan Limited, 
              Motorola International Development Corporation and Saif Telecom 
              (Pvt) Ltd , dated August 13, 1997 (previously filed as Exhibit 
              10.27D to the Registrant's June 30, 1997 Form 10-Q)
     10.105F  Letter Agreement amending the Restated and Amended Shareholders 
              Agreement Among Motorola International Development Corporation, 
              Saif Telecom (Pvt) Ltd and International Wireless 
              Communications Pakistan Limited, dated August 1997 (previously 
              filed as Exhibit 2.10J to the Registrant's September 12, 1997 
              Form 8-K)
     10.105G  Amended and Restated Shareholders' Agreement among 
              International Wireless Communications Pakistan Limited, 
              Pakistan Wireless Holdings Limited, Vanguard Pakistan, Inc. and 
              South Asia Wireless Communications (Mauritius) Limited, dated 
              August 13, 1997 (previously filed as Exhibit 2.10E to the 
              Registrant's September 12, 1997 Form 8-K)
     10.105H  IWC Group Agreement between Pakistan Wireless Holdings Limited 
              and Vanguard Pakistan, Inc., dated August 13, 1997; Voting 
              Trust Agreement between Pakistan Wireless Holdings Limited and 
              Vanguard Pakistan, Inc., dated August 13, 1997 (previously 
              filed as Exhibit 2.10F to the Registrant's September 12, 1997 
              Form 8-K)
     10.105I  Deed of Adherence to International Wireless Communications 
              Pakistan Limited Shareholders Agreement among International 
              Wireless Communications Pakistan Limited, Pakistan Wireless 
              Holdings Limited, Vanguard Pakistan, Inc. and South Asia 
              Wireless Communications (Mauritius) Limited, dated August 27, 
              1997 (previously filed as Exhibit 2.10G to the Registrant's 
              September 12, 1997 Form 8-K)
     10.105J  License granted to Pakistan Mobile Communications (Pvt) Ltd by 
              the Government of Pakistan, Ministry of Communications, dated 
              July 6, 1992 (previously filed as Exhibit 10.27G to the 
              Registrant's June 30, 1997 Form 10-Q)
     10.105K  Re-validation of License granted to Pakistan Mobile 
              Communications (Pvt) Ltd, dated August 9, 1997 (previously 
              filed as Exhibit 2.10I to the Registrant's September 12, 1997 
              Form 8-K)
     10.105L  Loan Agreement between Pakistan Wireless Holdings Limited, 
              Vanguard and the Toronto-Dominion Bank, dated August 18, 1997 
              (previously filed as Exhibit 10.28G to the Registrant's 
              September 12, 1997 Form 8-K)
     10.105M  Pakistan Wireless Holdings Limited Tranche A Exchangeable 
              Senior Secured Note (previously filed as Exhibit 10.28H to the 
              Registrant's September 12, 1997 Form 8-K)
     10.105N  Pledge Agreement between Pakistan Wireless Holdings Limited and 
              the Toronto-Dominion Bank, dated August 18, 1997 (previously 
              filed as Exhibit 10.28I to the Registrant's September 12, 1997 
              Form 8-K)
     10.105O  Security Agreement among Pakistan Wireless Holdings Limited and 
              the Toronto-Dominion Bank, dated August 18, 1997 (previously 
              filed as Exhibit 10.28J to the Registrant's September 12, 1997 
              Form 8-K)
     10.105P  Stock Option Agreement between Registrant and Pakistan Wireless 
              Holdings Limited, dated August 18, 1997 (previously filed as 
              Exhibit 10.28K to the Registrant's September 12, 1997 Form 8-K)
   10.105Q**  Interconnection Agreement between Pakistan Mobile 
              Communications (Pvt) Ltd. and Pakistan Telecommunications 
              Company Limited, dated December 5, 1997
     10.105R  Side Letter between Vanguard Pakistan, Inc. and Pakistan 
              Wireless Holdings Limited, dated February 12, 1998; Side Letter 
              between Vanguard Pakistan, Inc. and Pakistan Wireless Holdings 
              Limited, dated March 12, 1998
     10.105S  Financing and Security Agreement among Pakistan Mobile 
              Communications (Private) Limited and Motorola Credit 
              Corporation, dated March 5, 1998; Side Letter to Share Pledge 
              Agreement between Motorola Credit Corporation and International 
              Wireless Communications Pakistan Limited, dated March 5, 1998
     10.105T  First Amendment to Letter Agreement among Motorola 
              International Development Corporation, International 
              Wireless Communications Pakistan Limited and SAIF Telecom 
              (Pvt.) Limited, dated February 25,1998
     10.106A  Amended and Restated Senior Secured Promissory Note and Warrant 
              Purchase Agreement among the Registrant, Radio Movil Digital 
              Americas, Inc. and BT Foreign Investment Corporation, dated 
              January 23, 1998 (previously filed as Exhibit 10.30A to the 
              Registrant's February 6, 1998 Form 8-K)
     10.106B  International Wireless Communications Holdings, Inc. Stock 
              Purchase Warrants between the Registrant and BT Foreign Investment
              Corporation, dated January 23, 1998 (previously filed as Exhibit 
              10.30B to the Registrant's February 6, 1998 Form 8-K)
     10.106C  Amended and Restated Senior Secured Promissory Note between 
              Radio Movil Digital Americas, Inc. and BT Foreign Investment 
              Corporation, dated January 23, 1998 (previously filed as 
              Exhibit 10.30C to the Registrant's February 6, 1998 Form 8-K)
     10.106D  Pledge Agreement between International Wireless Communications, 
              Inc. and BT Foreign Investment Corporation, dated January 23, 
              1998 (previously filed as Exhibit 10.30D to the Registrant's 
              February 6, 1998 Form 8-K)

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<PAGE>

     10.106E  Pledge Agreement between Radio Movil Digital Americas, Inc. and 
              BT Foreign Investment Corporation, dated January 23, 1998 
              (previously filed as Exhibit 10.30E to the Registrant's 
              February 6, 1998 Form 8-K)
     10.106F  Letter Agreement among the Registrant, BT Foreign Investment 
              Corporation and Radio Movil Digital Americas, Inc., dated 
              January 23, 1998 (previously filed as Exhibit 10.30F to the 
              Registrant's February 6, 1998 Form 8-K)

    10.107**  Letter Agreement between Telcom Ventures. LLC and Registrant, 
              dated March 16, 1998

        21.1  Subsidiaries of the Registrant

        27.1  Financial Data Schedule


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

*          Confidential treatment has previously been granted as to certain 
           portions of this exhibit.
**         Confidential treatment has been requested as to certain portions of 
           this exhibit.

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