SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                            ______________________


                                   FORM 20-F

                 Annual report pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
                  for the fiscal year ended December 31, 2002

                       Commission file number 000-30075

                            ______________________

                             COMPLETEL EUROPE N.V.
            (Exact Name of Registrant as Specified in Its Charter)

                                The Netherlands
                (Jurisdiction of Incorporation or Organization)

                            ______________________

                          BLAAK 16, 3011 ta ROTTERDAM
                                The Netherlands
                   (Address of Principal Executive Offices)

                            ______________________

Securities registered or to be registered pursuant to Section 12(b) of the Act:
                                     None
                               (Title of Class)
Securities registered or to be registered pursuant to Section 12(g) of the Act:
                                Ordinary Shares
                      (nominal value(euro)0.04 per share)
                               (Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d)
                                  of the Act:
                                     None
                               (Title of Class)
                            ______________________

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

        3,905,414 Ordinary Shares (nominal value (euro)0.04 per share)
  21,730 Convertible Preferred A Shares (nominal value (euro) 4.00 per share)
  14,924 Convertible Preferred B Shares (nominal value (euro) 4.00 per share)
            1,548,261 C Shares, nominal value (euro)0.04 per share

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 check mark which financial statement item the registrant has
elected to follow.

                     Item 17 |_|             Item 18 |X|

Name and address of person authorized to receive notices and communications
from the Securities and Exchange Commission:

                                 Eden Quainton
                   Skadden, Arps, Slate, Meagher & Flom LLP
                       68, rue du Faubourg Saint Honore
                              75008 Paris, France


                               TABLE OF CONTENTS

PART I.......................................................................2

ITEM 1.      Identity of Directors, Senior Management and Advisors...........2

ITEM 2.      Offer Statistics and Expected Timetable.........................2

ITEM 3.      Key Information.................................................2

ITEM 4.      Information on the Company......................................10

ITEM 5.      Operating and Financial Review and Prospects....................25

ITEM 6.      Directors, Senior Management and Employees......................42

ITEM 7.      Major Shareholders and Related Party Transactions...............49

ITEM 8.      Financial Information...........................................51

ITEM 9.      The Listing.....................................................51

ITEM 10.     Additional Information..........................................53

ITEM 11.     Quantitative and Qualitative Disclosures about Market Risk......62

ITEM 12.     Description of Securities Other Than Equity Securities..........62

PART II......................................................................63

ITEM 13.     Defaults, Dividend Arrearages and Delinquencies.................63

ITEM 14.     Material Modifications to the Rights of Security Holders
             and Use of Proceeds.............................................63

ITEM 15.     Controls and Procedures.........................................67

ITEM 16.     Reserved........................................................67


PART III.....................................................................68

ITEM 17.     Financial Statements............................................68

ITEM 18.     Financial Statements............................................68

ITEM 19.     Exhibits........................................................68

<PAGE>


               Special Note Regarding Forward-Looking Statements

         All assumptions, anticipations, expectations and forecasts contained
in the following discussion regarding our future business plans and products
and services, financial results, revenue and expenditure forecasts,
performance, and the telecommunications industry and operating environment,
and future events are forward-looking statements within the meaning of Section
27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities
Exchange Act of 1934. These forward-looking statements are generally
identified by the use of forward-looking words such as "plan", "estimate",
"believe", "expect", "anticipate", "will", "should" and "may" or other
variations of such terms, or by discussion of strategy that involves risks and
uncertainties. The forward-looking statements contained herein represent a
good-faith assessment of our future performance for which we believe there is
a reasonable basis. These forward-looking statements represent our view only
as of the dates they are made, and we disclaim any obligation to update
forward-looking statements contained herein, except as may be otherwise
required by law. The forward-looking statements contained in this report
involve known and unknown risks, uncertainties and other factors that could
cause our actual future results, performance and achievements to differ
materially from those forecasted or suggested herein. For a more detailed
discussion of the risks affecting us, please see "Risk Factors."

         All statements made herein are accurate only as of the date of filing
of this Form 20-F with the U.S. Securities and Exchange Commission and may be
relied upon only as of that date. Unless otherwise indicated, all Ordinary
share numbers reflect the 670-for-one reverse split effected on September 16,
2002, and all Preferred share numbers reflect the 100-for-one reverse split
effected on September 18, 2002.

         Neither our independent auditors, nor any other independent
accountants, have compiled, examined, or performed any procedure, with respect
to the prospective financial information contained herein, nor have they
expressed any opinion or any other form of assurance on such information or
its achievability, and assume no responsibility for and disclaim any
association with the prospective financial information.
<PAGE>

                                    PART I

ITEM 1.  Identity of Directors, Senior Management and Advisors

         Not applicable

ITEM 2.  Offer Statistics and Expected Timetable

         Not applicable

ITEM 3.  Key Information

A.       Selected Consolidated Financial Data

         The following selected consolidated financial data has been derived
from our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States
of America. The selected financial data as of and for the three years ended
December 31, 2002, 2001 and 2000 has been derived from our consolidated
financial statements included in item 18 of this Annual Report. The following
selected consolidated financial data is qualified by reference to, and should
be read in conjunction with, Item 5--"Operating and Financial Review and
Prospects", and Item 18--"Financial Statements".

         The following selected financial data reflects the effect of our
discontinued operations in Germany and the United Kingdom as described in Note
3 to our consolidated annual financial statements included in this Annual
Report.


<PAGE>
<TABLE>
<CAPTION>
                                                                                                                 Commencement of
                                                Year ended       Year ended      Year ended      Year ended         operations
                Statement of                     December         December        December        December      (January 8, 1998)
                 operations                         31,             31,             31,             31,          to December 31,
                   data:                           2002             2001            2000            1999               1998


                                                          (euro, in thousands, except share and per share amounts)
<S>                                                <C>              <C>             <C>              <C>
Revenue.....................................       97,773           75,939          22,951           1,903                     -
Operating expenses:
Network costs, excluding depreciation.......       62,766           66,131          23,162           1,818                     -
Selling, general and administrative                53,862
(excluding
  non-cash compensation charges)............                        61,863          49,839          23,916                 3,754
Allocated costs from an affiliate(1)........            -            5,402          12,090           6,195                 2,551
Non-cash compensation charges...............        3,940            2,844          55,397             634                   164
Depreciation and amortization...............       30,763           28,520          14,472           3,600                    40
Restructuring, impairment and other charges.       13,636            6,049               -               -                     -
                                              ------------    -------------   -------------   -------------   -------------------
Total operating expenses....................      164,967          170,809         154,960          36,163                 6,509
                                              ------------    -------------   -------------   -------------   -------------------
OPERATING LOSS..............................     (67,194)         (94,870)       (132,009)        (34,260)               (6,509)
                                              ------------    -------------   -------------   -------------   -------------------
Other income (expense):
Interest income.............................        2,322           12,728          22,186           2,388                     -
Interest expense, net of capitalized             (22,943)
interest....................................                      (29,485)        (28,968)         (7,887)                     -
Foreign exchange gain (loss) and other              9,126
income (expense)............................                       (8,173)        (18,806)         (2,367)                     -
Net gain on exchange of Notes for shares....       91,057                -               -               -                     -
Gain on early extinguishment of debt........            -           46,168           1,053               -                     -
                                              ------------    -------------   -------------   -------------   -------------------
Total other income (expense)................       79,562           21,238        (24,535)         (7,866)                     -
Net income (loss) from continuing
  operations................................       12,368         (73,632)       (156,544)        (42,126)               (6,509)
Loss from discontinued operations...........       (5,148)       (225,417)        (43,681)         (7,664)                     -
                                              ------------    -------------   -------------   -------------   -------------------
Net income (loss) before cumulative effect          7,220        (299,049)       (200,225)        (49,790)               (6,509)
of change in accounting principle...........
Cumulative effect of change in accounting
principle...................................           -                -            (263)              -                     -
                                              ------------    -------------   -------------   -------------   -------------------
Net income (loss)...........................  (euro)7,220    (euro)(299,049) (euro)(200,488)  (euro)(49,790)        (euro)(6,509)
                                              ============    =============   =============   =============   ===================
Accretion of convertible preferred shares...       (2,800)                -               -               -                     -
Net income (loss) applicable to Ordinary
shares......................................  (euro)4,420    (euro)(299,049) (euro)(200,488)  (euro)(49,790)         (euro)(6,509)
                                              ------------    =============   =============   =============   ===================
Basic income (loss) per Ordinary share......   (euro)3.40   (euro)(1,272.81)  (euro)(896.67)  (euro)(336.77)        (euro)(178.41)
                                              ============    =============   =============   =============   ===================
Diluted income (loss) per Ordinary share....   (euro)3.05   (euro)(1,272.81)  (euro)(896.67)  (euro)(336.77)        (euro)(178.41)
                                              ============    =============   =============   =============   ===================
Income (loss) from continuing operations
per share...................................         9.52           (313.39)       (700.13)         (284.94)              (178.41)
                                              ============    =============   =============   =============   ===================
Weighted average number of Ordinary shares      1,299,507
outstanding ................................                       234,952        223,592          147,844                36,484
                                              ============    =============   =============   =============   ===================
Weighted average number of fully diluted        2,364,010          234,952        223,592          147,844                36,484
Ordinary shares outstanding ................  ============    =============   =============   =============   ===================
_____________________________
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                       As of            As of             As of            As of           As of
                                                   December 31,      December 31,     December 31,      December 31,   December 31,
                                                       2002              2001             2000              1999           1998

                                                                                  (euro, in thousands)
<S>                                                 <C>              <C>            <C>               <C>                <C>
Balance sheet data:
Cash and cash equivalents.......................   (euro)60,181     (euro)81,613     (euro)361,698    (euro)57,115      (euro)1,472
Short-term investments, restricted..............              -           16,694            28,030               -                -
Non-current investments, restricted.............              -            8,085            41,709               -                -
Property and equipment, net.....................        244,876          277,807           298,623          91,946            2,888
Total assets....................................        335,700          455,990           824,781         176,208            6,741
Net assets......................................        160,298          121,916           415,960          43,071           11,923
Long-term debt..................................          3,986          227,735           280,597          79,596                -
Convertible Preferred A Shares, nominal value,
(euro)4.00 per share, liquidation value,
(euro) 2,010 per share, 24,000 shares
authorized, 21,730 shares issued and
outstanding as of December 31, 2002.............         29,056                -                 -               -                -
Convertible Preferred B Shares, nominal value,
(euro)4.00 per share, liquidation value,
(euro) 2,010 per share, 16,000 shares
authorized, 14,924 shares issued and
outstanding as of December 31, 2002.............         98,187                -                 -               -                -
SHAREHOLDERS' EQUITY
Ordinary shares, nominal value (euro)0.04 per
share, 6,300,000 shares authorized; 3,905,414
and 239,635 shares issued and outstanding at
December 31, 2002 and 2001, respectively........            157               10                10               8                1
C Shares, nominal value,(euro)0.04 per share,
10,000,000 shares authorized, 1,548,261 shares
issued and outstanding as of December 31, 2002..             62                -                 -               -                -
Total shareholders' equity .....................        160,298          121,916           415,960          43,071          (5,182)
Total liabilities and shareholders' equity......        335,700          455,990           824,781         176,208            6,741

         Number of shares and EPS have been retroactively adjusted for the reverse stock splits of our Ordinary and Preferred
shares effected on September 16, 2002 and September 18, 2002, respectively.

</TABLE>


Exchange Rate Information

         In this Annual Report, all references to "euro" and "(euro)" are to
the lawful currency of the European Union. The following 12 member states of
the European Union have adopted the euro as their national currency: Austria,
Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, The
Netherlands, Portugal, Spain and Greece. Where this Annual Report contains
translations of euro into dollars, the translations have, unless otherwise
indicated, been made at the noon buying rate in the City of New York for cable
transfers in euro as certified for customs purposes by the Federal Bank of New
York on a specified date. Amounts in dollars have been translated from euro at
assumed rates solely for convenience and should not be construed as
representations that euro amounts actually represent such dollar amounts or
could be converted into dollars at the rate indicated or any other rate. All
references to "U.S.D.", "dollars" or "$" are to the lawful currency of the
United States of America.

         The following tables set forth, for the periods indicated,
information concerning the Noon Buying Rate for euro, expressed in euro per
dollar.


<TABLE>
<CAPTION>

                                      Euro per Dollar Exchange Rate
                                                                                                   Period-
Euro Exchange Rate                                           Average                                 End
Year Ended December 31,(1)                                   Rate(2)        High         Low        Rate
--------------------------                                   -------        ----         ---       -------
<C>                                                           <C>          <C>          <C>         <C>
1998(3).............................................          0.8991       0.9472       0.8213      0.8517
1999................................................          0.9445       0.9984       0.8466      0.9930
2000................................................          1.0861       1.2092       0.9676      1.0652
2001................................................          1.1224       1.1947       1.0488      1.1235
2002................................................          1.0671       1.1636       0.9846      1.0081
2003 (through May 20)...............................         0.90318      0.96749      0.85201     0.85404
</TABLE>

_____________________
(1)    Representing the Noon Buying Rate.
(2)    The average of the Noon Buying Rates on the last day of each month
       during the period.
(3)    A conversion rate of euros per U.S. dollar has been provided for 1998,
       prior to the introduction of the euro on January 1, 1999, by dividing
       the corresponding French franc exchange rate by 6.55957, the official
       French franc-euro conversion rate established on July 1,1999.


<TABLE>
<CAPTION>

                                            Euro per Dollar
Exchange Rate(1)                                                                High           Low
----------------                                                                ----           ----
<S>                                                                            <C>            <C>
September 2002.........................................................        1.0346         1.0033
October 2002...........................................................        1.0301         1.0106
November 2002..........................................................        1.0104         0.9846
December 2002..........................................................        1.00585       0.95298
January 2003...........................................................        0.96414       0.92035
February 2003..........................................................        0.93659       0.91449
March 2003.............................................................        0.95202       0.90449
April 2003.............................................................        0.94679       0.91249
May 2003 (through May 20)..............................................        0.85201       0.88715
_____________________
(1) Representing the Noon Buying Rate.
</TABLE>

         On May 20, 2003, the Noon Buying Rate was (euro)0.85404 = $1.00.

B.       Capitalization and Indebtedness

         Not applicable

C.       Reasons for the Offer and Use of Proceeds

         Not applicable

D.       Risk Factors

We may be liable for information disseminated through our network.

         The law relating to the regulation and liability of Internet service
providers in relation to information carried or disseminated is still
developing. The European Union has enacted its own privacy regulations. The
law of the Internet, however, remains largely unsettled, even in areas where
there has been some legislative action. It may take years to determine whether
and how existing laws, such as those governing intellectual property, privacy,
libel and taxation, apply to the Internet.

         Decisions, laws, regulations and other activities regarding
regulation and content liability may adversely affect the development and
profitability of companies offering Internet access services, including us.

         The European Union has adopted a directive on certain legal aspects
of electronic commerce, which requires member states to make certain changes
to national laws. The directive applies to us and other service providers
established in the EU and aims to establish a consistent legal framework for
electronic commerce within the EU.

         The imposition of potential liability upon Internet and web hosting
service providers for material carried on or disseminated through their
systems could require us to implement measures to reduce our liability
exposure. Such measures may require that we spend substantial resources or
discontinue some product or service offerings. Any of these actions could have
a material adverse effect on our business, operating results and financial
condition.

Our need to comply with extensive and changing government regulation and
licensing requirements could increase our costs and slow our development.

         The telecommunications industry in France is subject to a significant
degree of regulation. We need telecommunications licenses and other equivalent
authorizations to operate our business. We cannot assure that we will be
successful in maintaining or renewing licenses and other authorizations
required for services we provide or plan to provide. We must keep our existing
licenses and other authorizations in force in order to continue providing
services. In addition, we must comply with current and future regulation and
technical standards regarding interconnection, privacy, neutrality,
non-discrimination, security, environmental protection, limitations on
ownership and public service in order to maintain our licenses and other
authorizations and conduct our business.

We depend on agreements with third parties to obtain rights-of-way and leased
capacity to build and operate our business successfully.

         In order to develop and operate our local networks, we depend on
rights-of-way and other agreements to use underground conduit and building
access from various parties, including our competitors, governments and
private parties. In addition, we occasionally depend on leased local trunking
capacity or wireless transmission systems in order to achieve rapid connection
of new customers and maximize speed to market. If we cannot obtain or maintain
those arrangements on favorable terms, we may not be able to implement our
business plan on acceptable terms.

The liberalization of the French market in which we plan to operate may not
occur on a timely basis.

         Under European Union directives, each individual member state,
including France, must pass domestic laws to implement the European Union
directives, but has significant latitude to do so according to its own
national policies. France has had a legal obligation to liberalize its market
in accordance with these directives since January 1, 1998. Following the
outcome of the 1999 Communications Review on July 12, 2000, the EU Commission
proposed a package of legislative reforms intended to consolidate, simplify
and update the existing regulatory framework. These proposals include a new
framework directive for electronic communications networks and services, four
specific directives covering the licensing and authorization of network
operators and service providers, access and interconnection, universal service
and users' rights, data protection and privacy, as well as a regulation on
unbundled access to the local loop. These directives have been adopted in
February 2002, and the regulation regarding unbundled access to the local loop
entered into force on January 2, 2001. In July 2000, the EU Commission also
proposed a draft Competition Directive aiming to replace by a single text all
existing "liberalization" directives in the telecommunications sector. The
draft has been submitted to public consultation. As it develops, EU
legislation will continue to have a significant effect on our markets,
including future developments relating to the convergence of Internet, media
and information technology.

The price of our shares has declined significantly and may experience further
declines.

         The market price of our shares has declined significantly in recent
months and may experience further declines. This reflects a variety of
factors, including:

         anticipated fluctuations in our financial performance,

         perceived overhang in equity markets for telecommunications companies,

         problems related to our industry which pressure the stock prices
         industry-wide,

         announcements of technological innovations by our existing or future
         competitors, or

         changes in financial estimates by securities analysts.

         From time-to-time, following periods of decline in the market price
of a company's securities, securities class action litigation has been
instituted in the United States of America. The institution of any such
litigation against us could result in substantial costs and a diversion of our
management's attention and resources, which could materially adversely affect
our business, results of operations and financial condition.

We have experienced substantial operating losses to date, and we do not know
if or when our business will become a profitable enterprise.

         We have generated operating losses and negative cash flow from our
operating activities to date, and we expect to continue to experience
operating losses and negative cash flow from operations until we establish a
sufficient revenue generating customer base. From the commencement of our
operations in January 1998 through December 31, 2002, we have incurred
cumulative operating losses of (euro)334.8 million.

         Our ability to generate positive cash flow and operating profits in
the future will depend on a number of factors including our ability to:

         finance our business activities;

         attract and retain customers with substantial network traffic;

         develop network infrastructure and connect customers in a timely,
         efficient and cost-effective manner;

         attract and retain experienced, qualified personnel;

         price our services competitively; and

         successfully operate our networks and support systems, such as
         billing, provisioning and network management.

         The prices of communication services have fallen in Europe in recent
years, and may continue to decline in the future. In addition, we have been
affected by the general weakness in the European markets, including France,
for wholesale carrier and dial-up Internet access and Internet data center
services.

         We may be unable to achieve or maintain operating profits or positive
cash flow in the future, in which case we will not be able to meet our working
capital requirements. In addition, our Preferred A and Preferred B shares may
be exchanged for cash for a price of between (euro)2,010 and (euro)6,030 per
share, together with all unpaid dividends due on the preferred shares being
exchanged. The possibility of such an exchange of our preferred shares for
cash could negatively affect our liquidity, financial position and results of
operations.

The actual amount and timing of our future capital requirements may differ
materially from our current estimates due to various factors, many of which
are beyond our control.

         The actual amount and timing of our future capital requirements may
differ materially from our current estimates due to various factors, many of
which are beyond our control. Additional financing may be required in the
event of further departures from our current business plans and projections,
including those caused by (1) unforeseen delays, (2) cost overruns, (3)
engineering design changes, (4) demand for our services that varies from our
expectations, (5) adverse regulatory, technological or competitive
developments, (6) difficulties or delays in obtaining necessary rights-of-way,
or (7) major changes in market conditions. We have experienced and may
continue to experience material deviation of our capital requirements from our
estimates. For example, revenue generated from our operations during 2001 was
lower than we anticipated, increasing our need to generate cash from financing
sources and to modify our business plan to reduce our capital requirements.

Development of our activities involves many challenges that could slow or
possibly stop the development of our business.

         Our success in developing our business depends on our ability to
implement our business plan in a timely manner, at anticipated costs and on
acceptable terms and conditions. The successful implementation of our business
plan is subject to a variety of factors, including:

         attracting and retaining skilled, qualified personnel, including
         sales and marketing personnel;

         operating and technical problems;

         adverse changes in the regulatory environment;

         connecting new customers in a timely and cost-efficient manner, and
         obtaining the required rights-of-way, licenses and permits for doing
         so;

         delays by the incumbent operators in delivering interconnection
         capacity for our increased traffic volume on our network; and

         competition and pricing pressures in each of our markets.

         We may encounter difficulties in obtaining sufficient interconnection
capacity from incumbent operators, rights-of-way and building permits while we
deploy our networks to connect new customers and we may face construction
delays caused by other factors outside of our control. As a result, there can
be no assurance that we will be able to develop our networks and connect new
customers in accordance with our business plan at our anticipated costs.

We depend on effective billing, customer service and information systems, and
we may have difficulties in maintaining and operating these systems.

         We have implemented an integrated management information and billing
system to coordinate our key business processes. Our operations depend on
sophisticated back-office information and processing systems. We rely on these
systems to monitor costs, invoice customers, initiate, implement and track
customer orders and achieve operating efficiencies. If our information systems
are not effective or experience failures, our ability to develop our business
and collect revenue could be adversely affected. Errors in, or problems with,
our customer care system could affect our ability to respond quickly and
effectively to our customers and, therefore, the quality of our service. The
customer care and billing systems we use may require additional enhancements
in the future, particularly as traffic volume increases on our network. We may
encounter difficulties in enhancing, or integrating new technology into, our
systems in a timely and cost-effective manner. We cannot assure that our
management information and billing systems will operate effectively and
seamlessly, or will perform as expected or that we will be able to upgrade
successfully and maintain our management information systems. Any extended
difficulties could impair our ability to operate efficiently and to provide
adequate customer service.

If we do not continually adapt to technological change, we could lose
customers and market share.

         We could lose customers and market share if we fail to timely obtain
and effectively deploy new technology. The telecommunications industry is
subject to rapid and significant changes in services and technology. The
effect of technological changes on our business cannot be predicted, and we
may be unable to anticipate accurately or in a timely fashion the demand for
new technology or obtain access to new technology on satisfactory terms.

Our success depends on growth in the use of the Internet, electronic commerce,
data transmission services, multimedia and other bandwidth intensive
applications in our markets. Use of these services in our markets may not
increase as we expect.

         Our business depends on use of the Internet, electronic commerce,
data transmission services, multimedia and other bandwidth-intensive
applications in Europe, and in particular, in France. Our business plan
currently assumes that the use of such services will increase in the next few
years. If the use of data transmission services, multimedia and
bandwidth-intensive applications in our markets does not increase as we
anticipate, demand for many of our value-added products and services,
including high-speed data services, Internet access services and web hosting
services, could be lower than we currently anticipate. In addition, because
our customers include telecommunications carriers, Internet service providers
and other Internet-related companies, adverse trends in the demand for such
customers' services could have an indirect effect on the demand for our
products and services. In particular, during the past several months a number
of Carriers and Internet Service providers have announced restructurings or
have filed for bankruptcy, calling into question their continuing demand for
our products and services.

We face significant competition and cannot predict how the competitive
environment will develop or whether we will be able to compete successfully.

         We have deployed our Metropolitan Area Network (MANs) in a recently
liberalized market and are operating in an evolving and increasingly
competitive industry. In order to achieve profitability, we must compete
effectively against both new market entrants and existing telecommunications
providers. We expect to compete with France Telecom and other existing
telecommunications providers. We also expect to compete with new entrants to
our markets, including fiber-based local loop operators, wireless local loop
operators, DSL operators, electric and other utilities with rights-of-way or
existing cabling that can be used for telecommunications, railways, microwave
carriers, telecommunications resellers and large end-users that have private
networks. The ongoing liberalization of the French market may also attract
other facilities-based operators to enter the markets we serve and intensify
competition.

         The telecommunications markets in France, our only market, has been
dominated by France Telecom. France Telecom has significant competitive
advantages over us including:

         greater financial resources, market presence and network coverage;

         brand name recognition and customer loyalty;

         control over local, national and international transmission lines and
         over access to these lines by other participants; and

         established relationships with local and national regulatory
         authorities.

         We also are dependent upon France Telecom, as well as other
alternative service providers, for interconnection of our networks to the
incumbent infrastructures. Delays in their delivering sufficient
interconnection capacity as traffic increases on our network could adversely
impact our operations.

         Other facilities-based operators and resellers in our markets may
also have some of the same competitive advantages over us, especially with
respect to financial resources, market presence and network coverage. In order
to effectively compete, we will need to maintain an acceptable cost structure,
provide higher value services at competitive prices and generate increasing
amounts of telecommunications and data traffic.

A limited number of customers represent a significant portion of our revenue.
If we were to lose any of these customers, our revenue could decrease
significantly.

         Our three, five and ten largest customers in France generated
approximately 12%, 17% and 23% of our revenue for the year ended December 31,
2002, respectively. These customers include Cable & Wireless, which generated
slightly over 7% of our total revenue for the year. There can be no assurance
that we will be able to retain these customers or other large customers. The
loss, or a decrease, of business from one or more of these customers might
result in our revenue decreasing proportionately.

Our success depends on our ability to attract, retain and motivate highly
skilled, qualified and experienced managerial, sales, marketing, operating,
engineering and technical personnel.

         The loss of key personnel, or our inability to recruit qualified
personnel, could materially adversely affect our business. Our future
development and success depends on our ability to attract and retain skilled,
qualified and experienced managerial, sales, marketing, operating, engineering
and technical personnel. Competition for qualified personnel in the
telecommunications industry in Europe is intense and many of our competitors
have greater financial resources and other competitive advantages over us.
Moreover, in connection with our restructuring, we made significant reductions
in our workforce. These workforce reductions may have an adverse effect on our
ability to recruit and retain qualified personnel. Consequently, we cannot
assure that we will be able to hire or retain necessary personnel in the
future.

We rely on third-party equipment and service suppliers. Delays in obtaining or
inability to obtain necessary equipment and support services, or equipment
failure, could impair our operation and the quality of our services.

         If we cannot obtain the equipment needed for our planned networks and
services, or delivery of the equipment is delayed, or the price of the
equipment increases, the development of our business could be disrupted or our
costs could increase. We depend on Nortel Networks, Siemens AG, Cisco Systems,
Ciena Corporation and Riverstone and other third party suppliers to provide
voice, data and Internet switching and transmission equipment, and various
suppliers for billing and other information management and operations support
systems, and to design, build and install our networks and provide maintenance
and repair services. From time to time we have experienced network disruptions
due to equipment failure that have necessitated maintenance and repair
services on an emergency basis. Failure by our suppliers to provide equipment
and services necessary for our operations on a timely basis could have a
material adverse effect on our network operations, customer relations and
results of operations and financial condition.

The principal stock market for our equity securities is Euronext Paris and
there will be little or no active trading of our Ordinary shares in the United
States of America.

         Our Ordinary shares are listed on Euronext Paris, where they trade and
settle in euros and where the average monthly trading volume since the
completion of our Restructuring has been very limited. We have no current plans
to list any of our equity securities in the United States of America.
Consequently, we expect there will be little or no active trading of our
Ordinary shares in the United States of America. U.S. investors may find
trading and settlement of our Ordinary shares to be difficult because of time
zone and language differences between the United States of America and France.
Moreover, U.S. investors will experience fluctuations in the dollar value of
their holdings corresponding to changes in the exchange rate between the dollar
and the euro which are wholly unrelated to our operating or financial
performance.

ITEM 4.  Information on the Company

A.       History and Development of the Company

         Completel Europe N.V. was incorporated on December 14, 1998 as a
Netherlands public company with limited liability (naamloze vennootschap), and
our registered office is located at Blaak 16, 3011 TA, Rotterdam, The
Netherlands. We are registered with the Trade Register of the Amsterdam
Chamber of Commerce under number 34108119 and have our corporate seat at
Amsterdam, The Netherlands. Through a series of transactions in January 1999,
we became the holding company for our telecommunications businesses, which
commenced in January 1998 when Completel LLC, our then ultimate parent, was
formed.

         To address our funding requirements which were in excess of our
capital resources, we effected our recapitalization plan (the
"Recapitalization"), pursuant to a restructuring agreement (the "Restructuring
Agreement ") dated May 15, 2002, as amended on July 29, 2002, entered into
with the holders of our 14% senior discount notes due 2009 and 14% senior
notes due 2010 (collectively, the "Notes") and our principal shareholders. The
Recapitalization was completed on September 17, 2002. For more information on
the Recapitalization, see Item 5 - "Operating and Financial Review and
Prospects - Overview".

         During the year ended December 31, 2002, we made capital expenditures
in our continuing operations of approximately (euro)22.4 million. These
capital expenditures were primarily for connecting customers to our MANs.
During the year ended December 31, 2001, we made capital expenditures in our
continuing operations of approximately (euro)108.2 million. These capital
expenditures were for property and equipment necessary to deploy networks and
to connect customers to our MANs and include capitalized interest of
(euro)14.2 million. During the years ended December 31, 2000 and 1999, we made
capital expenditures in our continuing operations of approximately (euro)112.3
million and (euro)68.9 million, respectively, for property and equipment
necessary to deploy networks in our initial markets.

         We currently estimate that we will make total capital expenditures of
approximately (euro)28 million to (euro)35 million for the year ending
December 31, 2003, most of which will be expended to connect new customers to
our MANs. The actual amount and timing of our future capital requirements may
differ materially from our current estimates, and additional financing may be
required in the event of departures from our current business plans and
projections, including those caused by unforeseen delays, cost overruns,
engineering design changes, demand for our services that varies from our
expectations, adverse regulatory, technological or competitive developments,
difficulties or delays in obtaining necessary rights-of-way, or major changes
in market conditions.

B.  Business Overview

         We are a facilities-based operator of a technologically advanced,
high-capacity, fiber optic communications infrastructure. A facilities-based
operator uses its own telecommunications facilities to provide services, in
contrast with non-facilities-based resellers who purchase services from other
providers and then retail them to customers. We provide telecommunications and
Internet-related services to business and government end-users, carriers and
Internet service providers in targeted metropolitan areas in France. We
deliver these services primarily to on-net customers directly connected to our
fiber optic metropolitan area networks, or MANs.

         The construction of our MANs was completed during the last quarter of
2001. We are now focusing our efforts on expanding our customer base in our
MANs in France. These are located in nine areas in France, covering the cities
of: (1) Paris, (2) Lyon, (3) Marseille and Aix, (4) Lille, Roubaix and
Tourcoing, (5) Grenoble, (6) Toulouse, (7) Nice and Sophia-Antipolis, (8)
Nantes and (9) Strasbourg, Colmar and Mulhouse. We also constructed MANs in
four areas in Germany; however, following the sale of our German operations in
May 2002, we no longer have MANs in Germany. Our MANs are interconnected by
our leased inter-city network.

         As of December 31, 2002, we had a total of 1,208 on-net customers,
compared to 946 customers as of December 31, 2001 in our continuing
French-based operations. Our consolidated revenue for the year ended December
31, 2002 totaled (euro)97.8 million, an increase of approximately 29% over
consolidated revenue of (euro)75.9 million for the year ended December 31,
2001.

         We have generated operating losses and negative cash flow from our
operating activities to date, and we expect to continue to experience
operating losses and negative cash flows from our operations until we
establish a sufficient revenue-generating customer base. While we are
experiencing growth in our core retail activity in France, and believe that
this trend will continue, since mid-2001, we have been affected by the general
weakness in the European markets for carrier and dial-up Internet access and
Internet data center services. In light of these adverse market conditions, we
implemented operational reorganization and restructuring measures in order to
adjust our operations to foreseeable market conditions, reducing ongoing
operating expenses and capital outlays. In particular, we implemented a major
downsizing of our German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
Further, in April 2002, we decided to sell our entire German operations, which
sale was completed in early May 2002.

         Furthermore, faced with a significant downturn in the web hosting
market, linked to the collapse of the ".com" market and installed hosting
overcapacity in Europe, we decided to scale down the Internet data center
operations we had launched in France, Germany and the United Kingdom. In
France, we decided to integrate these activities with our retail business,
while in Germany and the United Kingdom we exited these markets by selling our
entire operations in these countries in May 2002.

         Having decided to concentrate our efforts solely in France, we closed
our London offices and simplified our corporate headquarters structure at the
end of the second quarter of 2002. In the third and fourth quarters of 2002 we
further reduced our selling, general and administrative expenses, in
particular, in our corporate headquarters functions and Internet data center
operations.

         Finally, on September 17, 2002, we completed our Recapitalization,
involving the conversion of all of our outstanding debt securities into shares
and a cash investment of (euro)43.7 million.

FACILITIES-BASED COMPETITIVE LOCAL ACCESS PROVIDER

On-net customer-driven network

         Overview


         We focus on providing on-net local access telecommunications services
to an underserved customer base. We believe our on-net strategy offers
substantial long-term benefits over carriers with limited or no local loop
infrastructure, such as:

         substantially increased product offerings made possible by direct
         fiber connection;

         higher revenue per customer;

         lower interconnection costs and improved operating margins; and

         increased loyalty of customers and reduced churn.

         Our integrated network supports both local and long-distance voice
products and services, as well as high-speed data and Internet services. We
believe our networks offer greater capacity, lower operating costs and higher
service reliability than those of the incumbent carriers in the areas we
serve. The integrated design of our networks significantly reduces our cost of
providing a bundled service offering.

         To deliver high-quality, reliable telecommunications services, we
employ a technologically advanced, uniform, high-capacity,
protocol-transparent technology platform. Our integrated network architecture
includes digital telephone switches, data switches and Internet protocol, as
well as synchronous digital hierarchy (SDH) and dense wavelength division
multiplexing (DWDM) transmission technology compliant with European
telecommunications standards. It employs centralized network management and
monitoring centers designed to accommodate anticipated future technology
upgrades.

         Customers and route design


         The design of our networks is based on the location and requirements
of our target customer segments. We have targeted those high-density business
areas where customers purchase their telecommunications services principally
from the incumbent operators or from resellers, because we believe these areas
currently are underserved by other local carriers.

         Network design principles

         Our network design enables us to provide high-capacity transmission
services to our customers, while providing substantial potential for expansion
of existing service offerings and adoption of new offerings in a
cost-effective manner. Our networks are capable of efficiently supporting a
wide mix of telecommunications traffic and protocols, including telephony,
data, high speed Ethernet, digital videoconferencing, virtual private networks
(VPNs), private lines and Internet. Our network design is based on the
following principles:

         Scalability. We can expand both transmission capacity, switching
                  capacity and routing capacity rapidly and cost-effectively
                  as traffic volume and capacity demands increase. We
                  installed duct systems, typically with the capacity to hold
                  six ducts, to ensure we would have sufficient capacity for
                  our future growth. Each duct is capable of holding between
                  one and three cables, and each cable is capable of holding
                  between 144 and 288 fibers. We currently use either one or
                  two ducts, each containing at least one cable, depending on
                  the level of network security required. The remaining ducts
                  can accommodate additional capacity for our use, or can be
                  sold to or swapped with other telecommunications service
                  providers. As we installed our duct system, we also
                  installed the access chambers immediately adjacent to our
                  network route in order to expedite the connection of new
                  customers.

         Opportunity-based deployment schedule. We have designed and deployed
                  our networks with the goal of maximizing potential revenue
                  generation while minimizing our build-out costs.

         Service reliability. Our networks provide redundancy at multiple
                  levels. The ring structure is designed to provide dual
                  direction routing capability that allows a connection to be
                  completed in the event of network failure. Our MANs use
                  European standards-based SDH transmission technology and
                  Ethernet protocol to transport information along our fiber
                  optic backbone. Our SDH systems are based on self-healing
                  concentric rings, a technology that routes traffic through
                  an alternative path in the event there is a point of
                  failure. This design results in a reliable network that is
                  less susceptible to disruptions in the event of breakage at
                  one point. Additionally, our external carrier
                  interconnections and Internet transit have alternative
                  routing capability that should assure access to alternative
                  carriers and to the Internet. Finally, we chose vendors that
                  we believe provide reliable and quality equipment, such as
                  Nortel Networks, Siemens, Ciena, Cisco Systems and
                  Riverstone Networks.

         Use of multiple local access and transmission technologies. We
                  employ a variety of access and transmission technologies,
                  including SDH, DWDM, packet data or Internet protocol
                  routing, Ethernet and Gigabit Ethernet. We believe they
                  allow us to (1) meet customers' changing communications
                  requirements; (2) pursue a flexible approach to network
                  coverage expansion; and (3) respond to a wide range of
                  integration requirements among different customer segments.
                  The link between our network and the customer is typically
                  fiber, but may also be copper or wireless transmission. On a
                  limited, case by case, basis, we extend the reach and
                  efficiency of our core network rings through alternative
                  methods, such as leased fiber or point-to-point wireless and
                  digital subscriber line (DSL) connections.

         Protocol transparent. We use transmission equipment that we believe
                  should allow us to converge circuit-switched and data
                  networks. As these networks effectively merge, traffic can
                  move more economically over data networks, resulting in
                  simplified network management. We are continually reviewing
                  our designs to ensure flexibility and rapid evolution, as we
                  believe that over time, voice, data, video, Internet,
                  intranets and extranets will interconnect with our network
                  platform.

         Network infrastructure

         The core of our network is the fiber loops that we built or leased in
selected areas. Metropolitan area networks, or MANs, are composed of single or
several fiber optic rings that allow customers direct connection within a city
or metropolitan area to our network. We have constructed MANs that have route
diversity and self-healing architecture, allowing re-routing of traffic in
case of a network outage and enabling us to provide high levels of service
reliability.

         During 2001, we completed the construction of our MANs in nine areas
in France and four areas in Germany. Following the sale of our German
operations in May 2002, we no longer have MANs in Germany. As of December 31,
2002, we had deployed over 1,600 route kilometers of fiber in our MANs, of
which approximately 600 kilometers are leased on long-term contracts. In
addition, we lease bandwidth capacity for our leased inter-city network, which
interconnects our MANs. Having completed the expansion of our network in
accordance with our current business plan, we intend to concentrate on network
development to connect new customers to our existing MANs.

         Network construction and installation

         Our local access networks consist of fiber deployed in existing
ducts, as well as newly constructed ducts for the extension of our network to
the customer's site, commonly known as the "the last drop." As of December 31,
2002, we had 1,707 buildings directly connected to our network. We have
installed our fiber optic cables in conduits we either own or lease from third
parties. In isolated instances, however, in order to achieve maximum speed to
market, we have leased fiber trunking capacity from third parties. We also
lease conduit and pole space from utilities, carriers, local governments and
transit authorities. These arrangements are generally for multi-year terms
with renewal options.

         Network components

         Switch Centers. We have constructed switching centers in each of our
markets. Our switching centers are purchased or leased facilities and are
typically sized between 600 square meters and 4,000 square meters. Our
switching centers are environmentally controlled, secure sites, featuring
back-up AC/DC power, emergency back-up battery and power generator,
ventilation and air-conditioning systems, redundant communication facilities,
fire suppression and dual direct connection to our high-speed fiber optic city
MAN backbone. In addition, at some of our switch sites, we have made specific
accommodations for the provision of co-location services. Each switch center
hosts a class-5 voice switch from either Nortel Networks or Siemens and a
backbone IP Router from Cisco Systems.

         Hubs and distribution nodes (DNs). Hubs and distribution nodes are
located in leased or purchased facilities. They house electronic equipment
that provides the ability to add and remove voice and data traffic from the
fiber backbone destined to a customer or an interconnection point. These hubs
and DNs are secured, environmentally-controlled, and continuously monitored
stand-alone facilities.

         Network operation center. We have a network operation center in a
Paris suburb, allowing centralized and integrated management of all the
equipment deployed in our MANs. This center continuously monitors performance
of the various pieces of transmission, and switching and routing equipment,
operating systems, performance of customer transmission paths and circuits and
customer premises equipment in each of the MANs.

         Third-party agreements supporting our network

         Leased inter-city network. Our leased inter-city network connects our
MANs. We lease bandwidth capacity (a) from Lambdanet, a network loop linking
our MANs in Paris, Strasbourg and Lille (b) from Telia, a network loop linking
our MANs in Paris, Lyon, Marseille, Toulouse and Nantes and (c) from various
service providers, fiber optic capacity connecting our MANs in Paris, Lyon,
Marseille, Lille, Grenoble, Toulouse, Nice, Strasbourg and Nantes.

         Interconnection and service agreements. We have several
interconnection or service agreements with a range of other operators for
transmission of traffic outside the reach of our local loops. We have principal
national interconnection agreements with the incumbent and dominant mobile
operators in France, France Telecom and its affiliate Orange and SFR. We also
have agreements with other national and international carriers, such as
WorldCom, Inc., Telecom Developpement and Swisscom. We have developed
additional physical interconnections with the incumbent public operators, at
both their tandem switching centers and the end office/serving wire centers, in
each of our markets. In addition, our networks have multiple interconnections
with some of the major switching centers of France Telecom. In connection with
our operational restructuring during the last quarter of 2001 and the first
half of 2002, we terminated some of our interconnection agreements as part of
our plan to concentrate our operations. Furthermore, in connection with the
sale of our German operations in May 2002, we entered into reciprocal
agreements for traffic termination with the purchaser of our German operations
to allow us to service our French customers who have operations in Germany.

         Access agreements and rights-of-way. Our MANs were constructed
primarily by digging trenches along rights-of-way obtained from local
authorities. Where necessary or economically preferable to digging trenches,
we secured alternative rights-of-way from highway commissions, utilities,
political subdivisions, subway operators, sewer operators and others. For
example, in Paris, we received approval from the city authorities to lay our
fiber in the underground sewer system. This agreement enabled us to lay our
fiber in a cost-effective manner, because it entailed minimal excavation of
city streets as the sewer system's conduits connect to nearly all buildings in
Paris.

         Building entry license agreements. Before providing services to
customers, we must obtain permission from the property owner. We have adopted
a collaborative approach with property developers and owners. Generally,
developers and owners are willing to provide access to their buildings since
we are providing enhanced services to the building. Our agreements typically
contain a provision for access by our network to a specified point inside the
building, with a renewable right of access regarding inside wiring to the
premises of our clients. Access is usually granted on a non-exclusive basis.

         Technology supplier relationships. We entered into an agreement with
Nortel Networks to supply us with equipment, including SDH, voice and data
switching, internet routers, customer premise equipment, engineering services,
network operations center management, inventory management, and equipment
installation maintenance during the initial start up phase of each market. We
selected Nortel Networks to provide the core components of our MANs. We also
purchased voice-switching equipment from both Siemens and Nortel Networks. We
have sourced network equipment from other suppliers, including SDH from
Siemens, routers from Cisco Systems, DWDM system equipment from Ciena and
Ethernet switches from Riverstone Networks.

         Alternative access and transmission technologies. Although we provide
our services primarily over our own fiber optic network, we occasionally use
alternative access technologies to allow us to provide services to those
customers who we may not be able to serve on-net. For example, we use leased
lines from France Telecom and DSL. This complementary strategy provides us
with rapid access to buildings and allows us to gain market penetration and
take advantage of market opportunities.

High-capacity telecommunications services

         We currently offer a broad range of telecommunications services,
including a number of value-added services.

         Voice services

         Current voice services. Through our direct connections to customers,
we offer switched voice services, covering inbound and outbound calls
(including local, national, international and mobile) allowing customers to
dispense with the incumbent operator for all their voice services. We also
provide voice services to off-net sites of on-net customers, allowing them to
access our long-distance services using pre-selection. The inbound voice
services we currently offer also include number portability, allowing
customers to retain their number from the incumbent operators. In addition, we
deliver voice value-added services, such as audio conference services, free
phone services and premium-rate services (known as "800 numbers" in France and
"900 numbers" in the United States of America).

         Planned voice services. In phase with the recent regulatory opening
of the French market for higher rate premium-rate services, we are currently
extending our voice services portfolio in France to include these services.

         Data and Internet services

         Our MANs allow customers to access our high-capacity technology to
transport their data and Internet traffic efficiently and flexibly.

         Current data and Internet services.  We offer:

         Point-to-point bandwidth between two customer sites, allowing
                  customers to operate their own private network for data
                  and/or intra-company communications. Point-to-point
                  bandwidth is provided either within one metropolitan area
                  (intra-city) or between two different metropolitan areas
                  (inter-city). Capacity ranges from 2 Mega bit per second to
                  2 Giga bit per second.

         LAN to LAN interconnection between 2 or more customer sites,
                  allowing customer's Local Area Networks to operate as if
                  they were located within the same building. Our fiber optic
                  customer access and other advanced technologies
                  significantly differentiate our LAN to LAN service from many
                  competing services because of the intra-city and inter-city
                  geographic availability that they provide, as well as the
                  transparency, flexibility and high capacity that it offers.
                  Capacity ranges from 10 Mega bit per second to 1 Giga bit
                  per second, available through standard Ethernet LAN
                  interfaces. With more than 400 customer sites connected in
                  2002, we believe we are the first Ethernet LAN to LAN
                  operator in France.

         Connectivity to the Internet, allowing customers' employees to have
                  access to the Internet and/or to have customer's web sites
                  and IP applications located on customer sites accessed from
                  the Internet. We provide all our customers overcapacity that
                  can be used in part instantly and can be upgraded smoothly
                  in phase with customer's increased capacity requirements.
                  Optional complementary services to basic connectivity are
                  often chosen by our customers, including standard or
                  advanced e-mail managed services.

         IP Virtual Private Network Services (IP VPN), allowing
                  customers to connect all their sites and employees to their
                  IT systems through our IP platforms and networks as if they
                  were using their own private network. Our IP VPN is based on
                  IP Security Protocol (IP SEC). Our IP VPN offering was
                  launched in 2002, during which time we signed 40 customer
                  contracts for this service.

         Internet hosting and managed services, allowing customers who want to
                  outsource part or all of their Internet based IT systems to
                  benefit from a reliable system environment, from flexible
                  and very high connectivity and from tailored managed
                  services. Our Internet and data centers, or IDCs, have been
                  designed and are operated in order to provide a secure and
                  controlled environment as well as high capacities to the
                  Internet as well to our data network. Tailored managed
                  services include support for hardware or operating system
                  maintenance, security services such as firewall and security
                  tests and application based services such as
                  extranet/intranet and back-up.

         Planned data and Internet services. We plan to enhance our LAN to LAN
and IP VPN services by adding more classes of services, providing customers
with a network tailored to the specific quality requirements of their
applications. We plan to package some of the managed services we currently
supply on a tailored basis, such as security services, and offer such packages
as optional add-on services to our data and Internet customer base.

         Carrier and call termination or collect services

         We provide carriers with high and very high capacity metropolitan
links that allow them to connect their points of presence, or to connect their
points of presence to other carriers or to their customers. We also provide
carriers with call termination services on a wholesale basis, allowing them to
benefit from lower costs for call termination. We provide major Internet
access providers with call collect on a wholesale basis, offering dial-up
access to their Internet hub for their retail mass market or professional
customers.

CUSTOMERS

         Telecommunications services

         We serve three principal groups of telecommunications customers:

         Business, government and institutional end-users. Businesses with a
                  minimum of 30 employees, with a focus on medium and large
                  businesses, governmental entities and institutions such as
                  hospitals and educational establishments;

         Internet service providers. Major mass market Internet access
                  providers and other Internet-related companies, such as web
                  agencies and application service providers;

         Carriers. Long-distance, international carriers, resellers and
                  alternative access providers.

Business, government and institutional end-users

         Initially, we primarily targeted small-sized and medium-sized
businesses, because we believed that these companies would have greater
flexibility to change to a new service provider and would make decisions
faster than large businesses. Subsequently, we have expanded our targeted
customers to include larger customers, for example multi-nationals that often
have service requirements in multiple locations. As of December 31, 2002, we
had 1,208 connected business customers, including Aventis, EADS and EDF.

         We also have identified local government authorities and other public
institutions as important potential customers in view of their need to obtain
advanced technology to link up their different geographic sites at competitive
prices. Moreover, local municipalities, government agencies and other public
institutions, such as hospitals, have a high degree of local calls and depend
heavily on local networks to provide their services. Our government and public
institutional customers include the French Senate, six French ministries, and
universities and public hospitals in several of our markets.

Internet service providers

         We target corporate customers that outsource their Internet related
IT systems, as well as Internet service providers, including mass market
Internet access providers, web agencies, and application and content service
providers. We are developing suites of services to respond to such customers'
specific needs, primarily in high-capacity access, co-location, dial-up
collect calls and various tailored managed services. The Internet-related
providers to whom we currently provide services include Tiscali, Noos,
T-Online, Cable & Wireless and Net-Up.

Carriers

         We provide carriers with high and very high capacity metropolitan
links, as well as call termination, call collect and dial-up services. Our
carrier customers include Swisscom, Telia, Equant and Cable and Wireless.

SALES, MARKETING AND DISTRIBUTION

Customer acquisition and retention strategy

         As of December 31, 2002, we had a sales force of 165 based in our
local markets in France. Tailored to our different target markets, our sales
organization includes:

         local sales teams located in each of our metropolitan areas of
         presence, each dedicated to a list of key accounts that are managed
         and served locally;

         a national sales team, dedicated to a list of multinational and
         national accounts that are managed and served nationally;

         sales teams dedicated to sales to the carriers and Internet access
         providers, respectively, in each geographic market; and

         local specialized sales teams dedicated to our Internet hosting and
         managed services, which focus on Internet related companies and on
         corporate customers who have outsourcing needs.

Marketing communications

         We believe that recognition of the Completel trade name is important
to our success and that awareness of our brand is becoming an important tool.
However, we believe that using mass-media to develop brand awareness is not
cost-effective. Instead, we use a targeted marketing approach for national
accounts and for on-net prospects within 500 meters of our network backbone,
primarily driven by national and local PR events, telemarketing and newsletter
activities. We supplement these targeted communications with periodic press
communications and event marketing.

Pricing and product portfolio strategy

         In addition to our high-capacity, quality-driven networks, we use our
pricing structure to differentiate ourselves from the incumbent operators and
to attract customers. We generally price our services to our customers at a
discount to the local incumbent operator. We offer combined services discounts
to encourage customers to purchase a portfolio of services in order to
maximize usage and revenue per customer. The wholesale rates charged to other
carriers and Internet-related providers are generally set at the market price
of the leading facilities-based carriers, and we do not anticipate offering a
major discount compared to any alternative carrier. On a promotional basis, we
may provide discounted installation to facilitate customer migration from the
incumbent carriers.

Customer service

         Our goal is to maintain an advantage over our competitors in our
target markets by providing superior customer service and care. We believe
that providing a high level of customer service is a key element to
establishing customer loyalty and attracting new customers. We have dedicated
customer service representatives who initiate contact with our customers on a
routine basis to ensure customer satisfaction. Shortly after we commenced
commercial operations, we established a practice of engaging an external
agency to periodically carry out customer satisfaction surveys. Results of
these surveys have generally been positive.

         We also believe that technology plays an important role in customer
satisfaction. Advanced technological equipment is crucial to enabling the
provision of high quality service to our customers. We have installed
sophisticated status-monitoring and diagnostic equipment at our network
operations centers that allows us to identify and remedy network problems
before they affect customers.

Our customer care function includes:

         on-line customer care personnel available 24 hours a day, seven days a
         week;

         an integrated data base management system that allows immediate access
         to data concerning our customers, enabling us to quickly respond to
         customers' inquiries;

         an integrated billing system that can be customized for all our
         services;

         access to technical support;

         escalation processes to deal with customer concerns;

         personal relationships with customers based on local and dedicated
         customer care staff; and

         local and national designated sales account executives and service
                  managers to grow and support customer relationships.

         We provide customer care to our business end-user customers on a
local rather than national basis, in order to develop customer relationships
at the city level and develop responsibility and accountability at the local
level. Our local customer care functions are supported by our centralized
operations centers, including service provisioning, network supervision and
after-hours customer care.

Management information and billing systems

         Our information systems are managed by our information technology
group based in Paris. The back-office systems are centralized in our central
data center located in Paris. We have selected our comprehensive management
information system based on a scalable and highly flexible platform of
off-the-shelf applications using technology proven in the European or U.S.
market. We believe these systems allows us to coordinate smoothly and
effectively our key business processes, including:

         Geomarketing (which consists in gathering information about the
         geographical location of our customers and and sales force automation;

         customer order management, service provisioning and activation;

         customer care and account management;

         network planning and design;

         customer rating, billing and collection;

         business financial systems; and

         network management and maintenance.

         The core of our management information system is based on
applications supplied by (a) Kenan for retail billing, (b) Intec for wholesale
billing, (c) Oracle for finance applications, (d) Metasolv for customer and
operations support system, (e) Rocket Software / TCSI for mediation systems
and (f) Nortel Networks, Siemens, Cisco Systems and Hewlett-Packard for
network supervision.

         The production platform to operate our systems is based on
high-capacity, scalable and highly reliable servers and technologies for data
storage, and a fully automated backup library, to ensure a complete secured
solution.

         We have incorporated a data warehouse within our central data center
in Paris. A data warehouse is a dedicated and integrated information system
which permits storage and retrieval of data concerning customers' usage of our
network. This data warehouse allows us to monitor usage on a daily basis by
type of customer and detect changes in customer behavior and usage. With this
information, we are better able to tailor our product and service offering to
the particular requirements of each type of customer.

         Our billing system allows for integrated invoicing of all the
products we currently offer. We offer customers different levels of detail on
invoices depending on their specific requirements. All these applications are
operated from our central data center in Paris.

COMPETITION

Overview

         The ongoing liberalization of the European telecommunications market
has coincided with technological innovation to create a fast changing and
increasingly competitive market, characterized by dominant incumbent
telecommunications operators as well as a number of new market entrants. We
expect that we will need to compete effectively against a considerable number
of telecommunications service providers and Internet operators in our targeted
markets, even though some alternative carriers exited the market or reduced
their presence during 2001 and 2002.

         The European Union is actively stimulating competition among
telecommunications providers. As a European member state, France is required
to end restrictions on the entry of new telecommunications operators and adopt
standardized regulations intended to promote competition. Under the new
regulatory structure, public telecommunications operators can compete in local
exchange services markets outside their home countries, either alone or
through existing joint ventures, subject to restrictions on market
concentration and anti-competitive mergers and acquisitions.

         We compete primarily on the basis of:

         variety of services;

         network coverage;

         network quality and service reliability;

         price;

         customer service; and

         accurate and detailed billing.

Incumbent telecommunications carriers

         We compete principally with France Telecom, the incumbent public
telecommunications operator in France, and to a lesser extent with other local
or long distance carriers in our markets. Based on its historically exclusive
market position, France Telecom has competitive advantages over new entrants
including:

         expansive financial, technical, management, marketing and other key
         human resources;

         established relationships with local and national regulatory
         authorities;

         established local and long-distance distribution facilities;

         existing rights-of-way;

         control of or access to the majority of end-users; and

         control over local telecommunications connectivity.

         We expect that our principal competitor will continue to be France
         Telecom.

Alternative telecommunications providers and IDC operators

         We also compete with a range of operators of fiber networks and,
potentially, with wireless local loop and DSL operators. These operators
include WorldCom (mostly in Paris, Lyon and Strasbourg), COLT (in Paris, Lyon
and Marseille) and, to a lesser extent, LD Com, Cegetel (in a few areas mostly
in Paris) and SIRIS (a member of the Deutsche Telekom group). We believe that
we can effectively compete with these operators because of our networks'
coverage and our local presence, and because most current competitors seeking
to gain market share from France Telecom are focusing on long-distance service
instead of local exchange service like us. Where competitive local exchange
operators are present, they have concentrated their efforts on limited
high-volume areas in and around Paris, such as the business district of La
Defense.

         Wireless Local Loop (WLL) deployment in France has been limited. To
date, we have not experienced significant competition from such operators.
However, we expect that some WLL operators may ultimately compete with us in
selected geographical areas for the low-end customer segment.

         Alternative DSL operators have not yet developed significant activity
in France for business customers, principally due to the slow implementation
of local loop unbundling. We anticipate that some DSL operators may ultimately
deploy DSL-based services, potentially competing with our services for small
customers with limited bandwidth requirements.

         Since we bundle our customer packages with both local and long
distance services, we also face competition from long distance resellers on
part of our voice services. However, during 2002, an increasing number of such
long distance competitors have withdrawn from the market, significantly
reducing the level of competition.

         Our Internet data centers and web hosting activity compete
principally with other operators of IDCs, including established
carriers such as COLT and Cable & Wireless.

REGULATION

General

         As a provider of telecommunications and Internet-related services in
France, we are subject to French telecommunications regulation. Furthermore,
because France is a member of the European Union (the "EU"), we are affected
by applicable EU regulation. We have obtained a fixed wireline license and a
service license for network deployment in France. In addition to these
licenses we have obtained licenses in Germany and the United Kingdom. However,
as a result of our operational restructuring, which included the sale of our
entire operations in Germany and the United Kingdom, we no longer operate in
these countries.

         Deregulation of the telecommunications market is a relatively new
phenomenon in Europe, and there is little history to guide competitive
entrants. There is little history in Western Europe to provide guidance to
competitive entrants concerning the independence of newly-created regulatory
bodies or to demonstrate how vigorously or efficiently such bodies will adopt
and enforce regulations or rules. While regulators in some European countries
have been increasing their enforcement of pro-competitive policies, in some
cases, regulators have relaxed regulatory requirements previously imposed on
the incumbent operators. Lifting carrier obligations before solid competition
has developed in a market sector could potentially harm competitors.
Competition at the local level in France is still underdeveloped. Although
local loop access was introduced, effective on January 2, 2001, by Regulation
No. 2887/2000 of December 18, 2000 in the European Union, in practice, many
technical and regulatory issues remain unresolved in most of the member
states. Thus, regulatory, judicial, legislative or political considerations
may prevent us from offering our services on a cost-effective basis and in a
timely fashion, which may adversely affect our business.

European Union

         The EU consists of the following member states: Austria, Belgium,
Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The
Netherlands, Portugal, Spain, Sweden and the United Kingdom (collectively, the
"Member States"). Other countries are applying for membership. EU legislation
can take a number of forms. Regulations have general applications and are
binding in their entirety and directly applicable in Member States. Directives
are binding, but Member States may choose the form and method of
implementation. If a Member State fails to effect such legislation or fails to
render the provisions of EU directives effective within its national
territory, the European Commission may take action against the Member State to
enforce the legislation, including initiating proceedings before the European
Court of Justice. Under certain circumstances, private parties also may bring
actions against Member States for failures to implement such legislation.

         The European Commission, the European Parliament and the Council of
Ministers have issued a number of key directives establishing basic principles
for the liberalization of the European Union telecommunications market.
Although the EU set January 1, 1998 as the deadline for mandatory
liberalization of the provision of voice telephony services throughout the EU,
each Member State had to enact its own laws to implement the EU's mandate
through its own processes. Not every Member State has enacted laws that
implement fully the EU directives within the time frame set by the EU or in a
way that complies or will comply fully with the intent and spirit of the
directives. Further, there can be no assurance that all EU Member States will
enact laws which fully comply with the intent and spirit of the EU directives.
The actual method or form of implementation of EU directives varies from
country to country. From time to time, the European Commission has initiated
legal action against several Member States for not implementing adequately
certain directives relating to the telecommunications industry. The European
Commission also challenged the way in which France Telecom's universal service
obligations are funded, with a particular emphasis on the burden it might
place on new carriers. In a judgment of December 6, 2001, the European Court
of Justice found that the method used to calculate the financial contributions
due by new entrants to the universal fund did not conform with the principles
of transparency, objectivity and non-discrimination, and led to an
overestimation of the burden that universal service represents for France
Telecom.

         In 1990, the "Services Directive" required Member States to abolish
all exclusive and special rights for the provision of all telecommunication
services other than for public switched voice telephony, teleprinter, mobile
phone, radio and satellite services, as well as public telecommunications
networks. Since that first phase of activity, further legislative initiatives
have been designed to provide full liberalization of the telecommunications
sector, including notably the adoption of:

         The revised Open Network Provision Directive, which Member
                  States were required to implement by June 30, 1998, aims to
                  ensure the availability of quality public telephone services
                  and to define the services to which all users should have
                  access in the context of universal service at an affordable
                  price.

         The Full Competition Directive, which required Member States to
                  abolish exclusive and special rights for the provision of
                  telecommunications services, including public voice
                  telephone services and to allow the provision of public
                  telecommunications networks by January 1, 1998. The Full
                  Competition Directive also required that Member States
                  abolished special and exclusive rights regarding the
                  self-provision of infrastructure, the use of infrastructure
                  operated by third parties and the use of shared
                  infrastructure for the provision of services other than
                  public voice telephony, by July 1, 1996.

         The Licensing Directive, which established a common framework
                  for general authorizations and individual licenses in the
                  field of telecommunication services. The Licensing Directive
                  is intended to allow telecommunications operators to benefit
                  from a European Union-wide market for telecommunications and
                  establish a common framework for national authorization
                  regimes and seeks to facilitate cross-border networks and
                  services.

         The Interconnection Directive, which mandates that each Member
                  State ensure that operators with significant market power
                  (generally, the incumbent telecommunications operator):
                  provide interconnection to other operators under terms and
                  conditions that are cost-effective, non-discriminatory,
                  objective and transparent; publish their "unbundled"
                  interconnection terms and conditions; negotiate access
                  agreements and specific terms of interconnection, subject to
                  the intervention of the Member State's regulatory authority
                  in case of a breakdown in the negotiations; and adopt
                  transparent accounting methods for each business unit.

         The Telecommunications Data Protection Directive, which covers
                  the processing of personal data and the protection of
                  privacy in the telecommunications sector, and complements
                  the general Data Protection Directive, Directive No.
                  95/46/EC.

         Member States are also required to adopt a quick, inexpensive and
effective procedure to solve interconnection disputes in order to prevent the
historical operator from maintaining its dominant position through unnecessary
litigation and other delaying tactics. Since January 2000, operators of public
fixed telecommunications networks with significant market power are required
to offer carrier pre-selection, enabling subscribers to choose an alternative
carrier to convey their long-distance calls, with the possibility of
overriding their choice on a call-by-call basis. In addition, the
Interconnection Directive requires number portability in the fixed-line
market, enabling subscribers, while remaining at a specific location, to
retain their telephone number despite switching network operators. Number
portability for all subscribers on public fixed-line networks was required by
January 1, 2000. Member States may also decide to apply this requirement to
other operators, as has been the case in the United Kingdom.

         In July 2000, following the 1999 Communications Review, the European
Commission proposed a package of legislative reforms intended to consolidate,
simplify and update the existing regulatory framework. This legislative
package includes, among others, a new Competition Directive which will
consolidate all existing liberalization directives; a new framework directive
covering all communications infrastructure and associated services, and four
specific directives on licensing and authorizations; access and
interconnection; universal service and users rights; and data protection and
privacy; as well as a regulation mandating unbundled access to the local loop.
The regulation requiring unbundled access to the local loop, Regulation No.
2887/2000/EC, became effective as of January 2, 2001. On February 14, 2002,
the Framework Directive, the Licensing and Authorizations Directive, the
Access and Interconnection Directive, and the Universal Service and Users
Rights Directive were finally adopted. Member States have fifteen months to
implement them in their national legal systems following their forthcoming
publication in the Official Journal of the European Communities. As it
develops, EU legislation will continue to have a significant effect on our
markets. This new European regulatory package must be implemented into French
national law no later than July 24, 2003.

         The regulatory regime concerning Internet services in Europe is
currently under development. On June 8, 2000, the EU adopted its E-Commerce
Directive, which establishes rules and guidelines regarding e-commerce
applicable throughout all the Member States. The Electronic Commerce Directive
is intended to ensure the free movement of information society services,
including electronic commerce, within the Member States of the EU according to
a country of origin principle. The directive was required to be implemented
within Member States by January 17, 2002. This directive regulates the legal
recognition and formulation of electronic contracts, the information to be
provided by service providers to consumers, and solicited and unsolicited
commercial communications with consumers. The directive also contains rules on
the liability of intermediary service providers for mere conduit, caching and
hosting activities. In principle, intermediary service providers cannot be
held liable if they only act as a mere conduit, that is, as long as they do
not initiate the transmission, select the receiver of the transmission, or
select or modify the information contained in the transmission. An
intermediary service provider cannot be held liable for caching, provided it
does not modify the information, complies with the conditions on access to and
updating of information, does not interfere with the lawful use of technology
to obtain data on use of the information, and acts expeditiously to remove or
disable access to information upon receiving knowledge that the information
has been removed or disabled at the initial source or this has been ordered by
a court or administrative authority. An intermediary service provider cannot
be held liable for hosting activities if it does not have actual knowledge of
illegal activity or information, and, as regards claims for damages, was not
aware of facts or circumstances from which illegal activity or information is
apparent or acts expeditiously to remove or disable access to the information
once it receives knowledge.

France

         In July 1996, France enacted legislation amending the French Code des
Postes et Telecommunications, abolishing France Telecom's legal monopoly and
providing for the immediate liberalization of all telecommunications
activities in France, but maintaining a partial exception for the provision of
voice telephony to the public on fixed wireline. Such voice telephony was
fully liberalized, including carrier selection on a call-by-call basis on
January 1, 1998. Carrier pre-selection was introduced on January 17, 2000.
Carrier selection and carrier pre-selection were extended on January 1, 2002
to include local calls. French law allows market participants to build and
operate public voice telecommunications networks or offer services following
receipt of the required license. Interconnection is available as a matter of
right to all licensed operators.

         Voice telephony licenses are granted by the Secretaire d'Etat a
l'Industrie, the "Minister of Telecommunications," in charge of
telecommunications upon recommendation of the Autorite de Regulation de
Telecommunications (the "ART"), which is an independent regulatory authority.
The ART has broad rule-making and adjudicatory powers and is administratively
independent from the Telecommunications Ministry. Among other things, the ART
has the power to approve interconnection rates of operators deemed dominant in
the market place, arbitrate interconnection disputes and to exercise oversight
powers and punish regulatory infringements through suspensions or revocations
of licenses or through fines based on a percentage of the infringer's
revenues.

         On December 13, 1998, the Minister of Telecommunications, pursuant to
the ART's recommendation, awarded our French operating subsidiary a fixed
wireline license and a service license for network deployment in four regions
and six cities and the provision of services in four regions and six
departments in France. The term of these licenses is 15 years from December
13, 1998, the date of publication of the license in the French Official
Gazette (Journal Officiel de la Republique Francaise). Under French law, these
licenses entitle us, among other things, to obtain rights-of-way to establish
network infrastructure along public roads, to obtain easements on private
property and to obtain certain rights on public domain property other than
roads. On November 7, 2000, we obtained an extension of our license to operate
a public telecommunications network in the city of Amiens and to provide
public voice telephony services in a fifth region, Picardie. On August 29,
2002, the Minister of Telecommunications, following the ART's recommendation,
awarded our French operating subsidiary a national extension to our preceding
multiregional license allowing us to serve and connect our clients in all of
France's counties (departements) and regions.

         On December 18, 1998, we entered into an interconnection agreement
with France Telecom. France is one of the Member States that differentiates
between interconnection for public telecommunications network operators and
for voice telephony service providers. The published interconnection tariffs
of France Telecom, which are approved annually by the ART, provide
substantially more favorable interconnection terms for public
telecommunications network operators than for voice telephony service
providers that use the transmission facilities of third-party operators.

         As a public network operator and service provider in France and
pursuant to our license, we must provide, among other things,
non-discriminatory treatment of customers and we must accept reasonable
requests for interconnection from other operators of networks open to the
public and from voice telephony and mobile telephony providers. In addition,
we are required to notify interconnection agreements to the ART and to make
contributions to the universal service fund based on our volume of activity.
The amounts for universal service contributions are set annually by the French
Telecommunications Ministry as proposed by the ART. In addition, we are
required to spend 5% of our net capital investments and property equipment
expenditures in the preceding fiscal year to support research and development
in France.

         Concerning access to France Telecom's copper local loops (commonly
known as unbundling of the local loop), following the setting up by the ART of
a working group at the beginning of 2000 to establish technical and financial
conditions for experimental access to the copper local loops, and the launch
of technical trials in July 2000 (we participated in a trial in Paris for one
of our ISP customers), on September 13, 2000, the French government published
Decree No. 2000-881 that, effective January 1, 2001, mandates full and shared
access to the copper local loops of the incumbent telecommunications operator,
as well as the provision of associated services, such as collocation. (The
obligation of the incumbent operator to provide access to the local loops is
also imposed by EC Regulation No. 2887/2000 of December 18, 2000 on unbundled
access to the local loop.) While legislation is in place, actual access to the
local loop is proceeding slowly due to practical and technical concerns. The
ART had to intervene several times in 2001 to obtain from the incumbent
operator, France Telecom, modifications to the technical and tariff conditions
for local loop access as set out in France Telecom's reference offer. The
modifications requested by the ART were eventually implemented by France
Telecom in its reference offer of July 16, 2001.

         In 2002, the French regulator issued two decisions requiring France
Telecom to offer leased lines to other operators under a more favorable
interconnection framework. In the past, operators purchased leased lines under
France Telecom's retail price and offering applicable to end-users. Following
a complaint brought by WorldCom to force France Telecom to offer true
interconnect leased lines as required by the Interconnection Directive, the
ART, in its February 12, 2002 decision, ordered France Telecom to offer
interconnect leased lines with a significant tariff reduction, and, at the
same time, approved an interconnect leased lines offering to be included in
France Telecom's interconnect offer available to all operators.

INSURANCE COVERAGE

         We have comprehensive construction, property, product and
professional liability insurance covering risks relating to the construction
and operation of our network sites, as is customary for similar
telecommunications companies.

         We also have liability insurance for our directors and officers and
loss of revenue insurance, which coverage extends to our subsidiaries. For the
year ended December 31, 2002, our insurance coverage costs, including premiums
and brokers' fees, totalled approximately (euro)3,059,408. The main exclusions
of the policies are war and wilful acts.

TRADEMARKS AND TRADE NAMES

         We have registered "Completel" as a trademark in France, Germany, the
United Kingdom and selected other Western European jurisdictions. In early
2000, we entered into a differentiation agreement with a German content and
telemedia services provider, restricting us from using the name Completel in
connection with the promotion of "speech, fax and data value added
telecommunications services." In 2001, we were involved in a dispute regarding
the scope of such limitation and were engaged in discussions to settle this
matter. In 2002, the German content and telemedia services provider ceased
using its brand-name and we have had no further discussions with them since
then. Although, at this stage, we are not in a position to predict the outcome
of any discussions that may resume, we believe that this dispute would not
have a material adverse effect on our marketing activity or on our financial
condition or results of operations.


C.  Organizational Structure.

         Below is a simplified organizational chart of our corporate structure
as of January 1, 2003.


                             CompleTel Europe N.V.
                                (Netherlands)
                                      |
                                      |
                                     100%
                                      |
                                      |
                               CompleTel S.A.S.
                                   (France)
                                      |
                                      |
                                     100%
                                      |
                                      |
                                  Estel S.A.
                                   (France)

D.  Property, Plants and Equipment.

         Our European headquarters are located in Paris, France. We also have
sales offices in each of our local markets. Our sales offices, switch and IDC
sites, as well as our operations and service centers, are located in leased
facilities.

     Our material properties currently under lease include our IDC sites and
switch sites, as follows:

 Location                              Size (sq. meters) Lease Expiration Date
 --------                              ----------------- ---------------------

France:
  Aubervilliers/Paris                              7,970 September 2012
  Grenoble                                           637 July 2011
  Marseille                                        1,789 February 2011
  Mundolsheim                                        220 September 2007
  Nanterre/Paris                                   2,638 November 2010
  Lille                                              684 May 2011
  Lyon                                               734 October 2011
  Nantes                                             150 October 2012
  Nice                                               625 November 2011
  Toulouse                                           640 Own facilities

ITEM 5.  Operating and Financial Review and Prospects

OVERVIEW


         General

         In connection with the sale of our German and U.K. operations in May
2002 (see Note 3 to our consolidated financial statements for the year ended
December 31, 2002), we report these operations' results in discontinued
operations, in accordance with Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"). Accordingly, the operating results presented in the following
discussion are the operating results of our continuing operations in France;
the operating results of our former German and U.K. operations are included in
discontinued operations for all periods presented.

         Our Business

         We are a facilities-based operator of a technologically advanced,
high-capacity, fiber optic communications infrastructure. We provide
telecommunications and Internet-related services to business and government
end-users, carriers and Internet service providers in targeted metropolitan
areas in France. We deliver these services primarily to on-net customers
directly connected to our fiber optic metropolitan area networks, or MANs. We
have MANs in nine areas in France, covering the cities of: (1) Paris, (2)
Lyon, (3) Marseille and Aix, (4) Lille, Roubaix and Tourcoing, (5) Grenoble,
(6) Toulouse, (7) Nice and Sophia-Antipolis, (8) Nantes and (9) Strasbourg,
Colmar and Mulhouse. The construction of our MANs was completed during the
last quarter of 2001. Our MANs are connected by our leased inter-city network.

         We were incorporated in December 1998. Through a series of
transactions in January 1999, we became the holding company for our
telecommunications business, which commenced in January 1998 when Completel
LLC, our then ultimate parent, was formed.

         Our operational restructuring

         Since our inception, we have generated operating losses and negative
cash flow from our operating activities. We expect to continue to experience
operating losses and negative cash flows from our operations until we
establish a sufficient revenue-generating customer base. While we are
experiencing growth in our core retail activity in France, and believe that
this trend will continue, since mid-2001, we have been affected by the general
weakness in the European markets for carrier and dial-up Internet access and
Internet data center services. In light of these adverse market conditions, we
implemented operational reorganization and restructuring measures in order to
adjust our operations to foreseeable market conditions, reducing ongoing
operating expenses and capital outlays. In particular, we implemented a major
downsizing of our German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
Further, in April 2002, we decided to sell our entire German operations, which
sale was completed in early May 2002 (see Note 3 to our consolidated financial
statements for the year ended December 31, 2002). In addition, faced with a
significant downturn in the web hosting market, linked to the collapse of the
".com" market and installed hosting overcapacity in Europe, we decided to
scale down the Internet data center operations we had launched in France,
Germany and the United Kingdom. In France, we integrate these activities with
our retail business, while in Germany and the United Kingdom we exited these
markets by selling our entire operations in these countries in May 2002.

         Having decided to concentrate our efforts solely in France, we closed
our London offices and simplified our corporate headquarters structure at the
end of the second quarter of 2002. In 2002, we also reduced our selling,
general and administrative expenses in our corporate headquarters functions
and Internet data center operations.

         Our Recapitalization

         Although our operational restructuring described above had the
desired effect of reducing ongoing operating expenses and capital outlays, our
funding requirements were still in excess of our capital resources. To address
our funding situation, we effected our recapitalization plan (the
"Recapitalization"), pursuant to a restructuring agreement (the "Restructuring
Agreement ") dated May 15, 2002, as amended on July 29, 2002, which we entered
into with the holders of our 14% senior discount notes due 2009 and 14% senior
notes due 2010 (collectively, the "Notes ") and our principal shareholders.
The Recapitalization was completed on September 17, 2002, and involved the
following:

         Exchange of Senior Notes and Senior Discount Notes for Convertible
         Preferred B shares and Ordinary shares;

         Payment of interest due on the Senior Notes by releasing the
         outstanding balance in the escrow account established to provide
         funds for interest payment on these Senior Notes;

         A(euro)43.7 million cash investment in Convertible Preferred A and
         Ordinary shares; and

         The issuance of warrants to holders of Ordinary shares. 362,557 of
         these warrants were exercised, resulting in the issuance of 2,171
         Ordinary shares for a total cash consideration of (euro)21,818.55.

         Exchange of the Notes for Convertible Preferred B shares and Ordinary
shares. The outstanding Senior Notes with a carrying value of (euro)121.9
million at the date of the exchange where exchanged for 757,340 Convertible
Preferred B shares, with a deemed value of (euro)50.7 million and 757,340
Ordinary shares with a fair value of (euro)7.5 million, resulting in a gain of
(euro)63.5 million. The outstanding Senior Discount Notes with a carrying
value of (euro)100.7 million at the date of the exchange where exchanged for
702,692 Convertible Preferred B shares, with a deemed value of (euro)47.1
million and 702,692 Ordinary shares with a fair value of (euro)7.1 million,
resulting in a gain of (euro)46.5 million. The Convertible Preferred B shares
and Ordinary shares together represent issued in these exchanges represent
approximately 39% of CompleTel Europe's share capital outstanding (excluding
the C shares described below). The deemed value of the Convertible Preferred B
shares issued in exchange for our Notes was determined as the sum of their
redemption value and the dividends payable through the date of redemption
under the term of of the agreements, in accordance with the provision of
Statement of Financial Accounting Standards ("SFAS") N(degree)15, "Accounting
by Debtors and Creditors for Troubled Debt Restructurings", under which this
exchange was effectively considered to be a modification of the terms of the
Notes. Net of expenses relating to this exchange amounting to (euro)2.7
million and the write off of deferred financing cost relating to the Notes of
(euro)7.0 million, the total gain recognized on this exchange amounted to
(euro)100.5 million.

         Payment of interest due on the Senior Notes. We sold certain
securities held in escrow to meet future interest payment obligations under
the Senior Notes and distributed the proceeds of (euro)16.8 to the Note
holders. Since the interest payable on the Notes only amounted to (euro)7.3
million, we recognized a loss of (euro)9.4 million, which is recorded as part
of the Recapitalization gain. Certain Noteholders used (euro)9.9million of
the cash received to reinvest in the Company as described below.

         A (euro)43.7 million cash investment in Convertible Preferred A and
Ordinary Shares. The Recapitalization included an investment of an aggregate
of :

         (euro)30.0 million by Meritage Private Equity Funds ("Meritage") and
                  DeGeorge Telcom Holdings ("DeGeorge Telcom"), two of our
                  principal shareholders, in return for the issuance of
                  1,492,537 Convertible Preferred A shares and 1,492,537
                  Ordinary shares. Meritage and DeGeorge Telcom were also
                  issued, on a pro rata basis, a total of 1,217,719 C shares
                  that will cause them to hold the same number of shares for
                  voting purposes as the former holders of the Notes. In order
                  to limit the effect of the C shares strictly to the
                  allocation of voting power, the C shares are structured in a
                  way that effectively gives them only nominal economic value.

         (euro)9.9million made by certain of the holders of the Senior Notes
                  from the proceeds of the payment of interest to these Senior
                  Note holders as described above, in return for the issuance
                  of 490,400 Convertible Preferred A shares, 32,538
                  Convertible Preferred B shares and 522,938 Ordinary shares.

         (euro)2.9million invested by an institutional investor made in
                  return for the issuance of 143,400 Convertible Preferred A
                  shares and Ordinary shares.

         (euro)0.9million invested by several members of the Company's
                  management and senior employees in return for 46,700
                  Convertible Preferred A shares and 46,700 Ordinary shares.

         The Company used a relative fair value method for establishing the
initial carrying value of the shares issued in return for the cash investment
of (euro)43.7 million. Accordingly, of the aggregate cash investment, an
amount of (euro)26.3 million was ascribed to Convertible Preferred A shares,
(euro)0.3 million to Convertible Preferred B shares, (euro)17.0 million to
Ordinary shares and (euro)0.1 million to C shares.

         The issuance of warrants to holders of Ordinary Shares. The
Restructuring Agreement also contemplates that up to an additional (euro)3.3
million may be invested in the form of the exercise of warrants for Ordinary
shares. These warrants were issued on September 12, 2002 to the Company's then
existing shareholders and will be exercisable between December 15, 2002 and
the fifteenth day following the publication of the Company's 2002 financial
statements. In the event that warrants expire unexercised, the Company has
undertaken to make the Ordinary shares underlying those warrants available for
subscription by the holders of its Convertible Preferred A shares and
Convertible Preferred B Shares. The Company has received a commitment from
Deutsche Bank AG to take up approximately 51% of these subscription rights, if
they are offered. As of April 11, 2003, 362,557 warrants have been exercised,
resulting in the issuance of 2,171 Ordinary shares, for total cash
consideration of (euro)21,818.55. In compliance with its commitment
obligations, Deutsche Bank, on April 10, 2003, subscribed for 168,545 ordinary
shares, for total cash consideration of (euro)1,693,877.25

         Effect on financial condition. As part of the Recapitalization, all
of our outstanding Notes were converted into Convertible Preferred B and
Ordinary shares. In addition, we raised a total of (euro)43.7 million in cash
through investment in our Convertible Preferred A and Ordinary shares. We
believe that, as a result of the completion of the Recapitalization and the
cash saving effect of our operational restructuring, our cash balances,
together with the anticipated cash flow from our operations, will be
sufficient to fund our operations until we achieve a level of cash flows from
operations that is sufficient to fund our capital expenditure needs.

         Our funding needs, primarily relating to capital expenditures, are
expected to further decrease, as a result of the completion of the buildout of
our MAN's during 2001 and our current focus on network development to connect
new customers to our existing MAN's, which involves lower expenses in
comparison to deployment of new MAN's.

REVENUE AND EXPENSES

         Revenue

         Our revenue consists of revenue from two principal categories of
service offerings, as follows:

         Retail Services

         We generate revenue from the voice, data and Internet services we
provide primarily to our directly connected retail customers. We expect
revenue from retail services to represent an increasing percentage of our
total revenue.

         Voice services. We derive substantially all our voice revenue from
                  the switched voice communications services we provide to
                  customers directly connected to our networks through our
                  owned fiber and leased lines. A small portion of our voice
                  revenue is derived, however, from off-net sites of customers
                  who are otherwise connected to our network, or from
                  customers awaiting completion of their connection to our
                  network. Voice revenue is based primarily on traffic minutes
                  billed and, to a lesser extent, on monthly fixed access
                  charges.

         Data and Internet services. We derive revenue from the local
                  dedicated access and private line services we provide
                  customers for data connections over our MANs. This revenue
                  is based primarily on transmission capacity provided on
                  intra-city dedicated access, inter-city dedicated access, or
                  IP VPN services. We also derive revenue by providing
                  high-capacity Internet protocol-based services and
                  interconnection between local area networks in each of the
                  cities in which our MANs operate. Lastly, we derive a small
                  portion of our revenue from the web hosting, Internet access
                  and other value-added Internet services we provide at our
                  Internet data centers. We also offer web site creation and
                  maintenance services as well as miscellaneous dial-up
                  services to certain of our Internet data centers' customers.

WHOLESALE SERVICES

         We derive revenue by providing transmission capacity to other
carriers, as well as dial-up Internet access to our Internet service provider
customers.

         Carrier and termination services. We derive revenue from the
                  services we provide to other telecommunications service
                  providers that require local connection to their
                  end-customers, transmission capacity to support gaps in
                  their networks, need additional capacity, require alternate
                  routing, or do not have their own transmission facilities.
                  We also terminate traffic for other operators. We expect
                  this revenue, which is based primarily on transmission
                  capacity provided and traffic minutes terminated, to
                  represent a decreasing portion of our total revenue.

         Internet dial-up. We also derive revenue from dial-up Internet access
                  to our ISP customers delivering the traffic. This revenue is
                  based primarily on switched traffic minutes. This traffic is
                  highly volatile and may decrease in the future. We otherwise
                  expect our Internet dial-up services revenue to represent a
                  decreasing proportion of our total revenue, as our revenue
                  from our retail services increases.

Customers

         Our three, five and ten largest customers generated approximately
12%, 17% and 23% of our revenue, respectively, for the year ended December 31,
2002. These customers include Cable & Wireless, which generated slightly over
7% of our total revenue for the year. For the year ended December 31, 2001,
our three, five and ten largest customers in France generated approximately
19%, 22% and 29%, respectively, of our revenue, including Cable & Wireless,
which generated slightly over 7% of our total revenue for the year.

Operating expenses

         Our primary operating expenses consist of:

         network costs,

         selling, general and administrative expenses,

         non-cash compensation charges,

         depreciation and amortization expenses, and

         restructuring, impairment and other charges.

         Network costs

         Our network costs include variable costs, which are directly related
to revenue generated from a customer, such as traffic termination and traffic
collection costs directly related to voice minutes invoiced, mostly to the
incumbent operator. Other significant variable costs are Internet access
capacity purchased on a wholesale basis and resold to our retail customers.

         In addition to these variable costs, we incur:

         1.   internal labor and contractual maintenance costs related to
              plant maintenance, network transmission equipment maintenance,
              and, to a lesser extent, customer transmission equipment
              maintenance;

         2.   rental, on a short-term basis, of interconnection capacity,
              primarily from the incumbent operator;

         3.   cost of bandwidth capacity to interconnect our MANs under
              operating leases;

         4.   rights of ways on public or private property in selected areas
              crossed by our networks. We also lease dark fiber or conduits on
              a limited basis to establish and augment our MANs in certain
              markets;

         5.   rental and maintenance of technical facilities such as switch
              centers, hubs, nodes, and Internet data centers; and

         6.   lease of private lines, mostly from the incumbent operator, or
              DSL or WLL links, to connect customer sites, where, due to the
              remoteness of these sites, it is not cost efficient to directly
              connect them to our network.

         To date, we have been able to deploy our networks faster than we
initially anticipated in our business plans. As a result, we have experienced
relatively high incremental network costs related to network deployment and
network completion. We anticipate that, as we continue to expand our customer
base and generate revenue from our completed network, our network costs will
decrease as a percentage of revenue.

         Selling, general and administrative expenses

         Our selling, general and administrative expenses include costs
relating to our sales and marketing department, customer care, billing,
corporate administration, salaries and other personnel costs, as well as legal
and consultant fees. We expect that selling, general and administrative
expenses are likely to continue to decline as a proportion of our total
revenue.

         We have a large, locally-based, direct sales force in our local and
regional markets, and a national account team to service multiple location
customers and key accounts. At December 31, 2002, we had 456 employees,
compared to 550 employees at December 31, 2001.

         Allocated costs from an affiliate

         Prior to January 1, 2002, we recorded as "allocated costs from an
affiliate" amounts we paid CableTel Management, Inc. (then, a wholly-owned
subsidiary of Completel LLC) to reimburse expenses incurred by CableTel
Management, Inc. in the performance of certain ordinary and necessary general
and administrative services for us and our operating subsidiaries. Beginning
October 1, 2000, a significant portion of the expenses that were previously
incurred on our behalf by CableTel Management, Inc. (representing primarily
salaries to some of our European headquarter employees) are now incurred by
Completel Headquarters Europe S.A.S, our wholly owned subsidiary, and
accounted for as selling, general and administrative costs. Furthermore, in
early 2002, we completed the acquisition of CableTel Management, Inc. from
Completel LLC. Accordingly, effective January 1, 2002, all the expenses
incurred by CableTel Management, Inc. are accounted for as selling, general
and administrative costs.

         Non-cash compensation charges

         We incur stock-based compensation expense under our fixed stock
option plan based on the deferred compensation recorded on the date of grant.
In addition, some of our employees have purchased common units of Completel
LLC, our former ultimate parent, for which Completel LLC incurs non-cash
compensation charges. We record such non-cash compensation charges as a deemed
capital contribution with an offsetting entry to deferred compensation.
Deferred compensation is amortized to expense over the vesting period of the
common units. The non-cash compensation charges are attributable to employees
whose salary and benefits were otherwise classified as selling, general and
administrative expenses.

         Depreciation and amortization expense

         We record depreciation and amortization expense for our property and
equipment, including network equipment, office furniture and equipment,
computer equipment and software, leasehold improvements and other properties.
Assets are stated at cost and are depreciated when ready for their intended
use on a straight-line basis over their estimated useful lives. Network
equipment is depreciated on a straight-line basis over an estimated useful
life of three to eight years. Our Network plant is depreciated on a
straight-line basis over an estimated useful life of fifteen to twenty years.

         Other income and expense

         Other income includes interest income on our cash balances.

         Interest expense recorded reflects interest on our 14% senior notes
that were due 2010, the accretion of our 14% senior discount notes that were
due 2009, and the amortization of deferred financing costs. In connection with
the elimination of the indebtedness under these notes as part of our
Recapitalization, we ceased incurring interest expense on these notes. We
charged the remaining balance of the deferred financing costs related to the
Notes against the gain recorded on the exchange of the Notes for shares.

         We capitalized a portion of our interest costs as part of the
construction cost of our networks, in accordance with Statement of Financial
Accounting Standards No. 34 "Capitalization of Interest Costs." Starting
January 1, 2002, we ceased capitalizing interest as a result of our completion
of the construction of our MANs.

         Foreign exchange loss and other expense

         Our revenue, operating expenses, capital expenditures, assets and
liabilities are, for the most part, denominated in euro, which became our
functional and reporting currency effective January 1, 2000. We invest all
excess cash in euro-denominated accounts. Prior to the completion of our
Recapitalization on September 17, 2002, we were exposed to changes in currency
exchange rates due to our U.S. dollar denominated senior discount notes. As
part of our Recapitalization, these notes were exchanged into Ordinary shares
and Convertible Preferred B shares. We believe that our current exposure to
exchange rate risks is immaterial.

         Discontinued operations

         In May 2002, we disposed of our German and U.K. operations in their
entirety. We have accounted for these transactions in accordance with SFAS No.
144. Accordingly, discontinued operations include the operating results of our
former German and U.K. operations for all periods presented.


Operating Results

Year ended December 31, 2002 compared to year ended December 31, 2001

         Our revenue for the year ended December 31, 2002 totalled (euro)97.8
million, compared to (euro)75.9 million for the year ended December 31, 2001.
The increase in revenues is due to

         (i) additional customers connected to our network;

         (ii) incremental services provided to existing customers; and

         (iii) the provision of traffic termination services and datalinks to
carriers.

         The following table summarizes our revenue by category of service
offering (in thousands):

                              Year ended December         Year ended December
                                    31, 2002                    31, 2001
Revenue Category
Retail                           (euro) 54,526               (euro) 27,722
Voice....................
Retail Data and                        17,448                      11,829
Internet.................
      Total retail.......              71,974                      39,551
Carrier..................              13,749                      10,224
ISP......................              12,050                      26,164
                                -------------               --------------
Total....................       (euro) 97,773               (euro) 75,939
                                =============               ==============

         Retail revenue increased by 82% for the year ended December 31, 2002,
totalling (euro)72 million, as compared to (euro)39.6 million for the
comparable period in 2001. Our strong retail growth is a result of our
strategy of targeting both private business and public entities. Retail
revenue accounted for 73.6% of total revenue for the year ended December 31,
2002 compared to 52% for the year ended December 31, 2001, significantly
reducing our exposure to the volatile ISP market and weaker carrier market.
The carrier and the ISP dial up business are becoming smaller as a percentage
of our total revenue as we continue to focus on our core retail activity.

OPERATING EXPENSES

         Network costs

         Our network costs for the year ended December 31, 2002 decreased to
(euro)62.8 million from (euro)66.1 million for the previous financial year.
This decrease resulted from:

         (i)  the shift of product-mix towards bandwith and internet, resulting
in a lower proportion of variable traffic termination and traffic collection
costs in our total network costs;

         (ii)  the rationalization of our interconnection structure;

         (iii) the restructuring of our long distance leased network; and

         (iv) the renegotiation of maintenance contracts.

         Going forward, we believe that our network costs will continue to
decrease as a percentage of revenue.

         Gross Margin

         Gross margin constitutes the difference between revenue and network
costs, divided by revenue. For the year ended December 31, 2002, our gross
margin was 35.8%, compared to 12.9% for the corresponding period in 2001. This
improvement is primarily the result of (1) our continued focus on higher
margin products, (2) improved network cost efficiency as a result of increase
in traffic carried on our network and (3) the reduction in average customer
fixed network costs due to an increase in the total number of on-network
customers. We expect our gross margin to continue to improve as additional
customers are added, network utilization improves with increased on-network
traffic and customers continue to move towards higher margin products and
services.

         Selling, general and administrative expenses

         For the year ended December 31, 2002, our selling, general and
administrative expenses totalled (euro)53.9 million, compared to (euro)61.9
million for the year ended December 31, 2001. The decrease in selling, general
and administrative expenses resulted from:

         (i) our operational restructuring and the integration of our Internet
data center operations with our retail business; and

         (ii) the closing of our London offices and the simplification of our
corporate headquarters structure.

         Our selling, general and administrative expenses represented 55% of
our total revenue for year ended December 31, 2002, compared to 81% for the
year ended December 31, 2001. We expect our selling, general and
administrative expenses as a percentage of our total revenue to continue to
decrease in future periods, as our revenue increases.

         Non-cash compensation charges

         We incurred non-cash stock-based compensation expense of (euro)6.1
million under our fixed stock option plan for the year ended December 31,
2002. This amount was based on deferred compensation at the date of grant
totalling (euro)25.1 million. We also recorded a compensation credit of
(euro)2.2 million, based on the closing price per share on December 31, 2002
related to our performance vesting and time vesting shares. The non-cash
compensation charges are attributable to employees whose salary and benefits
were otherwise classified within selling, general and administrative expenses.
Our performance and time vesting shares have been fully amortized as of
December 31, 2002.

         Depreciation and amortization

         Depreciation and amortization increased to (euro)30.8 million for the
year ended December 31, 2002, compared to (euro)28.5 million for the year
ended December 31, 2001. The majority of these increases resulted from
incremental depreciation on assets brought into service at the end of 2001,
when we completed our MANs. We expect our depreciation & amortization to
increase in the future, as we continue to add equipment to our network.

         Restructuring, impairment and other charges

         In connection with our restructuring efforts during 2002, we
recognized approximately (euro)13.6 million in restructuring, impairment and
other charges in our continuing operations for the year ended December 31,
2002.

         These charges consist of the following (in millions):

                                                                   2002
Restructuring Charges.................................             7.8
Impairment of goodwill................................             5.8
                                                             ----------
Total.................................................      (euro)13.6


         Impairment charges

         In connection with our annual impairment test of goodwill in December
2002, we impaired our entire balance of goodwill which had a carrying value of
(euro)5.8 million.

         Restructuring charges

         Our restructuring charges relate primarily to severance costs
associated with:

         (i) the reductions in the size of our workforce in France;

         (ii) the closing of our headquarters in the United Kingdom, and the
reduction of our headquarters functions in France;

         (iii) charges incurred as a result of lease terminations of long
distance lines and the renegotiation of interconnection agreements in
connection with the restructuring of our operations in France; and

         (iv) legal and consulting charges incurred in conjunction with our
operational restructuring and our Recapitalization.

         For the year ended December 31, 2002, we have incurred the following
restructuring charges (in thousands):

<TABLE>
<CAPTION>

                                            Summary of Restructuring Charges
                                          as of the year ended December 31, 2002

                                                                                 Europe HQ
                                      France(4)       Germany(5)     UK(5)       and other            Total
                                      ---------       ----------     -----       ---------            -----
<S>                                       <C>             <C>          <C>          <C>            <C>
Severance (1)...................      (euro) 4,187            -          -      (euro) 1,700   (euro) 5,887
Facilities and Network (2)......               335            -          -                 -            335
Other (3).......................               137            -          -             1,484          1,621
TOTAL...........................      (euro) 4,659            -          -      (euro) 3,184   (euro) 7,843

</TABLE>

_______________________________


     (1)   Severance charges relate to estimated termination salaries and
           benefits in connection with the termination of employees, related
           outplacement fees and other related benefits.
     (2)   Facilities and network charges relate to costs to terminate or
           renegotiate facilities and equipment leases and interconnection
           agreements.
     (3)   Other charges primarily relate to legal and consulting costs
           incurred in connection with our operational restructuring and the
           Recapitalization.
     (4)   Restructuring charges for the Company's continuing operations are
           reflected in Restructuring, Impairment, and Other Charges.
     (5)   Restructuring charges for the Company's former operations in
           Germany and the United Kingdom are reflected in loss from
           discontinued operations (see Note 3). As of December 31, 2001,
           (euro)3,134,000 was accrued. During 2002, these amounts were paid
           in full.

         For a description of the number of employees terminated in connection
with the Restructuring, see Note 12 to the consolidated financial statements
included in Item 18 of this Annual Report, which is incorporated herein by
reference.

Other income and expense

         We recorded interest income of (euro)2.3 million during the year
ended December 31, 2002, compared to (euro)12.7 million for the previous
financial year. These decreases are the result of lower cash and cash
equivalents balances prior to the completion of the Recapitalization on
September 17, 2002.

         We incurred interest expense of (euro)22.9 million during the year
ended December 31, 2002, compared to interest expense for the year ended
December 31, 2001 of (euro)29.5 million, net of capitalized interest expense
of (euro)14.2 million. We ceased capitalizing interest as of January 1, 2002
when our MANs were completed. The interest expense recorded reflects interest
on our Senior Notes that were due 2010, the accretion of our Senior Discount
Notes that were due 2009 and the amortization of deferred financing costs. As
a result of the exchange of these notes for Ordinary and Convertible Preferred
B shares as part of our Recapitalization, we expect future interest expense to
be immaterial.

Foreign exchange gain (loss) and other income expense

         For the year ended December 31, 2002, we recorded foreign exchange
gain and other income of (euro)9.1 million, compared to a loss of (euro)8.2
million in the corresponding period in 2001. The foreign exchange gain (loss)
and other income (expenses) in the years ended December 31, 2002 and 2001
resulted primarily from unrealized foreign exchange gains and losses related
to our dollar-denominated senior discount notes due 2009. These notes were
exchanged for Ordinary and Convertible Preferred B shares as part of our
Recapitalization. We expect future foreign exchange results to be immaterial
as a result of our limited exposure to foreign currencies.

Gain on exchange of notes for shares

         In connection with the Recapitalization, we recorded a gain of
(euro)91.1 million on the exchange of our 14% Senior Notes due 2010 and 14%
Senior Discount Notes due 2009 for our Ordinary and Convertible Preferred B
shares. The gain represents the difference between the carrying value of the
debt less the fair market value of the Ordinary shares and the total cash
payments payable on the Convertible Preferred B shares. Additionally, we
charged against this gain certain direct expenses incurred to effect the
exchange of our Notes for shares.

Net income (loss) from continuing operations

         Our net income from continuing operations for the year ended December
31, 2002 was (euro)12.4 million, compared to a net loss from continuing
operations of approximately (euro)73.6 million for the year ended December 31,
2001. These changes resulted primarily from the gain on the exchange of our
Notes for Ordinary and Convertible Preferred B shares, as described above, as
well as from the reduction of our Operating Loss.

Segment information

         Historically, management has evaluated our development efforts and
results according to the geographic location of our markets in France, Germany
and the UK. As discussed in Note 3 to our consolidated financial statements,
we sold and discontinued our operations in Germany and the United Kingdom in
May 2002. Having decided to concentrate our efforts solely in France, we
closed our London offices and simplified our corporate headquarters structure
at the end of the second quarter of 2002. Consequently, our French operations
constitute our sole operating segment. Except for revenues, we do not retain
discrete financial information for retail, ISP and carrier customers, as we do
not allocate the costs or the fixed assets infrastructure to the services
provided through the same network and interconnection structure.

Year ended December 31, 2001 compared to year ended December 31, 2000

         Revenue

         Revenue for the year ended December 31, 2001 increased to (euro)75.9
million, compared to (euro)23.0 million for the year ended December 31, 2000.
We attribute these increases in revenue to our overall growth resulting from
the continued implementation of our business plan and the rapid deployment of
our networks. Specifically, the increase resulted from the steady growth of
our customer base to 946 customers as of December 31, 2001, an increase in
traffic over our networks, which totalled 2.9 billion minutes in 2001, and a
heightened demand for services from existing customers.

         For the year ended December 31, 2001, revenue from retail services,
including revenue from Internet data centers, web hosting and other
Internet-related services, totalled (euro)39.6 million (or 52% of our total
revenue); and revenue from wholesale services totalled (euro)36.3 million (or
48% of our total revenue). For the year ended December 31, 2000, revenue from
retail services, including revenue from Internet data centers, web hosting and
other Internet-related services totalled (euro)11.3 million (49% of total
revenue), and revenue from wholesale services totalled (euro)11.7 million (51%
of total revenue).

Operating expenses

         Network costs

         Our network costs for the year ended December 31, 2001 increased to
approximately (euro)66.1 million, from (euro)23.2 million for the year ended
December 31, 2000. This increase resulted primarily from the continued
deployment of our networks and the associated costs of establishing
interconnection and leasing arrangements. The increase also resulted from
increased customer traffic, which resulted in higher interconnection payments,
primarily to France Telecom.

         Selling, general and administrative expenses

         For the year ended December 31, 2001, selling, general and
administrative expenses totalled approximately (euro)61.9 million, compared to
approximately (euro)49.8 million for the year ended December 31, 2000. This
increase primarily resulted from the growth in the number of personnel and the
expenses related to wages and salaries in the first three quarters of 2001.
The increase in selling, general and administrative expenses is also
attributable to an increase from (euro)0.7 million to (euro)1.5 million in our
provision for doubtful receivables primarily relating to trade receivables
attributable to ISP and carrier customers. During the year ended December 31,
2001, several of our ISP and carrier customers entered into bankruptcy
proceedings or faced financial difficulties resulting in receivables from
these customers being outstanding for more than 90 days. Accordingly, we
recognized a provision for these customers in accordance with our accounts
receivable allowance policy. In response to this problem, we have expanded the
credit and business checks we perform on new customers in order to minimize
collection risk.

         Selling, general and administrative expenses for the year ended
December 31, 2001 also include an expense of approximately (euro)1.7 million
associated with our repayment of loans made by a commercial bank to certain
senior employees and an expense of approximately (euro)1.4 million associated
with an incentive bonus (structured as a forgivable loan) granted to our
former Chief Executive Officer, Timothy Samples. These expenses are described
more fully in Note 4 to our consolidated financial statements (Related Party
Transactions).

         As a percentage of our total revenue, selling, general and
administrative expenses represented 81% of our total revenue for the year
ended December 31, 2001, compared to 217% for the year ended December 31,
2000. We expect our selling, general and administrative expenses as a
percentage of our total revenue to continue to decrease in future periods, as
our revenue increases and our restructuring and other cost saving measures
continue to take effect.

         Allocated costs from an affiliate

         For the year ended December 31, 2001, we recorded approximately
(euro)5.4 million of allocated costs from an affiliate, compared with
approximately (euro)12.1 million for the year ended December 31, 2000. This
decrease is the direct result of reduced personnel, legal and accounting costs
allocated from CableTel Management, Inc.

         Non-cash compensation charges

         We incurred non-cash stock-based compensation expense of
approximately (euro)6.6 million under our fixed stock option plan for the year
ended December 31, 2001. This amount was based on deferred compensation at the
date of grant totalling approximately (euro)25.1 million. Additionally, we
recorded a compensation credit of approximately (euro)3.8 million, based on
the closing price per share on December 31, 2001 related to our performance
vesting and time vesting shares. The non-cash compensation charges are
attributable to employees whose salary and benefits were otherwise classified
within selling, general and administrative expenses.

         Depreciation and amortization

         Depreciation and amortization increased to approximately (euro)28.5
million for the year ended December 31, 2001, from approximately (euro)14.5
million for the year ended December 31, 2000. The majority of this increase
resulted from the build-out of our MANs.

         Restructuring, impairment and other charges

         In connection with our restructuring efforts during the second half
of 2001, we recognized approximately (euro)164.5 million in restructuring and
impairment charges. As discussed below, the impairment charge and the
restructuring charges that relate to our former operations in Germany and the
United Kingdom are reported in discontinued operations in our consolidated
statement of operations (see Note 3, Discontinued Operations, to our
consolidated financial statements).

         These charges consist of the following (in millions):

Write-down of German and United Kingdom assets.............   (euro)142.7
Write-down of materials and supplies.......................           6.0
Restructuring charges(1)...................................          15.8
Total......................................................   (euro)164.5

         ______________________________________


         (1)      Includes (euro)6.0 million of restructuring charges
                  recognized by our holding company, Completel Europe N.V. and
                  our French operations and reflected in loss from continuing
                  operations in our consolidated statements of operations.

         Impairment charges

         In light of adverse market conditions and our efforts to reduce our
ongoing operating expenses and capital outlays, in the fourth quarter of 2001
we decided to significantly scale-back our operations in Germany and exit the
market in the United Kingdom. As a result of this decision, and in light of
the adverse conditions in these markets, we determined, in accordance with our
policy relating to recoverability of long-lived assets, that we were unlikely
to recover our investment in these assets (whether by utilizing these assets
in our business or through disposition) and thus, that the values of our
German and U.K. assets (consisting of network property and equipment,
including switches, network plant, customer access equipment and operational
support systems) were impaired as of December 31, 2001. Accordingly, we
recorded total charges of (euro)142.7 million to write-down the carrying
values of these assets to their estimated fair market values using a
discounted cash flow approach. These charges are reflected in loss from
discontinued operations in our consolidated statements of operations.

         In addition, as a result of our decision to significantly scale-back
our operations in Germany, we had materials and supplies in excess of what we
needed in order to complete construction of our networks under our revised
business plan. Accordingly, we revalued these excess materials and supplies,
resulting in the write-down of all these excess materials and supplies to the
lower of cost or market value, as of December 31, 2001.

         Restructuring charges

         Our restructuring charges relate primarily to severance costs
associated with the reductions in the size of our workforce in France, Germany
and the United Kingdom and charges incurred as a result of lease terminations
and the renegotiation of interconnection agreements in connection with our
decision to significantly scale back our operations in Germany and to exit the
market in the United Kingdom.

         Our restructuring charges can be detailed as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                        Europe HQ
                                                                                           and
                                        France         Germany(5)         UK(5)           other            Total
                                       --------      -----------       ---------        ---------      ----------
<S>                                 <C>              <C>               <C>              <C>           <C>
Severance (1)                       (euro)1,151      (euro)2,399       (euro)527        (euro)603     (euro)4,680
Facilities and Network (2)                1,558            5,194             992                -           7,744
Other (3)                                    43              578              50            2,694           3,365
                                       --------      -----------       ---------        ---------      ----------
                                          2,752            8,171           1,569            3,297          15,789
Paid during 2001                          1,025            2,251             546            2,228           6,050
                                       --------      -----------       ---------        ---------      ----------
Accrual balance,
 December 31, 2001(4)               (euro)1,727      (euro)5,920     (euro)1,023      (euro)1,069     (euro)9,739
                                    ===========      ===========      ==========      ===========     ===========
</TABLE>

_______________________________

     (1)   Severance charges relate to estimated termination salaries and
           benefits in connection with the termination of employees, related
           outplacement fees and other related benefits.

     (2)   Facilities and network charges relate to costs to terminate or
           renegotiate facilities and equipment leases and interconnection
           agreements.

     (3)   Other charges primarily relate to legal and consulting costs
           incurred in connection with the Company's operational restructuring
           and recapitalization.

     (4)   Outstanding accruals were paid in full in 2002.

     (5)   Restructuring charges for our former operations in Germany and the
           United Kingdom are included in discontinued operations (see Note 3
           to our consolidated financial statements).

         For a description of the number of employees terminated in connection
with the restructuring, see Note 12 to the consolidated financial statements
included in Item 18 of this Annual Report, which is incorporated herein by
reference.


Other income and expense

         We recorded interest income of approximately (euro)12.7 million
during the year ended December 31, 2001, compared to (euro)22.2 million for
the year ended December 31, 2000. This decrease is the direct result of lower
cash and cash equivalents balances in 2001 compared to 2000.

         We incurred interest expense, net of approximately (euro)14.2 million
of capitalized interest expense, of approximately (euro)29.5 million during
the year ended December 31, 2001. For the year ended December 31, 2000,
interest expense totalled approximately (euro)29.0 million, net of capitalized
interest expense of approximately (euro)10.1 million. The interest expense
recorded reflects interest on our senior notes due 2010, the accretion of our
senior discount notes due 2009 and the amortization of deferred financing
costs.

Foreign exchange gain (loss) and other income (expense)

         For the year ended December 31, 2001, we recorded foreign exchange
loss and other expenses of (euro)8.2 million, compared to (euro)18.8 million
in foreign exchange loss and other expenses in the year ended December 31,
2000. The foreign exchange loss and other expenses in the year ended December
31, 2001 resulted primarily from an unrealized foreign exchange loss related
to our dollar-denominated senior discount notes due 2009. The foreign exchange
loss in 2000 is attributable primarily to the requirement that we invest the
cash we raised in our debt and equity offerings in U.S. treasury bills,
pending receipt of an exemption from regulations under the Investment Company
Act of 1940. We received that exemption in August 2000.

Loss from discontinued operations

         For the year ended December 31, 2001, we recorded a loss of
(euro)225.4 million from discontinued operations, reflecting write-down of the
carrying values of our Germany and U.K. assets in connection with our
decision, in the fourth quarter of 2001, to significantly scale-back our
operations in Germany and exit the market in the United Kingdom. We sold our
German operations on May 10, 2002 and our U.K. operations on May 15, 2002.

Gain on Early Extinguishment of Debt

         As a result of our repurchases during the second half of 2001 of
(euro)78.1 million face amount of our 14% senior notes due 2010, we recorded a
gain on early extinguishment of debt totalling (euro)46.2 million. In
addition, the gain reflects a (euro)6.0 million write-off of deferred
financing costs. On September 17, 2002, the Company adopted SFAS 145 which
resulted in a reclassification of previously recognized gain on early
extinguishment of debt from extraordinary item to other income and expense in
the consolidated statements of operations.

Segment information

         General

         In May 2002, we disposed of our German and U.K. operations in their
entirety. In accordance with SFAS 144, the results of these disposed
operations are reported in our consolidated financial statements in
discontinued operations (see Note 3 to our consolidated financial statements).

         France

         As further described above, in France, we had revenue of
approximately (euro)75.9 million for the year ended December 31, 2001,
compared to approximately (euro)23.0 million for 2000.

         Operating expenses, excluding non-cash compensation charges and
restructuring, impairment and other charges, in France totalled approximately
(euro)109.4 million for the year ended December 31, 2001, compared to
approximately (euro)77.8 million for 2000. This increase is primarily a result
of increased network costs associated with the growth in our connected
customer base and an increase in French employees to 467 at December 31, 2001,
from 433 as of December 31, 2000. Additionally, depreciation and amortization
in France increased as a result of the build-out of our MANs in France.

Statements of Cash Flows

Year ended December 31, 2002 compared to year ended December 31, 2001

         We had cash and cash equivalents of approximately (euro)60.2 million
as of December 31, 2002, a decrease of 26.2 % from approximately (euro)81.6
million as of December 31, 2001. The decrease is a result of the cash outflows
from our operations, was partially offset by the equity increase effected
through the Recapitalization, as set forth below.

         Details of the change in cash and cash equivalents are set forth in
the table below (in thousands).

<TABLE>
<CAPTION>

                                                                            Year ended December 31,

                                                                                 2002            2001
                                                                                 ----            ----

<S>                                                                           <C>             <C>
Cash flows from continuing operating activities......................   (euro)(44,246)  (euro)(67,191)
Cash flows from discontinuing operating activities...................            2,938        (52,625)
Cash flows from investing activities.................................         (23,338)       (130,050)
Cash flows from financing activities.................................           43,679        (29,679)
Effect of exchange rates on cash.....................................            (465)           (540)
Net decrease in cash and cash equivalents............................         (21,432)       (280,085)
Cash and cash equivalents at beginning of period.....................           81,613         361,698
Cash and cash equivalents at end of period...........................     (euro)60,181    (euro)81,613
</TABLE>


Cash flows from operating activities

         During the year ended December 31, 2002, we used approximately
(euro)41.3 million in continuing and discontinuing operating activities, a
decrease of 65.5% from the approximately (euro)119.8 million used in continued
and discontinued operating activities for the year ended December 31, 2001.
This decrease in cash used for operating activities was primarily the result
of the sale of our discontinued operations, and, to a lesser extent, the
increase in revenue and to the operating cost savings resulting from our
restructuring efforts.

Cash flows from investing activities

         We used approximately (euro)23.3 million in investing activities
during the year ended December 31, 2002, compared to approximately (euro)130
million for the year ended December 31, 2001. The decrease was primarily due
to lower capital expenditures as we completed the buildout of our MANs at the
end of 2001 and concentrated on customer connections.

Cash flows from financing activities

         We received proceeds from our Recapitalization of approximately
(euro)43.7 million during the year ended December 31, 2002. In comparison, we
used (euro)29.7 million of cash in financing activities during the year ended
December 31, 2001.

Year ended December 31, 2001 compared to year ended December 31, 2000

         We had cash and cash equivalents of approximately (euro)81.6 million
as of December 31, 2001, a decrease of (euro)280.1 from approximately
(euro)361.7 million as of December 31, 2000. Additionally, as of December 31,
2001, we had approximately (euro)24.8 million of restricted investments placed
in escrow for debt service.

         Details of the change in cash and cash equivalents since inception
are set forth in the table below.

<TABLE>
<CAPTION>

                                                                                Year Ended December 31,
                                                                                2001              2000
                                                                                ----              ----
                                                                                 (euro, in thousands)

<S>                                                                           <C>               <C>
Cash flows from continuing operations................................         (67,191)          (50,817)
Cash flows from discontinued operations..............................         (52,625)          (20,325)
                                                                             ---------         ---------
Net cash flows from operating activities.............................        (119,816)          (71,142)
Cash flows from investing activities.................................        (130,050)         (299,940)
Cash flows from financing activities.................................         (29,679)           678,762
Effect of exchange rates on cash.....................................            (540)           (3,097)
                                                                             ---------         ---------
Net increase (decrease) in cash and cash equivalents.................        (280,085)           304,583
Cash and cash equivalents at beginning of period.....................          361,698            57,115
                                                                             ---------         ---------
Cash and cash equivalents at end of period...........................     (euro)81,613     (euro)361,698
                                                                           ===========      ============
</TABLE>


         Cash flows from continuing operating activities

         During the year ended December 31, 2001, we used approximately
(euro)119.8 million in continuing and discontinuing operating activities, a
(euro)48.7 million increase from the approximately (euro)71.1 million used in
continuing and discontinuing operating activities for the year ended December
31, 2000. This increase in cash used for operating activities was primarily
related to the significant growth of our customer base and the associated
increased selling, general and marketing costs, an increase in network costs
and additional capital expenditures resulting from planned network expansion.

         Cash flows from investing activities

         We used approximately (euro)130.1 million in investing activities
during the year ended December 31, 2001, compared to using approximately
(euro)299.9 million for the year ended December 31, 2000. The decrease was
primarily due to proceeds from the issue of our senior note being placed in
escrow in 2000, and lower capital expenditure as we completed the build out of
our MANs.

         Cash flows from financing activities

         We used approximately (euro)29.7 million of cash for financing
activities during the year ended December 31, 2001, compared to (euro)678.8
million of cash flows provided by financing activities for the year ended
December 31, 2000. The change was due primarily to the net proceeds from our
IPO being reflected in 2000 and approximately (euro)28.9 million used to
repurchase a portion of our outstanding senior notes due 2010 in 2001.

Liquidity and Capital Resources

         The telecommunications business is capital intensive. We have used
and will continue to need large amounts of capital to fund capital
expenditures, working capital, and operating losses. As of December 31, 2002,
we had (euro)60.2 million of unrestricted cash and cash equivalents. We
believe that our cash balances, together with the anticipated cash flow from
our operations, will be sufficient to fully fund our operations until we
achieve a level of cash flows from operations that is sufficient to fund our
capital expenditure needs.

         The following table presents our contractual obligations and
commercial commitments for the periods indicated, as of December 31, 2002:

<TABLE>
<CAPTION>

                                                               Payments due by period
                                                               (in thousands of euro)
       Description                        -----------------------------------------------------------------
      of obligation                                               Less than                      More than
      or commitment                            Total              1 year         1-3 years       5 years
-----------------------------                  -----              ------         ---------       --------
<S>                                                 <C>                 <C>            <C>             <C>
Operating leases                              (euro)1,874         (euro)833      (euro)371       (euro)670
Other long-term debt                                3,986               308            665           3,013
Total obligations/commitments                 (euro)5,860       (euro)1,141    (euro)1,036     (euro)3,683
</TABLE>


         Information concerning our financial condition and debt servicing
obligations is presented in the following table (amounts in thousands):

<TABLE>
<CAPTION>

                                                         At December 31,      At December 31,
                                                              2002                  2001
                                                         ---------------      ---------------
<S>                                                          <C>                   <C>
Cash and cash equivalents                                    60,181                81,613
Other current assets                                         28,284                70,538
                                                         ---------------      ---------------
              Total current assets                           88,465               152,151
Non-current assets                                          247,235               303,839
                                                         ---------------      ---------------
              Total assets                                  335,700               455,990
                                                         ===============      ===============

Current Liabilities                                          44,173               106,339
Long-term debt (1)                                            3,986               227,735
                                                         ---------------      ---------------
              Total liabilities                              48,159               334,074
                                                         ===============      ===============
</TABLE>


(1)  Long-term debt as of December 31, 2002 consists only of long term capital
     lease obligations acquired in our purchase of one of our French
     subsidiaries in 2001. Long-term debt as of December 31, 2001 consisted of
     the capital lease obligations, in addition to (a) 14% Senior Discount
     Notes due 2009 and (b) 14% Senior Notes due 2010.


In addition, our Convertible Preferred shares carry dividend and redemption
features, as described in Note 7 to our Financial Statements, which could
affect our cash flows between 2004 and 2007.

Capital Expenditures

         During the year ended December 31, 2002, we made capital expenditures
in our continuing operations of approximately (euro)23.3 million. These
capital expenditures were primarily for connecting customers to our MANs.
During the year ended December 31, 2001, we made capital expenditures of
approximately (euro)149.9 million for property and equipment necessary to
deploy networks in our initial markets. The decrease in capital expenditures
during the year ended December 31, 2002 compared to the year ended December
31, 2001 is attributable to the completion of the buildout of our MANs during
2001 and our current focus on network development to connect new customers to
our existing MANs, which involves lower expenses in comparison to deployment
of new MANs.

         We currently estimate that we will make total capital expenditures of
approximately (euro)28 million to (euro)35 million for the year ending
December 31, 2003, most of which will be expended to connect new customers to
our MANs and increase capacity. We anticipate this trend to continue as we
connect new customers, and to evolve in proportion to customer acquisition
growth. The actual amount and timing of our future capital requirements may
differ materially from our current estimates, and additional financing may be
required in the event of departures from our current business plans and
projections, including those caused by unforeseen delays, cost overruns,
engineering design changes, demand for our services that varies from our
expectations, adverse regulatory, technological or competitive developments,
difficulties or delays in obtaining necessary rights-of-way, or major changes
in market conditions.

Off Balance Sheet Arrangements

         We do not have any off balance sheet arrangements, except for
operating leases considered normal to our business.

         Critical Accounting Policies and Estimates

         The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts
of assets and liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities as of the date of our financial statements.
Actual results may differ for these estimates under different assumptions or
conditions.

         Critical accounting policies are defined as those that are reflective
of significant judgments and uncertainties, which would potentially result in
materially different results under different assumptions and conditions. We
believe that our critical accounting policies are limited to those described
below. For a detailed discussion on the application of these and other
accenting policies, see Note 2 "Summary of Significant Accounting Policies" in
the notes to the consolidated financial statements as of and for the year
ended December 31, 2002, and included in Item 18 of this Annual Report.

         Revenue Recognition

         Revenue related to non-installation services offered by the Company
is recognized in the period the services are delivered.

         Installation revenue is initially deferred upon installation and
invoicing and recognized as revenue over the expected life of the service.
Based on our experience with the churn rate for our services, we determined
that the average life of these services is three years.

         On December 6, 2002, France Telecom brought a complaint against us
before the ART in order to obtain a modification of the interconnection
tariffs that we charge and invoice to France Telecom for the termination of
incoming calls. France Telecom's complaint is based on a decision that was
issued by the ART in December 2001 in a dispute between France Telecom and
another French operator. France Telecom claims that our tariffs are excessive
and that the resulting overcharge creates an unfair advantage for us on the
sales market for providing telecom services to end-users. We believe that the
ART decisions involving third parties and invoked by France Telecom are not
applicable to us and that no overcharge can be demonstrated, since we believe
we can justify our tariffs on a cost-basis analysis. At this stage, we are not
in a position to predict the outcome of such litigation, which may affect our
future gross margin (revenue minus network costs) in the future favorably or
unfavorably by several percentage points in comparison to 2002.

         Recoverability of Long-Lived Assets Other Than Goodwill

         We assess the impairment of long-lived assets other than goodwill
whenever events or changes in circumstances indicate that the carrying value
may not be recoverable. Factors we consider important which could trigger an
impairment review include the following:

         significant underperformance relative to expected historical or
              projected future operating results;

         significant changes in the manner of our use of the acquired assets
              or the strategy for our overall business; and

         significant negative industry or economic trends.

         When we determine that the carrying value of long-lived assets may
not be recoverable based upon the existence of one or more of the above
indicators of impairment, we evaluate the future anticipated cash flows to
determine if we need to take an impairment charge. If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the
carrying amount of the assets, we recognize an impairment loss. The
measurement of the impairment loss is based on the fair value of the asset,
which we generally determine using a discounted cash flow approach.
Additionally, we include recent comparable transactions in the market in our
analysis of fair value.

         Allowance for Doubtful Accounts

         The allowance for doubtful accounts is based upon our assessment of
probable loss related to overdue accounts receivable. The allowance is
maintained on the books either until receipt of payment, or until the account
is deemed non-collectible. We maintain allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make
required payments. We have attempted to reserve for expected losses based on
our past experience and believe our reserves to be adequate. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

New Accounting Pronouncements

         See Note 2 to the Financial Statements, which is incorporated herein
by reference.

Trend Information

         See "Item 3D - Risk Factors", "Item 4 - Information on the Company",
and "Item 5 - Operating and Financial Review and Prospects", which are
incorporated herein by reference.

ITEM 6.  Directors, Senior Management and Employees

A.       Directors and Senior Management

         For purposes of this Annual Report, "directors" include the
individuals who are members of our Supervisory Board and our Management Board,
as well as our executive officers.

         Our general affairs and business are managed by our Board of
Management and supervised by our Supervisory Board. The Supervisory Board
provides advice to the Board of Management and has the authority to decide
that certain resolutions of the Board of Management will be subject to
Supervisory Board approval. In fulfilling their duties, all members of the
Supervisory Board must serve our best interests.

         Pursuant to our Articles of Association, which, in connection with
our Restructuring, were amended with effect from September 18, 2002, our
Supervisory Board is composed of two Supervisory Directors A, two Supervisory
Directors B, and two Supervisory Directors C.

         Our Supervisory Board currently consists of the following six
members:

<TABLE>
<CAPTION>

               Name                 Age            Position           Member Since            Term Expires
----------------------------------------------------------------------------------------------------------
<S>                                 <C>   <C>                           <C>                  <C>
James C. Allen(1).............       56   Supervisory Director A      March 2000              2004
Lawrence F. DeGeorge(1).......       58   Supervisory Director A      March 2000              2004
Jean-Pierre Vandromme(2)......       49   Supervisory Director B      December 16, 2002       2004
Duncan Lewis(2) ..............       51   Supervisory Director B      December 16, 2002       2004
Jean-Marie Descarpentries(3) .       67   Supervisory Director C      December 16, 2002       2004
Dominique Vignon(3)...........       55   Supervisory Director C      December 16, 2002       2004
</TABLE>


(1)      James C. Allen and Lawrence F. DeGeorge, our former supervisory
         directors, were designated as Supervisory Directors A at our
         Extraordinary General Meeting held on December 16, 2002, pursuant to
         a resolution adopted by our Supervisory Board and Board of
         Management.

(2)      Jean-Pierre Vandromme and Duncan Lewis were appointed as Supervisory
         Directors B at our Extraordinary General Meeting held on December 16,
         2002, from a binding nomination drawn up by a meeting of the holders
         of the Preferred B shares.

(3)      Jean-Marie Descarpentries and Dominique Vignon were appointed as
         Supervisory Directors C at our Extraordinary General Meeting held on
         December 16, 2002, from a binding nomination drawn up by our
         Supervisory Board.

         Following the reconstitution of the Supervisory Board as a six-member
body, which occurred at our Extraordinary General Meeting held on December 16,
2002:

         Supervisory Directors A are appointed by the general meeting of
our shareholders from a binding nomination drawn up by the combined meeting of
holders of Preferred A shares and holders of C shares, of at least two
nominees for each vacancy to be filled. If the combined meeting of holders of
Preferred A shares and holders of C shares fails to make use of its right to
draw up a binding nomination or fails to do so in a timely manner, the general
meeting is free to make the appointment.

         Supervisory Directors B are appointed by the general meeting of
shareholders from a binding nomination drawn up by the meeting of holders of
Preferred B shares, of at least two nominees for each vacancy to be filled. If
the meeting of holders of Preferred B shares fails to make use of its right to
draw up a binding nomination or fails to do so in a timely manner, the general
meeting is free to make the appointment.

         Supervisory Directors C are appointed by the general meeting of
our shareholders from a binding nomination drawn up by the Supervisory Board
and approved by the Supervisory Directors A and the Supervisory Directors B of
at least two nominees for each vacancy to be filled. If the Supervisory Board
fails to make use of its right to draw up a binding nomination or fails to do
so in a timely manner, the general meeting is free to make the appointment.

         The general meeting of shareholders may at all times override the
binding nature of the Supervisory Board's nomination by adopting a resolution
to this effect with two-thirds of the votes cast at a meeting representing
more than half of the issued capital.

         Every two years the Supervisory Directors must resign at the close of
the general shareholders' meeting at which the annual accounts are considered;
resigning Supervisory Directors will be immediately eligible for re-election.

         Our Board of Management currently consists of two members:

<TABLE>
<CAPTION>

           Name               Age               Position                   Member Since         Term Expires
-------------------------------------------------------------------------------------------------------------
<S>                           <C>    <C>                                <C>                      <C>
Jerome de Vitry ...........   41    Managing Director, President and     January 30, 2001           2003
                                    Chief Executive Officer, Chief
                                    Operating Officer, President of
                                    Completel Headquarters SAS.
----------------------------------------------------------------------------------------------------------------
Alexandre Westphalen.......   41    Chief Financial Officer                May 15, 2003             2003
</TABLE>

Director and Officer Biographies

         James C. Allen, age 56, has served as a member of our Supervisory
Board since the consummation of the initial public offering of our Ordinary
shares in March 2000. He also has served as a Director of Completel LLC since
December 1998. From March 1993 to January 1998, Mr. Allen was the CEO and
Vice-Chairman of Brooks Fiber Properties, Inc. Since June 1998, Mr. Allen has
acted as an investment director and member of Meritage Investment Partners
LLC, a Denver-based private equity firm that invests exclusively in
telecommunication companies. Mr. Allen also currently serves on the boards of
directors of Masergy, Inc. and of Xspedius, Corp., each, a privately held U.S.
telecommunications company, and of David Lipscomb University in Nashville,
Tennessee.

         Lawrence F. DeGeorge, age 58, has served as a member of our Board of
Management from January 2000 to March 2000, when, upon the consummation of the
initial public offering of our shares, he stepped down from this position and
was elected to our Supervisory Board. He also has served as a Director of
Completel LLC since January 1998. Mr. DeGeorge is a private investor who has
managed and participated in a number of principal equity investments in
technology and communications companies, including, since December 1995, as
President and Chief Executive Officer of LPL Investment Group, Inc., LPL
Management Group, Inc. and DeGeorge Holdings Ltd. From June 1987 to January
1991, Mr. DeGeorge held various positions with Amphenol Corporation, including
serving as President from May 1989 to January 1991, as Executive Vice
President and Chief Financial Officer from June 1987 to May 1989 and as a
director from June 1987 until January 1991. Mr. DeGeorge also currently serves
as a director of Advanced Display Technologies, which is a publicly traded
company, and several private companies, including GigaRed LLC, iplan networks,
HomeSource Capital Mortgage LLC and Cervalis LLC.

         Jean-Pierre Vandromme, age 49, is currently the Chairman, President
and CEO of Ventelo (formerly GTS Business Services). Mr. Vandromme has over 30
years' experience in the telecommunications industry. Prior to his work with
Global Telesystems, Mr. Vandromme served as the Commercial Director for
Combelga-Russia, a joint venture between Belgacom, Alcatel, Moscow City
Telephone Network and Comincom. From September 1994 to September 1998, Mr.
Vandromme served as the First Deputy - General Director of Sovintel
GTS-Russia, a joint venture between Global Telesystems (GTS) and Rostelcom,
Russia's national carrier, where Mr. Vandromme succeeded in transforming
Sovintel into the largest alternative international carrier in Russia. From
March 1998 to March 1999, Mr. Vandromme served as Vice President and Chief
Operating Officer of GTS Russia, where he was responsible for developing a
strategy to take the Company public in order to shield the shareholders from
the effects of the Russian financial crisis. In April 1999, Mr. Vandromme
served as Vice President and, in February 2000, President of GTS-Business
Services, during which time Mr. Vandromme oversaw key acquisitions and
integrations of strategic telecommunications assets. As President of
GTS-Business Services, Mr. Vandromme was responsible for operational P&L for
the company's retail channel with activities in 12 European countries. Mr.
Vandromme served as CEO of GTS Business Services from November 2000 to
September 2001.

         Duncan Lewis, age 51, is currently a member of the Board of Directors
of Viridian Plc. Mr. Lewis is an experienced professional in the
telecommunications, Internet, and media industries. Prior to becoming a
director of Viridian, Mr. Lewis served, from January 2001 to March 2002, as
Chief Executive and President of GTS Inc., where he was responsible for
running one of Europe's largest optical and Internet networks. From 1998 to
December 2000, Mr. Lewis served as the Managing Director and Chief Corporate
Development Officer of Equant N.V., which runs one of the largest global data
networks in the world, where he had overall responsibility for the strategic
and operational development of the business, and from July 1998, overall
responsibility for day-to-day global operations. While at Equant N.V., Mr.
Lewis brought the company to profitability within three years of its start-up,
and oversaw the Company's IPO in 1998 and two secondary offerings in 1999,
raising a total of $8 billion. From 1991 to 1996, Mr. Lewis was employed with
Cable & Wireless plc, where he served as managing director of Cable & Wireless
Business Networks from 1991 to 1994, CEO of Cable & Wireless Europe from 1992
to 1993, and Vice Chairman of Cable & Wireless Inc. from 1993 to 1994. While
at Cable & Wireless, Mr. Lewis was responsible for the development of the new
C&W Business Networks designed to offer global voice and data services to the
Group's multinational customers. Mr. Lewis also served as the Chief of
Strategic Planning and Operations and as a member of the executive board of
Hawker Sidley plc from 1990 to 1991 and served as Director of various
divisions of BT plc. from 1996 to 1998.

         Jean-Marie Descarpentries, age 67, serves as an independent Board
Member of seven different companies. Since 2001, Mr. Descarpentries has served
as the President of Board of Directors of Sidel, the world's leading
manufacturer of blow-moulding machines for plastic bottles and a provider of a
comprehensive array of packaging products. Mr. Descarpentries graduated from
the Ecole Polytechnique and began his career with the Shell group and went on
to become a Consultant-Partner at McKinsey, and served as general manager of
Glaverbel SA and Saint-Gobain. Mr. Descarpentries earned an international
reputation as a leading business manager largely as a result of his work at
CarnaudMetalBox, a European leader in food packaging, where, from 1982-1991 he
served as Board Member, General Manager, and then President, as well as for
his work at Bull, a European leader in information technology. From 1994 to
1997, Mr. Descarpentries served as the CEO of Bull, where he presided over a
two-year turn around of the company from recording annual losses of
(euro)760,000 to earning net profits of (euro)467,000 in 1995 and
(euro)924,000 in 1997, the return of the company to positive growth, and a
sixfold increase in share value. An Officer of the Legion d'Honneur and
l'Ordre National du Merite, Fortune magazine in 1989 distinguished Mr.
Descarpentries as one of the 25 most influential business leaders.

         Dominique Vignon, age 55, is the Chairman of Gemplus Card
International, where he has responsibility for Gemplus's relations with the
French government authorities as well as the unions while the company
undergoes a restructuring. Mr. Vignon is a graduate of France's renowned
engineering school, the Ecole Polytechnique, and of the leading French Civil
Engineering School, the Ecole Nationale des Ponts et Chaussees. After an
assignment as a civil engineer in the central administration of the French
Ministry for Equipment, he joined the nuclear industry in 1975, first with
Electricite de France. Mr. Vignon joined the Framatome Group in 1990, where he
was appointed Chief Executive of Nuclear Power International (NPI), the joint
subsidiary of Framatome and Siemens for the development of the European
pressurized water reactor (EPR). In 1993, Mr. Vignon took over as Chairman the
newly organized Jeumont Industries, and from 1995 he was also Managing
Director of Framatome's nuclear business. In 1996, Mr. Vignon was appointed
Chairman and CEO of the Framatome Group, and, following the merger of the
nuclear activities of Framatome and Siemens in January 2001, he was CEO of the
new joint venture company Framatome ANP, a company with 93 reactors in
operation, 13,300 employees, and (euro)2.5 billion turnover. Mr. Vignon served
as CEO of Framatome ANP until December 2001.

         Jerome de Vitry, age 41, was appointed our President and Chief
Executive Officer on May 22, 2002, replacing Timothy Samples. Mr. De Vitry was
appointed as our Chief Operating Officer in January 2001 and became a member
of our Board of Management at the end May 2001. Mr. de Vitry joined us in
February 1999, and from March 1999 until January 2001, he served as the
President of Completel Headquarters S.A.S and as Managing Director and
President of Completel GmbH. Prior to joining Completel, Mr. de Vitry was Vice
President of Radio Communications France for Alcatel Access System Division
from January 1995 until December 1999. From January 1993 until December 1995,
Mr. de Vitry was Vice President Marketing, Research and Development for
Alcatel Radio Transmissions Systems.

         Alexandre Westphalen, age 41, was appointed our Chief Financial
Officer on January 29, 2003, and became a member of our Board of Management on
May 15, 2003. Mr. Westphalen has served as Vice President - Finance since June
2001, and as Vice President - Finance of our operating subsidiary, Completel
SAS, France since July 1998. Prior to joining Completel, Mr. Westphalen served
as the Chief Financial Officer of Time Warner Cable - France, a position he
held since December 1994 until June 1998. From December 1991 to December 1994,
Mr. Westphalen served as the director of finance of the ERD Group.

B.       Compensation

         In 2002, Mr. de Vitry received aggregate compensation
of(euro)789,922, and Mr. Westphalen received aggregate compensation of
(euro)232,944. In 2002, Timothy A. Samples, our Chief Executive Officer until
May 17, 2002, received aggregate compensation of $726,268.

         In 2002 the aggregate compensation paid or accrued for our executive
officers, including the members of our Board of Management, was (euro)2.6
million (5 individuals). There was no additional amount set aside in 2002 to
provide pension, retirement or similar benefits for these individuals.

         The members of the Supervisory Board are not compensated and do not
have service contracts with the Company or any of its subsidiaries providing
for benefits upon termination of employment. We reimburse the members of our
Supervisory Board for their reasonable out of pocket expenses incurred in
connection with attending our and any of our subsidiaries' board or committee
meetings. We also maintain directors' and officers' indemnity insurance
coverage. In addition, members of our Supervisory Board participate in our
equity incentive plans.

         The members of the Supervisory Board do not have service contracts
with the Company or any of its subsidiaries providing for benefits upon
termination of employment.

         All of our employees are entitled to receive a year-end bonus ranging
from 10-40% of annual salary. The amount of any bonus awarded is based equally
on an individual employee's performance and on the Company's performance
during the year.

C.       Board Practices

         Management and policy making for us and our subsidiaries is entrusted
to the Board of Management under the supervision of the Supervisory Board. The
Board of Management may have no more than three members, and the Supervisory
Board designates a member as Chief Executive Officer and a member as
President, although one person could have both designations. The members of
the Board of Management are appointed by the general meeting of shareholders
from a binding nomination, drawn up by the Supervisory Board, of at least two
nominees for each vacancy to be filled. If the Supervisory Board fails to make
use of its right to draw up a binding nomination or fails to do so in a timely
manner, the general meeting of shareholders is free to make the appointment.
The general meeting may at all times override the binding nature of the
Supervisory Board's nomination by adopting a resolution to this effect with
two-thirds of the votes cast representing more than half of the issued
capital.

         The general legal authority to represent us is vested in the Board of
Management and in the Chief Executive Officer acting together with one other
member of the Board of Management. Certain resolutions by the Board of
Management determined from time to time by the Supervisory Board will require
the approval of the Supervisory Board.

Committees of our Supervisory Board

         We have established the following three Supervisory Board committees:

         an Audit Committee;

         a Compensation Committee; and

         an Executive Committee.

         Below is a description of the current composition and responsibilities
of our Supervisory Board committees.

         The audit committee. The members of the audit committee are currently
Lawrence F. DeGeorge, Duncan Lewis, and Dominique Vignon.

         None of the Committee's members is a current or former employee of
Completel or any of its subsidiaries or has any relationship that we believe
would interfere with the exercise of independent judgement in carrying out his
responsibilities as a director.

         The audit committee is responsible for making recommendations to the
Board of Management regarding the selection of independent auditors, reviewing
the results and scope of the audit and other services provided by our
independent accountants and reviewing and evaluating our audit and control
functions. In fiscal 2000, our Supervisory Board approved and adopted a
written charter, setting forth the audit committee's duties and
responsibilities, which charter has been filed as Appendix A to the proxy
statement relating to our 2001 annual meeting. A revised Charter was adopted
on January 29, 2003 to reflect certain regulatory and other developments
affecting us, and is attached hereto as an exhibit.

         The compensation committee. The members of the compensation committee
are Dominique Vignon, Chairman, Jean-Marie Descarpentries and James C. Allen.
The compensation committee is responsible for reviewing and, as it deems
appropriate, recommending to the Supervisory Board with respect to members of
the Board of Management, and to the Board of Management with respect to other
managerial employees, policies, practices and procedures relating to
compensation and the establishment and administration of employee benefit
plans. The compensation committee is responsible for making recommendations to
the Board of Management in relation to any employee stock option, stock
purchase or other rights plans, and advises and consults with our officers as
may be requested regarding managerial personnel policies.

         The executive committee. The members of the Executive Committee are
James C. Allen, Lawrence F. DeGeorge and Jean-Pierre Vandromme. The executive
committee is authorized to take certain actions on behalf of the Supervisory
Board, but such actions must be approved unanimously by the members of the
executive committee or they will be referred to the full Supervisory Board.

         Disclosure Committee. In 2002, we established a Disclosure Committee,
designed to help senior management, and the Chief Executive Officer and Chief
Financial Officer, in particular, in the maintenance and evaluation of
disclosure controls and procedures. The Disclosure Committee gathers all
relevant financial and non-financial information and assesses materiality,
timeliness and necessity for disclosure of such information. The Disclosure
Committee is composed of the Chief Financial Officer, the Corporate
Controller, the Director of Investor Relations and the Legal Director.

         The Disclosure Committee reports to the Board of Management, in
particular to our Chief Executive Officer and Chief Financial Officer. The
Board of Management has also re-emphasized the importance of internal controls
within Completel, pursuing continuous improvement of internal control
procedures and reporting.

         In addition, we have adopted a Policy on Trading in Company
Securities in order to ensure compliance with laws prohibiting insider trading
and to provide employees and Board members with meaningful guidance to avoid
individual and/or Company liability under the securities laws or the
appearance of impropriety in the trading of the Company's securities by Board
members, officers and employees. Under the policy, all Board members, officers
and employees are prohibited from acquiring or selling securities of the
Company while in possession of material, nonpublic information until 48 hours
after such information is released to the public. Employees are also
prohibited from disclosing material, nonpublic information regarding the
Company to other employees and third parties, and from purchasing or selling
securities of another company while in possession of material, nonpublic
information about such other company learned through their work at Completel.
Further, officers and certain employees who, by virtue of their position or
responsibilities, are presumed to have access to material, nonpublic
information are permitted to trade in the Company's securities only in periods
of relative stability for the Company and its securities, and are prohibited
from trading during certain defined periods. Finally, all members of the
Supervisory Board and the Board of Management, all 10% beneficial owners and
all officers are subject to additional restrictions relating to short-term
trades.

D.       Employees

         At December 31, 2002, we had 456 employees, compared to 696
(including 550 employees in our continuing operations) at December 31, 2001.
In 2002, in connection with our restructuring measures and our efforts to
adjust our operations to foreseeable market conditions and reduce ongoing
operating expenses, we continued to make significant reductions to our
workforce, in particular, as a result of the workforce reductions in Germany
and the United Kingdom, the subsequent sale of our operations in these
countries in May 2002, the closure of our London offices and the
simplification of our corporate headquarters structure.

         Our French employees are covered by a collective bargaining agreement
governing the telecommunications industry.

E.       Share Ownership

         The following table sets forth information regarding the beneficial
ownership of our equity securities as of April 11, 2003 by our directors and
members of our administrative, supervisory, or management bodies:

<TABLE>
<CAPTION>

Name of Beneficial Owner       Ordinary         Preferred A        Preferred B        C Shares(4)         Total
                              Shares(1)          Shares(2)          Shares(3)                         Percentage of
                                                                                                      Voting Rights

                               #        %       #         %         #         %        #        %         %
<S>                           <C>       <C>      <C>       <C>        <C>      <C>      <C>       <C>     <C>
Jerome de Vitry(5).......      12,500     *    125.00         *          -       -         -       -            *
Alexandre Westphalen(6)..       8,400     *     84.00         *          -       -         -       -            *
Lawrence F. DeGeorge(7)..     395,083   9.6   3552.24      16.3          -       -   329,931    21.3         11.4
James C. Allen(8)........       1,243     *         -         -          -       -         -       -            *
Jean-Marie Descarpentries           -     -         -         -          -       -         -       -            -
Dominique Vignon.........           -     -         -         -          -       -         -       -            -
Jean-Pierre Vandromme....           -     -         -         -          -       -         -       -            -
Duncan Lewis.............           -     -         -         -          -       -         -       -            -
</TABLE>

___________
*        Less than 0.5%.

(1)      As of April 11, 2003, we had 4,076,057 Ordinary shares outstanding,
         each entitled to one vote. The information concerning beneficial
         ownership in our Ordinary shares presented in the table above does
         not reflect Ordinary shares that may be acquired upon conversion of
         our Preferred shares.

(2)      As of April 11, 2003, we had 21,730 Preferred A shares outstanding,
         each entitled to 100 votes. Each Preferred A share is convertible
         into 100 Ordinary shares at any time at the option of its holder.

(3)      As of April 11, 2003, we had 14,925 Preferred B shares outstanding,
         each entitled to 100 votes. Each Preferred B share is convertible
         into 100 Ordinary shares at any time at the option of its holder.

(4)      As of April 11, 2003, we had 1,548,261 C shares outstanding, each
         entitled to one vote. The C shares beneficially owned by Meritage and
         LPL Investment Group are held by a trustee pursuant to a trust
         instrument, which provides that the trustee will vote the C shares in
         accordance with the directions of their beneficial owners in
         proportion to their respective holdings of Convertible Preferred A
         shares.

(5)      Mr. de Vitry became our President and Chief Executive Officer
         effective May 22, 2002. 173 of these shares are owned indirectly by
         Mr. de Vitry through his ownership interests in Completel LLC.

(6)      Alexandre Westphalen, Chief Financial Officer, was designated an
         executive officer of Completel Europe N.V. with effect from November
         5, 2002.

(7)      Mr. DeGeorge is a member of our Supervisory Board and a Supervisory
         Director A designee. Mr. DeGeorge holds 742 of our Ordinary shares
         directly. The remaining shares are held indirectly as follows:
         355,224 Ordinary shares, 3552.24 Preferred A shares and 289,817 C
         shares are owned by DeGeorge New Completel Holdings LP ("DeGeorge New
         Completel"); 39,859.8 Ordinary shares and 289,817 C shares are owned
         by DeGeorge Telcom Holdings Limited Partnership ("DeGeorge Telcom").
         As the Chairman and Chief Executive Officer of LPL Investment Group,
         Inc., which controls DeGeorge New Completel and DeGeorge Telcom, Mr.
         DeGeorge has sole voting and investment power over the shares owned
         by DeGeorge New Completel and DeGeorge Telcom.

(8)      Mr. Allen is a member of our Supervisory Board and a Supervisory
         Director A designee. Mr. Allen holds 1,243 of our Ordinary shares. 48
         of these shares are owned indirectly by Mr. Allen through his
         ownership interests in Completel LLC and 1,195 shares are owned
         directly by Mr. Allen.

Equity Incentive Plans

General

         Since our inception, we have provided three forms of equity incentive
plans to our employees. After our initial public offering in March 2000, we
established our 2000 Stock Option Plan. Following our Recapitalization, we
established, in December 2002, our 2002 Stock Option Plan.

Our 2000 Stock Option Plan

         Our 2000 Stock Option Plan provides for the grant to our employees of
options to purchase our Ordinary shares. All of our employees (including
management) are eligible to participate in this plan.

         Options granted under the plan are subject to the following terms:

         Vesting. Options granted to employees resident in France vest in an
increment of 60% on the second anniversary of the date of grant and in two
additional increments of 20% on the third and fourth anniversaries of the date
of grant. The options are valid for a period of 10 years from the date of
grant by the Management Board.

         Exercise Price. The exercise price of any options granted under the
plan must be at least equal to the fair market value of the shares at the time
of the grant. Subject to the exception noted below, the fair market value is
deemed to be the closing price of the shares on Euronext Paris, or the
principal stock exchange outside the United States on which the shares are
traded, on the date the option is granted. With regard to options granted to
employees resident in France, the exercise price may not be lower than the
average closing price of the shares on the Euronext Paris over the 20 trading
days preceding the grant.

Our 2002 Stock Option Plan

         Our 2002 Stock Option Plan provides for the grant to approximately 25
of our key managers (including management) of options to purchase our Ordinary
shares.

         Options granted under the plan are subject to the following terms:

         Vesting. Options granted to employees resident in France are
exercisable over a period of 4 years. Some options may only be exercised upon
the Company's meeting or achieving certain financial targets. Options also
become immediately exercisable upon occurrence of certain events, such as a
change of control of the Company. The options are valid for a period of 6
years from the date of their grant by the Management Board.

         Exercise Price. The exercise price of options granted under the plan
are equal to the fair market value of the shares at the time of the grant for
options becoming exercisable at the end of year one, and greater for options
becoming exercisable at the end of the remaining three years. Subject to the
exception noted below, the fair market value is deemed to be the closing price
of the shares on Euronext Paris, or the principal stock exchange outside the
United States on which the shares are traded, on the date the option is
granted. With regard to options granted to employees resident in France, the
exercise price may not be lower than 95% of the average closing price of the
shares on the Euronext Paris over the 20 trading days preceding the grant.

Remuneration Plan for Supervisory Directors

         At our Extraordinary General Meeting of December 16, 2002, our
shareholders approved the implementation of a remuneration plan for our
Supervisory Directors. Under this plan, each of our Supervisory Directors B
and Supervisory Directors C received options to purchase 20,000 of our
Ordinary shares, with a total of 80,000 options authorized to be issued to the
Supervisory Directors B and Supervisory Directors C as a group under the Plan.

         Options granted under the plan are subject to the following terms:

         Vesting. Options granted to Directors are exercisable over 3 years.
Options become immediately exercisable upon occurrence of certain events, such
as a change of control of the Company. The options are valid for a period of 3
years from the date of grant by the Management Board.

         Exercise Price. The exercise price of options granted under the plan
are equal to 95% of the average closing price of the shares on the Euronext
Paris over the 20 trading days preceding the date of grant.

         The table below shows the total number of outstanding options granted
to our directors and members of our administrative, supervisory, or management
bodies as of April 18, 2003:

<TABLE>
<CAPTION>

         Name of Beneficial Owner        Number of Shares     Exercise Price     Expiration Date
                                                                 (Euro)
<S>                                          <C>                 <C>             <C>
         Jerome de Vitry(1)                      142,628             13.35      December 18, 2008
         Timothy A. Samples(2)                    10,945             20.10           May 15, 2007
         Alexandre Westphalen                     45,042             13.35      December 18, 2008
         Jean-Marie Descarpentries                20,000              6.38      December 18, 2005
         Duncan Lewis                             20,000              6.38      December 18, 2005
         Jean-Pierre Vandromme                    20,000              6.38      December 18, 2005
         Dominique Vignon                         20,000              6.38      December 18, 2005
</TABLE>

         (1)  These stock options were granted to Mr. de Vitry pursuant to our
2002 stock option plan.

         (2) Timothy A. Samples was Chief Executive Officer of Completel
Europe N.V. until May 17, 2002. Mr. Samples was granted stock options pursuant
to our 2000 stock option plan.


ITEM 7.  Major Shareholders and Related Party Transactions

A.       Major Shareholders

         The following table sets forth information regarding the beneficial
ownership of our equity securities as of April 11, 2003 by our shareholders
that are the beneficial owners of 5% or more of a class of our equity
securities:

<TABLE>
<CAPTION>

Name of Beneficial Owner       Ordinary        Preferred A       Preferred B      C Shares(4)        Total
                              Shares(1)         Shares(2)         Shares(3)                       Percentage
                                                                                                   of Voting
                                                                                                    Rights
                              #        %        #        %        #        %       #        %          %
<S>                          <C>       <C>     <C>       <C>      <C>     <C>      <C>      <C>       <C>
Lawrence F.
DeGeorge(5)(6)..........    395,083     9.7   3552.24     16.3        -       -  329,931    21.3       11.4
LPL Investment Group,
Inc.(6).................    394,341     9.7   3552.24     16.3        -       -  329,931    21.3       11.4
Meritage Funds (7)......   1,147,400   28.1 11,373.13     52.3        -       - 1,056,333   59.9       35.2
Deutsche Bank AG........    697,513    17.1     1,434      6.6    3,769    25.3        -       -       13.3
SISU Capital Limited....    262,334     6.4    491.00      2.3  2132.34    14.3        -       -       11.4
The Goldman Sachs Group,
Inc.....................    666,172    17.1     3,272     15.1 3,389.72    22.7        -       -       14.6
Malo Asset Management...    313,157     7.7    928.00      4.3 2,203.57    14.8        -       -        6.9
</TABLE>

___________

(1)      As of April 11, 2003, we had 4,076,057 Ordinary shares, each entitled
         to one vote. The information concerning beneficial ownership in our
         Ordinary shares presented in the table above does not reflect
         Ordinary shares that may be acquired upon conversion of our Preferred
         shares.

(2)      As of April 11, 2003, we had 21,730 Preferred A shares outstanding,
         each entitled to 100 votes. Each Preferred A share is convertible
         into 100 Ordinary shares at any time at the option of its holder.

(3)      As of April 11, 2003, we had 14,925 Preferred B shares outstanding,
         each entitled to 100 votes. Each Preferred B share is convertible
         into 100 Ordinary shares at any time at the option of its holder.

(4)      As of April 11, 2003, we had 1,548,261 C shares outstanding, each
         entitled to one vote. The C shares beneficially owned by Meritage and
         LPL Investment Group are held by a trustee pursuant to a trust
         instrument, which provides that the trustee will vote the C shares in
         accordance with the directions of their beneficial owners in
         proportion to their respective holdings of Convertible Preferred A
         shares.

(5)      Mr. DeGeorge is a member of our Supervisory Board and a Supervisory
         Director A. Mr. DeGeorge holds 742 of our Ordinary shares directly.
         The remaining shares are held indirectly as follows: 355,224 Ordinary
         shares, 3552.24 Preferred A shares and 289,817 C shares are owned by
         DeGeorge New Completel Holdings LP ("DeGeorge New Completel"), and
         39,859.8 Ordinary shares and 289,817 C shares are owned by DeGeorge
         Telcom Holdings Limited Partnership ("DeGeorge Telcom"). As the
         Chairman and Chief Executive Officer of LPL Investment Group, Inc.,
         which controls DeGeorge New Completel and DeGeorge Telcom, Mr.
         DeGeorge has sole voting and investment power over the shares owned
         by DeGeorge New Completel and DeGeorge Telcom.

(6)      LPL Investment Group Inc. is the general partner of DeGeorge Holdings
         LP, which is the 100% owner of DeGeorge Telcom LLC. DeGeorge Telcom
         LLC, in turn, is the general partner of DeGeorge Telcom Holdings
         Limited Partnership and DeGeorge New Completel Holdings LP. LPL
         Investment Group Inc. owns its shares indirectly through DeGeorge New
         Completel Holdings LP, which owns 355,224 Ordinary shares and 3552.24
         Convertible Preferred A shares, and through DeGeorge Telcom Holdings
         Limited Partnership, which owns 39,859.8 Ordinary shares and which
         has contributed 289,817 C shares to a trust. The address of LPL
         Investment Group Inc. is 140 Intracoastal Pointe Drive, Suite 410,
         Jupiter, Florida 33477.

(7)      The Meritage Funds ("Meritage") own, in the aggregate, 1,147,400
         Ordinary shares, 11,373.13 Preferred A shares and 927,902 C shares.
         423 of the Ordinary shares owned by Meritage are held indirectly
         through its ownership interests in Completel LLC. Mr. Allen, a member
         of our Supervisory Board and a Supervisory Director A, is the
         investment director of Meritage. The address of Meritage Private
         Equity Funds is 1600 Wynkoop, Suite 300, Denver, Colorado 80202-5910.

Voting rights of our major shareholders

         Pursuant to our Restructuring Agreement, DeGeorge Telcom and Meritage
were issued, on a pro rata basis, that number of C shares that caused them to
have the same number of shares for voting purposes as the former holders of
our Senior Notes. In addition, we have granted to the Convertible Preferred A
shareholders an option, exercisable upon a sale of us (including by way of
merger or sale of substantially all of our assets) to which we are a party or
which is approved by our Supervisory Board (a "Company Sale"), to subscribe,
at their nominal value, to that number of newly issued C shares that, when
taken together with the outstanding Preferred shares, would provide sufficient
voting rights to constitute the majority required to adopt a resolution to
dissolve the Company in a general meeting of shareholders. The option will
provide that these C shares may not be voted for any other purpose. The
purpose of this option is to give the Convertible Preferred A shareholders an
effective blocking vote on any Company Sale that is not in their economic
interest. We will not issue C shares for any other purpose. In order to limit
the effect of the C shares strictly to the allocation of voting power, as
described above, the C shares are structured in a way that effectively gives
them no independent economic value.

         The C shares vote with the Ordinary shares and with the Preferred
shares on all matters submitted for approval by the shareholders, with each C
share entitled to one vote.

         The C shares issued to Meritage and DeGeorge Telcom to equalize their
voting rights are held by a trustee (the "C shares Trustee") pursuant to a
trust instrument that provides that: (i) the C shares Trustee will not
transfer the C shares to any person other than the Company; (ii) in the event
of any distribution in respect of the C shares, the C shares Trustee will pay
such distribution (net of expenses) to the Company; (iii) so long as the C
shares are outstanding, the C shares Trustee will vote the C shares in
accordance with the directions of Meritage and DeGeorge Telcom, in proportion
to their respective holdings of the Convertible Preferred A shares; and (iv)
upon conversion of 50% or more of those Convertible Preferred A shares
initially issued to Meritage and DeGeorge Telcom into Ordinary shares, or the
sale to a third party of 50% or more of those Convertible Preferred A shares,
the C shares Trustee will tender the C shares it holds to the Company for nil
consideration.

Record holders

         As used below, the term "record holders" refers to the holders of our
shares whose names are recorded in the Dutch Register, and does not include
beneficial owners who may hold their shares through a bank, broker, or
Euroclear France.

         As of April 11, 2003, approximately 1,501,287, or 37.04%, of our
total outstanding Ordinary Shares were held in the United States of America by
91 record holders and 14,975.37, or 68.91%, of our total outstanding Preferred
A shares were held in the United States of America by 91 record holders. None
of our Preferred B shares are held by record holders in the United States of
America.

B.       Related Party Transactions

         See Note 4 to the Financial Statements, incorporated herein by
reference.

C.       Interests of Experts & Counsel

         Not applicable

ITEM 8.  Financial Information

A.       Consolidated Statements and Other Financial Information

         See Item 18 --"Financial Statements".

B.       Significant Changes

See Item 14 to the Consolidated Annual Financial Statements, incorporated
herein by reference.

ITEM 9.  The Listing

A.       Listing Details

         The Ordinary shares the Preferred A shares and the Preferred B shares
are listed for trading on the Premier Marche of Euronext Paris S.A. ("Euronext
Paris"). We voluntarily delisted our Ordinary shares from the Nasdaq National
Market (Nasdaq) effective May 31, 2002. The principal trading market of the
Ordinary and the Preferred shares, the Preferred A shares and the Preferred B
shares is Euronext Paris.

         Historical information relating to the Ordinary shares contained in
this Annual Report has been adjusted to give retroactive effect to the
670-for-one reverse split effected on September 16, 2002. Historical
information relating to the Preferred A and B shares contained in this Annual
Report has been adjusted to give retroactive effect to the 100 for one reverse
split effected on September 16, 2002.

         The following table contains high and low sales prices of the
Ordinary shares, since our initial public offering on March 27, 2000, on
Nasdaq, as well as high and low sales prices of the Ordinary shares on
Euronext Paris, as reported in the official price list of Euronext Paris.

<TABLE>
<CAPTION>

                               Annual High and Low Prices of Ordinary shares
                                      on Nasdaq and on Euronext Paris

                                                      Nasdaq ($) (1)          Euronext Paris ((euro))(2)

                                                   High        Low            High             Low
                                                   ----        ---            ----             ---
<C>                                               <C>          <C>            <C>             <C>
2000..........................................    23.56        3.00           23.30           3.65
2001..........................................     6.25        0.50            7.10           0.47
2002 (through September 16) (1) (2)...........     1.08        0.08            1.30           0.10
2002 (September 17 - December 31)(2)..........      NA          NA             7.69           3.81
2003 (through May 20).........................      NA          NA            16.98           4.61
</TABLE>

____________________________

(1)      We voluntarily delisted our Ordinary shares from the Nasdaq National
         Market effective May 31, 2002
(2)      Indicates the price of our old Ordinary shares (I.S.I.N. Code
         NL0000233427) up to the time of the 670-for-one reverse split
         effected on September 16, 2002; thereafter, indicates the price
         of the new Ordinary shares (I.S.I.N. Code NL0000262822)


<TABLE>
<CAPTION>

                     Quarterly High and Low Prices of Ordinary shares
                               on Nasdaq and Euronext Paris

                                              Nasdaq ($)              Euronext Paris ((euro))

                                          High           Low           High            Low
<C>                                      <C>           <C>            <C>            <C>
1st quarter 2001...................       6.25          2.75           7.10           2.89
2nd quarter 2001...................       3.85          2.06           4.51           2.31
3rd quarter 2001 ..................       2.60          0.50           3.17           0.47
4th quarter 2001  .................       1.60          0.51           1.90           0.63
1st quarter 2002...................       1.08          0.46           1.30           0.59
2nd quarter 2002(1)................       0.68          0.08           0.73           0.10
3rd quarter 2002...................        NA            NA            0.33           0.04
4th quarter 2002 (2)...............        NA            NA            7.69           3.81
1st quarter 2003...................        NA            NA            7.50           4.61
2nd quarter 2003 (through May 20)..        NA            NA           16.98           6.28
</TABLE>

____________________________

(1)      We voluntarily delisted our Ordinary shares from the Nasdaq National
         Market effective May 31, 2002
(2)      Indicates the price of the new Ordinary shares (I.S.I.N. Code
         NL0000262822) following the 670-for-one reverse spilt effected
         on September 16, 2002.



                Monthly High and Low Prices of Ordinary shares
                             on Euronext Paris (1)


                                    Euronext Paris ((euro))
                                     High           Low
                                     ----           ---
October 2002.................        7.35          3.81
November 2002................        7.69          5.01
December 2002................        7.36          7.46
January 2003.................        5.56          4.61
February 2003................        6.25          5.01
March 2003...................        7.50          5.42
April 2003...................       10.22         6.28
May 2003 (through May 20)           16.98         10.32
____________________________

         (1)      Indicates the price of the new Ordinary shares (I.S.I.N Code
                  NL0000262822) following the 670-for-one reverse split on
                  effected on September 16, 2002.

         Since the listing of the Preferred A shares and the Preferred B
shares on Euronext Paris on September 19, 2002, no trades of the Preferred A
shares have occurred, and only an insignificant number of trades of the
Preferred B shares have occurred.


B.       Plan of Distribution

         Not applicable

C.       Markets

         See  Item 9A--"Listing Details."

D.       Selling Shareholder

         Not applicable

E.       Dilution

         Not applicable

F.       Expenses of the Issue

         Not applicable

ITEM 10. Additional Information

A.       Share Capital

         Not applicable

B.       Memorandum and Articles of Association

         Incorporated by reference to Completel's Form S-1/A, filed with the
Commission on December 11, 2002.

C.       Material Contracts

         Restructuring Agreement

         See Item 5--"Operating and Financial Review and Prospects - Overview."

D.       Exchange Controls

         There are currently no limitations, either under the laws of The
Netherlands or in our Articles of Association, to the rights of non-residents
to hold or vote Ordinary shares. Cash distributions, if any, payable in euros
on registered shares may be officially transferred from The Netherlands and
converted into any other currency without being subject to any Dutch legal
restrictions. Except for statistical purposes, such payments and transactions
must be reported by us to the Dutch Central Bank. Furthermore, no payments,
including dividend payments, may be made to jurisdictions subject to certain
sanctions, adopted by the government of The Netherlands, implementing
resolutions of the Security Council of the United Nations. We have never
declared or paid any dividends. Until June 30, 2004, we plan to retain our
earnings, if any, to reinvest in our business. Following this date, and until
the cancellation or conversion of our Preferred A and Preferred B shares in
accordance with their terms, we will pay a dividend equal to 11% per annum,
calculated over an amount of (euro)2,010.00 per share to the holders of these
Preferred shares. If in any financial year during this period we do not have
sufficient profit to pay this dividend in full to the holders of these
Preferred shares, the amount of any deficit will carry over to subsequent
dividend payments, together with interest thereon at an annual rate of 11%
compounded quarterly.

E.       Taxation

Netherlands Taxation

         The statements below represent a summary of current Netherlands tax
laws. The description is limited to the material tax implications for a holder
of Ordinary shares, Preferred A or Preferred B shares who is not, or is not
deemed to be, a resident of the Netherlands for Netherlands tax purposes (a
"Non-resident Holder"). This description does not address special rules that
may apply to special classes of holders of Ordinary or Preferred shares and
should not be read as extending by implication to matters not specifically
referred to herein. As to individual tax consequences, each investor in
Ordinary shares, Preferred A or Preferred B shares should consult his or her
tax counsel.

General

         The acquisition of Ordinary shares or Preferred shares by a
non-resident of the Netherlands should not be treated as a taxable event for
Netherlands tax purposes. The income tax consequences in connection with
owning and disposing of our Ordinary shares and our Preferred shares are
discussed below.

         Substantial Interest

         A person that, directly or indirectly, owns 5% or more of our share
capital, or holds options to purchase 5% or more of our share capital, has a
substantial interest in our shares or our options, as applicable. A deemed
substantial interest is present if (part of) a substantial interest has been
disposed of, or is deemed to be disposed of, in a transaction where no tax is
recognized. Special attribution rules exist in determining the presence of a
substantial interest.

Income Tax Consequences for Non-Resident Holders on Owning and Disposing of the
Ordinary Shares, the Preferred A Shares and Preferred B Shares

         Individual income tax for individual Non-resident Holders

         An individual who is a Non-resident Holder will not be subject to
Netherlands income tax on received income in respect of our Ordinary shares or
Preferred shares or capital gains derived from the sale, exchange or other
disposition of our Ordinary shares or Preferred shares, provided that such
holder:

         (1)      does not carry on and has not carried on a business in the
                  Netherlands through a permanent establishment or a permanent
                  representative to which the Ordinary shares or Preferred
                  shares are attributable;

         (2)      does not hold and has not held a substantial interest in
                  Completel's share capital or, in the event the Non-resident
                  Holder holds or has held a substantial interest in the
                  Company's share capital, such interest is or was a business
                  asset in the hands of the holder;

         (3)      does not share and has not shared directly (not through the
                  beneficial ownership of Ordinary shares, Preferred shares or
                  similar securities) in the profits of an enterprise managed
                  and controlled in the Netherlands which owned or was deemed
                  to have owned Completel's Ordinary shares or Preferred
                  shares;

         (4)      does not carry out and has not carried out any activities
                  which generate taxable profit or taxable wages (belastbaar
                  resultaat uit overige werkzaamheden) to which the holding of
                  Completel's Ordinary shares or Preferred shares was
                  connected;

         (5)      does not carry out and has not carried out employment
                  activities in the Netherlands, does not serve and has not
                  served as a director or board member of any entity resident
                  in the Netherlands, and does not serve and has not served as
                  a civil servant of a Netherlands public entity with which
                  the holding of Completel's Ordinary shares or Preferred
                  shares is or was connected; and

         (6)      is not an individual that has opted to be taxed as a resident
                  of the Netherlands.

         Corporate income tax for corporate Non-resident Holders

         Income derived from Ordinary shares or Preferred shares or capital
gains derived from the sale, exchange or disposition of Ordinary shares or
Preferred shares by a Non-resident Holder which is a corporation is taxable
if:

         (1)      the holder carries on a business in the Netherlands through
                  a permanent establishment or a permanent agent in the
                  Netherlands (Netherlands enterprise) and the Ordinary shares
                  or Preferred shares are attributable to this permanent
                  establishment or permanent agent, unless the participation
                  exemption (discussed below) applies; or

         (2)      the holder has a substantial interest in Completel, which is
                  not allocable to his enterprise; or

         (3)      certain assets of the holder are deemed to be treated as a
                  Netherlands enterprise by under Netherlands tax law and the
                  Ordinary shares or Preferred shares are attributable to this
                  Netherlands enterprise.

         To qualify for the Netherlands participation exemption, the Holder
must generally hold at least 5% of the nominal paid-in capital of Completel
and meet other requirements.

         Under most Netherlands tax treaties the right to tax capital gains
realized by a Non-resident Holder from the sale, exchange or other disposition
of Ordinary shares or Preferred shares is allocated to the holder's country of
residence and not the Netherlands.

         Dividend Withholding Tax

         In general, a dividend distributed by us in respect of our Ordinary
shares or Preferred shares will be subject to a withholding tax imposed by the
Netherlands at a statutory rate of 25%.

         Dividends include:

         (1)      dividends in cash or in kind;

         (2)      deemed and constructive dividends;

         (3)      consideration for the repurchase of Ordinary shares or
                  Preferred shares (including a repurchase by a direct or
                  indirect subsidiary) in excess of the recognized average
                  paid-in capital unless such repurchase is for temporary
                  investment or exempt;

         (4)      proceeds from the redemption of Ordinary shares or Preferred
                  shares in excess of recognized paid-in capital;

         (5)      stock dividends equal to their nominal value (unless
                  distributed out of recognized paid-in share premium);

         (6)      repayment of paid-in capital not recognized as capital for
                  Netherlands dividend withholding tax purposes; and

         (7)      liquidation proceeds in excess of average paid-in capital
                  recognized as capital for Netherlands dividend withholding
                  tax purposes.

         A reduction of Netherlands dividend withholding tax can be obtained
if:

         (1)      the participation exemption applies and the Ordinary shares
                  or Preferred shares are attributable to a business carried
                  out in the Netherlands;

         (2)      the dividends are distributed to a qualifying EU corporate
                  holder satisfying the conditions of the EU Parent-Subsidiary
                  Directive; or

         (3)      the rate is reduced by treaty; or

         (4)      surtax was due on the dividend distribution and the
                  recipient is a resident of the Netherlands Antilles or
                  Aruba, a Member State of the EU or a country with which the
                  Netherlands has concluded a treaty for the avoidance of
                  double taxation.

         A Non-resident Holder of Ordinary shares or Preferred shares can be
eligible for a partial or complete exemption or refund of all or a portion of
the above withholding tax under a tax treaty that is in effect between the
Netherlands and the Non-resident Holder's country of residence. The
Netherlands has concluded such treaties with the United States of America,
Canada, Switzerland, Japan, all European Union member states, and other
countries.

         Under the Treaty between the United States of America and the Kingdom
of the Netherlands for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income (the "Tax Treaty"), dividends
paid by us to a Non-resident Holder that is a resident of the United States of
America as defined in the Tax Treaty (other than an exempt organization or
exempt pension trust, as discussed below) are generally eligible for a
reduction of the 25% Netherlands withholding tax to 15% or, in the case of
certain U.S. corporate shareholders owning at least 10% of our voting power,
to 5%, provided that the shareholder does not have an enterprise or an
interest in an enterprise that is, in whole or in part, carried on through a
permanent establishment or permanent representative in the Netherlands to
which the dividends are attributable. The Tax Treaty provides for a complete
exemption from tax on dividends received by exempt pension trusts and exempt
organizations, as defined therein. Except in the case of exempt organizations,
the reduced dividend withholding rate (or exemption from withholding) can be
applied at the source upon payment of the dividends, provided that the proper
forms have been filed in advance of the payment. Exempt organizations remain
subject to the statutory withholding rate of 25% and are required to file for
a refund of such withholding.

         A Non-resident Holder may not claim the benefits of the Tax Treaty
unless (i) it is a resident of the United States of America as defined therein
and (ii) its entitlement to those benefits is not limited by the provisions of
article 26 (limitation on benefits) of the Tax Treaty.

Dividend Stripping Rules

         Under Netherlands tax legislation regarding anti-dividend stripping,
no exemption from, or refund of, Netherlands dividend withholding tax is
granted if the recipient of dividends paid by Completel is not considered the
beneficial owner of such dividends.

Surtax

         As a result of Netherlands tax reform effective from January 1, 2001,
Completel will be subject to a 20% corporate income tax, or Surtax, on
'excessive' (evaluated based on certain criteria, including previous dividend
distributions) dividends Completel distributes during the period from January
1, 2001 to, and including, December 31, 2005.

Gift or Inheritance Taxes

         Netherlands gift or inheritance taxes will not be levied on the
transfer of Ordinary shares or Preferred shares by way of gift, or upon the
death of a Non-resident Holder, unless:

         (1)      the transfer is construed as an inheritance or as a gift
                  made by or on behalf of a person who, at the time of the
                  gift or death, is deemed to be, a resident of the
                  Netherlands; or

         (2)      the Ordinary shares or Preferred shares are attributable to
                  an enterprise or part thereof that is carried on through a
                  permanent establishment or a permanent representative in the
                  Netherlands.

         For purposes of Netherlands gift and inheritance tax, an individual
of Netherlands nationality is deemed to be a resident of the Netherlands if he
has been a resident thereof at any time during the ten years preceding the
time of the gift or death. For purposes of Netherlands gift tax, a person not
possessing Netherlands nationality is deemed to be a resident of the
Netherlands if he has resided therein at any time in the twelve months
preceding the time of the gift.

Value Added Tax

         No Netherlands value added tax is imposed on dividends in respect of
Completel's Ordinary shares or Preferred shares or on the transfer of
Completel's Ordinary shares or Preferred shares.

Residence

         A Non-resident Holder will not become resident, or be deemed to be
resident, in the Netherlands solely as a result of holding Completel's
Ordinary shares or Preferred shares or of the execution, performance, delivery
and/or enforcement of rights in respect of Completel's Ordinary shares or
Preferred shares.

United States of America Federal Income Taxation

         The following discussion is a summary of certain material United
States of America federal income tax consequences of the acquisition,
ownership and disposition of Ordinary shares, Preferred A shares, and
Preferred B shares. This discussion is based on the United States Internal
Revenue Code (the "Code"), Treasury regulations promulgated thereunder,
administrative rulings, judicial decisions, and The Convention Between the
United States of America and the Kingdom of The Netherlands for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income (the "Treaty"), all as currently in effect and all of which are
subject to change (possibly with retroactive effect) and to differing
interpretations. This discussion applies only to U.S. Holders (as defined
below) that use the United States dollar as their functional currency and only
to the extent that such U.S. Holders hold Ordinary shares, Preferred A shares,
or Preferred B shares as capital assets within the meaning of Section 1221 of
the Code. As used herein, a "U.S. Holder" is a beneficial owner of Ordinary
shares, Preferred A shares, or Preferred B shares that, for United States of
America federal tax purposes, is:

         o        a citizen or resident of the United States of America;
         o        a corporation created or organized in the United States of
                  America or under the laws of the United States or any
                  state (or the District of Columbia);
         o        an estate the income of which is subject to United States of
                  America federal income taxation regardless of its source;
         o        a trust if a court within the United States of America is
                  able to exercise primary supervision over the administration
                  of the trust and one or more United States of America
                  persons have the authority to control all substantial
                  decisions of the trust; or
         o        a trust if it has a valid election in effect to be treated as
                  a United States of America person under the Code.

         Furthermore, this discussion does not address all aspects of United
States federal income taxation that may be relevant to a particular holder in
light of its particular circumstances or to holders subject to special
treatment under the United States of America federal income tax laws,
including:

         o        non-U.S. Holders;
         o        investors that hold (directly, indirectly or constructively)
                  10% or more of the voting power or value of our stock;
         o        banks or other financial institutions;
         o        tax-exempt organizations;
         o        insurance companies;
         o        dealers in securities or non-United States dollar currency
                  ("Foreign Currency");
         o        traders in securities who elect to apply a mark-to-market
                  method of accounting;
         o        pass-through entities and investors in such entities; and
         o        holders who hold their Ordinary shares, Preferred A shares,
                  or Preferred B shares as part of a hedge, straddle,
                  constructive sale, conversion transaction or other
                  integrated investment.

         In addition, the discussion does not address any alternative minimum
tax or any state, local or non-United States of America tax consequences.

         If a partnership (including for this purpose any entity treated as a
partnership for United States of America federal tax purposes) is a beneficial
owner of Ordinary shares, Preferred A shares, or Preferred B shares, the
treatment of a partner in the partnership will generally depend upon the
status of the partner and upon the activities of the partnership. Partnerships
and partners in such partnerships should consult their tax advisors concerning
the United States of America federal income tax consequences of acquiring,
owning and disposing of Ordinary shares, Preferred A shares, and Preferred B
shares.

         EACH HOLDER OF ORDINARY SHARES, PREFERRED A SHARES, OR PREFERRED B
SHARES SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER, INCLUDING THE STATE, LOCAL, AND NON-UNITED STATES
OF AMERICA TAX CONSEQUENCES, OF ACQUIRING, OWNING, AND DISPOSING OF ORDINARY
SHARES, PREFERRED A SHARES, OR PREFERRED B SHARES.

The Ordinary shares, Preferred A shares, and Preferred B shares

         Distributions--In General

         We do not anticipate paying dividends with respect to the Ordinary
shares, the Preferred A shares, or the Preferred B shares in the foreseeable
future, other than amounts payable with respect to the Preferred A shares and
the Preferred B shares commencing July 1, 2004. However, if we were to pay
dividends, subject to the passive foreign investment company rules discussed
below, the gross amount of any dividend distributions (including the amount of
any Netherlands withholding tax imposed thereon) paid out of current and/or
accumulated earning and profits, as determined under United States of America
tax principles, would be includible in the gross income of a U.S. Holder on
the day such dividends were actually or constructively received and would be
characterized as ordinary income for United States of America federal income
tax purposes. To the extent that a dividend distribution exceeded our current
and accumulated earnings and profits, it would be treated as a non-taxable
return of capital to the extent of a U.S. Holder's adjusted basis in the
shares and thereafter as capital gain. We do not currently maintain
calculations of our earnings and profits under United States of America tax
principles. Dividends paid by us to corporate U.S. Holders would not be
eligible for the dividends-received deduction that might otherwise be
available if such dividends were paid by a United States of America
corporation.

                  Foreign Currency Considerations

                  Dividends paid by us in euros will be includible in a U.S.
Holder's income when the distribution is actually or constructively received
by the U.S. Holder. The amount of the dividend distribution includible in the
income of a U.S. Holder will be the United States dollar value of the euros,
determined by the spot rate of exchange on the date when the distribution is
actually or constructively received by the U.S. Holder, regardless of whether
the euros are actually converted into United States dollars at such time. If
the euros received as a dividend were not converted into United States dollars
on the date of receipt, then a U.S. Holder might realize exchange gain or loss
on a subsequent conversion of such euros into United States dollars. The
amount of any gain or loss realized in connection with a subsequent conversion
would be treated as ordinary income or loss and would generally be treated as
income or loss from sources within the United States of America for foreign
tax credit purposes.

                  The Netherlands Withholding Tax/Foreign Tax Credits

                  Subject to certain conditions and limitations, Netherlands
withholding tax imposed on dividend distributions will be treated as a
non-United States of America tax that U.S. Holders may elect to credit against
their United States federal income tax liability. For United States of America
foreign tax credit purposes, income resulting from dividend distributions on
Ordinary shares, Preferred A shares, and Preferred B shares will generally be
treated as "passive income" or in the case of certain holders, "financial
services income." If tax is withheld at a rate in excess of the applicable
Treaty rate, the excess withholding will not be eligible for credit against
the U.S. Holder's United States of America federal income tax liability.

                  Netherlands withholding tax may not be creditable against the
U.S. Holder's United States of America federal income tax liability, however,
to the extent that we are allowed to retain the amount of such tax withheld
(rather than paying such amount over to The Netherlands tax administration) by
crediting withholding tax imposed on certain dividend distributions paid to
us. Although we do not anticipate being subject to these provisions, in the
event that such provisions are applicable, we will endeavor to provide to U.S.
Holders the information that they will need to calculate their foreign tax
credit.

                  In lieu of claiming a foreign tax credit, a U.S. Holder may
be eligible to claim a deduction for Netherlands withholding taxes imposed in a
taxable year.  However, a deduction generally does not reduce a U.S. Holder's
United States of America federal income tax liability on a dollar-for-dollar
basis like a tax credit.  An election by a U.S. Holder to claim a deduction for
non-United States of America taxes for a taxable year will apply to all
non-United States of America taxes for such taxable year, and no foreign tax
credit may be claimed for such taxable year.

The rules relating to foreign tax credits are complex and U.S. Holders are
urged to consult their tax advisers to determine whether and to what extent a
foreign tax credit might be available in connection with dividends paid on the
Ordinary shares, Preferred A shares, and Preferred B shares.

         We intend to treat the Preferred A shares and the Preferred B shares
as not constituting "preferred stock" for certain United States of America
federal income tax purposes. If the Preferred A shares or the Preferred B
shares were treated as "preferred stock" for certain United States of America
federal income tax purposes, the shares might be treated as issued with a
greater than de minimis redemption premium. In such circumstance, a U.S.
Holder of a Preferred A share or a Preferred B share would be required to
include the redemption premium in income as a dividend on a constant-yield
basis. We assume for purposes of this discussion that the Preferred A shares
and the Preferred B shares do not constitute "preferred stock" for such United
States of America federal income tax purposes.

         Disposition of Ordinary shares, Preferred A shares, and Preferred B
shares

         Subject to the passive foreign investment company rules described
below, a U.S. Holder will generally recognize gain or loss on the sale or
other taxable disposition of the Ordinary shares, Preferred A shares, and
Preferred B shares in an amount equal to the difference between the amount
realized in such sale or disposition and the U.S. Holder's adjusted tax basis
in the Ordinary shares, Preferred A shares, or Preferred B shares. Such gain
or loss will generally be treated as capital gain or loss and will be
long-term capital gain or loss if the U.S. Holder's holding period with
respect to such shares exceeds one year. Such gain will generally be income
from sources within the United States of America for foreign tax credit
purposes. Long-term capital gain realized by an individual U.S. Holder is
generally subject to reduced rates of taxation. The deductibility of capital
losses is subject to limitations.

         A U.S. Holder that receives Foreign Currency upon the sale or other
disposition of an Ordinary share, a Preferred A share, or a Preferred B share
will generally realize an amount equal to the United States dollar value of
the Foreign Currency on the date of sale (or, if the share is traded on an
established securities market, in the case of cash basis taxpayers and
electing accrual basis taxpayers, the settlement date). A U.S. Holder will
have a tax basis in the Foreign Currency received equal to the United States
dollar value of the amount realized. Any gain or loss realized by a U.S.
Holder on a subsequent conversion or other disposition of Foreign Currency
will be ordinary income or loss and will generally be income or loss from
sources within the United States of America for foreign tax credit purposes.

         The receipt of Ordinary shares upon the conversion of a Preferred A
share or Preferred B share will not subject a U.S. Holder to United States of
America federal income tax. The U.S. Holder's adjusted tax basis in the shares
converted, reduced by the amount of any accrued and unpaid dividends for which
the U.S Holder receives a certificate and that are not treated as dividends
for United States of America federal income tax purposes, will be allocated
among the Ordinary shares received upon the conversion.

        Passive Foreign Investment Company Status In general, we will be
classified as a passive foreign investment company (a "PFIC") for any taxable
year in which:

         o    at least 75% of our gross income is "passive income," or

         o    the average percentage of our assets that consist of assets that
              produce or are held for the production of "passive income" is at
              least 50%.

         For this purpose, "passive income" includes dividends, interest,
certain royalties, rents, annuities, and the excess of gains over losses from
the disposition of assets which produce passive income.

        We do not believe that we were a PFIC for the taxable year 2002, and
we intend to treat the Company as other than a PFIC for the taxable year 2002.
Such determination is based upon the composition of our income and our assets
and the valuation of those assets. As a result, it is possible that the IRS
could assert that we were a PFIC for the taxable year 2002. Thus, no assurance
can be given that the IRS will not take positions contrary to our intended
treatment or that a court would not agree with such positions. Furthermore,
because the valuation of our assets may be derived from the trading value of
our Ordinary shares which is subject to fluctuation, there is a possibility
that we may be a PFIC for future taxable years. Consequently, no assurrance
can be given that we will not be a PFIC for any future taxable year.

        If we are classified as a PFIC for any taxable year during which a
U.S. Holder holds an Ordinary share, a Preferred A share, or a Preferred B
share, then unless a U.S. Holder makes one of the elections described below
for the first such year, the U.S. Holder would generally be subject to special
tax rules on certain excess distributions by us to the U.S. Holder and on any
gain realized on the sale or other disposition of the share. Under the PFIC
rules:

         o    the excess distribution or gain would be allocated ratably over
              the U.S. Holder's holding period for the share;

         o    the amount allocated to the current taxable year and any taxable
              year prior to the first taxable year in the U.S. Holder's
              holding period in which we are treated as a PFIC would be
              treated as ordinary income;

         o    the amount allocated to each taxable year beginning with the
              first taxable year in the U.S. Holder's holding period in which
              we are classified as a PFIC, other than the current taxable
              year, would be subject to tax at the highest tax rate in effect
              for the applicable class of taxpayer for that year; and

         o    the interest charge generally applicable to underpayments of tax
              would be imposed on the tax attributable to each taxable year
              beginning with the first taxable year in the U.S. Holder's
              holding period in which we were classified as a PFIC, other than
              the current taxable year.

         A U.S. Holder may generally avoid the tax consequences described
above by either:

         o    electing to be taxed annually on its pro rata share of our
              ordinary earnings and net capital gain for the taxable year in
              which we are a PFIC (regardless of whether amounts are
              distributed to an electing U.S. Holder) (a "QEF Election"), or

         o    in certain circumstances, electing to be taxed annually on the
              excess of the fair market value of its Ordinary shares,
              Preferred A shares, and Preferred B shares at the end of the
              taxable year over the adjusted tax basis of the shares (and
              eligible, subject to limitation, for a deduction equal to the
              excess of the adjusted tax basis of the shares over the fair
              market value of the shares at the end of the taxable year) (a
              "Mark-to-Market Election").

        The electing U.S. Holder's adjusted tax basis in the Ordinary shares,
Preferred A shares, and Preferred B shares would be adjusted to reflect any
income or loss resulting from such elections. If we are or become a PFIC, we
will provide information necessary for our U.S. Holders to make a QEF Election
and to elect to mark shares to market. A U.S. Holder who owns Ordinary shares,
Preferred A shares, or Preferred B shares during any year that we are a PFIC
must file an annual IRS Form 8621 with the IRS.

        Each prospective investor is urged to consult its tax advisor
concerning the United States of America federal income tax consequences of
purchasing, holding, and disposing of Ordinary shares, Preferred A shares, and
Preferred B shares if we are or become a PFIC, including the possibility of
making a mark-to-market election and the coordination of the PFIC rules with
the CFC (as defined below) and FPHC (as defined below) rules.

         Controlled Foreign Corporation Status A non-United States of America
corporation will be classified as a controlled foreign corporation (a "CFC")
for any period in which more than 50% of the value or the voting power of the
stock of such corporation is owned (directly, indirectly, or constructively)
by U.S. Holders and certain other United States persons (including any entity
treated as a domestic partnership for United States of America federal income
tax purposes) each of whom owns (directly, indirectly, or constructively) 10%
or more of the voting power of the corporation (a "CFC Shareholder").

         In general, each CFC Shareholder of a CFC that holds stock of the CFC
directly, or indirectly through non-United States of America entities, is
subject to United States federal income tax on the CFC Shareholder's pro rata
share of the "Subpart F Income" of the CFC, regardless of whether such CFC
Shareholder has received distributions on such stock. We will be classified as
a CFC for the taxable year 2002 and may be classified as a CFC in future
taxable years. Accordingly, each prospective investor who may be a CFC
Shareholder is urged to consult its tax advisor concerning the United States
of America federal income tax consequences to such investor of purchasing,
holding, and disposing of interests in a CFC and the coordination of the CFC
rules with the PFIC and FPHC rules.

         Foreign Personal Holding Company Status A non-United States of
America corporation will be classified as a foreign personal holding company
(an "FPHC") for a taxable year, if:

         o    five or fewer individuals who are United States of America
              citizens or residents own (directly or constructively through
              certain attribution rules) more than 50% of the total voting
              power or the total value of our stock at any time during the
              taxable year (the "Ownership Test"), and

         o    at least 60% (50%, in certain cases) of our gross income for the
              taxable year consists of "foreign personal holding company
              income," which generally includes passive income such as
              dividends, interest, rent, royalties, and gains from certain
              commodities and securities transactions (the "Income Test").

         Classification as an FPHC will, in general, require each U.S. Holder
who holds (directly or indirectly through non-United States of America
entities) Ordinary shares, Preferred A shares, or Preferred B shares on the
last day of the taxable year during which the Ownership Test is satisfied to
include in gross income as a dividend the U.S. Holder's pro rata portion of
our "undistributed foreign personal holding company income" for such taxable
year. Although we may have met the Ownership Test for the taxable year 2002,
we did not meet the Income Test for the taxable year 2002. As a result, we
were not a FPHC for the taxable year 2002. Although we may meet the Ownership
Test for future taxable years, we do not expect to meet the Income Test for
such future taxable years and, thus, do not expect to be classified as an FPHC
for such future taxable years. Nevertheless, FPHC status for a taxable year is
based upon the facts in existence during such taxable year. Consequently, no
assurance can made that we will not be classified as an FPHC for any future
taxable year. If we are classified as an FPHC for a taxable year, we will
provide each U.S. Holder with the information necessary to comply with the
FPHC rules. Each prospective investor is urged to consult its tax advisor
concerning the United States of America federal income tax consequences of
purchasing, holding, and disposing of Ordinary shares, Preferred A shares, and
Preferred B shares if we are or become an FPHC including the coordination of
the FPHC rules with the PFIC and CFC rules.

Information Reporting and Back-up Withholding

         Dividend payments made with respect to Ordinary shares, Preferred A
shares, and Preferred B shares and proceeds received in connection with the
sale or other disposition of Ordinary shares, Preferred A shares, and
Preferred B shares may be subject to information reporting to the IRS and
backup withholding. Backup withholding will not apply, however, if a U.S.
Holder (i) is a corporation or comes within certain other exempt categories
and, when required, demonstrates such fact or (ii) provides a taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable backup withholding rules.
Persons required to establish their exempt statues must generally provide such
certification on IRS Form W-9 or Form W-8BEN (as applicable). Amounts withheld
as backup withholding may be credited against a holder's United States of
America federal income tax liability. A holder may obtain a refund of any
excess amounts withheld under the backup withholding rules by filing the
appropriate claim for refund with the IRS and furnishing any required
information.

F.       Dividends and Paying Agents

         Not applicable

G.       Statement by Experts

         Not applicable

H.       Documents on Display

         We are subject to certain of the informational requirements of the
Securities Exchange Act of 1934. Following our Extraordinary General Meeting
held on December 16, 2002, at which our Supervisory Board was reconstituted as
a six-member body, we became a "foreign private issuer" as defined under Rule
3b-4 of the Securities Exchange Act of 1934. As such, we are exempt from the
rules under the Securities Exchange Act prescribing certain disclosure and
procedural requirements for proxy solicitations, and our officers, directors
and principal shareholders are exempt from the reporting and "short-swing"
profit recovery provisions contained in Section 16 of the Securities Exchange
Act, with respect to their purchases and sales of shares. In addition, we are
not required to file annual, quarterly and current reports and financial
statements with the Securities and Exchange Commission as frequently or as
promptly as U.S.companies whose securities are registered under the Securities
Exchange Act. However, we will file with the Securities and Exchange
Commission, within 180 days after the end of each fiscal year, an annual
report on Form 20-F containing financial statements audited by an independent
accounting firm. We will also publish unaudited interim financial information
after the end of each quarter. We will furnish this financial information to
the SEC under cover of a Form 6-K. We file our materials electronically with
the SEC, so you can also review our filings by accessing the site maintained
by the SEC at http://www.sec.gov. This site contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. In addition, you can review our SEC filings by
accessing our website www.completel.com.

         You may read and copy any document we file with the SEC at its public
reference facilities at 450 Fifth Street, NW, Washington, DC 20549, Woolworth
Building, 233 Broadway, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You may also obtain
copies of the documents at prescribed rates by writing to the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington DC 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference facilities.

I.       Subsidiary Information

         See Item 4--"Information on the Company--Organizational Structure".

ITEM 11. Quantitative and Qualitative Disclosures about Market Risk

INVESTMENT PORTFOLIO AND INTEREST RATE SENSITIVITY

         Our investment policy is to utilize instruments denominated in euros
that meet high credit quality standards, such as certificates of deposits,
money market deposits, and commercial paper with a rating of A-1 or P-1, with
maturity below 90 days, and interest rates derived from money market rates.

         Interest income earned on our investment portfolio is affected by
changes in short-term interest rates. We are thus exposed to market risk
related to changes in market interest rates. To date, we have managed these
risks by monitoring market rates and the duration of our investments.

IMPACT OF FOREIGN CURRENCY RATE CHANGES

         Our revenue, operating expenses, capital expenditures, assets and
liabilities are, for the most part, denominated in euro, which is our
functional and reporting currency. In order to minimize our exposure to
exchange rate risk, we invest all excess cash in euro-denominated accounts and
limit our expenditures in other currencies. Prior to the completion of our
Recapitalization on September 17, 2002, we were exposed to changes in currency
exchange rates due to our U.S. dollar denominated senior discount notes. As
part of our Recapitalization, these notes were exchanged into Ordinary shares
and Convertible Preferred B shares. We believe that our current exposure to
exchange rate risks is immaterial.

ITEM 12. Description of Securities Other Than Equity Securities

         Not applicable


                                    PART II


ITEM 13.  Defaults, Dividend Arrearages and Delinquencies

          None

ITEM 14.  Material Modifications to the Rights of Security Holders and Use of
Proceeds

A.        Reverse Share Splits

         On August 20, 2002, Company held an extraordinary general meeting at
which its shareholders approved an amendment of the Company's Articles of
Association to effect a 670-for-one reverse split of the Company's Ordinary
shares, combined with a reduction of the nominal value of the resulting
Ordinary shares to (euro)0.04 each. This reverse split of the Ordinary shares
was effected on September 16, 2002. Furthermore, at the extraordinary general
meeting, the Company's shareholders approved an amendment to the Company's
Articles of Association to effect a 100-for-one reverse split of the
Convertible Preferred A and B shares. This reverse split of the Company's
Preferred shares was effected on September 18, 2002.

B.       Issuance of Preferred A, Preferred B, and C Shares.

         In connection with our Recapitalization, which was completed on
September 17, 2002, we exchanged our 14% senior discount notes due 2009 and
14% senior notes due 2010 (collectively, the "Notes ") for convertible
preferred B shares (the "Convertible Preferred B shares") and Ordinary shares
together representing approximately 39% of Completel Europe's share capital
outstanding (excluding the C shares described below). We also issued
convertible preferred A shares (the "Convertible Preferred A shares") and
Ordinary shares, together representing approximately 40% of the Company's
share capital (excluding the C shares), to Meritage Private Equity Funds
("Meritage") and DeGeorge Telcom Holdings ("DeGeorge Telcom"), two of the
Company's principal shareholders, as consideration for an investment of an
aggregate of (euro)30.0 million by these shareholders. Meritage and DeGeorge
Telcom were also issued, on a pro rata basis, a number of C shares that would
cause them to hold the same number of shares for voting purposes as the former
holders of the Notes. Furthermore, certain of the holders of the senior notes
due 2010 made an investment of approximately (euro)9.9 million (reflecting a
reinvestment of a portion of the escrow funds released to these holders) in
return for the issuance of Convertible Preferred A shares, Convertible
Preferred B shares and Ordinary shares, together representing approximately
14% of Completel Europe's share capital (excluding the C shares). In addition,
an institutional investor made an investment of approximately (euro)2.9
million in return for the issuance of Convertible Preferred A shares and
Ordinary shares.

         Finally, several members of the Company's management and senior
employees made an investment of approximately (euro)0.9 million in return for
the issuance of Convertible Preferred A shares and Ordinary shares.

         To the Company's best knowledge, none of the holders of Convertible
Preferred A shares, Convertible Preferred B shares or Ordinary shares is
subject to any lock-up or other similar arrangement.

         Following is a description of the effect of the issuance of the
Preferred A, Preferred B and C shares on the rights of the holders of our
Ordinary shares.

         Ordinary Shares

         Voting rights: The Ordinary shares vote with the C shares and with
the Preferred shares on all matters submitted for the approval of our
shareholders (other than those matters, described below, requiring (a) a
separate vote of the Convertible Preferred A shareholders, the Convertible
Preferred B shareholders, or the C shareholders, or (b) a combined vote of the
Convertible Preferred A shareholders and the Convertible Preferred B
shareholders or, as the case may be, a combined vote of the Convertible
Preferred A shareholders and the C shareholders). Each Ordinary share is
entitled to one vote.

         Pre-emptive rights: Each holder of an Ordinary share (together with
the holders of Preferred shares) has a pre-emptive right with respect to any
issue of shares (other than C shares issued in connection with a Company Sale,
as defined below). This pre-emptive right exists in proportion to the
aggregate nominal value of shares held by the shareholder. However, this
pre-emptive right does not apply to shares issued to or for the benefit of
employees of the Company or of a Group Company, or to a person who exercises a
previously acquired subscription right. Nor shall it apply to shares issued in
consideration for anything other than cash.

         Until March 29, 2005, pre-emptive rights may be excluded or
restricted by the Board of Management, subject to the unanimous approval by
all members of the Supervisory Board in office. After March 29, 2005, if the
Board of Management is so designated by a two-thirds majority of the votes
cast at a general meeting of our shareholders, pre-emptive rights may be
excluded or restricted by the Board of Management, subject to Supervisory
Board approval, adopted with a two-thirds majority of the votes cast by all
members of the Supervisory Board in office. If after March 29, 2005, the Board
of Management is not so designated, pre-emptive rights may only be restricted
or excluded by a two-thirds majority of votes cast at a general meeting of
shareholders.

         Liquidation rights: After we have paid our creditors and any
liquidation preference to which the holders of our Preferred shares (including
former holders of Preferred shares that have been cancelled) are entitled, we
will distribute any remaining balance, first to the holders of C shares in an
amount not exceeding the par value of the C shares, and then to all holders of
Ordinary shares and Preferred shares in proportion to the total number of
shares held by each holder.

         Preferred A Shares

         Voting rights: The Convertible Preferred A shares vote with the
Convertible Preferred B shares, the C shares and the Ordinary shares on all
matters submitted for the approval of our shareholders, with each Convertible
Preferred A share entitled to one hundred votes. Any proposed sale of all or
substantially all of our business to a third party (including by way of a
merger) for less than an amount equal to the total number of Preferred shares
multiplied by (euro)2,010.00 will require the approval of the meeting of the
Convertible Preferred A shares, as well as the meeting of Convertible
Preferred B shares. A meeting of the holders of the Convertible Preferred A
shares shall also be required to approve any amendment to the Articles of
Association that adversely affects the rights of the holders of Convertible
Preferred A shares.

         Pre-emptive rights: Each holder of a Convertible Preferred A share
(together with the holders of the Convertible Preferred B shares and Ordinary
shares) has a pre-emptive right with respect to any issue of shares (other
than C shares issued in connection with a Company Sale). This pre-emptive
right exists in proportion to the aggregate nominal value of shares held by
the shareholder. However, this pre-emptive right does not apply to shares
issued to or for the benefit of employees of the Company or of a Group
Company, or to a person who exercises a previously acquired subscription
right. Nor does it apply to shares issued in consideration for anything other
than cash.

         Until March 29, 2005, pre-emptive rights may be excluded or
restricted by the Board of Management, subject to the unanimous approval by
all members of the Supervisory Board in office. After March 29, 2005, if the
Board of Management is so designated by a two-thirds majority of the votes
cast at a general meeting of our shareholders, pre-emptive rights may be
excluded or restricted by the Board of Management, subject to Supervisory
Board approval, adopted with a two-thirds majority of the votes cast by all
members of the Supervisory Board in office. If after March 29, 2005, the Board
of Management is not so designated, pre-emptive rights may only be restricted
or excluded by a two-thirds majority of votes cast at a general meeting of
shareholders.

         Liquidation rights: After our creditors have been paid, we will
distribute in respect of each Convertible Preferred A share, out of any
surplus that remains, (euro)2,010.00, the amount of any accrued but unpaid
dividends in respect of the Convertible Preferred A shares, and the amount of
any accrued dividends in respect of cancelled Convertible Preferred A shares
that remains unpaid as of the time of their cancellation (unless subsequently
paid). Subject to the same having been paid to the holders of Convertible
Preferred B shares, we will distribute any remaining balance first to the
holders of the C shares, in an amount not exceeding the par value of the C
shares, and then to all holders of our Ordinary shares and Preferred shares in
proportion to the total number of such shares held by each holder.

         In addition, we have granted to the Convertible Preferred A
shareholders an option, exercisable upon a sale of us (including by way of
merger or a sale of substantially all our assets) to which we are a party or
which is approved by our Supervisory Board (a "Company Sale"), to subscribe,
at their nominal value, to that number of newly issued C shares that, when
taken together with the outstanding Preferred shares, would provide sufficient
voting rights to constitute the majority of a general meeting of shareholders
required to adopt a resolution to dissolve the Company. The purpose of this
option is to give the Convertible Preferred A shareholders an effective
blocking vote on any Company Sale that is not in their economic interest. The
option will expire upon the conversion or transfer by DeGeorge Telcom and
Meritage of 50% (or more) of the aggregate 14,925 Convertible Preferred A
shares they have received in the Recapitalization.

         Dividends: Until June 30, 2004, the holders of Convertible Preferred
A shares are entitled to the same dividend per share, if any, as the holders
of Convertible Preferred B shares and one hundred times any dividend per share
paid to holders of Ordinary shares, following payment of accrued dividends in
respect of our C shares, with the C shares being entitled only to no more than
an annual dividend of one hundredth of a percent (0.01%) of their (euro)0.04
par value. Commencing July 1, 2004, and until the cancellation or conversion
of the Convertible Preferred A shares in accordance with their terms, we will
pay a dividend equal to 11% per annum, calculated over an amount of
(euro)2,010.00 per share to the holders of Convertible Preferred A shares. If
in any financial year during this period we do not have sufficient profit to
pay this dividend in full to the holders of Convertible Preferred A shares,
the amount of any deficit will carry over to subsequent dividend payments,
together with interest thereon at an annual rate of 11% compounded quarterly.
The Board of Management may make interim dividends payable to the holders of
Convertible Preferred A shares, subject to the requirements of Dutch law and
the approval of the Supervisory Board.

         Share premium reserves: We maintain a separate share premium reserve
account exclusively for the Convertible Preferred A shares. Commencing July 1,
2004, the holders of Convertible Preferred A shares may request distributions
from the Preferred A share premium reserve account to make up for any dividend
shortfall. If a portion of the Convertible Preferred A shares ceases to exist,
we will allocate a pro rata part of the Preferred A share premium reserves to
our general reserves.

         Conversion: Each Convertible Preferred A share is convertible into
one hundred Ordinary shares at any time at the option of the holder of the
Convertible Preferred A share and will be entitled to customary anti-dilution
adjustments in relation to share dividends, share splits and similar
transactions. In addition, if at the time of conversion, there are accrued but
unpaid dividends in respect of the Convertible Preferred A shares, holders of
the Convertible Preferred A shares will be issued a certificate representing
the right to receive such accrued but unpaid dividends. The Convertible
Preferred A shares will be subject, at any time, to mandatory conversion if a
two-thirds majority of the total outstanding Preferred shares elect to do so
with respect to all of the Preferred shares.

         Cancellation: A resolution adopted on August 20, 2002 at a general
meeting of our shareholders authorized the redemption, as of July 1, 2007, of
all (but not less than all) of the Convertible Preferred A shares at a
redemption value of (euro)6,030.00 per share, as well as any accrued but
unpaid dividends in respect of the cancelled Convertible Preferred A shares.
If at that time we do not have access to sufficient funds to redeem all our
then outstanding Preferred shares, the holders of Convertible Preferred A
shares shall have the right to receive (euro)2,010.00 per share, as well as
any accrued but unpaid dividends in respect of the cancelled Convertible
Preferred A shares. Subject to the same having been paid to the holders of
Convertible Preferred B shares, we will distribute any remaining surplus
proportionally to the holders of the Convertible Preferred A shares and the
Convertible Preferred B shares, up to the remaining balance of (euro)4,020.00
per share. The general meeting resolution must be approved by a simple
majority vote, or by a two-thirds majority vote if less than half of the
issued share capital is represented at the meeting.

         In addition, provided all holders of Convertible Preferred A shares
consent thereto, all (but not less than all) of the Convertible Preferred A
shares may be cancelled, at any time, pursuant to a Management Board proposal
(subject to Supervisory Board approval, adopted with a two-thirds majority of
the votes cast by all members of the Supervisory Board in office), approved by
the general meeting of our shareholders by a simple majority vote, or a
two-thirds majority vote if less than half of the issued share capital is
represented at that meeting.

         Preferred B Shares

         Voting rights: The Convertible Preferred B shares will vote with the
Convertible Preferred A, the C shares and Ordinary shares on all matters
submitted for the approval of our shareholders, with each Convertible
Preferred B share entitled to one hundred votes. Any proposed sale of all or
substantially all of our business to a third party (including by way of a
merger) for less than an amount equal to the total number of Preferred shares
multiplied by (euro)2,010.00 will require the approval of the meeting of
Convertible Preferred B shares, as well as the meeting of Convertible
Preferred A shares. A meeting of the holders of the Convertible Preferred B
shares will also be required to approve any amendment to the Articles of
Association that adversely affects the rights of the holders of Convertible
Preferred B shares.

         Pre-emptive rights: Each holder of a Convertible Preferred B share,
together with the holders of Convertible Preferred A shares and Ordinary
shares has a pre-emptive right with respect to any issue of shares (other than
C shares issued in connection with a Company Sale). This pre-emptive right
exists in proportion to the aggregate nominal value of shares held by the
shareholder. However, this pre-emptive right does not apply to shares issued
to or for the benefit of employees of the Company or of a Group Company, or to
a person who exercises a previously acquired subscription right. Nor does it
apply to shares issued in consideration for anything other than cash.

         Until March 29, 2005, pre-emptive rights may be excluded or
restricted by the Board of Management, subject to the unanimous approval by
all members of the Supervisory Board in office. After March 29, 2005, if the
Management Board is so designated by a two-thirds majority of the votes cast
at a general meeting of our shareholders, pre-emptive rights may be excluded
or restricted by the Board of Management, subject to Supervisory Board
approval, adopted with a two-thirds majority of the votes cast by all members
of the Supervisory Board in office. If after March 29, 2005, the Management
Board is not so designated, pre-emptive rights may only be restricted or
excluded by a two-thirds majority of votes cast at a general meeting of
shareholders.

         Liquidation rights: After our creditors and the holders of
Convertible Preferred A shares have been paid, we will distribute in respect
of each Convertible Preferred B share, out of any surplus that remains,
(euro)2,010.00, the amount of any accrued but unpaid dividends in respect of
the Convertible Preferred B shares, and the amount of any accrued dividends in
respect of cancelled Convertible Preferred B shares that remains unpaid as of
the time of their cancellation (unless subsequently paid). We may then
distribute any remaining balance first to the holders of C shares, in an
amount not exceeding the par value of the C shares, and then to the holders of
our Ordinary shares and Preferred shares in proportion to the total number of
shares (except C shares) held by each holder.

         C Shares

         General: Pursuant to our Restructuring Agreement, DeGeorge Telcom and
Meritage were issued, on a pro rata basis, that number of C shares that caused
them to have the same number of shares for voting purposes as the former
holders of our senior Notes. In addition, we have granted to the Convertible
Preferred A shareholders an option, exercisable upon a sale of us (including
by way of merger or sale of substantially all of our assets) to which we are a
party or which is approved by our Supervisory Board (a "Company Sale"), to
subscribe, at their nominal value, to that number of newly issued C shares
that, when taken together with the outstanding Preferred shares, would provide
sufficient voting rights to constitute the majority required to adopt a
resolution to dissolve the Company in a general meeting of shareholders. The
option will provide that these C shares may not be voted for any other
purpose. The purpose of this option is to give the Convertible Preferred A
shareholders an effective blocking vote on any Company Sale that is not in
their economic interest. We will not issue C shares for any other purpose. In
order to limit the effect of the C shares strictly to the allocation of voting
power, as described above, the C shares are structured in a way that
effectively gives them no independent economic value.

         Voting rights: The C shares vote with the Ordinary shares and with
the Preferred shares on all matters submitted for approval by the
shareholders, with each C share entitled to one vote.

         Pre-emptive rights: The holders of C shares do not have pre-emptive
rights with respect to the issue of Ordinary shares or Preferred shares.

         Liquidation rights: After we have paid our creditors and any
liquidation preference to which holders of Preferred shares (including former
holders of Preferred shares that have been cancelled) are entitled, we will
distribute any remaining balance, first to the holders of C shares in an
amount not exceeding the par value of the C shares, and then to the holders of
Ordinary shares and Preferred shares in proportion to the total number of such
shares held by each holder.

         Dividends: The C shares are entitled to any distribution from any of
our premium reserves. The holders of C shares are only entitled to a
non-cumulative dividend of 0.01% per annum calculated over the (euro)0.04 par
value per share of the C shares. Beginning July 1, 2004, the holders of C
shares will only be entitled to this dividend after payment of all dividends
owed to our Preferred Shareholders.

         Transfer restrictions: The C shares may only be transferred with the
approval of our Supervisory Board. We shall not issue share certificates for C
shares.

         Cancellation: The C shares held by the Company are subject to
cancellation pursuant to the general meeting's adoption of a Management Board
proposal, with the approval of our Supervisory Board, by a two-thirds majority
vote if less than half of the issued share capital is represented at that
meeting, at a redemption value equal to the par value of the C shares, subject
to the consent of all holders of the C shares.

         The C shares trust: The C shares issued to Meritage and DeGeorge
Telcom to equalize their voting rights are held by a trustee (the "C shares
Trustee") pursuant to a trust instrument that provides that: (i) the C shares
Trustee will not transfer the C shares to any person other than the Company;
(ii) in the event of any distribution in respect of the C shares, the C shares
Trustee will pay such distribution (net of expenses) to the Company; (iii) so
long as the C shares are outstanding, the C shares Trustee will vote the C
shares in accordance with the directions of Meritage and DeGeorge Telcom, in
proportion to their respective holdings of the Convertible Preferred A shares;
and (iv) upon conversion of 50% or more of those Convertible Preferred A
shares initially issued to Meritage and DeGeorge Telcom into Ordinary shares,
or the sale to a third party of 50% or more of those Convertible Preferred A
shares, the C shares Trustee will tender the C shares it holds to the Company
for nil consideration.

D.       Not applicable.

E.       Use of Proceeds.

         The Registration Statement relating to the offering of up to 326,778
of our Ordinary shares issuable upon the exercise of Warrants was declared
effective on, December 13, 2002. Each other record holder of our Ordinary
shares at 9:00 a.m. (Paris time) on September 13, 2002 received one Warrant
for each Ordinary share (nominal value (euro)0.10 per share) held at that
time. On September 16, 2002, we effected a 670-for-one reverse split and
reduction of the nominal value of our Ordinary shares from (euro)0.10 to
(euro)0.04 per share. With the effect of that reverse share split, each
Warrant entitles its holder to subscribe to 0.005988 of our Ordinary shares
(nominal value (euro)0.04 per share) and 167 Warrants were required to
subscribe to one Ordinary share at a price of (euro)10.05. Warrants were only
exercisable for the receipt of a whole number of Ordinary shares.

         The Warrants were exercisable during the period commencing at 9:00
a.m. (Paris time) on December 15, 2002, and ending at 5:00 p.m. (Paris time)
on March 14, 2003. The total number of warrants exercised during the exercise
period was 362,557, resulting in the issuance of 2,171 Ordinary shares, for
which we received total proceeds of (euro)21,818.55. We intend to add these
proceeds to our general funds for general corporate purposes.

         We did not incur any expenses in connection with the issuance and
distribution of the Ordinary shares underlying the warrants.

ITEM 15. Controls and Procedures

         (a)  Evaluation of Disclosure Controls and Procedures. The Company's
              Chief Executive Officer, Chief Financial Officer and Chief
              Accounting Officer have evaluated the effectiveness of the
              Company's disclosure controls and procedures (as such term is
              defined in Rules 13a-14(c) and 15d-14(c) under the Securities
              Exchange Act of 1934, as amended (the "Exchange Act")) as of a
              date within 90 days prior to the filing date of this Annual
              Report (the "Evaluation Date"). Based on such evaluation, such
              officers have concluded that, as of the Evaluation Date, the
              Company's disclosure controls and procedures are effective in
              alerting them on a timely basis to material information relating
              to the Company required to be included in the Company's reports
              filed or submitted under the Exchange Act.

         (b)  Code of Ethics. The Company adopted a Code of Ethics on January
              29, 2003, a copy of which is attached hereto as Exhibit 10.2.

         (c)  Changes in Internal Controls. Since the Evaluation Date, there
              have not been any significant changes in the Company's internal
              controls or in other factors that could significantly affect
              such controls.


ITEM 16. Reserved


                                   PART III

ITEM 17. Financial Statements

         Not applicable

ITEM 18. Financial Statements

         In response to this item, the Company incorporates herein by
reference the Financial Statements of the Company set forth on pages F-3
through F-30 hereto.

ITEM 19. Exhibits

Exhibit No.        Description
-----------        -----------

  1(4)           Restated and Amended Articles of Association of Completel
                 Europe N.V.

  4.1(1)         Restructuring Agreement, dated May 15, 2002, as amended as of
                 July 29, 2002, among (i) an ad hoc committee of holders of
                 the registrant's 14% Senior Discount Notes due 2009 and 14%
                 Senior Notes due 2010, constituting over 75% of its
                 outstanding Notes, (ii) Meritage Private Equity Funds and
                 (iii) DeGeorge Telcom Holdings

  4.2(4)         Form of Warrant Agreement

  4.3(3)         CompleTel Europe N.V. 2000 Stock Option Plan, as amended

  4.4            Completel Europe N.V. 2002 Stock Option Plan

  4.5            Remuneration Plan for Supervisory Directors

  4.6(2)         Extension of French License, dated November 17, 2000

  8              List of Subsidiaries of the Registrant

  10.1           Certification of CEO and CFO Pursuant to 18 U.S.C. Section
                 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                 Act of 2002

  10.2           Completel Europe N.V. Code of Ethics

  10.3           Completel Europe N.V. Audit Committee Charter

  10.4           Consent of Deloitte & Touche

__________
(1)      Previously filed as exhibits to the Registrant's Current Reports on
         Form 8-K, filed with the Securities and Exchange Commission on May
         23, 2002 and September 4, 2002.

(2)      Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-K for the year ended December 31, 2000, filed with the
         Securities and Exchange Commission on April 2, 2001 and incorporated
         herein by reference.

(3)      Previously filed as an exhibit to the Registrant's Quarterly Report
         on Form 10-Q for the period ended September 30, 2001, filed with the
         Securities and Exchange Commission on November 14, 2001 and
         incorporated herein by reference.

(4)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-1, file number 333-99501, filed with the
         Securities and Exchange Commission on September 13, 2002 and
         incorporated herein by reference.


                                  SIGNATURES

         Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant certifies that it meets all of the requirements
for filing on Form 20-F and has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                           Completel Europe N.V.
                                           (Registrant)


                                           By: /s/ Alexandre Westphalen
                                               -----------------------------
                                                 Alexandre Westphalen
                                                 Chief Financial Officer



Dated:  May 22, 2003

<PAGE>


                   CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jerome de Vitry, certify that:

1.       I have reviewed this annual report on Form 20-F of Completel Europe
         N.V.;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,
         based on our most recent evaluation, to the registrant's auditors and
         the audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and
                  report financial data and have identified for the
                  registrant's auditors any material weaknesses in internal
                  controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in
         this annual report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent
         evaluation, including any corrective actions with regard to
         significant deficiencies and material weaknesses.


Date:    May 22, 2003


Signature: /s/ Jerome de Vitry
--------------------------------
Name:    Jerome de Vitry
Title:   Chief Executive Officer
<PAGE>


                   CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Alexandre Westphalen, certify that:

1.       I have reviewed this annual report on Form 20-F of Completel Europe
         N.V;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,
         based on our most recent evaluation, to the registrant's auditors and
         the audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and
                  report financial data and have identified for the
                  registrant's auditors any material weaknesses in internal
                  controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in
         this annual report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent
         evaluation, including any corrective actions with regard to
         significant deficiencies and material weaknesses.


Date:    May 22, 2003


Signature: /s/ Alexandre Westphalen
-----------------------------------
Name:    Alexandre Westphalen
Title:   Chief Financial Officer
<PAGE>

EXHIBIT INDEX

Exhibit No.        Description
-----------        -----------

  1(4)          Restated and Amended Articles of Association of Completel
                Europe N.V.

  4.1(1)        Restructuring Agreement, dated May 15, 2002, as amended as of
                July 29, 2002, among (i) an ad hoc committee of holders of the
                registrant's 14% Senior Discount Notes due 2009 and 14% Senior
                Notes due 2010, constituting over 75% of its outstanding
                Notes, (ii) Meritage Private Equity Funds and (iii) DeGeorge
                Telcom Holdings

  4.2(4)        Form of Warrant Agreement

  4.3(3)        CompleTel Europe N.V. 2000 Stock Option Plan, as amended

  4.4           CompleTel Europe N.V. 2002 Stock Option Plan

  4.5           Remuneration Plan for Supervisory Directors

  4.6(2)        Extension of French License, dated November 17, 2000

  8             List of Subsidiaries of the Registrant

  10.1          Certification of CEO and CFO Pursuant to 18 U.S.C. Section
                1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002

  10.2          Completel Europe N.V. Code of Ethics

  10.3          Completel Europe N.V. Audit Committee Charter

  10.4          Consent of Deloitte & Touche

__________
(1)      Previously filed as exhibits to the Registrant's Current Reports on
         Form 8-K, filed with the Securities and Exchange Commission on May
         23, 2002 and September 4, 2002.

(2)      Previously filed as an exhibit to the Registrant's Annual Report on
         Form 10-K for the year ended December 31, 2000, filed with the
         Securities and Exchange Commission on April 2, 2001 and incorporated
         herein by reference.

(3)      Previously filed as an exhibit to the Registrant's Quarterly Report
         on Form 10-Q for the period ended September 30, 2001, filed with the
         Securities and Exchange Commission on November 14, 2001 and
         incorporated herein by reference.

(4)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-1, file number 333-99501, filed with the
         Securities and Exchange Commission on September 13, 2002 and
         incorporated herein by reference.


<PAGE>

                         INDEX TO FINANCIAL STATEMENTS


          COMPLETEL EUROPE N.V. AND SUBSIDIARIES
          Independent Auditor's Report..................................... F-2
          Consolidated Balance Sheets as of December 31, 2002 and 2001..... F-3
          Consolidated Statements of Operations for the Years Ended
          December 31, 2002, 2001 and 2000................................. F-4
          Consolidated Statements of Shareholders' Equity for the Years
          Ended December 31, 2002, 2001 and 2000........................... F-5
          Consolidated Statements of Cash Flows for the Years Ended
          December 31, 2002, 2001 and 2000................................. F-6
          Notes to Consolidated Financial Statements....................... F-8

<PAGE>

                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of CompleTel Europe N.V.:

We have audited the accompanying consolidated balance sheet of CompleTel
Europe N.V. (an N.V. registered in the Netherlands) and subsidiaries (the
"Company") as of December 31, 2002 and 2001 and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 2002. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CompleTel
Europe N.V. and subsidiaries as of December 31, 2002 and 2001 and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, effective
January 1, 2002, the Company changed its method of accounting for goodwill in
accordance with Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets".


                                              Deloitte & Touche Accountants
                                             /s/ Deloitte & Touche Accountants


Amsterdam, The Netherlands,
February 25, 2003 except for
the matters described in Note
14 as to which the date is
April 10, 2003.





<PAGE>


<TABLE>
<CAPTION>
                                                COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                                      CONSOLIDATED BALANCE SHEETS
                                   (Stated in thousands of euro, except share and per share amounts)


                                            ASSETS                                           December 31,           December 31,
                                                                                                     2002                   2001
<S>                                                                                         <C>                     <C>
CURRENT ASSETS:
  Cash and cash equivalents.............................................................     (euro)60,181           (euro)81,613
  Short-term investments, restricted....................................................                -                 16,694
  Accounts receivable, net of allowance for doubtful receivables
    of(euro)691 and(euro)1,530, respectively............................................           14,892                 15,757
  Affiliate receivables.................................................................              266                  2,121
  VAT receivables.......................................................................           10,196                 24,472
  Prepaid expenses and other current assets.............................................            2,930                 11,494
                 Total current assets...................................................           88,465                152,151



NON-CURRENT ASSETS:
  Property and equipment, net...........................................................          244,876                277,807
  Licenses, net of accumulated amortization of(euro)355 and(euro)335,
    respectively........................................................................              983                  2,104
  Goodwill..............................................................................                -                  5,793
  Deferred financing costs, net.........................................................                -                  7,525
  Non-current investments, restricted...................................................                -                  8,085
  Other non-current assets..............................................................            1,376                  2,525

         Total non-current assets.......................................................          247,235                303,839
TOTAL ASSETS............................................................................    (euro)335,700          (euro)455,990

                                                LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Network vendor payables...............................................................     (euro)10,384           (euro)37,356
  Accrued liabilities ..................................................................            4,875                 11,640
  Accrued payroll.......................................................................           10,215                 10,256
  Trade accounts payable................................................................           18,699                 45,694
  Affiliate payables....................................................................                -                  1,393

                Total current liabilities...............................................           44,173                106,339
LONG-TERM DEBT..........................................................................            3,986                227,735
COMMITMENTS AND CONTINGENCIES (Note 8)
CONVERTIBLE PREFERRED A SHARES, nominal value, (euro)4.00 per share,
  liquidation value, (euro)2,010 per share, 24,000 shares authorized, 21,730
  shares issued and outstanding at
  December 31, 2002.....................................................................           29,056                      -
CONVERTIBLE PREFERRED B SHARES, nominal value,(euro)4.00 per share, liquidation
  value,(euro)2,010 per share, 16,000 shares authorized, 14,924 shares issued
  and outstanding at December 31, 2002..................................................           98,187                      -
SHAREHOLDERS' EQUITY:
   Ordinary shares, nominal value (euro)0.04 per share, 6,300,000 shares
         authorized; 3,905,414 and 239,635 shares issued and outstanding at
         December 31, 2002
         and December 31, 2001, respectively............................................              157                     10
  C shares, nominal value(euro)0.04 per share, 10,000,000 shares authorized,
         1,548,261 shares issued and outstanding at December 31, 2002...................               62                      -
  Additional paid-in capital............................................................          728,848                706,138
  Deferred compensation.................................................................           (2,697)               (11,192)
  Other cumulative comprehensive loss...................................................              495                    747
  Accumulated deficit...................................................................         (551,014)              (558,234)
  Treasury stock, at cost...............................................................          (15,553)               (15,553)

TOTAL SHAREHOLDERS' EQUITY..............................................................          160,298                121,916
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............................................    (euro)335,700          (euro)455,990


              The accompanying notes are an integral part of these consolidated financial statements.


                                      F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Stated in thousands of euro, except share and per share amounts)



                                                                                                Year Ended          Year Ended
                                                                           Year Ended          December 31,        December 31,
                                                                       December 31, 2002           2001                2000
                                                                       -------------------    ----------------    ----------------
<S>                                                                        <C>                 <C>                 <C>
REVENUE...........................................................          (euro) 97,773       (euro) 75,939       (euro) 22,951

OPERATING EXPENSES:
  Network costs, excluding depreciation...........................                 62,766              66,131              23,162
  Selling, general and administrative
  (excluding non- cash compensation charges)......................                 53,862              61,863              49,839
  Allocated costs from an affiliate...............................                      -               5,402              12,090
  Non-cash compensation charges...................................                  3,940               2,844              55,397
  Depreciation and amortization...................................                 30,763              28,520              14,472
  Restructuring, impairment and other charges.....................                 13,636               6,049                   -
                                                                       -------------------    ----------------    ----------------
         Total operating expenses.................................                164,967             170,809             154,960
                                                                       -------------------    ----------------    ----------------

OPERATING LOSS....................................................               (67,194)            (94,870)           (132,009)
                                                                       -------------------    ----------------    ----------------

OTHER INCOME (EXPENSE):
  Interest income.................................................                  2,322              12,728              22,186
  Interest expense, net of capitalized interest...................               (22,943)            (29,485)            (28,968)
  Net gain on exchange of Notes for shares........................                 91,057                   -                   -
  Gain on early extinguishment of debt............................                      -              46,168               1,053
  Foreign exchange gain (loss) and other income (expense).........                  9,126             (8,173)            (18,806)
                                                                       -------------------    ----------------    ----------------
         Total other income (expense).............................                 79,562              21,238            (24,535)
                                                                       -------------------    ----------------    ----------------

NET INCOME (LOSS) FROM CONTINUING OPERATIONS                                       12,368            (73,632)           (156,544)

DISCONTINUED OPERATIONS:
  Loss from discontinued operations...............................                (5,148)           (225,417)            (43,681)
                                                                       -------------------    ----------------    ----------------

NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE.................................                  7,220           (299,049)           (200,225)

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                                     -                   -               (263)

                                                                       -------------------    ----------------    ----------------
NET INCOME (LOSS).................................................           (euro) 7,220    (euro) (299,049)    (euro) (200,488)
                                                                       ===================    ================    ================

ACCRETION OF CONVERTIBLE PREFERRED SHARES                                         (2,800)                   -                   -
                                                                       ===================    ================    ================

NET INCOME (LOSS) APPLICABLE TO ORDINARY SHARES...................           (euro) 4,420    (euro) (299,049)    (euro) (200,488)
                                                                       ===================    ================    ================

BASIC INCOME (LOSS) PER ORDINARY SHARE............................            (euro) 3.40   (euro) (1,272.81)     (euro) (896.67)
                                                                       ===================    ================    ================
DILUTED INCOME (LOSS) PER ORDINARY SHARE..........................            (euro) 3.05   (euro) (1,272.81)     (euro) (896.67)
                                                                       ===================    ================    ================

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING............
                                                                                1,299,507             234,952             223,592
                                                                       ===================    ================    ================

WEIGHTED AVERAGE NUMBER OF DILUTED ORDINARY SHARES OUTSTANDING....
                                                                                2,364,010             234,952             223,592
                                                                       ===================    ================    ================

         The accompanying notes are an integral part of these consolidated financial statements.


                                      F-4
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                          (Stated in thousands of euro, except share amounts)

                                                                                                 Additional
                                                                                                  Paid-in         Deferred
                                                    Ordinary Shares             C Shares          Capital      Compensation
                                                    ---------------             --------        ------------   ------------
                                                  Number         Amount    Number      Amount


<S>                                               <C>         <C>        <C>         <C>      <C>            <C>
BALANCE January 1, 2000......................       188,258      (euro)8         -     (euro)-(euro)129,068  (euro)(28,036)


 Issuance of ordinary shares in connection
 with initial public offering, net of
 underwriters' discount and offering costs...        46,687            2         -           -      512,534              -
 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.             -            -         -           -       66,832        (60,493)
 Issuance of stock options, net of forfeited
 stock options...............................             -            -         -           -       (1,122)         1,122
 Amortization of deferred compensation.......             -            -         -           -            -         54,211
 Issuance of ordinary shares as
 consideration for LLC units.................         4,690            -         -           -       15,554              -
 Cumulative translation adjustment...........             -            -         -           -            -              -
 Net loss....................................             -            -         -           -            -              -
BALANCE, December 31, 2000...................       239,635           10         -           -      722,866        (33,196)
 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.             -            -         -           -      (16,744)         9,496
 Exercise of stock options...................             -            -         -           -           16              -
 Amortization of deferred compensation.......             -            -         -           -            -         12,508
 Cumulative translation adjustment ..........             -            -         -           -            -              -
 Net loss......................................           -            -         -           -            -              -
BALANCE, December 31, 2001........................  239,635           10         -           -      706,138        (11,192)
 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.             -            -         -           -       (4,192)         2,031
 Amortization of deferred compensation.......             -            -         -           -            -          3,462
 Issuance of Ordinary shares upon
recapitalization.............................     3,665,606          147         -           -       30,063              -
 Issuance of C shares........................             -            -  1,548,261         62            -              -
 Accretion of convertible preferred A and B
shares.......................................             -            -         -           -       (2,800)             -
 Issuance of stock options...................             -            -         -           -        2,640              -
 Issuance of Ordinary shares upon warrants
exercise.....................................            73            -         -           -            1              -
 Conversion of convertible preferred B
shares to   Ordinary shares..................           100            -         -           -            -              -
 Forfeitures of stock options................             -            -         -           -       (3,002)         3,002
 Cumulative translation adjustment...........             -            -         -           -            -              -
 Net loss....................................             -            -         -           -            -              -
BALANCE, December 31, 2002                        3,905,414   (euro) 157  1,548,261  (euro) 62 (euro)728,848   (euro)(2,697)


<CAPTION>
[Table continued]                               COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                          (Stated in thousands of euro, except share amounts)


                                                         Other                     Treasury
                                                       Cumulative                  Stock at           Total
                                                     Comprehensive  Accumulated      Cost         Comprehensive
                                                         Loss         Deficit      (Note 4)           Loss         Total
                                                    -------------   -----------   ----------      -------------    -------



<S>                                                     <C>        <C>              <C>          <C>            <C>
BALANCE January 1, 2000......................            (euro)728 (euro)(58,697)      (euro)-   (euro)(48,925) (euro)43,071


 Issuance of ordinary shares in connection
 with initial public offering, net of
 underwriters' discount and offering costs...                    -             -             -               -       512,536
 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.                    -             -             -               -         6,339
 Issuance of stock options, net of forfeited
 stock options...............................                    -             -             -               -             -
 Amortization of deferred compensation.......                    -             -             -               -        54,211
 Issuance of ordinary shares as
 consideration for LLC units.................                    -             -       (15,554)              -             -
 Cumulative translation adjustment...........                  291             -             -             291            291
 Net loss....................................                    -      (200,488)            -        (200,488)      (200,488)

BALANCE, December 31, 2000...................                1,019      (259,185)      (15,554)       (200,197)       415,960

 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.                    -             -             -               -         (7,248)
 Exercise of stock options...................                    -             -             1               -             17

 Amortization of deferred compensation.......                    -             -             -               -         12,508
 Cumulative translation adjustment ..........                (272)             -             -            (272)          (272)
 Net loss.....................................                          (299,049                      (299,321)      (299,049)
BALANCE, December 31, 2001........................             747      (558,234)      (15,553)       (299,321)       121,916
 Deemed contributions by LLC related to
 allocation of non-cash compensation charges.                    -             -             -               -         (2,161)
 Amortization of deferred compensation.......                    -             -             -               -          3,462
 Issuance of Ordinary shares upon
recapitalization.............................                    -             -             -               -         30,210
 Issuance of C shares........................                    -             -             -               -             62
 Accretion of convertible preferred A and B                      -             -             -               -         (2,800)
shares.......................................
 Issuance of stock options...................                    -             -             -               -          2,640
 Issuance of Ordinary shares upon warrants
exercise.....................................                    -             -             -               -              1
 Conversion of convertible preferred B
shares to   Ordinary shares..................                    -             -             -               -              -
 Forfeitures of stock options................                    -             -             -               -              -
 Cumulative translation adjustment...........                 (252)            -             -            (252)          (252)
 Net loss....................................                    -         7,220             -           7,220          7,220
BALANCE, December 31, 2002                              (euro) 495(euro)(551,014)(euro)(15,553)   (euro) 6,968  (euro)160,298


                            The accompanying notes are an integral part of these consolidated financial statements.



                                      F-5
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Stated in thousands of euro)

                                                            Year Ended               Year Ended                  Year Ended
                                                         December 31, 2002        December 31, 2001          December 31, 2000
                                                       ----------------------  ------------------------   -----------------------
<S>                                                                 <C>                     <C>                        <C>
 OPERATING ACTIVITIES:
 Income (loss) from continuing operations...........                12,368                  (73,632)                   (156,544)
   Adjustments to reconcile income (loss) from
   continuing operations to net cash flows provided
   by continuing operating activities:
     Depreciation and amortization..................                30,763                   28,520                      14,472
     Non-cash compensation expense..................                 3,940                    2,844                      55,397
     Accretion of senior discount notes.............                10,090                   13,347                      10,932
     Amortization of deferred financing costs.......                   574                    1,596                       2,081
     Gain on early extinguishment of debt...........                     -                  (46,168)                     (1,053)
     Gain on exchange of Notes for shares...........               (91,057)                       -                           -
     Impairment of property, equipment and intangibles               5,793                        -                           -
     Foreign exchange loss..........................                    86                    6,926                      12,188
        Effect of change in accounting principle......                   -                        -                        (263)
     Changes in operating assets and liabilities net
     of the effects of acquisitions:
       Decrease (increase) in accounts receivable...                (1,863)                      87                     (10,657)
        Decrease (increase) in prepaid expenses,
         VAT receivables and other current assets...                11,714                    9,167                     (29,361)
       Decrease (increase) in other non-current assets                (288)                     370                        (647)
       Increase (decrease) in accrued liabilities and
       trade accounts payable.......................               (26,828)                 (11,453)                     54,047
       Increase (decrease) in net affiliate
       payables/receivables.........................                   462                    1,205                      (1,409)
     Net cash used in continuing operations.........               (44,246)                 (67,191)                    (50,817)
     Net cash used in discontinued operations.......                 2,938                  (52,625)                    (20,325)
Net cash flows used in operating activities.........               (41,308)                (119,816)                    (71,142)

INVESTING ACTIVITIES:
   Expenditures for property and equipment..........               (23,163)                (149,852)                   (227,496)
   Expenditures for licenses and other intangibles..                  (175)                    (936)                     (2,705)
    Acquisitions, net of cash acquired..............                     -                  (12,886)                          -
   Offering proceeds and investment earnings placed
   in    escrow.....................................                     -                        -                     (69,739)
   Proceeds from escrowed offering and investment
     earnings.......................................                                         33,624                           -
                                                                         -
 Net cash flows used in investing activities........               (23,338)                (130,050)                   (299,940)

FINANCING ACTIVITIES:
   Net proceeds from recapitalization...............                43,678                        -                           -
   Net proceeds from initial public offering........                     -                        -                     512,536
   Net proceeds from senior notes...................                     -                        -                     192,995
   Proceeds from issuance of warrants...............                     1                        -                           -
   Repurchase of senior discount notes..............                     -                        -                     (14,867)
   Repurchase of senior notes from cash and cash
     equivalents....................................                     -                  (11,236)                          -
   Repurchase of senior notes from restricted                            -                  (17,721)                          -
   investments......................................
   Deferred financing costs.........................                                           (722)                    (11,902)
                                                                         -
Net cash flows provided by (used in) financing
   activities.......................................                43,679                  (29,679)                    678,762

   Effect of exchange rates on cash.................                  (465)                    (540)                     (3,097)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                   (21,432)                (280,085)                    304,583
CASH AND CASH EQUIVALENTS, beginning of
   period...........................................                81,613                  361,698                      57,115

CASH AND CASH EQUIVALENTS, end of period............(euro)          60,181  (euro)           81,613   (euro)            361,698



SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Cash paid for interest.............................           (euro)8,531             (euro)25,488                (euro)14,000
 Cash paid for taxes................................               (euro)-                  (euro)-                     (euro)-
 Non-cash financing and investing activities:
   Senior Notes and Senior Discount Notes exchanged
 for        preferred and ordinary shares...........         (euro)222,608                  (euro)-                     (euro)-
   Carrying value of preferred and ordinary shares
 issued in exchange for Senior Notes and Senior
 Discount Notes.....................................         (euro)112,494                  (euro)-                     (euro)-

         The accompanying notes are an integral part of these consolidated financial statements.


</TABLE>



<PAGE>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(1)  Organization And Nature Of Operations

         The Company's business

         CompleTel Europe N.V. ("CompleTel Europe") (together with its
wholly-owned subsidiaries, the "Company") is a Dutch holding company
incorporated on December 14, 1998. The Company is a facilities-based operator
of a technologically advanced, high-capacity, fiber optic communications
infrastructure. A facilities-based operator uses mainly its own
telecommunications facilities to provide services, in contrast with
non-facilities-based resellers, who purchase services of other providers and
then retail the services to customers.

         The Company provides telecommunications, data and Internet-related
services to business and government end-users, carriers and Internet service
providers in targeted metropolitan areas in France. It delivers these services
primarily to on-net customers directly connected to its fiber optic
metropolitan area networks, or MANs. The Company has MANs in nine areas in
France, covering the cities of: (1) Paris, (2) Lyon, (3) Marseille and Aix,
(4) Lille, Roubaix and Tourcoing, (5) Grenoble, (6) Toulouse, (7) Nice and
Sophia-Antipolis, (8) Nantes and (9) Strasbourg, Colmar and Mulhouse. The
construction of the Company's MANs was completed during the last quarter of
2001. The Company's MANs are connected by its inter-city network leased on a
short-term basis.

         The Company's operational restructuring

         Since its inception, the Company has generated operating losses and
negative cash flow from its operating activities. The Company expects to
continue to experience operating losses and negative cash flows from
operations until it establishes a sufficient revenue-generating customer base.
While the Company is experiencing growth in its core retail activity in
France, and believes that this trend will continue, since mid-2001, the
Company has been affected by the general weakness in the European markets for
carrier and dial-up Internet access and Internet data center services. In
light of these adverse market conditions, the Company implemented operational
reorganization and restructuring measures in order to adjust its operations to
foreseeable market conditions, reducing ongoing operating expenses and capital
outlays. In particular, the Company implemented a major downsizing of its
German operations in view of the slowdown in German telecommunications markets
(particularly in the carrier and ISP segments). Further, in April 2002, the
Company decided to sell its entire German operations, which sale was completed
in early May 2002 (see Note 3, Discontinued Operations). In addition, faced
with a significant downturn in the web hosting market, linked to the collapse
of the ".com" market and installed hosting overcapacity in Europe, the Company
decided to scale down the Internet data center operations it had launched in
France, Germany and the United Kingdom. In France, the Company integrated
these activities with its retail business, while in Germany and the United
Kingdom the Company exited these markets by selling its entire operations in
these countries in May 2002.

         Having decided to concentrate its efforts solely in France, the
Company closed its London offices and simplified its corporate headquarters
structure at the end of the second quarter of 2002. In 2002, the Company also
reduced its selling, general and administrative expenses, in particular, in
its corporate headquarters functions and Internet data center operations.

         The Company's Recapitalization

         Although the Company's operational restructuring described above had
the desired effect of reducing ongoing operating expenses and capital outlays,
the Company's funding requirements were still in excess of its capital
resources. To address its funding situation, the Company effected a
recapitalization plan (the "Recapitalization"), pursuant to a restructuring
agreement (the "Restructuring Agreement ") dated May 15, 2002, as amended on
July 29, 2002, among the Company, holders of its 14% senior discount notes due
2009 and 14% senior notes due 2010 (collectively, the "Notes") and its
principal shareholders. The Recapitalization was completed on September 17,
2002, and involved the following:

         Exchange of Senior Notes and Senior Discount Notes for Convertible
              Preferred B Shares and Ordinary shares;

         Payment of interest due on the Senior Notes by releasing the
              outstanding balance in the escrow account established to provide
              funds for interest payments on these Senior Notes;

         A(euro)43.7 million cash investment in Convertible Preferred A and
              Ordinary shares; and

         The issuance of warrants to holders of Ordinary shares. The exercise
              of these warrants would result in an additional investment of up
              to (euro)3.3 million.

         Exchange of the Notes for Convertible Preferred B shares and Ordinary
shares. The outstanding Senior Notes with a carrying value of (euro)121.9
million at the date of the exchange where exchanged for 757,340 Convertible
Preferred B shares, with a deemed value of (euro)50.7 million and 757,340
Ordinary shares with a fair value of (euro)7.5 million, resulting in a gain of
(euro)63.5 million. The outstanding Senior Discount Notes with a carrying
value of (euro)100.7 million at the date of the exchange where exchanged for
702,692 Convertible Preferred B shares, with a deemed value of (euro)47.1
million and 702,692 Ordinary shares with a fair value of (euro)7.1 million,
resulting in a gain of (euro)46.5 million. The Convertible Preferred B shares
and Ordinary shares together represent issued in these exchanges represent
approximately 39% of CompleTel Europe's share capital outstanding (excluding
the C shares described below). The deemed value of the Convertible Preferred B
shares issued in exchange for the Company's Notes was determined as the sum of
their redemption value and the dividends payable through the date of
redemption under the term of of the agreements, in accordance with the
provision of Statement of Financial Accounting Standards ("SFAS")N(degree)15,
"Accounting by Debtors and Creditors for Troubled Debt Restructurings", under
which this exchange was effectively considered to be a modification of the
terms of the Notes. Net of expenses relating to this exchange amounting to
(euro)2.7 million and the write off of deferred financing cost relating to the
Notes of (euro)7.0 million, the total gain recognized on this exchange
amounted to (euro)100.5 million.

         Payment of interest due on the Senior Notes. The Company sold certain
securities held in escrow to meet future interest payment obligation under the
Senior Notes and distributed the proceeds of (euro)16.8 to the Note holders.
Since the interest payable on the Notes only amounted to (euro)7.3 million,
the company recognized a loss of (euro)9.4 million, which is recorded as part
of the Recapitalization gain. Certain Note holders used (euro)9.9million of
the cash received to reinvest in the Company as described below.

         A (euro)43.7 million cash investment in Convertible Preferred A and
Ordinary shares. The Recapitalization included an investment of an aggregate
of :

         o    (euro)30.0 million by Meritage Private Equity Funds ("Meritage")
              and DeGeorge Telcom Holdings ("DeGeorge Telcom"), two of the
              Company's principal shareholders, in return for the issuance of
              1,492,537 Convertible Preferred A shares and 1,492,537 Ordinary
              shares. Meritage and DeGeorge Telcom were also issued, on a pro
              rata basis, a 1,217,719 C shares that will cause them to hold the
              same number of shares for voting purposes as the former holders
              of the Notes. In order to limit the effect of the C shares
              strictly to the allocation of voting power, the C shares are
              structured in a way that effectively gives them only nominal
              economic value.

         o    (euro)9.9 million made by certain of the holders of the Senior
              Notes from the proceeds of the payment of interest to these
              Senior Note holders as described above, in return for the
              issuance of 490,400 Convertible Preferred A shares, 32,538
              Convertible Preferred B shares and 522,938 Ordinary shares.

         o    (euro)2.9 million invested by an institutional investor made in
              return for the issuance of 143,400 Convertible Preferred A shares
              and Ordinary shares.

         o    (euro)0.9 million invested by several members of the Company's
              management and senior employees in return for 46,700 Convertible
              Preferred A shares and 46,700 Ordinary shares.

         The Company used a relative fair value method for establishing the
initial carrying value of the shares issued in return for the cash investment
of (euro)43.7 million. Accordingly, of the aggregate cash investment, an
amount of (euro)26.3 million was ascribed to the Convertible Preferred A
shares, (euro)0.3 million to Convertible Preferred B shares, (euro)17.0
million to Ordinary shares and (euro)0.1 million to C shares.

         The issuance of warrants to holders of Ordinary shares. The
Restructuring Agreement also contemplates that up to an additional (euro)3.3
million may be invested in the form of the exercise of warrants for Ordinary
shares. These warrants were issued on September 12, 2002 to the Company's then
existing shareholders and will be exercisable between December 15, 2002 and
the fifteenth day following the publication of the Company's 2002 financial
statements. In the event that warrants expire unexercised, the Company has
undertaken to make the Ordinary shares underlying those warrants available for
subscription by the holders of its Convertible Preferred A Shares and
Convertible Preferred B Shares. The Company has received a commitment from an
institutional investor to take up approximately 51% of these subscription
rights, if they are offered. As of December 31, 2002, 73 warrants have been
exercised.

         Effect on financial condition. As part of the Recapitalization, all
of the Company's outstanding Notes were converted into Convertible Preferred B
and Ordinary shares; thereby, the Company's outstanding indebtedness
effectively was eliminated. In addition, the Company raised a total of
(euro)43.7 million cash investment in its Convertible Preferred A and Ordinary
shares. The Company believes that, as a result of the completion of the
Recapitalization and the cash saving effect of its operational restructuring,
its cash balances, together with the anticipated cash flow from its
operations, will be sufficient to fully fund its operations to cash flow
breakeven.

         Accounting Treatment of the Recapitalization. The Convertible
Preferred A shares and Convertible Preferred B shares (together, the
"Preferred shares") issued in the Recapitalization are classified outside of
shareholders' equity as a result of their redemption feature (see Note 7,
terms of the Preferred Shares). The total gain on the Recapitalization
amounted to (euro)91.1 million, which comprises the gain on the exchange of
the Notes of (euro)100.5 and the loss on the repayment of interest of
(euro)9.4 million as described above.


         The Company's Organization

         As discussed further below, CompleTel Europe was an indirect majority
owned subsidiary of CompleTel LLC ("LLC"), a Delaware limited liability
company, through November 2000. An indirect 7% interest in CompleTel Europe
was acquired by purchasers of units in the Company's Senior Discount Note
offering (Note 6). LLC was known as CableTel Delaware LLC ("CableTel
Delaware") from its formation on January 8, 1998 through May 18, 1998, when it
was reorganized and renamed as CableTel Europe LLC in connection with the
admission of a new member. Effective August 20, 1998, CableTel Europe LLC
changed its name to CompleTel LLC.

         In November and December 1999, LLC received additional cash
contributions totaling approximately (euro)41.7 million from new and existing
investors. As of December 31, 1999, LLC had contributed, through a series of
planned transactions, (euro)39.6 million to CompleTel GmbH through
intermediate subsidiaries in exchange for one share of CompleTel GmbH, and
contributed approximately (euro)2.1 million to CompleTel Europe through
intermediate subsidiaries in exchange for ordinary shares of CompleTel Europe.
Through this series of planned transactions, an intermediate subsidiary of LLC
received one share of CompleTel GmbH, which was contributed to BVI in February
2000 in exchange for one BVI Class B share. Also, in February 2000 the BVI
share was contributed to CompleTel Europe in exchange for ordinary shares in
CompleTel Europe. These transactions have been accounted for as a
reorganization of entities under common control. Accordingly, the accompanying
consolidated financial statements retroactively reflect the deemed capital
contribution by LLC through certain intermediate subsidiaries to BVI and
CompleTel Europe of the one share interest in CompleTel GmbH and the
associated 31,009 ordinary shares issued by CompleTel Europe as if such
transaction had occurred in December 1999.

         Following CompleTel Europe's initial public offering ("IPO") (see
Note 5), LLC commenced certain transactions that provided its members the
ability to hold their interests in CompleTel Europe directly rather than
indirectly. In December 2000, an aggregate 92,048 shares of CompleTel Europe
were distributed to members of LLC. As a result of this distribution and the
contribution transaction described in Note 4, LLC no longer exercises majority
voting control over CompleTel Europe and CompleTel Europe is not a
consolidated entity in the financial statements of LLC, effective December 1,
2000. CompleTel L.L.C. is therefore not preparing consolidated financial
statements including CompleTel Europe N.V. for the fiscal years 2002 and 2001.

(2)  Summary Of Significant Accounting Policies

         Basis of Presentation

         The accompanying consolidated financial statements of the Company
have been prepared in accordance with accounting principles generally accepted
in the United States of America ("U.S. GAAP"). The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with the current
year presentation.

         Stock Split

         On August 20, 2002, Company held an extraordinary general meeting at
which its shareholders approved an amendment of the Company's Articles of
Association to effect a 670-for-one reverse split of the Company's Ordinary
shares, combined with a reduction of the nominal value of the resulting
Ordinary shares to (euro)0.04 each. This reverse split of the Ordinary shares
was effected on September 16, 2002. Furthermore, at the extraordinary general
meeting, the Company's shareholders approved an amendment to the Company's
Articles of Association to effect a 100-for-one reverse split of the
Convertible Preferred A and B shares. This reverse split of the Company's
Preferred shares was effected on September 18, 2002. All share and per share
amounts have been restated to show the effect of these stock splits.
Accordingly, the accompanying consolidated financial statements have been
retroactively restated to give effect to these recapitalizations.

         Principles of Consolidation

         The accompanying consolidated financial statements include the
accounts of CompleTel Europe and its wholly-owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation.

         Cash and Cash Equivalents

         For purposes of reporting cash flows, the Company considers
commercial paper with original maturities of ninety days or less at the date
of acquisition to be cash equivalents.

         Restricted Current and  Non-current Investments

         Restricted current and non-current investments include investments in
Italian government bonds which are considered to be held-to-maturity
securities. Upon maturity the proceeds from these securities are used to pay
interest on the Senior Notes (note 6). The held-to-maturity securities are
recorded at their current discounted value, amounting to (euro)24.8 million as
of December 31, 2001. These securities had a total maturity value of
(euro)31.0 million at redemption date.

         Accounts Receivable

         Customer accounts receivable represent receivables from the Company's
services, less an allowance for doubtful receivables based on the Company's
assessment of probable loss related to overdue accounts receivable.
Additionally, accounts receivable includes deferred revenue balances and
excludes the VAT applicable to the customer receivables, which are separately
disclosed. The following table reflects the movement in the Company's
allowance for doubtful receivables (in thousands):

<TABLE>
<CAPTION>
                                                                                          2002               2001
<S>                                                                                <C>                  <C>
Allowance for doubtful receivables, beginning of year .................            (euro)1,530          (euro)733
Additional provisions..................................................                  1,357              4,748
Receivables write-offs.................................................                (2,196)            (3,951)
Allowance for doubtful receivables, end of year........................              (euro)691       (euro) 1,530
</TABLE>

         Prepaid Expenses, VAT Receivables and Other Current Assets

         Prepaid expenses consist primarily of prepaid rent and prepaid
insurance. Prepayments are amortized on a straight-line basis over the life of
the underlying agreements. VAT receivables consist primarily of the value
added taxes ("VAT") related to the receivable from customers from the
Company's services and amounts due to the Company's subsidiaries for VAT paid
on purchased goods and services. VAT receivables are recoverable through a
netting of VAT payables on sales revenue or by a request for reimbursement to
the applicable taxing authority. Other current assets consist primarily of
deposits on office and switch location premises.

         Property and Equipment

         Property and equipment includes network equipment, office furniture
and equipment, computer equipment and software, leasehold improvements,
buildings and construction in progress. These assets are stated at historical
cost and are depreciated when ready for their intended use on a straight-line
basis over the estimated useful lives of the related assets as follows:

                                                              Estimated
                                                              Useful Life

Network plant........................................         15 to 20 years
Network equipment....................................         3 to 8 years
Office furniture and equipment.......................         5 years
Computer equipment and software......................         3 to 5 years
Leasehold improvements...............................         9 to 12 years
Buildings............................................         20 years

                  Property and equipment consisted of the following (in
thousands):

                                                       December 31,
                                                       2002         2001

Network plant and equipment.................    (euro)301,033 (euro)276,206
Office furniture and equipment..............            3,127         3,602
Computer equipment and software.............            5,177         7,152
Leasehold improvements......................            3,762         4,096
Materials and supplies .....................                -         5,525
Buildings...................................              205           205

Property and equipment, in service..........          313,304       296,786
Less: accumulated depreciation..............         (76,018)      (49,573)

Property and equipment, in service, net.....          237,286       247,213
Construction in progress....................            7,590        30,594

Property and equipment, net.................    (euro)244,876 (euro)277,807



         Network plant costs include the network plant and cable installed and
portions of labor involved in the installation of the Company's core MANs and
the extensions from the core MANs to buildings and sites where potential
customers may be located. The Company depreciates its network plant over
periods ranging from 15 years for cable to 20 years for duct.

         Network equipment costs include the network and switch equipment
installed and portions of labor involved in the installation of the Company's
switch sites, hubs and nodes and the extensions from the nodes to buildings
and sites where potential customers may be located. The Company depreciates
its network equipment over periods ranging from 3 years for network support
equipment to 8 years for switch equipment and network transmission equipment.

         The Company capitalized approximately (euro)0.9 million, (euro)14.2
million and (euro)10.1 million of interest during the years ended December 31,
2002, 2001 and 2000. As of December 31, 2002, the cumulative net book value of
capitalized interest totalled approximately (euro)14.8 million.

         Expenditures for maintenance and repairs are expensed as incurred.

         Computer Software Costs

         The Company capitalizes software used for internal purposes in
accordance with Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1").
Internal and external costs incurred in the planning or conceptual development
of software for internal use are expensed as incurred. Once the planning or
conceptual development of software has been achieved and the project has
reached the application or development stage, external direct costs of
materials and services used in the project, payroll and payroll-related costs
for employees who are directly associated with and who devote time to the
project (to the extent of the time spent directly on the project) and interest
cost incurred in the development of the project are capitalized. Training and
routine maintenance costs are expensed as incurred.

         Deferred Financing Costs

         Costs to obtain debt financing are capitalized and amortized to
interest expense over the life of the related debt facility using the
effective interest method. All remaining deferred financing costs were written
off as a result of the Company's Recapitalization.

         License Costs

         The Company capitalizes third-party direct costs associated with
obtaining licenses. Capitalized license costs are amortized at commencement of
operations over the lives of the related licenses, ranging from 15 to 25 years
on a straight-line basis.


         Recoverability of Long-Lived Assets

         The Company evaluates the carrying value of its long-lived assets
whenever events or circumstances indicate the carrying value of assets may
exceed their recoverable amounts. For long-lived assets other than goodwill,
an impairment loss is recognized when the estimated future cash flows
(undiscounted and without interest) expected to result from the use of an
asset are less than the carrying amount of the asset. If an asset, which is
expected to be held and used, is determined to be impaired, then the asset
would be written down to its fair market value based on the present value of
the discounted cash flows related to such asset.

         For goodwill the Company applied the policy described in the
preceding paragraph for years prior to 2002. Beginning in 2002 the Company
follows the goodwill impairment guidelines of SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). Under SFAS 142, goodwill is tested for
impairment on an annual basis and whenever indicators of impairment arise. The
goodwill impairment test, which is based on fair value, is performed on a
reporting unit level. A reporting unit is defined as an operating segment or
one level lower. In connection with the Company's annual impairment test in
December 2002, the Company impaired its entire goodwill which had a carrying
value of (euro)5.8 million

           Measurement of an impairment loss for an asset held for sale are
based on an asset's fair market value less the estimated costs to sell. In
accordance with this policy, as of December 31, 2001, the Company assessed all
of its network assets and consequently recorded impairment losses in 2001
totaling (euro)130.3 million in Germany and (euro)12.4 in the United Kingdom
(see Note 12). These impairments are classified as part of discontinued
operations (see Note 3).

         Revenue Recognition

         Revenue related to non-installation services offered by the Company
is recognized in the period the services are delivered.

         Installation revenue is initially deferred upon installation and
invoicing of the service and recognized as revenue over the expected life of
the service.

         As required, the Company adopted Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements" ("SAB 101") in the fourth
quarter of 2000, retroactive to January 1, 2000. SAB 101 provides the staff's
views in applying generally accepted accounting principles to selected revenue
recognition issues. The Company's 2000 statement of operations reflects the
application of SAB 101, which initially resulted in the deferral of
approximately (euro)2.1 million of installation revenue into future periods.
The cumulative effect of change in accounting principle is reflected in the
2000 consolidated statement of operations for the impact related to periods
prior to January 2000. The cumulative effect related to periods prior to
January 2000 was immaterial to the consolidated financial statements taken as
a whole.

         The Company's three largest customers generated approximately 12% of
its revenue for the year ended December 31, 2002. The Company's largest
customer generated slightly over 7% of total revenue for the year.

         The Company generates revenue from four primary categories of service
offering, including: (i) retail voice services, (ii) retail data and Internet
services, (iii) carrier services, and (iv) ISP (Internet service providers)
dial-up services.

         The following table presents the Company's revenue by category of
service offering for each of the years ended December 31, 2002, 2001 and 2000
(in thousands):

<TABLE>
<CAPTION>
Revenue Category                                       2002              2001              2000
<S>                                             <C>               <C>                <C>
Retail Voice................................    (euro)54,526      (euro)27,722       (euro)6,860
Retail Data and Internet....................          17,448            11,829             4,463
Carrier.....................................          13,749            10,224             3,727
ISP.........................................          12,050            26,164             7,901
     Total..................................    (euro)97,773      (euro)75,939      (euro)22,951
</TABLE>


         Fair Value of Financial Instruments

         The fair value of a financial instrument represents the amount at
which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced sale or liquidation. Significant
differences can arise between the fair value and carrying amount of financial
instruments that are recognized at historical cost amounts.

         The following methods and assumptions were used by the Company in
estimating fair value disclosures for financial instruments:

         Cash and cash equivalents, trade receivables - the carrying
                  amounts represent fair value because of the short maturities
                  of such instruments.

         Short-term and non-current investments, restricted - the fair value
                  is based on quoted market values.

         Long-termdebt - the fair value is based on quoted market values, if
                  available. At December 31, 2002, the carrying amounts
                  represent fair value as the only long-term debt is
                  represented by non-marketable capital lease obligations.

         The following table presents carrying amounts and fair values for the
Company's financial instruments (in thousands):

<TABLE>
<CAPTION>
Assets (Liabilities) as of December 31, 2002                             Carrying Amount               Fair Value
<S>                                                                      <C>                       <C>
Short-term and non-current investments....................                   (euro)-                  (euro)-
Long-term debt.........................................                      (euro)3,986              (euro)3,986

Assets (Liabilities) as of December 31, 2001                             Carrying Amount               Fair Value
Short-term and non-current investments.................                     (euro)24,779             (euro)24,779
Long-term debt.........................................                    (euro)227,735             (euro)66,437
</TABLE>

         Stock-Based Compensation

         The Company accounts for stock-based compensation to employees using
the intrinsic value method prescribed in Accounting Principles Board ("APB")
Opinion No. 25 Accounting for Stock Issued to Employees," and certain related
interpretations including Financial Accounting Standards Board ("FASB")
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation--an interpretation of APB Opinion No. 25" ("FIN 44"). Certain
non-cash compensation amounts had been pushed down from LLC to the Company and
recorded as a deemed capital contribution, with an offsetting entry to
deferred compensation. Deferred compensation was amortized to expense over the
vesting period of the related stock-based awards. The deferred compensation
related to the amounts pushed down from LLC have been fully amortized as of
December 31, 2002. Non-cash compensation charges are primarily attributable to
employees whose salary and benefits were otherwise recorded in selling,
general and administrative expenses.

         The following table illustrates the effect on net income (loss) and
earnings per share for each of the years ended December 31, 2002, 2001 and
2000, if the Company had applied the fair value recognition provisions of SFAS
148 to stock-based employee compensation (in thousands):

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                    ----------------------------------------------------------
                                                           2002                2001               2000
                                                    ------------------- ------------------- ------------------
<S>                                                   <C>           <C>                  <C>
Reported net income (loss)                            (euro)4,420    (euro)  (299,049)   (euro) (200,488)
Stock-based employee compensation as   reported
using intrinsic method...................                   6,052               6,620              7,050
Less: Total stock-based employee
  compensation expense determined
  under fair value based method for
  all awards......................................         (1,778)             (1,995)            (2,005)
                                                    --------------   -----------------    ---------------
Adjusted net income (loss) .......................    (euro)8,694    (euro)  (294,424)    (euro)(195,443)
                                                    ==============   =================    ===============
Reported basic income (loss) per share............     (euro)3.40    (euro) (1,272.81)    (euro) (896.67)
Adjusted basic income (loss) per share............     (euro)6.69    (euro) (1,253.12)    (euro) (874.11)
                                                    ==============   =================    ===============
Reported diluted income (loss) per share..........     (euro)3.05    (euro) (1,272.81)    (euro) (896.67)
Adjusted diluted income (loss) per share..........     (euro)1.25    (euro) (1,292.49)    (euro) (919.23)
</TABLE>


         Pro Forma Fair Value Disclosures

         The FASB issued SFAS No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123"), which defines a fair value based method of
accounting for employee stock options and similar equity instruments. However,
as allowed by SFAS 123, the Company has elected to account for its stock-based
compensation plans using the intrinsic value based method of APB 25 and
provide pro forma disclosures of net loss and loss per share as if the fair
value based method had been applied.

         For pro forma disclosure purposes, the Company has computed the fair
value of each option as of the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions.

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                    2002           2001            2000
<S>                                                                <C>            <C>             <C>
          Risk-free interest rate...........................       4.00%          4.15%            6.0%
          Expected dividend yield...........................          0%             0%              0%
          Expected lives outstanding........................   5.5 years      5.5 years       5.5 years
          Expected volatility...............................       80.0%          70.0%           70.0%
</TABLE>

         The estimated fair value of options granted is amortized to expense
over the option vesting period. Cumulative compensation costs recognized in
pro forma net loss with respect to options that are forfeited prior to vesting
are adjusted as a reduction of pro forma compensation expense in the period of
forfeiture.

         Income Taxes

         The Company accounts for income taxes under the asset and liability
method which requires recognition of deferred tax assets and liabilities for
the expected future income tax consequences of transactions which have been
included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the differences
between the financial statement and income tax bases of assets, liabilities
and carryforwards using enacted tax rates in effect for the year in which the
differences are expected to reverse or the carryforwards are expected to be
utilized. Deferred tax assets are then reduced by a valuation allowance if
management believes it is more likely than not they will not be realized.

         Comprehensive Loss

         SFAS No. 130, "Reporting Comprehensive Income" ("SFAS 130"), requires
that an enterprise (i) classify items of other comprehensive income (loss) by
their nature in the financial statements and (ii) display the accumulated
balance of other comprehensive income (loss) separately from retained earnings
(deficit) and additional paid-in capital in the equity section of a balance
sheet. The Company's other comprehensive loss, as set forth in the
accompanying consolidated statements of shareholders' equity (deficit), is
comprised of the net loss for the period plus the current period cumulative
translation adjustments.

         Basic and Diluted Income (Loss) Per Ordinary Share

         Basic income (loss) per Ordinary share is determined by dividing net
income (loss) applicable to Ordinary shares by the weighted average number of
Ordinary shares outstanding during each period. Diluted income (loss) per
Ordinary share is determined by dividing net income (loss) by the sum of the
weighted average share outstanding and any potentially issuable Ordinary
shares, but only if such potentially issuable ordinary shares are dilutive.
During 2002, the Company's Preferred A shares and Preferred B shares were
dilutive. Because the Company was in a loss position in 2001 and 2000, there
are no differences between basic and diluted loss per Ordinary share during
these two years. Under the Company's employee incentive plans 1,144, 319 and
148 Ordinary shares were exercisable as of December 31, 2002, 2001 and 2000,
respectively, but were not included in the computation of diluted earnings per
share because the effect would be antidilutive. The weighted average Ordinary
shares outstanding for each period excludes the issuance in November 2000 of
4,690 Ordinary shares for LLC units contributed to the Company (See Note 4).

         The following table sets forth the weighted average shares used in
the computations of basic and diluted per share results for the years ended
December 31, 2002, 2001 and 2000.

<TABLE>
<CAPTION>
                                                                            2002           2001           2000
<S>                                                                    <C>              <C>            <C>
  Shares in basic per share calculation.........................       1,299,507        234,952        223,592
  Effects of dilutive securities:
    Conversion of convertible preferred A and convertible
   preferred B shares to Ordinary shares........................       1,064,503              -              -
                                                                  ---------------  ----------------------------
  Shares in diluted per share calculation.......................       2,364,010        234,952        223,592


         For the years ended December 31, 2002, 2001 and 2000, basic income
(loss) per Ordinary share is comprised of the following:


                                                                            2002           2001           2000
  Income (loss) from continuing operations......................      (euro)9.52 (euro)(313.39) (euro)(700.13)
  Income (loss) from discontinued operations....................          (3.96)       (959.42)       (195.36)
  Accretion of convertible preferred shares.....................          (2.16)              -              -
  Cumulative effect of change in accounting principle...........               -              -         (1.18)
                                                                  ---------------  ----------------------------
  Basic income (loss) per Ordinary share........................      (euro)3.40(euro)(1,272.81) (euro)(896.67)

         For the years ended December 31, 2002, 2001 and 2000, diluted income
(loss) per Ordinary share is comprised of the following:

                                                                          2002             2001           2000
  Income (loss) from continuing operations......................    (euro)5.23   (euro)(313.39) (euro)(700.13)
  Income (loss) from discontinued operations....................        (2.18)         (959.42)       (195.36)
  Cumulative effect of change in accounting principle...........             -                -         (1.18)
                                                                 --------------  ------------------------------
  Diluted income (loss) per Ordinary share......................    (euro)3.05 (euro)(1,272.81) (euro)(896.67)
</TABLE>

         Foreign Operations and Foreign Exchange Rate Risk

         CompleTel Europe and each of its subsidiaries, except those in the
U.K. use the euro as their functional currency.

         Assets and liabilities of foreign subsidiaries for which the
functional currency is the local currency are translated at exchange rates in
effect at period-end, and the consolidated statements of operations are
translated at the average exchange rates during the period. Exchange rate
fluctuations on translating foreign currency financial statements into euro
that result in unrealized gains or losses are recorded net of tax and referred
to as translation adjustments. Cumulative translation adjustments are recorded
as a separate component of shareholders' equity.

         Transactions denominated in currencies other than the local
functional currency of the Company's operating subsidiaries, including U.S.
dollar denominated intercompany accounts and notes payable to LLC and
Management Co., are recorded based on exchange rates at the time such
transactions arise. Subsequent changes in exchange rates result in transaction
gains and losses, which are reflected in income as unrealized (based on
period-end translations) or realized upon settlement of the transactions.

         Newly Adopted Accounting Standards

         In June 2001, the FASB issued SFAS No. 141, "Business Combinations"
("SFAS 141") and SFAS No. 142. SFAS 141 requires the use of the purchase
method of accounting for all business combinations initiated after June 30,
2001. SFAS 142 requires intangible assets to be recognized if they arise from
contractual or legal rights or are "separable," i.e., it is feasible that they
may be sold, transferred, licensed, rented, exchanged or pledged. As a result,
it is likely that more intangible assets will be recognized under SFAS 142
than its predecessor, APB Opinion No. 16 although in some instances previously
recognized intangibles will be subsumed into goodwill. The non-amortization
provisions of SFAS 142 resulted in an increase in reported net income for 2002
of approximately (euro)0.6 million.

         Under SFAS 142, goodwill is no longer amortized on a straight-line
basis over its estimated useful life, but is tested for impairment on an
annual basis and whenever indicators of impairment arise. Additionally,
goodwill on equity method investments is no longer amortized; however, it will
continue to be tested for impairment in accordance with APB Opinion No. 18,
"The Equity Method of Accounting for Investments in Common Stock". Under SFAS
142, intangible assets with indefinite lives are not amortized. Instead, they
are carried at the lower of cost or market value and are tested for impairment
at least annually. All other recognized intangible assets will continue to be
amortized over their estimated useful lives.

         The Company adopted SFAS 141 effective January 1, 2002. The adoption
of this statement did not have a material impact on its results of operations,
financial position, or cash flows.

         The Company's adoption of SFAS 142 on January 1, 2002 did not have a
material impact on the results of operations, financial position or cash
flows. However, in connection with the Company's annual impairment test of
goodwill in December 2002, the Company impaired its entire goodwill which had
a carrying value of (euro)5.8 million.

         The goodwill amortization expense and net loss of the Company for the
years ended December 31, 2002, 2001 and 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                    ----------------------------------------------------------
                                                           2002                2001               2000
                                                    ------------------- ------------------- ------------------
<S>                                                    <C>           <C>                  <C>
Reported net income (loss) applicable to ordinary
shares.................................                (euro)4,420    (euro) (299,049)   (euro) (200,488)
     Add back: goodwill amortization..............               -                305                441
                                                       ------------   ---------------    ---------------
Adjusted net income (loss) .......................     (euro)4,420    (euro) (298,744)   (euro) (200,047)
                                                       ===========    ================   ===============
Reported basic income (loss) per share............     (euro)3.40     (euro) (1,272.81)  (euro) (896.67)
Adjusted basic income (loss) per share............     (euro)3.40     (euro) (1,271.50)  (euro) (894.70)
                                                       ===========    =================  ===============
Reported diluted income (loss) per share..........     (euro)3.05     (euro) (1,272.81)  (euro) (896.67)
Adjusted diluted income (loss) per share..........     (euro)3.05     (euro) (1,271.50)  (euro) (894.70)
</TABLE>

         The carrying amount of the Company's licenses as of December 31,
2002, was approximately (euro)1.4 million, with corresponding accumulated
amortization of (euro)0.4 million. The carrying amount of the Company's
goodwill of (euro)5.8 million was fully impaired at December 31, 2002.

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 establishes accounting
requirements for retirement of obligations associated with tangible long-lived
assets, including (1) the timing of the liability recognition, (2) initial
measurement of the liability, (3) allocation of cost to expense, (4)
subsequent measurement of the liability, and (5) related financial statement
disclosure. SFAS 143 requires that the fair value of the liability for an
asset retirement obligation be recognized in the period during which it is
incurred, if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying value of the
asset and depreciated over the life of the associated asset. SFAS 143 requires
the measurement of changes in the liability for an asset retirement obligation
due to the passage of time by applying an interest method of allocation to the
amount of the liability at the beginning of a reporting period. The interest
rate used to measure that change is the credit-adjusted-risk-free rate that
existed when the liability was initially measured. Finally, SFAS 143 requires
such changes in liability for asset retirement obligations to be recognized as
an increase in the carrying amount of the liability and as an expense
classified as an operating item in the statement of income. SFAS 143 applies
to fiscal years beginning after June 15, 2002. The Company does not anticipate
that the adoption of SFAS 143 will have a material impact on its results of
operations, financial position, or cash flows.

         In August 2001, the FASB issued SFAS 144. SFAS 144 establishes a
single accounting model for long-lived assets to be disposed of by sale
consistent with the fundamental provisions of SFAS 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."
While it supersedes APB Opinion 30 "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions," it
retains the presentation of discontinued operations but broadens that
presentation to include a component of an entity (rather than a segment of a
business). However, discontinued operations are no longer recorded at net
realizable value and future operating losses are no longer recognized before
they occur. Under SFAS 144 there is no longer a requirement to allocate
goodwill to long-lived assets to be tested for impairment. SFAS 144 also
establishes a probability weighted cash flow estimation approach to deal with
situations in which there is a range of cash flows that may be generated by
the asset being tested for impairment. SFAS 144 also establishes criteria for
determining when an asset should be treated as held for sale.

         SFAS 144 is effective for fiscal years beginning after December 15,
2001. Other than the restatement of the Company's financial statements to
report in discontinued operations the results of its German and U.K.
operations, which were disposed of in May 2002, the adoption of SFAS 144 on
January 1, 2002 did not have a material impact on the Company's results of
operations, financial position, or cash flows.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections" ("SFAS 145"). SFAS 145 rescinds SFAS 4 "Reporting Gains
and Losses from Extinguishment of Debt" and also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings or describe their applicability under changed conditions. SFAS 145
applies to fiscal years beginning after May 15, 2002. Other than the
classification in its statement of operations of the gain resulting from the
September 17, 2002 Recapitalization, the adoption by the Company of SFAS 145,
as of July 1, 2002, did not have a material impact on the Company's results of
operations, financial position, or cash flows.

         Recently Issued Accounting Standards

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS 146"). SFAS 146 requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of a commitment to an exit or
disposal plan. SFAS 146 replaces Emerging Issues Task Force No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS 146 will be applied prospectively to exit or disposal
activities initiated after December 31, 2002. The Company does not expect the
adoption of SFAS 146 to have a material impact on its results of operations,
financial position, or cash flows.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123 " ( "SFAS 148 "). SFAS 148 provides two general guidelines:
(i) it provides alternative methods of transition for a voluntary change from
a fair value based method of accounting for stock-based employee compensation,
and (ii) it requires more prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. Under SFAS
148, an entity that adopts the fair value provisions of SFAS 123 for
stock-based employee compensation in a fiscal year beginning before December
16, 2003, may report the change in accounting principle using any one of the
following methods: (a) prospective, (b) modified prospective, or (c)
retroactive restatement. For an entity that adopts the fair value provisions
of SFAS 123 in a fiscal year beginning after December 15, 2003, that change in
accounting must be reported using either the modified prospective or the
retroactive restatement method.

         In November 2002, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 00-21, "Revenue Arrangements with Multiple
Deliverables." EITF Issue No. 00-21 provides guidance on how to account for
arrangements that involve the delivery or performance of multiple products,
services and/or rights to use assets. The provisions of EITF Issue No. 00-21
will apply to revenue arrangements entered into in fiscal periods beginning
after June 15, 2003. The Company is currently evaluating the effect that the
adoption of EITF Issue No. 00-21 will have on its results of operations and
financial condition.


(3)  Discontinued Operations

         In light of the general weakness in the European markets for carrier
and dial-up Internet access and Internet data center services observed by the
Company since mid-2001, the Company implemented operational reorganization and
restructuring measures in order to adjust its operations to foreseeable market
conditions, reducing ongoing operating expenses and capital outlays. In
particular, the Company implemented a major downsizing of its German
operations in the fourth quarter of 2001 in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
Finally, in April 2002, in connection with its Recapitalization as described
in Note 1, the Company decided to sell its entire German and U.K. operations.

         On May 10, 2002, the Company sold its German operations to a third
party. Pursuant to the agreement governing the terms of the sale, the Company
transferred to the buyer the entire share capital of CompleTel GmbH, which,
until the sale, was an indirect wholly-owned subsidiary of CompleTel Europe.
Furthermore, the Company agreed to acquire from CompleTel GmbH certain
transmission equipment for (euro)500,000, which represented the carrying value
of the equipment at the time of sale. In addition, the Company agreed to
provide the buyer support billing and financial IT services for a period of up
to 12 months after the sale at no additional cost. Following the sale of
CompleTel GmbH, the Company no longer operates or generates revenue in
Germany. In connection with the sale of its German operations, the Company
entered into reciprocal agreements for terminating traffic, which allows the
Company to service its French customers that have operations in Germany.

         On May 15, 2002, the Company sold its U.K. operations to a third
party. Pursuant to the agreement governing the terms of the sale, the Company
transferred to the buyer the entire share capital of CompleTel UK Limited,
which, until the sale, was an indirect wholly-owned subsidiary of CompleTel
Europe. Following the sale of CompleTel U.K. Limited, the Company no longer
operates or generates revenue in the United Kingdom.

         The Company has accounted for these transactions in accordance with
SFAS No. 144. In the sale transactions of both the German operations and U.K.
operations, both conditions of qualifying as a component of an entity are met,
that is, (a) the operations and cash flows of the component have been
eliminated from the ongoing operations of the Company as a result of the
disposal transaction, and (b) the Company did not have any significant
continuing involvement in the operations of the component since the disposal
transaction.

         The following table presents the carrying amounts of the major
classes of assets and liabilities of the Company's German and U.K. operations
as of December 31, 2001 (in thousands):

<TABLE>
<CAPTION>
                                                     Germany       United               Total
                                                                    Kingdom
<S>                                              <C>               <C>            <C>
Current assets..............................     (euro)13,727      (euro)2,193    (euro)15,920
Property and equipment, net.................           24,429                -          24,429
Licenses, net...............................            1,362               62           1,424
Other non-current assets....................            1,445                -           1,445
Current liabilities.........................           35,380            2,501          37,881
Non-current liabilities.....................              489                -             489


         The following table presents the components of discontinued
operations, as reflected in the accompanying consolidated statements of
operations (in thousands):

                                                        2002             2001            2000
Revenue.....................................     (euro)8,830     (euro)21,970     (euro)8,589
Operating expenses..........................         (11,276)        (236,640)        (52,714)
  Operating loss............................          (2,446)        (214,670)        (44,125)
Other income (expense)......................           1,231          (10,747)            444
Loss on disposal of discontinued operations.          (3,933)               -               -
Loss from discontinued operations...........   (euro) (5,148)  (euro)(225,417)  (euro)(43,681)
Basic net loss from discontinued
   operations per ordinary share............     (euro)(3.96)   (euro)(959.42)  (euro)(195.36)
Diluted net loss from discontinued
   operations per ordinary share............     (euro)(2.18)   (euro)(959.42)  (euro)(195.36)
</TABLE>

         Note 12 sets forth further discussion concerning the impairment and
restructuring charges relating to the Company's discontinued operations.

(4)  Related Party Transactions

         Employee Loans

         In March 2000, iPcenta Limited, a wholly-owned indirect subsidiary of
the Company, loaned one of the Managing Directors and the President of its
subsidiary, CompleTel UK Limited, the principal amount of U.S.$206,500
((euro)220,000) to purchase common units of LLC. The principal amount,
together with accumulated interest at the rate of 7% compounded semi-annually,
was to become due and payable on the earlier of (a) January 15, 2003, (b) 30
days after a termination for cause, or (c) 90 days after any termination of
employment. The common units were subject to vesting and forfeiture provisions
and will, if vested, entitle the Managing Director to receive a pro rata
number of its ordinary shares when and if LLC is liquidated. In accordance
with the terms of the loan, iPcenta forgave a pro rata portion of the
principal and interest on the note as the common units vest or upon
forfeiture. In addition, iPcenta reimbursed the Managing Director for tax
liabilities arising as a result of this arrangement. The Company forgave a
total of (euro)179,880 of this loan, including principal and interest and
reimbursement of associated tax liabilities. Following the termination of the
Managing Director's employment with the Company in late May 2001,
approximately (euro)101,752 of the loan became due and payable. This amount
was settled by the Managing Director by transferring to the Company, LLC units
he owned, representing 64 ordinary shares and having market value equal to the
amount due for repayment as of the date of transfer.

         In March 2000, a limited number of the Company's employees obtained
interest bearing loans in an approximate aggregate principal amount of (euro)2
million from a commercial bank to purchase shares in the Company's IPO. The
shares purchased by these employees were pledged to the bank as a security for
the repayment of the loans. In connection with these loans, the Company
entered into certain arrangements with these employees and the lending bank,
including indemnity letters under which the Company agreed to pay the lending
bank the amount of any shortfalls from the amount payable on these loans
(including interest), that is, the difference between the amount due for
repayment and the proceeds of the sale of the pledged shares. In accordance
with their terms, the loans matured in September 2001. In August 2001, the
employees decided to prepay the loans prior to the maturity date. On August
16, 2001 the commercial bank sold the 167 ordinary shares pledged to it by the
employees and used the proceeds from such sale to repay the amount of the
loans. The Company paid to the lending bank the amount of approximately
(euro)1.8 million, which represented the difference between the proceeds of
the sale of the pledged sales and the amount due for repayment on the maturity
of the loans. The charge related to this repayment has been included in
selling, general and administrative expense in the accompanying 2001
consolidated statement of operations.

         In December 2000, the Company loaned William Pearson, its then
President and Chief Executive Officer, the principal amount of U.S.$1.5
million. The principal amount, together with accumulated interest at the
annual rate of 7% was secured by a pledge of 1,430 of Mr. Pearson's ordinary
shares in the Company and was originally scheduled to be due and payable on
the earlier of December 31, 2001, or 180 days after any termination of
employment. Effective as of December 11, 2001, the maturity date for this loan
was extended to December 31, 2002, or 180 days after any termination of
employment. As a result of Mr. Pearson's resignation on February 22, 2002, the
loan became due and payable on August 19, 2002. However, Mr. Pearson has
indicated that he was unable to repay the full amount owed and has asserted
that the loan was made to him solely with recourse to the collateral.
Accordingly, and in light of the decline in current fair market value of the
collateral, the Company recorded a (euro)1.9 million reserve for the full loan
amount and accrued interest. The Company claimed repayment of the loan and
initiated collection through civil action. On December 13, 2002, the Company
and Mr. Pearson reached an out of court settlement agreement of all claims
under which Mr. Pearson paid $174,873, corresponding to the average per share
selling price of the 1,430 pledged shares.

         In April 2001, the Company granted Timothy Samples, its then Chief
Executive Officer ("CEO"), an incentive bonus, which was structured as a Loan
Agreement, pursuant to which the Company made a (euro)865,000 forgivable loan
to the CEO. The loan accrued interest at 6%, compounded quarterly, and became
due February 28, 2002. In accordance with its terms, the repayment of the loan
(including interest and reimbursement of associated tax liabilities) was
forgiven by the Company on the date of maturity, as the CEO was still employed
by the Company. The charge related to the forgiveness of this loan has been
included in selling, general and administrative expense in the accompanying
2002 and 2001 statements of operations.

         Management Agreement

         During 1999, LLC and Management Co., executed management services
agreements (as amended, the "Management Agreements"), pursuant to which
Management Co. performed certain services for LLC and its direct and indirect
subsidiaries. The Management Agreements provided for reimbursement in an
amount of 105% (103% prior to February 1999) of all expenses incurred by
Management Co. in the performance of the Management Agreements. These items
incurred by Management Co. consist primarily of executive management salaries
and benefits, occupancy costs and professional fees and were allocated to
certain of the LLC's direct and indirect subsidiaries (the "Operating
Subsidiaries") based upon an estimate of the percentage of such items that are
attributable to the operations of the Operating Subsidiaries. Beginning
October 2000, these expenses were accounted for within CompleTel Headquarters
Europe S.A.S (``Europe Headquarters"). Accordingly, after October 1, 2000,
allocated costs from an affiliate represents only those costs of Management
Co. and are included in the consolidated statements of operations as allocated
costs from an affiliate, while costs incurred by Europe Headquarters are
classified as part of selling, general and administrative costs. Management
believes that the allocation method is reasonable and that such costs are
representative of the costs which would have been incurred by the Operating
Subsidiaries on a stand-alone basis without any support from LLC. For the
years ended December 31, 2001 and 2000 the Company recorded approximately
(euro)5.4 million and (euro)12.1 million respectively, for billings under the
Management Agreements. In early 2002, the Company completed the acquisition of
Management Co. for U.S. $1.00 from LLC. Accordingly, effective January 1,
2002, all the expenses incurred by Management Co. have been accounted for as
selling, general and administrative costs.

         Contribution of LLC Common Units for CompleTel Europe NV Ordinary
Shares

         In November 2000, certain employees of CompleTel Europe who held
common units of CompleTel LLC ("LLC"), contributed all such common units,
except for those still subject to performance vesting provisions, to CompleTel
Europe in consideration for 4,690 newly issued ordinary shares of CompleTel
Europe. The number of ordinary shares issued was equal to the number of
ordinary shares represented by the common units contributed to CompleTel
Europe and were recorded at (euro)15.6 million, the fair market value of those
shares on the date of issuance. The corresponding investment in LLC,
representing approximately 3,280 common units which are exchangeable into
4,690 ordinary shares of the Company, is reflected as a reduction of CompleTel
Europe's equity in the accompanying consolidated statement of shareholders'
equity (deficit), similar to treasury stock. The common units contributed
included both vested and non-vested time vesting units. The ordinary shares
issued in respect of the non-vested units remained subject to the same vesting
provisions as the original award. The shares of CompleTel Europe will be
distributed to LLC's original investors upon the liquidation of LLC.


(5)  Initial Public Offering

         On March 30, 2000, CompleTel Europe completed the IPO of its ordinary
shares. In the offering, CompleTel Europe issued 31,280,000 ordinary shares
(pre-reverse share split) in exchange for gross proceeds of approximately
(euro)547.4 million, based on the euro public offering price of (euro)17.50
per share. A portion of the IPO shares, 8,343,931, (pre-reverse share split)
were offered in the U.S., at a public offering price of $17.09 per share.
After giving effect to the translation of U.S. dollars received for shares
offered in the U.S., gross proceeds translated into euro totaled approximately
(euro)551.4 million, or approximately (euro)512.5 million, net of offering
costs. CompleTel Europe voluntarily delisted from the NASDAQ markets on May
31, 2002.

(6)  Indebtedness

         Senior Discount Notes

         In February 1999, the CompleTel Europe and CompleTel Holdings
completed an Offering of 147,500 units (the "Units") consisting of
approximately (euro)131.9 million aggregate principal amount of 14% Senior
Discount Notes due 2009 (the "Notes") issued by CompleTel Europe and 1,475,000
non-voting Class B Membership Senior Discount Interests of CompleTel Holdings.
CompleTel Europe issued the Notes at a substantial discount from their
principal amount at maturity on February 16, 2009. A principal investor in LLC
acquired 400 Units in the Offering. The proceeds of the Offering, net of
offering fees and costs, were approximately (euro)64.9 million and were held
in an escrow account until CompleTel Europe received a minimum commitment of
$90 million in senior credit facilities, which was received in April 1999. To
comply with Netherlands laws, the Senior Discount Notes were guaranteed by LLC
on a senior unsecured basis. Of the approximately (euro)67.1 million gross
proceeds from the Offering, approximately (euro)63.1 million was attributed to
the Senior Discount Notes and approximately (euro)4 million was attributed to
the 1,475,000 Class B Membership Interests of CompleTel Holdings. The (euro)4
million allocated to the Class B Membership Interests represented additional
discount on the Senior Discount Notes. As a result of the Company's
Recapitalization (see note 1), these Senior Discount Notes were exchanged for
702,692 Convertible Preferred B shares and 702,692 Ordinary shares and LLC's
obligations were terminated.

         Senior Notes Offering

         In April 2000, the Company completed an offering of an aggregate
(euro)200 million 14% senior notes due 2010 (the "Senior Notes"). A portion of
the proceeds were used to repurchase $27.0 million ((euro)27.6 million)
principal amount at maturity of the Senior Discount Notes. To comply with
Netherlands laws, the Senior Notes were guaranteed by LLC on a senior,
unsecured basis. In March 2001, this guaranty terminated. The Company lent
approximately (euro)78.0 million of the initial net proceeds to a wholly-owned
subsidiary which used the funds to invest in a portfolio of securities which
was pledged as security for the Senior Notes. The proceeds of these pledged
securities were being used to make the first six interest payments on the
Senior Notes. The remaining proceeds from the Senior Notes offering were used
to fund the further deployment of the Company's networks in existing markets,
to fund net operating losses and for general and corporate purposes. As a
result of the Company's Recapitalization (see Note 1), the remaining Senior
Notes were exchanged for 757,340 Convertible Preferred B shares and 757,340
Ordinary shares.

         Senior Notes Repurchases

         During 2001, the Company repurchased (euro)78.1 million principal
amount of its Senior Notes for (euro)28.9 million ((euro)11.2 million in
unrestricted cash and (euro)17.7 million in proceeds from pledged securities).
In connection with these repurchases, the Company recognized a gain on early
extinguishment of debt of approximately (euro)46.2 million, net of related
deferred financing costs which were also written off.

         Exchange of Notes for Shares

         In September 2002, the Senior Discount Notes and the Senior Notes
were exchanged for Convertible Preferred B shares and Ordinary shares upon the
closing of the Company's Recapitalization (see Note 1).

         Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                                       December 31,
                                                                                                       ------------
                                                                                                   2002            2001
                                                                                                   ----            ----
<S>                                                                                        <C>              <C>
      14% Senior Discount Notes, face amount $120.5 million, due 2009,
      effective rate of interest 15.1%, converted to euro at December 31, 2001
      exchange rate of 0.886............................................................   (euro)        -  (euro)99,333
      14% Senior Notes, due 2010.........................................................                -       121,870
      Other long-term debt...............................................................            3,986         6,532
                                                                                           (euro)    3,986 (euro)227,735
</TABLE>

         The other long-term debt represents leases with terms of 12 to 15
years for certain network plant capacity consisting of intercity fiber and
bandwidth. Leases were capitalized with an interest rate of 5.15%, consistent
with the financing rate used by the lessor. Future payments will amount to
(euro)0.5 million per annum.

         Credit agreement

         In January 2000, the Company executed an agreement for a (euro)265
million senior secured credit facility with Goldman Sachs International and
BNP Paribas as co-arrangers of the facility. The Company never drew on this
facility and in August 2001 the facility was terminated. The remaining
deferred financing costs associated with this facility were written off at the
time the facility was terminated.

(7)  Convertible Preferred Shares

         Dividends. The holders of Preferred shares are entitled to receive a
dividend equal to 11% per annum, compounded quarterly, paid semi-annually in
June and December, and calculated over an amount of (euro)2,010.00 per
Preferred share for the period commencing July 1, 2004, and until the
cancellation or conversion of the Preferred shares in accordance with their
terms.

         Redemption. Upon liquidation, the Preferred shares are entitled to
receive, prior to any distribution in respect of the Ordinary shares, an
amount in cash equal to (euro)2,010.00 per share, or approximately (euro)73.7
million in the aggregate. Furthermore, on August 20, 2002, CompleTel Europe's
extraordinary general meeting of shareholders adopted a resolution to
authorize the redemption, on July 1, 2007, of all of the Preferred shares
issued in the Recapitalization, in accordance with their terms. Upon the
redemption of the Preferred shares, their holders will be entitled to receive
a redemption value of (euro)6,030.00 per share. If at such time the Company
does not have access to sufficient funds to redeem all the then outstanding
Preferred shares, the holders of Convertible Preferred A shares shall have the
right to receive (euro)2,010.00 per share. After the Company similarly pays
the holders of Convertible Preferred B shares, the Company will distribute any
remaining surplus proportionally to the holders of Preferred shares up to the
remaining balance of (euro)4,020.00 per share. Assuming that none of the
Preferred shares issued in the Recapitalization are converted prior to the
redemption date, the aggregate redemption value due on the Preferred Shares
would be approximately (euro)221.0 million. The Preferred shares are
classified outside of shareholder's equity as a result of the Preferred shares
having a redemption feature at a determinable future date for cash.

         Conversion. Each Preferred share is convertible into one hundred
Ordinary shares at any time at the option of the holder of the Preferred share
and is entitled to customary anti-dilution adjustments in relation to share
dividends, share splits and similar transactions. In addition, if at the time
of conversion, there are accrued but unpaid dividends in respect of the
Preferred shares, holders of the Preferred shares will be entitled to receive
such accrued but unpaid dividends. The Preferred shares are subject, at any
time, to mandatory conversion if a two-thirds majority of the total
outstanding Preferred shares elect to do so with respect to all of the
Preferred shares. As of December 31, 2002, one Convertible Preferred B share
had been converted into 100 Ordinary shares.

         Liquidation preference. In accordance with their respective terms, in
the event of a liquidation of CompleTel Europe, the Convertible Preferred A
shares rank senior to the Convertible Preferred B shares, which rank senior to
the Ordinary shares.


(8)  Commitments And Contingencies

         Operating Leases, Including Rights-of-Way Agreements

         The Company has entered into various operating lease agreements for
network switch locations, office space, and vehicles. In addition, the Company
has entered into various rights-of-way agreements. Future minimum lease
obligations related to the Company's operating leases and rights-of-way
agreements are as follows for the years ending December 31 (in thousands):


2003...................................................             4,302
2004...................................................             3,488
2005...................................................             3,012
2006...................................................             2,929
2007...................................................             2,872
Thereafter.............................................             7,472
Total..................................................      (euro)24,075


         Total rent expense for the years ended December 31, 2002, 2001 and
2000 was approximately (euro)5.6 million, (euro)4.3 million and (euro)1.4
million, respectively.

         Legal Proceedings

         On October 12, 2000, CompleTel UK, Ltd. entered into a ten year lease
for a property in London, UK with CompleTel Europe N.V. as a guarantor. Rent
and charges payable under the lease were approximately GBP 300,000 per annum.
In the course of the Company's reorganization of its operations in the UK, the
lease was reassigned to CompleTel Europe N.V. on May 7, 2002. The lease was
terminated on September 30, 2002 in accordance with the Dutch Bankruptcy Code.
On January 23, 2003, the landlord filed a petition before a UK court to claim
that the lease had not been terminated and is still in full force and effect.
The proceedings are currently in progress. Although at this stage the Company
is not in a position to predict the outcome of these proceedings, the Company
estimates that it should not have a material adverse effect on its financial
condition or results of operations.

         On December 6, 2002, France Telecom brought a complaint against the
Company before the Autorite' de Regulation de Telecommunications (the "ART")
in order to obtain a modification of the interconnection tariffs that the
Company charges and invoices to France Telecom for the termination of incoming
calls. France Telecom's complaint is based on a decision that was issued by
the ART in December 2001 in a dispute between France Telecom and another
French operator. France Telecom claims that the Company's tariffs are
excessive and that the resulting overcharge creates an unfair advantage for
Completel in the market for the provision of telecom services to end-users.
The Company believes that the ART decisions involving third parties and
invoked by France Telecom are not applicable to Completel and that no
overcharge can be demonstrated, since CompleTel believes it can justify its
tariffs on a cost-basis analysis. At this stage, the Company is not in a
position to predict the outcome of such litigation, which may affect its
future gross margin (revenue minus network costs) in the future favorably or
unfavorably by several percentage points in comparison to 2002.

         The Company is not party to any other pending legal proceedings that
it believes would, individually or in the aggregate, have a material adverse
effect on its financial condition or results of operations.

(9)  Income Taxes

         The Netherlands

         In general, a Dutch holding company may benefit from the so-called
"participation exemption." The participation exemption is a facility in Dutch
corporate tax law which allows a Dutch company to exempt, from Dutch income
tax, any dividend income and capital gains in relation to its participation in
subsidiaries which are legal entities residing in The Netherlands or in a
foreign country. Capital losses are also exempted, apart from liquidation
losses (under stringent conditions). Any costs in relation to participations,
to the extent these participations do not realize Dutch taxable profit, are
not deductible. These costs include costs to finance such participation.
However, at present a court case is pending in which it will be decided
whether costs relating to subsidiaries established within the European Union
can nevertheless be deducted.

         As of December 31, 2002, CompleTel Netherlands had estimated net
operating losses ("NOL") carryforwards for income tax purposes totaling
approximately (euro)70 million. For Dutch corporate income tax purposes, NOL
carryforwards may be carried forward indefinitely. The above-mentioned losses
have not been established by decree by the Dutch tax inspector and could
therefore be subject to change. The current statutory tax rate for the
Netherlands is approximately 34.5%.

         France

         As of December 31, 2002, CompleTel France had NOL carryforwards for
income tax purposes available. For French income tax purposes NOL
carryforwards may generally be carried forward for a period of up to five
years. The yearly depreciation expense can be eligible for the deferred
depreciation regime for French tax purposes, resulting in an indefinite
carryforward tax amount. The current statutory rate for France is 33.1/3%,
excluding surcharge.

         The Company has recorded a valuation allowance equal to the total net
deferred tax assets as of December 31, 2002 and 2001, due to the uncertainty
of realization through future operations. The valuation allowance will be
reduced at such time as management believes it is more likely than not that
the net deferred tax assets will be realized.

         As a result of the discontinued operations, the company estimates
that the related operating loss carry-forwards of those operations have been
reduced in 2002.

         The difference between income tax expense provided in the
consolidated financial statements and the expected income tax benefit at
statutory rates related to the Company's corporate and foreign subsidiary
operations for the years ended December 31, 2002, 2001 and 2000 (in
thousands):

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                      -----------------------
                                                             2002                 2001               2000
                                                             ----                 ----               ----
<S>                                                       <C>                <C>                 <C>
Expected loss/(income) tax benefit (expense) at the
 weighted average statutory rate of 33.92% (39.56%        (euro)(4,195)      (euro)118,303       (euro)79,313
 for 2001 and 2000)..................................
Stock-based compensation.............................               (-)             (2,080)           (23,953)
Reduction of tax loss carry forward on losses from            (127,007)                 --                 --
 discontinued cummulative loss carry forwards
Valuation allowance..................................          131,202            (116,223)           (55,360)
Total income tax benefit............................. (euro)        --      (euro)      --       (euro)    --


<CAPTION>
          Deferred tax assets are as follows (in thousands):
                                                                             December 31,
                                                                             ------------
                                                                          2002              2001
                                                                          ----              ----
 Deferred tax assets:
<S>                                                                   <C>            <C>
   Operating loss carryforwards...................................    (euro)50,880   (euro)132,130
   Depreciation and amortization..................................          11,133          61,085
 Total deferred tax assets........................................          62,013         193,215
   Less valuation allowance.......................................         (62,013)       (193,215)
                                                                     ------------------------------
   Net deferred taxes.............................................    (euro)    --   (euro)     --
</TABLE>


(10)  Segment Reporting

         Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS 131"),
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. Operating
segments are components of an enterprise about which discrete financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.

         Historically, management has evaluated the Company's development
efforts and results according to the geographic location of its markets in
France, Germany and the UK. As discussed in Note 3, the Company sold and
discontinued its operations in Germany and the United Kingdom in May 2002.
Having decided to concentrate its efforts solely in France, the Company closed
its London offices and simplified its corporate headquarters structure at the
end of the second quarter of 2002. Consequently, the Company's French
operations constitute its sole operating segment. Except for revenues, the
Company does not retain discrete financial information for retail, ISP and
carrier customers, as the company does not allocate the costs nor the fixed
assets infrastructure to the services provided through the same network and
interconnection structure.

(11)  Employee and Non-employee Director Incentive Plans

         LLC Common Units

         Certain employees of the Company and LLC had purchased common units
of LLC for $1 per unit under their executive securities agreements. The common
units issued consist of non-performance time vesting units and performance
based vesting units. The non-performance based time vesting units generally
vested over a four-year period. Vesting for non-performance based time vesting
units was accelerated by one year upon the completion of the IPO in March
2000. As discussed in Note 4, certain of these non-performance based time
vesting units were contributed to CompleTel Europe in exchange for newly
issued CompleTel Europe ordinary shares, subject to the same vesting
provisions of the original issuance of common units. The Company accounted for
these awards under APB 25 and related interpretations. Accordingly, the
intrinsic value of the non-performance based time vesting units was accounted
for at issuance and pushed down to the Company as additional paid-in capital,
with an offsetting entry to deferred compensation. The original intrinsic
value of the non-performance based time vesting units issued totalled
approximately (euro)4.0 million. This deferred compensation was amortized over
the vesting period for the applicable award, generally four years. During
2002, this deferred compensation was fully amortized.

         The performance based vesting units were, in addition to time
vesting, subject to performance based vesting according to certain
multiple-of-invested-capital tests calculated based upon the valuation of
LLC's equity implied by a qualified public offering and/or by actual sales of
LLC's securities by Madison Dearborn Partners ("MDP"). In December 2002, MDP
sold all of its shares of the Company. Accordingly, any related deferred
compensation was fully amortized in 2002. As a result of MDP's sale of its
shares and the unvested performance vesting shares being forfeited, the
Company has proceeded with liquidation proceedings of LLC.

         CompleTel Europe's IPO in March 2000 caused certain common units of
LLC held by employees of the Company to vest as a result of meeting specified
performance vesting criteria. As a result, the Company recorded compensation
expense of approximately (euro)41.9 million based on the value of those vested
common units as implied by the IPO price received. In addition, based upon the
IPO value indicated above, the Company recorded additional compensation
expense and deferred compensation in the quarter ended March 31, 2000, of
approximately (euro)24.0 million and (euro)74.9 million, respectively, for
performance vesting units that did not vest as a result of the IPO but which
may have vested upon a qualified sale by MDP, or in May 2005 based on a deemed
vesting date. The additional deferred compensation was fully amortized in 2002
as a result of the decline in the market price of the shares and the sale by
MDP of its shares.

         The compensation charges described above are included in non-cash
compensation charges in the accompanying consolidated statements of operations
for the years ended December 31, 2002, 2001 and 2000. Also included in
non-cash compensation charges for these periods is amortization resulting from
the recognition of deferred compensation on fixed stock option awards granted
to the Company's employees and other common units of LLC held by employees
subject only to time vesting.

         Stock Option Plans

         In December 1999, the Company adopted the CompleTel Europe N.V. 2000
Stock Option Plan (the "2000 Option Plan"). The 2000 Option Plan provides for
the grant of options to purchase ordinary shares of CompleTel Europe to
employees of the Company.

         Options granted under the 2000 Option Plan are subject to vesting as
follows. Options granted to employees resident in France vest in an increment
of 60% of the ordinary shares subject to the option on the second anniversary
of the date of the grant and in two increments of 20% on the third and fourth
anniversaries of the date of the grant. Options granted to employees resident
in the United Kingdom, Germany and the U.S. vest in annual increments of 25%
of the ordinary shares subject to the option, commencing on the first
anniversary date of the grant. Grants under this plan are accounted for under
fixed plan accounting in accordance with APB 25 and related interpretations.


         In December 2002, the Company adopted the CompleTel Europe N.V. 2002
Stock Option Plan (the "2002 Option Plan "). The 2002 Option Plan provides for
the grant of options to purchase ordinary shares of CompleTel Europe to
approximately 25 of the Company's key employees (including management).

         Options granted under the 2002 Option Plan are subject to the
following terms. Options granted to employees resident in France are
exercisable over a period of 4 years. Some options may only be exercisable
upon occurrence of meeting or achieving certain financial performance targets.
Also, Options become immediately exercisable upon occurrence of certain
events, such as change in control. The options expire after 6 years from the
date of their grant by the Management Board.

         At the Company's Extraordinary General Meeting in December 2002, the
Company's shareholders approved the implementation of a remuneration plan for
the Company's Supervisory Directors (the "Non-employee Director Option Plan
"). Under the Non-employee Director Option Plan, each of the Company's
Supervisory Directors B and Supervisory Directors C received options to
purchase 20,000 Ordinary shares, with a total of 80,000 options authorized to
be issued to the Supervisory Directors B and Supervisory Directors C as a
group under the Non-employee Director Option Plan.

         Options granted under the Non-employee Director Option Plan are
exercisable over a period of 3 years. Options become immediately exercisable
upon occurrence of certain events, such as change of control. The options
expire after 3 years from the date of their grant by the Management Board.

         A summary of stock option activity for the Option Plan is as follows:

<TABLE>
<CAPTION>
                                                       Year Ended                  Year Ended                Year Ended
                                                   December 31, 2002           December 31, 2001          December 31, 2000
                                                   -----------------           -----------------          -----------------
                                                                  Weighted                   Weighted                  Weighted
                                                  Number of       Average    Number of        Average   Number of      Average
                                                      Shares     Exercise       Shares Exercise Price       Shares    Exercise
                                                                     Price                                                Price
                                                                    (euro)                    (euro)                    (euro)
<S>                                                   <C>         <C>            <C>         <C>             <C>       <C>
Outstanding at the beginning of the period...         11,100      2,539.30       5,795       4,087.00        3,037     1,956.40
Granted during the period....................        680,942         12.82       8,500       1,815.70        3,751     5,621.30
Cancelled during the period..................         (5,769)     2,433.92      (3,186)      3,303.10         (993)    3,363.40
Exercised during the period..................              -             -          (9)      1,956.40            -            -
Outstanding at the end of the period.........        686,273         31.42      11,100       2,539.30        5,795     4,087.00
Exercisable at the end of the period.........          1,144      3,242.03         319       4,308.10          148     1,956.40


         The combined weighted-average fair values and weighted-average exercise prices of options granted are as follows:

<CAPTION>
                                              Year Ended                Year Ended                 Year ended
                                           December 31, 2002         December 31, 2001          December 31, 2000
                                           -----------------         -----------------          -----------------
                                          Number of                  Number of                 Number of
                                            Options   Fair Value        Options  Fair Value       Options    Fair Value
<S>                                         <C>            <C>            <C>     <C>               <C>       <C>
Exercise Price:
Less than market price................            -            -              -          -            573    10,351.50
Equal to market price.................      220,021         7.28          8,500   1,815.70          3,178     4,147.30
Greater than market price.............      460,921        15.46              -          -              -            -

Total.................................      680,942        12.82          8,500   1,815.70          3,751     5,621.30




         The following table summarizes information about stock options outstanding, vested and exercisable
as of December 31, 2002:

<CAPTION>
                                                Options Outstanding                           Options Exercisable
                                --------------------------------------------------------------------------------------------
                                                        Weighted
                                                         Average
                                      Number of        Remaining    Weighted Average      Number of                Weighted
                                       Options      Contractual      Exercise Price        Options  Average Exercise Price
                                    Outstanding     Life (Years)              (euro)    Exercisable                  (euro)
<S>                                     <C>              <C>               <C>            <C>                  <C>
Exercise Price Range (euro)
0-10...........................         220,021             3.65                7.28              -                       -
10-50..........................         460,921             3.65               15.46              -                       -
50-500.........................               -                -                   -              -                       -
>500...........................           5,331                -            2,467.09          1,144                3,242.03
Total..........................         686,273                -               31.42          1,144                3,242.03

(12)  Restructuring, Impairment and Other Charges

         In 2001, in connection with its restructuring efforts, the Company
recognized approximately (euro)6.0 million in restructuring and impairment
charges in its continuing operations. In addition, the Company recognized
restructuring and impairment charges, totaling (euro)158.5 million, in its
discontinued operations in Germany and the United Kingdom (See Note 3).

         In 2002, continuing its restructuring efforts, the Company recognized
approximately (euro)8.1 million in restructuring charges and 5.8 million in
impairment of goodwill.

<CAPTION>
         These charges consist of the following (in millions):

                                                                                 2002            2001
<S>                                                                           <C>         <C>
Write-down of German and United Kingdom assets.....................           (euro)-     (euro)142.7
Write-down of materials and supplies...............................                 -             6.0
Restructuring charges (1)..........................................               7.8            15.8
Impairment of goodwill ............................................               5.8              -
Total..............................................................     (euro)   13.6     (euro)164.5

         ____________________


         (1)      2001 includes (euro)6.0 million of restructuring charges
                  recognized by CompleTel Europe NV and its subsidiaries and
                  reflected in loss from continuing operations.
</TABLE>




         Impairment charges

         In light of adverse market conditions and the Company's efforts to
reduce its ongoing operating expenses and capital outlays, in the fourth
quarter of 2001 the Company decided to significantly scale-back its operations
in Germany and exit the market in the United Kingdom. As a result of its
decision, and in light of the adverse conditions in these markets, the Company
determined, in accordance with its policy relating to recoverability of
long-lived assets, that it was unlikely to recover its investment in these
assets (whether by utilizing these assets in its business or through
disposition) and thus, that the values of its German and U.K. assets
(comprising network property and equipment, including switches, network plant,
customer access equipment and operational support systems) were impaired as of
December 31, 2001. Accordingly, the Company recorded total charges of
(euro)142.7 million to write-down the carrying values of these assets to their
estimated fair market values using a discounted cash flow approach. These
charges, with the exception of (euro)5.4 million of impaired capitalized
interest, are included in discontinued operations, as discussed further in
Note 3.

         In addition, as a result of its decision to significantly scale-back
operations in Germany, the Company had materials and supplies in excess of
what it needed in order to complete construction of its networks under its
revised business plan. Accordingly, the Company revalued these excess
materials and supplies, resulting in the write-down of all these excess
materials and supplies to the lower of cost or market value, as of December
31, 2001.

         In connection with the Company's annual impairment test in December
2002, the Company impaired its entire goodwill which had a carrying value of
(euro)5.8 million.

         Restructuring Charges

         In 2001 and 2002, the restructuring charges relate primarily to (i)
severance costs associated with the reductions in the size of the Company's
workforce in France and its headquarters in the United Kingdom and France, as
well as with Germany and the United Kingdom prior to their sale in May 2002,
(ii) charges incurred as a result of lease terminations and the renegotiation
of interconnection agreements in connection with the Company's decision to
significantly scale-back its operations in Germany, exit the market in the
United Kingdom, and scale back its IDC operations in France. Other legal and
consulting charges were incurred in connection with the Company's operational
restructuring and Recapitalization.

         Since the Company began its restructuring efforts in June 2001, the
Company has incurred the following restructuring charges (in thousands):

<TABLE>
<CAPTION>
                                      Summary of Restructuring Charges 2001
                                                                                    Europe HQ and
                                      France(4)        Germany(5)       UK(5)          other(4)         Total
                                      ---------        ----------       -----          --------         -----
<S>                                    <C>             <C>            <C>             <C>            <C>
Severance (1)...................       (euro)1,151      (euro)2,399      (euro)527       (euro)603     (euro)4,680
Facilities and Network (2)......             1,558            5,194            992               -           7,744
Other (3).......................
                                                43              578             50           2,694           3,365
 Total, 2001....................              2,752           8,171          1,569           3,297          15,789


                                      Summary of Restructuring Charges 2002
                                                                                    Europe HQ and
                                      France(4)        Germany(5)       UK(5)          other(4)         Total
                                      ---------        ----------       -----          --------         -----
Severance (1)...................       (euro)4,187          (euro)-        (euro)-     (euro)1,700     (euro)5,887
Facilities and Network (2)......               335                -              -               -             335
Other (3).......................               137                -              -           1,484           1,621
 Total, 2002....................             4,659                -              -           3,184           7,843

_______________________________

      (1)   Severance charges relate to estimated termination salaries and benefits in connection with the
            termination of employees, related outplacement fees and other related benefits.

      (2)   Facilities and network charges relate to costs to terminate or renegotiate facilities and
            equipment leases and interconnection agreements.

      (3)   Other charges primarily relate to legal and consulting costs incurred in connection with the
            Company's operational restructuring and Recapitalization.

      (4)   Restructuring charges for the Company's continuing operations are reflected in Restructuring,
            Impairment, and Other Charges.

      (5)   Restructuring charges for the Company's former operations in Germany and the United Kingdom are
            reflected in loss from discontinued operations (see Note 3). As of December 31, 2001,
            (euro)3,134,000 was accrued. During 2002, these amounts were paid in full.



         The following table details the number of employees involved in the
restructuring:
<CAPTION>

                                             Total number of employees        Total number of employees terminated
                                                 terminated in 2002                          in 2001
                                        ------------------------------------- --------------------------------------
<S>                                            <C>                                <C>
        France                                            63                                 122
        Germany                                            6                                 220
        UK                                                 1                                  33
        Europe HQ and other                               36                                  15
                                        ------------------------------------- --------------------------------------
        Total                                            106                                 390
        =============================== ===================================== ======================================
</TABLE>


(13) Acquisitions

         On May 31, 2001 CompleTel France acquired 100% of Estel SA, a local
network telecommunications operator in France. The acquisition was paid for in
cash and accounted for under purchase accounting. Effective June 1, 2001, the
Company began consolidating the acquired entity. In connection with this
transaction, the Company initially recorded (euro)12.4 million as net assets,
(euro)5.7 million as long-term liabilities assumed and (euro)6.1 million as
goodwill, which has subsequently been fully impaired as of December 31, 2002.
The acquisition was not material to the Company's financial position or
results of operations.

(14)     Subsequent Events

         Following its operational restructuring and its Recapitalization, the
Company has initiated the liquidation of its legal entities which no longer
harbour operations. Completel HQ UK Ltd. was liquidated on January 14, 2003.
Completel HQ SAS, ASI SARL, Completel BV and Completel Management Inc. are in
the process of being liquidated. The Company is studying further
simplification of its legal entities in the Netherlands.

         As part of the Recapitalization, warrants were issued on September
12, 2002 to the Company's then existing shareholders and were exercisable
between December 15, 2002 and March 14, 2003. Further to this warrant
issuance, 362,557 warrants have been exercised, resulting in the issuance of
2,171 Ordinary shares, for total cash consideration of (euro)21,818.55.

         In the event that warrants expired unexercised on March 14, 2003, the
Company had received a commitment from Deutsche Bank AG to take up
approximately 51% of the shares underlying the warrants, if they were so
offered. In compliance with its commitment obligations, Deutsche Bank on April
10, 2003, subscribed for 168,545 Ordinary shares, for total cash consideration
of (euro)1,693,877.25

         On October 12, 2000, CompleteTel UK, Ltd. entered into a ten-year
lease for a property in London, UK with Completel Europe N.V. as a guarantor.
Rent and charges payable under the lease were approximately GBP 300,000 per
annum. In the course of the Company's reorganization of its operations in the
UK, the lease was reassigned to Completel Europe N.V. on May 7, 2002. The
lease was terminated on September 30, 2002 in accordance with the Dutch
Bankruptcy Code. On January 23, 2003, the landlord filed a petition before a
UK court to claim that the lease had not been terminated and is still in full
force and effect. On March 14, 2003 a UK court ruled that the lease is still
in effect. Notwithstanding this English law ruling, the company believes that
under Dutch law, the lease was validly terminated on September 30, 2002.
Although at this stage the Company is not in a position to predict the outcome
of these proceedings, the Company estimates that it should not have a material
adverse affect on its financial condition or results of operations.
<PAGE>

                                                                  Exhibit 4.4







                             COMPLETEL EUROPE N.V.

                             2002 STOCK OPTION PLAN

























<PAGE>

INTRODUCTION

The following is a stock option plan (the "Plan") of CompleTel Europe N.V., a
company incorporated under the laws of the Netherlands (the "Company"), having
its seat (statutaire zetel) at Amsterdam and its registered address at Blaak
16, Rotterdam, The Netherlands, registered with the trade register under
number 34108119, as adopted and approved by the joint Board of Management and
Supervisory Board meeting of November 5, 2002.



ARTICLE 1. - Definitions

For the purposes of the Plan,

         (i)      "Affiliated Company" means a company in which the Company
                  owns, directly or indirectly, at least 10% of the shares of
                  stock or other capital interest and voting rights of that
                  company;

         (ii)     "Employee" means any employee of any Group Company;

         (iii)    "Fair Market Value" means at least 95% of the average
                  quotation price of the Shares on the Paris stock exchange
                  during the twenty trading sessions preceding the Option Date
                  or, if the Shares are not listed on the Paris stock exchange
                  on the Option Date, such value as determined in accordance
                  with Article 8;

         (iv)     "Group Company" means the Company or any Affiliated Company;

         (v)      "Management Board" means the Board of Management of the
                  Company.

         (vi)     "Option" means a right to subscribe for Shares pursuant to
                  the Plan;

         (vii)    "Option Date" means the date on which the Management Board
                  shall determine the number, the exact terms and conditions
                  of the Options and award them to the Employees;

         (viii)   "Option Term" means the period during which an Option is
                  exercisable, as determined by the Management Board pursuant
                  to Article 5.5;

         (ix)     "Shares" means the ordinary shares in the capital of the
                  Company;

         (x)      "Section 16 Employees" means Employees, including Employees
                  who are members of the Management Board, who are subject to
                  the rules under Section 16 of the United States Securities
                  Exchange Act of 1934, as amended; and

         (xi)     "Supervisory Board" means the Supervisory Board of the
                  Company.



ARTICLE 2. - Granting of Options

         2.1 The Management Board may grant Options to Employees, subject to
the approval of the Supervisory Board.

         2.2 Subject to the provisions of Article 4.2, the total number of
Shares with respect to which Options may be granted pursuant to the Plan shall
not exceed 8 % of the share capital of the Company, excluding C Shares. Shares
issued or issuable upon exercise of Options shall reduce the maximum number of
Shares available for use under the Plan. Shares relating to expired,
forfeited, or terminated and unexercised Options are available for reissue for
grant of Options under the Plan.



         2.3 The Management Board subject to the approval of the Supervisory
Board, shall determine, from time to time, consistent with the terms of the
Plan, the form of the agreements with Employees which shall evidence the
particular provisions, terms, conditions, rights and duties of the Company and
Employee with respect to Options granted under the Plan (an "Option
Agreement").

         2.4 If at any time the number of Shares relating to any Option
granted under the Plan that are exercisable includes a fractional Share, such
number of Shares shall be rounded down to the next whole number.

         2.5 No Option shall be granted to (i) an Employee prior to the day on
which such Employee has commenced work with the Company or Affiliated Company,
as the case may be; (ii) during the ten trading sessions preceding the date on
which the consolidated accounts or annual accounts of the Company are
published; and (iii) during a period (x) starting from the date on which the
corporate bodies of the Company become aware of any information which, if
published, could significantly affect the Shares' market price and (y) ending
at the close of the tenth trading session following the publication of the
information. No Option may be granted less than twenty trading sessions after
a coupon giving a right to a dividend or to a capital increase has detached
from the Shares.



ARTICLE 3. - Plan Administration

         3.1. Except as provided in Article 3.2, the Management Board, subject
to the approval of the Supervisory Board, shall have the right to grant
Options under terms, which may be different from the general terms set forth
in the Plan, as the Management Board determines to be necessary or appropriate
in order to comply with the laws of the country in which the Employee resides
or is employed or for any other reason.

         3.2. To the extent required by Rule 16b-3 promulgated by the United
States Securities and Exchange Commission under Section 16 of the Securities
Exchange Act of 1934, as amended, the Supervisory Board shall specifically
approve each grant of an Option to a Section 16 Employee.

         3.3 Subject to the provisions of Article 4.1, the Management Board
subject to the approval of the Supervisory Board, shall amend the terms and
conditions of any Options, authorize any officer of the Company to execute on
behalf of the Company any instrument required to effect the grant of an Option
under the Plan previously approved by the Management Board subject to the
approval of the Supervisory Board, designate from time to time a brokerage or
financial institution to process and administer the exercise of all Options
granted under the Plan, and establish such other terms and requirements of the
Option, consistent with the Plan, as it deems proper and in the best interests
of the Company. No member of the Management Board subject to the approval of
the Supervisory Board, shall be liable for any action or determination made in
good faith. The determinations and interpretations of the Management Board
subject to the approval of the Supervisory Board, shall be binding and
conclusive for all purposes and on all persons.



ARTICLE 4. - Option Price

         4.1 The price to be paid to subscribe to the Shares (the "Option
Price") shall be at least equal to the Fair Market Value. The Option Price
shall be determined by the Management Board on the Option Date and, subject to
the provisions of Article 4.2 below, shall not be modified in any way.

         4.2      If, after the Option Date, one of the following events
shall occur:

         o    reduction of the Company's share capital to offset losses;

         o    capital increase by capitalization of retained earnings, profits,
              or issue premium;

         o    capital increase in cash;

         o    distribution of shares and/or retained earnings, either in cash
              or in securities, for no consideration;

         o    issuance of convertible bonds or exchangeable bonds, or bonds
              with subscription rights attached;

         o    issuance of preferred shares without voting rights;

         o    purchase by the Company of Shares at a purchase price higher than
              market price;

the Option Price and/or the number of the Shares with respect to which Options
have been granted will be adjusted if reasonably necessary, in such a way that
the intrinsic value of the Options immediately after the above?mentioned event
is equal to the intrinsic value of the Options immediately before such event.
In any event, any such adjustment made to the Option Price and/or the number
of Shares to be subscribed under the Options awarded shall not be more
favorable to the Employees concerned resident in France than those adjustments
that would be made in accordance with the provisions of Article L 225-181 of
the French commercial code.



ARTICLE 5. - Option Exercise and Non-transferability

         5.1 Except as otherwise approved by the Management Board, and subject
to the approval of the Supervisory Board, Options may only be exercised by the
Employee, or if the Employee has died, by the Employee's heirs (hereinafter
referred to as the "Legal Successors"). In this latter case, the Options
transferred will have to be exercised by the Legal Successors within a period
of six months following the death of such Employee.

         5.2      Options may be exercised in full or in part.

         5.3 Options shall be exercised by way of a notice to be sent by the
Employee in the form set out by the Company, from time to time. Any such
notice of exercise shall state the number of Shares to be subscribed pursuant
to such exercise. No option shall be validly exercised unless the Option Price
is paid in full at the time the exercise notice is sent or at such other time
as the Management Board may decide.

         The Option Price for the Shares to be purchased shall be paid by
         electronic transfer, certified check, cashier's check or other check
         acceptable to the Company;

         5.4 Except as otherwise approved by the Management Board, and except
as otherwise provided in the Option Agreement and under applicable laws of
descent and distribution, no Option shall be transferred, assigned, pledged or
hypothecated, nor shall any right to any third party be granted on it, by the
Employee holding such Options.

         5.5 At the time an Option is granted, the Management Board subject to
the approval of the Supervisory Board, or, if required by the law of country
in which the Employee works or resides, the Company's shareholders, shall
determine the Option Term; provided, however, that the Option Term must end,
in all cases, not more than six years from the Option Date. The Option
Agreement, if applicable, shall also set forth any installment or other
restrictions on exercise of the Option during such period, if any, as may be
determined by the Management Board subject to the approval of the Supervisory
Board. Each Option shall become exercisable and unconditional at such times or
upon such events, as determined by the Management Board subject to the
approval of the Supervisory Board, and as specified in the Option Agreement.
An Option may be exercised only during the Option Term, except as provided in
Article 7, and at such times as it has become exercisable and unconditional.

         5.6 Options may not be exercised if the Employee has insider
information as defined in the Insider Trading Rules, as those terms are
defined in Article 13. However, the prohibition on insider trading is not
applicable to Options which are exercised on the last day of the Option Term
or within the period of five working days immediately preceding the expiration
of the Option Term. In such a case, the Employee concerned, if he is deemed to
be insider as defined in the Insider Trading Rules, does not need to report
such a transaction to Authority Financial Market of the Netherlands
(Autoriteit Financiele Markten).



ARTICLE 6. - Delivery of Shares

         Promptly after the exercise of an Option and upon payment in full of
the Option price, the Company will transfer the number of Shares in respect of
which the Option is exercised. However, the Company shall not be obligated to
transfer any Shares unless the Employee has made arrangements satisfactory to
the Company to comply with any withholding requirements.



ARTICLE 7. - Consequences of Termination of Employment

         7.1 In the event of death, disability, retirement, resignation or
dismissal of an Employee, save in case of dismissal for cause (faute lourde
for French law purposes), an Employee (or its heirs in case of death) shall
retain the right to exercise the Options it holds on the date of such event
only up to the number of Options the Employee would be entitled to exercise on
such date.

         7.2 In the case of a dismissal for cause (faute lourde for French law
purposes), an Employee shall not be entitled to exercise the Options that he
would have been entitled to exercise on the date of the termination of his
employment if no such dismissal for cause had occurred.

         7.3 As stated above in Article 5.1, in the case of the Employee's
death, the Employee's heirs will have to exercise the Options within the
six-month period following such death.

         7.4 The Management Board, with the Supervisory Board's approval, may
amend, from time to time, the provisions of this Article 7.



ARTICLE 8. -  No Further Listing- Fair Market Value of the Shares

         8.1 In case the Shares would cease to be listed on the Paris stock
exchange, the Fair Market Value shall be determined in good faith by the
Managing Board, taking into account, notably, the price used for the last
transaction made affecting the share capital of the Company, unless otherwise
decided by the Management Board for a well-founded reason, subject to the laws
and regulations applicable on the date of determination of the Fair Market
Value. In any event, any such determination of the Fair Market Value shall not
be more favorable to the Employees concerned resident in France than the
determination that would be made in accordance with the provisions of Article
L 225-177 of the French commercial code.

         8.2 Fair Market Value under this Article 8 shall be determined no
more frequently than once every six months. The Fair Market Value at the
relevant date shall be deemed to be the most recent prior valuation, unless
there has been an event which, in the sole discretion of the Management Board,
is likely to have a material effect on the Fair Market Value, in which case a
new valuation may be carried out, using the then current valuation
methodology.



ARTICLE 9. - Taxes and Social Security Charges; Withholding

         9.1 In accordance with the laws of the jurisdiction in which the
Employee works or resides, the Company or any Affiliated Company shall be
entitled to withhold, and the Employee shall be obliged to pay, the amount of
any tax, social security charges, or any other charges attributable to or
payable in connection with the grant, vesting or exercise of any Option.

         9.2 The Management Board may set out appropriate procedures to ensure
that any such payment are made in due course and that the Company or the
Affiliated Company receives advice concerning the occurrence of any event that
may create, or affect the timing or amount of, any obligation to pay or
withhold any such taxes or social security contributions or which may make
available to the Company or such Affiliated Company any tax deduction
resulting from the occurrence of such an event.

         9.3 The Company or any Affiliated Company may, by notice to the
Employee and subject to such rules as the Management Board may adopt, require
that the Employee pays at the time of exercise or sale of any Option an amount
estimated by the Company or any Affiliated Company to cover all or a portion
of the tax and/or employee's social security or other contributions payable in
connection with the grant, vesting, exercise or sale of any Option.
Alternatively, the Company or any Affiliated Company may deduct from the
salary or other sums payable to the Employee at any time after the exercise of
an Option or sale of Shares issued as a result of the exercise of any Option,
such amounts as may be necessary to cover tax and/or employee's social
security or other contributions payable in connection with the grant, vesting,
exercise or sale of the Option to the extent that such deductions are
permitted under applicable law.

         9.4 Any tax or social security or other contributions due by the
Employee or his Legal Successors with respect to the granting, maintaining or
the exercising of the Options or the sale of the Shares shall be borne by the
Employee or his Legal Successors, respectively.

         9.5 No tax and/or social security charges paid by the Employee or his
legal Successors will be refunded or compensated by the Company, including
when some of all the Options were not exercised.

         9.6 The Company's obligation to transfer any Shares upon exercise of
an Option are subject to the Employee's satisfaction of all withholding
obligations attributable to the grant, vesting, or exercise of any Option.



ARTICLE 10. - Merger and Take-over

         In the case of a merger or other reorganization in which the Company
is not the surviving entity, the Management Board may require holders of
Options to exchange their Options for new options under the new merged
entity's stock option plan, provided that such new options will be at least
equivalent in value to the Options, or may provide for such other adjustment
to the Options that the Management Board, in its sole discretion, deems
equitable.



ARTICLE 11. - Sale of the Shares resulting from the exercise of the Options

         11.1 No sale of Shares will be permitted before the expiration of a
four-year period following the Option Date of the corresponding Options.

         11.2 This restriction shall not apply in case of the dismissal,
retirement, disability or death of the Employee concerned (to the extent, in
case of dismissal or retirement, that the Options have been exercised at least
three months before the effective date of said dismissal or retirement).



ARTICLE 12. - Employment

         Neither the grant of the Options nor the Plan itself or any provision
therein shall be construed as an obligation of the Company or an Affiliated
Company to employ the Employee for a certain period of time or to guarantee
him a certain salary or position.



ARTICLE 13. - Insider Trading Rules

         By accepting the Options, the Employee agrees to adhere to the
Company's insider trading policy, as may be amended from time to time (the
"Insider Trading Rules"). Employees who may be deemed to be insiders further
agree to adhere to any applicable notification or other requirements,
including without limitation the notification requirements under Dutch law.



ARTICLE 14. - Notices

         14.1 For the purposes of the Plan, notices to an Employee shall be
sent to the address of the Employee as known by the personnel department of
the Group Company concerned.

         14.2 For the purposes of the Plan, notices to the Company, other than
Option exercise notices which shall be submitted in the form and manner
determined by the Management Board from time to time, shall be sent by the
Employee concerned to the particular Group Company that employs him.



ARTICLE 15. - Amendment and Termination

         The Management Board may, at any time, terminate, amend or modify the
Plan. Unless otherwise provided in this agreement, no amendment, modification
or termination of the Plan shall in any manner adversely affect any Options as
granted under the Plan without the consent of the Employee holding such
Options.



ARTICLE 16. - Choice of Law and Jurisdiction

         The Plan will be governed by Netherlands law. All disputes arising in
connection with the Plan, except for disputes arising under article 8.2, shall
be brought before the competent court in the district of Amsterdam.

<PAGE>

                                                                  EXHIBIT 4.5











                             COMPLETEL EUROPE N.V.

                        2002 DIRECTORS STOCK OPTION PLAN

























<PAGE>

INTRODUCTION

The following is a stock option plan (the "Plan") of CompleTel Europe N.V., a
company incorporated under the laws of the Netherlands (the "Company"), having
its seat (statutaire zetel) at Amsterdam and its registered address at Blaak
16, Rotterdam, The Netherlands, registered with the trade register under
number 34108119, as adopted and approved by the joint Board of Management and
Supervisory Board meeting of December 16, 2002, and the General Meeting of the
shareholders of December 16, 2002.



ARTICLE 1. - Definitions

For the purposes of the Plan,

         (i)      "Director" means any Supervisory Director B or Supervisory
                  Director C of the Company;

         (ii)     "Fair Market Value" means the quotation price of the Shares
                  on the Paris stock exchange on the Option Date or, if the
                  Shares are not listed on the Paris stock exchange on the
                  Option Date, such value as determined in accordance with
                  Article 8;

         (iii)    "Management Board" means the Board of Management of the
                  Company;

         (iv)     "Option" means a right to subscribe for Shares pursuant to
                  the Plan;

         (v)      "Option Date" means the date on which the Management Board,
                  after approval by the Supervisory Board and the general
                  meeting of the shareholders of the Company, shall determine
                  the number, the exact terms and conditions of the Options and
                  award them to the Directors;

         (vi)     "Option Term" means the period during which an Option is
                  exercisable, as determined by the Management Board pursuant
                  to Article 5.5;

         (vii)    "Shares" means the ordinary shares in the capital of the
                  Company; and

         (viii)   "Supervisory Board" means Supervisory Board of the Company.



ARTICLE 2. - Granting of Options

         2.1 The Management Board may grant Options to Supervisory Directors,
subject to the approval of the Supervisory Board.

         2.2 Subject to the provisions of Article 4.2, the total number of
Shares with respect to which Options may be granted pursuant to the Plan shall
not exceed 80,000 Shares. Shares issued or issuable upon exercise of Options
shall reduce the maximum number of Shares available for use under the Plan.
Shares relating to expired, forfeited, or terminated and unexercised Options
are available for reissue for grant of Options under the Plan.

         2.3 The Management Board subject to the approval of the Supervisory
Board, shall determine, from time to time, consistent with the terms of the
Plan, the form of the agreements with Directors which shall evidence the
particular provisions, terms, conditions, rights and duties of the Company and
a Director with respect to Options granted under the Plan (an "Option
Agreement").

         2.4 If, at any time, the number of Shares relating to any Option
granted under the Plan that are exercisable includes a fractional Share, such
number of Shares shall be rounded down to the next whole number.

         2.5 No Option shall be granted to a Director (i) during the ten
trading sessions preceding the date on which the consolidated accounts or
annual accounts of the Company are published; and (ii) during a period (x)
starting from the date on which the corporate bodies of the Company become
aware of any information which, if published, could significantly affect the
Shares' market price and (y) ending at the close of the tenth trading session
following the publication of the information. No Option may be granted less
than twenty trading sessions after a coupon giving a right to a dividend or to
a capital increase has detached from the Shares.

         2.6. No Option shall be granted if, on the Option Date, (i) the
Director is registered for social taxes purposes in the Netherlands, or (ii)
the Director is not registered for social taxes purposes in his country of
residence.



ARTICLE 3. - Plan Administration

         3.1. Except as provided in Article 3.2, the Management Board shall
have the right to grant Options under terms, which may be different from the
general terms set forth in the Plan, as the Management Board determines to be
necessary or appropriate in order to comply with the laws of the country in
which the Director resides or for any other reason.

         3.2 To the extent required by Rule 16b-3 promulgated by the United
States Securities and Exchange Commission under Section 16 of the Securities
Exchange Act of 1934, as amended, the Supervisory Board shall specifically
approve each grant of an Option to a Director.

         3.3 Subject to the provisions of Article 4.1, the Management Board
subject to the approval of the Supervisory Board, shall amend the terms and
conditions of any Options, authorize any officer of the Company to execute on
behalf of the Company any instrument required to effect the grant of an Option
under the Plan previously approved by the Management Board subject to the
approval of the Supervisory Board, designate from time to time a brokerage or
financial institution to process and administer the exercise of all Options
granted under the Plan, and establish such other terms and requirements of the
Option, consistent with the Plan, as it deems proper and in the best interests
of the Company. No member of the Management Board subject to the approval of
the Supervisory Board, shall be liable for any action or determination made in
good faith. The determinations and interpretations of the Management Board
subject to the approval of the Supervisory Board, shall be binding and
conclusive for all purposes and on all persons.



ARTICLE 4. - Option Price

         4.1 The price to be paid to subscribe to the Shares (the "Option
Price") shall be at least equal to the Fair Market Value. The Option Price
shall be determined by the Management Board on the Option Date and, subject to
the provisions of Article 4.2 below, shall not be modified in any way.

         4.2 If, after the Option Date, one of the following events shall
occur:

         o    reduction of the Company's share capital to offset losses;

         o    capital increase by capitalization of retained earnings, profits,
              or issue premium;

         o    capital increase in cash;

         o    distribution of shares and/or retained earnings, either in cash
              or in securities, for no consideration;

         o    issuance of convertible bonds or exchangeable bonds, or bonds
              with subscription rights attached;

         o    issuance of preferred shares without voting rights;

         o    purchase by the Company of Shares at a purchase price higher than
              market price;

the Option Price and/or the number of the Shares with respect to which Options
have been granted will be adjusted if reasonably necessary, in such a way that
the intrinsic value of the Options immediately after the above-mentioned event
is equal to the intrinsic value of the Options immediately before such event.



ARTICLE 5. - Option Exercise and Non-transferability

         5.1 Except as otherwise approved by the Management Board, and subject
to the approval or the Supervisory Board, Options may only be exercised by the
Director, or if the Director has died, by the Director's heirs (hereinafter
referred to as the "Legal Successors"). In this latter case, the Options
transferred will have to be exercised by the Legal Successors within a period
of six months following the death of such Director.

         5.2      Options may be exercised in full or in part.

         5.3 Options shall be exercised by way of a notice to be sent by the
Director in the form set out by the Company, from time to time. Any such
notice of exercise shall state the number of Shares to be subscribed pursuant
to such exercise. No option shall be validly exercised unless the Option Price
is paid in full at the time the exercise notice is sent or at such other time
as the Management Board may decide.

         The Option Price for the Shares to be purchased shall be paid by
         electronic transfer, certified check, cashier's check or other check
         acceptable to the Company;

         5.4 Except as otherwise approved by the Management Board, and except
as otherwise provided in the Option Agreement and under applicable laws of
descent and distribution, no Option shall be transferred, assigned, pledged or
hypothecated, nor shall any right to any third party be granted on it, by the
Director holding such Options.

         5.5 At the time an Option is granted, the Management Board subject to
the approval of the Supervisory Board, or, if required by the law of country
in which the Director resides, the Company's shareholders, shall determine the
Option Term; provided, however, that the Option Term must end, in all cases,
not more than six years from the Option Date. The Option Agreement, if
applicable, shall also set forth any installment or other restrictions on
exercise of the Option during such period, if any, as may be determined by the
Management Board subject to the approval of the Supervisory Board. Each Option
shall become exercisable and unconditional at such times or upon such events,
as determined by the Management Board subject to the approval of the
Supervisory Board, and as specified in the Option Agreement. An Option may be
exercised only during the Option Term, except as provided in Article 7, and at
such times as it has become exercisable and unconditional.



ARTICLE 6. - Delivery of Shares

         Promptly after the exercise of an Option and upon payment in full of
the Option price, the Company will transfer the number of Shares in respect of
which the Option is exercised. However, the Company shall not be obligated to
transfer any Shares unless the Director has made arrangements satisfactory to
the Company to comply with any withholding requirements.



ARTICLE 7. - Consequences of Termination of Directorship

         7.1 In the event of death, disability, retirement, resignation or
dismissal of a Director, a Director (or its heirs in case of death) shall
retain the right to exercise the Options it holds on the date of such event
only up to the number of Options the Director would be entitled to exercise on
such date.

         7.2 As stated above in Article 5.1, in the case of the Director's
death, the Director's heirs will have to exercise the Options within the
six-month period following such death.

         7.3 The Management Board, with the Supervisory Board's approval, may
amend, from time to time, the provisions of this Article 7.



ARTICLE 8. -  No Furter Listing- Fair Market Value of the Shares

         8.1 In case the Shares would cease to be listed on the Paris stock
exchange, the Fair Market Value shall be determined in good faith by the
Managing Board, taking into account, notably, the price used for the last
transaction made affecting the share capital of the Company, unless otherwise
decided by the Management Board for a well-founded reason, subject to the laws
and regulations applicable on the date of determination of the Fair Market
Value.

         8.2 Fair Market Value under this Article 8 shall be determined no
more frequently than once every six months. The Fair Market Value at the
relevant date shall be deemed to be the most recent prior valuation, unless
there has been an event which, in the sole discretion of the Management Board,
is likely to have a material effect on the Fair Market Value, in which case a
new valuation may be carried out, using the then current valuation
methodology.



ARTICLE 9. - Taxes; Withholding

         9.1 In accordance with the laws of the jurisdiction in which the
Director resides, the Company shall be entitled to withhold, and the Director
shall be obliged to pay, the amount of any tax, or any other charges
attributable to or payable in connection with the grant, vesting or exercise
of any Option.

         9.2 The Management Board may set out appropriate procedures to ensure
that any such payment are made in due course and that the Company receives
advice concerning the occurrence of any event that may create, or affect the
timing or amount of, any obligation to pay or withhold any such taxes or which
may make available to the Company any tax deduction resulting from the
occurrence of such an event.

         9.3 The Company may, by notice to the Director and subject to such
rules as the Management Board may adopt, require that the Director pays at the
time of exercise or sale of any Option an amount estimated by the Company to
cover all or a portion of the tax or other contributions payable in connection
with the grant, vesting, exercise or sale of any Option. Alternatively, the
Company may deduct from any amounts payable to the Director at any time after
the exercise of an Option or sale of Shares issued as a result of the exercise
of any Option, such amounts as may be necessary to cover tax or other
contributions payable in connection with the grant, vesting, exercise or sale
of the Option to the extent that such deductions are permitted under
applicable law.
         9.4 Any tax or other contributions due by the Director or his Legal
Successors with respect to the granting, maintaining or the exercising of the
Options or the sale of the Shares shall be borne by the Director or his Legal
Successors, respectively.

         9.5 No tax paid by the Director or his legal Successors will be
refunded or compensated by the Company, including when some of all the Options
were not exercised.

         9.6 The Company's obligation to transfer any Shares upon exercise of
an Option are subject to the Director's satisfaction of all withholding
obligations attributable to the grant, vesting, or exercise of any Option.



ARTICLE 10. - Merger and Take-over

         In the case of a merger or other reorganization in which the Company
is not the surviving entity, the Management Board may require holders of
Options to exchange their Options for new options under the new merged
entity's stock option plan, provided that such new options will be at least
equivalent in value to the Options, or may provide for such other adjustment
to the Options that the Management Board, in its sole discretion, deems
equitable.



ARTICLE 11. - Sale of the Shares resulting from the exercise of the Options

         Shares may be sold by the Director at any time and with no
restriction other than the restrictions that are provided for in the Company's
Articles of Association, as amended from time to time.



ARTICLE 12. - No implied rights of the Director

         Neither the grant of the Options nor the Plan itself or any provision
therein shall be construed as an obligation of the Company to maintain the
Director in his/her position for a certain period of time or to guarantee him
a certain remuneration.



ARTICLE 13. - Insider Trading Rules

         By accepting the Options, the Director agrees to adhere to the
Company's insider trading policy, as may be amended from time to time (the
"Insider Trading Rules"). Directors who may be deemed to be insiders further
agree to adhere to any applicable notification or other requirements,
including without limitation the notification requirements under Dutch law.



ARTICLE 14. - Notices

         14.1 For the purposes of the Plan, notices to a Director shall be
sent to the address of the Director as known by the personnel department of
the Company.

         14.2 For the purposes of the Plan, notices to the Company, other than
Option exercise notices, which shall be submitted in the form and manner
determined by the Management Board from time to time, shall be sent by the
Director concerned to the address of the Company, as mentioned on the fore
page of this Plan.



ARTICLE 15. - Amendment and Termination

         The Management Board may, at any time, terminate, amend or modify the
Plan. Unless otherwise provided in this agreement, no amendment, modification
or termination of the Plan shall in any manner adversely affect any Options as
granted under the Plan without the consent of the Director holding such
Options.



ARTICLE 16. - Choice of Law and Jurisdiction

         The Plan will be governed by Netherlands law. All disputes arising in
connection with the Plan, except for disputes arising under article 8.2, shall
be brought before the competent court in the district of Amsterdam.



<PAGE>

                                                                    EXHIBIT 8

<TABLE>
<CAPTION>
                              List of Subsidiaries


                                      Registered         Proportion of issued
Name                                  office              share capital
---------------------------------     ---------------    --------------------
<S>                                   <C>                      <C>
Completel Holding I BV                Rotterdam                100%
Completel Holding II BV               Rotterdam                100%
Completel Holding BV                  Rotterdam                100%
Completel ECC BV                      Rotterdam                100%
Completel Escrow BV                   Rotterdam                100%
Completel SAS                         Courbevoie               100%
Completel Headquarters Europe SAS     Courbevoie               100%
Acces et Solutions Internet SARL      Lyon                     100%
Estel SA                              Strasbourg               100%
CableTel                              Denver, CO               100%
Completel SPC Ltd                     London                   100%
</TABLE>




<PAGE>

                                                                 EXHIBIT 10.1

                    Certification of CEO and CFO Pursuant to
                            18 U.S.C. Section 1350,
                             as Adopted Pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 20-F of Completel Europe N.V.
(the "Company") for the fiscal year ended December 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), Jerome
de Vitry, as Chief Executive Officer of the Company, and Alexandre Westphalen,
as Chief Financial Officer of the Company, each hereby certifies, pursuant to
18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of
2002, that, to the best of his knowledge:

(1)      The Report fully complies with the requirements of Section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations
         of the Company.


/s/ Jerome de Vitry
----------------------------------
Name:    Jerome de Vitry
Title:   Chief Executive Officer
Date:    May 22, 2003


/s/ Alexandre Westphalen
----------------------------------
Name:    Alexandre Westphalen
Title:   Chief Financial Officer
Date:    May 22, 2003

         This certification accompanies the Report pursuant to ss.906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
ss.18 of the Securities Exchange Act of 1934, as amended.

         A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906
HAS BEEN PROVIDED TO COMPLETEL AND WILL BE RETAINED BY COMPLETEL AND FURNISHED
TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

<PAGE>

                                                                  EXHIBIT 10.2

                      Completel Europe N.V. Code of Ethics


                                 CODE OF ETHICS

                         FOR SENIOR FINANCIAL OFFICERS

Completel is committed to full and accurate financial disclosure in compliance
with applicable laws, rules and regulations and to maintaining its books and
records in accordance with applicable accounting policies, laws, rules and
regulations. This Code of Ethics for Senior Financial Officers, applicable to
the Company's CFO, Comptroller, and Investor Relations Director, sets forth
specific policies to guide the Company's Senior Financial Officers in the
performance of their duties. As Senior Financial Officers, you perform a task
that is critical to the Company. This Code is designed to assist you in that
task.

This Code of Ethics sets forth the fundamental principles and key policies and
procedures that govern the conduct of all of us in our business. You are bound
by the requirements and standards set forth in this Code of Ethics.

Compliance with Rules and Regulations
Completel is committed to conducting our business in accordance with all
applicable laws, rules and regulations and in accordance with the highest
standards of business ethics. As a Senior Financial Officer, you must not only
comply with applicable laws, however. You also have leadership
responsibilities that include creating a culture of high ethical standards and
commitment to compliance; maintaining a work environment that encourages
employees to raise concerns; and promptly addressing employee compliance
concerns.

Conflicts of Interest
In order to maintain the highest degree of integrity in the conduct of
Completel's business and your independent judgment, you must avoid any
activity or personal interest that creates or appears to create a conflict
between your interests and the interests of the Company. A conflict of
interest occurs when your private interests interfere in any way, or even
appear to interfere, with the interests of the Company as a whole. You should
conduct the Company's business in an honest and ethical manner, and never act
in a manner that could cause you to lose your independence and objectivity.
Although we cannot list every conceivable conflict, following are some common
examples that illustrate actual or apparent conflicts of interest that should
be avoided:


Improper Personal Benefits from the Company
Conflicts of interest arise when an officer or a member of his or her family
receives improper personal benefits as a result of his or her position in the
Company. You may not accept any benefits from the Company that have not been
duly authorized and approved pursuant to Company policy and procedure,
including any Company loans or guarantees of your personal obligations.


Financial Interests in Other Businesses
Neither you nor your immediate family members may have an ownership interest
in any other enterprise if that interest compromises or appears to compromise
your loyalty to Completel. For example, you may not own an interest in a
Company that competes with Completel. You may not own an interest in a Company
that does business with Completel (such as Completel customer or supplier)
unless you obtain the written approval of the Audit Committee of the Board of
Directors before making any such investment. However, it is not typically
considered a conflict of interest (and therefore prior written approval of the
Audit Committee is not required) to make investments in competitors, customers
or suppliers that are listed on a national or international securities
exchange.

Business Arrangements with the Company and Corporate Opportunities
Without the prior written approval of the Audit Committee of the Board of
Directors, you may not participate in a joint venture, partnership or other
business arrangement with Completel. If you learn of a business or investment
opportunity through the use of corporate property or information or your
position at the Company, such as from a competitor or actual or potential
client, supplier or business associate of the Company (including a principal,
officer, director or employee of any of the above), you may not participate in
the business or make the investment and must instead inform the Chief
Executive Officer. Such an opportunity is an investment opportunity for
Completel, not for you individually.

Outside Employment or Activities With a Competitor
Simultaneous employment with or serving as a director of a competitor of
Completel is strictly prohibited, as is any activity that is intended to or
that you should reasonably expect to advance a competitor's interests. You may
not market products or services in competition with Completel's current or
potential business activities. It is your responsibility to consult with the
Chief Executive Officer to determine whether a planned activity will compete
with any of Completel's business activities before you pursue the activity in
question.

Outside Employment With a Customer or Supplier
Without the prior written approval of the Audit Committee of the Board of
Directors, you may not be a customer or be employed by, serve as a director of
or represent a customer of Completel. Similarly, without the prior written
approval of the Audit Committee, you may not be a supplier or be employed by,
serve as a director of or represent a supplier to Completel. Nor may you
accept money or benefits of any kind from a third party as compensation or
payment for any advice or services that you may provide to a client, supplier
or anyone else in connection with its business with Completel.


Family Members Working In The Industry
If your spouse or significant other, your children, parents, or in-laws, or
someone else with whom you have a familial relationship is a competitor,
supplier or customer of Completel or is employed by one, you must carefully
guard against inadvertently disclosing Completel confidential information and
being involved in decisions on behalf of Completel that involve the other
Company.

Use Of Completel's Time And Assets
Except as specifically authorized by the Company, Company assets, including
Company time, equipment, materials, resources and proprietary information,
must be used for legitimate business purposes only. Incidental and occasional
personal use of the Company's electronic mail and telephone systems is
permitted. However, you should be aware that even personal messages on the
Company's computer and telephone systems are Company property and you should
therefore have no expectation of personal privacy in connection with your use
of these resources.

Disclosures in Periodic Reports
As a public Company, Completel is required to file various periodic reports
with the Securities and Exchange Commission and the Commission des Operations
de Bourse. It is Company policy to make full, fair, accurate, timely and
understandable disclosure in compliance with all applicable laws and
regulations in all required periodic reports.

Compliance with the Code of Ethics
If you have questions about this Code of Ethics, you should seek guidance from
the Chief Executive Officer or the Compliance Officer. If you know of or
suspect a violation of applicable laws or regulations or the Code of Ethics,
you must immediately report that information to the Chief Executive Officer or
the Compliance Officer or the Audit Committee of the Board of Directors. No
one will be subject to retaliation because of a good faith report of suspected
misconduct.

Waivers of the Code
The Company will waive application of the policies set forth in this Code of
Ethics only when circumstances warrant granting a waiver, and then only in
conjunction with any appropriate monitoring of the particular situation.
Changes in and waivers of this Code of Ethics may be made only by the Board of
Directors or the Audit Committee of the Board and will be disclosed as
required under applicable law and regulations.

No Rights Created
This Code is a statement of the fundamental principles and key policies and
procedures that govern the Company's Senior Financial Officers in the conduct
of Completel's business. It is not intended to and does not constitute an
employment contract or assurance of continued employment, and does not create
any rights in any employee, client, supplier, competitor, shareholder or any
other person or entity.


ACKNOWLEDGMENT FORM


I have received and read the Code of Ethics for Senior Financial Officers, and
I understand its contents. I agree to comply fully with the standards,
policies and procedures contained in the Code of Ethics and the Company's
related policies and procedures. I understand that I have an obligation to
report to the Chief Executive Officer, the Compliance Officer or the Audit
Committee of the Board of Directors any suspected violations of the Code of
Ethics that I am aware of. I certify that, except as fully disclosed in
accordance with the terms of this Code of Ethics, I have not engaged in any
transactions or activities that would constitute an actual or apparent
conflict with the interests of Completel. I further certify that, except as
noted below, I am otherwise in full compliance with the Code of Ethics.


                                          ___________________________________
                                          Printed Name

                                          ___________________________________
                                          Signature


                                          ___________________________________
                                          Date


<PAGE>

                                                                EXHIBIT 10.3

                            Audit Committee Charter

I. PURPOSE

The Audit Committee is established by and amongst the Supervisory Board of
Directors for the primary purpose of assisting the Supervisory Board and Board
of Management (together the "Boards") in :

      o     overseeing the integrity of the Company's financial statements,

      o     overseeing the Company's compliance with legal and regulatory
            requirements,

      o     overseeing the independent auditor's qualifications and
            independence,

      o     overseeing the performance of the company's internal audit function
            and independent auditor, and

      o     overseeing the Company's system of disclosure controls and system
            of internal controls regarding finance, accounting, legal
            compliance, and ethics that management and the Boards have
            established

Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Company's policies,
procedures and practices at all levels. The Audit Committee should also
provide an open avenue of communication among the independent auditors,
financial and senior management, the internal auditing function, and the
Supervisory Board.

The Audit Committee has the authority to obtain advice and assistance from
outside legal, accounting, or other advisors as deemed appropriate to perform
its duties and responsibilities.

The Company shall provide appropriate funding, as determined by the Audit
Committee, for compensation to the independent auditor and to any advisers
that the audit committee chooses to engage.

The Audit Committee will primarily fulfill its responsibilities by carrying
out the activities enumerated in Section III of this Charter. The Audit
Committee will report regularly to the Supervisory Board regarding the
execution of its duties and responsibilities.

II. COMPOSITION AND MEETINGS

The Audit Committee shall be comprised of three or more directors as
determined by the Supervisory Board, each of whom shall be independent
Supervisory Directors (as defined by all applicable rules and regulations),
and free from any relationship (including disallowed compensatory
arrangements) that, in the opinion of the Supervisory Board, would interfere
with the exercise of his or her independent judgment as a member of the
Committee. All members of the Committee shall have a working familiarity with
basic finance and accounting practices, and at least one member of the
Committee shall be a "financial expert", as determined by the company's
Supervisory Board, taking into account the criteria established by the SEC and
other relevant regulations. The existence of such member(s) shall be disclosed
in periodic filings as required by applicable laws and regulations. Committee
members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Company or an outside
consultant.


The members of the Committee shall be elected by the Supervisory Board at the
annual organizational meeting of the Supervisory Board or until their
successors shall be duly elected and qualified. Unless a Chair is elected by
the full Board, the members of the Committee may designate a Chair by majority
vote of the full Committee membership.

The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. Each regularly scheduled meeting shall conclude with an
executive session of the Committee absent members of management and on such
terms and conditions as the Committee may elect. As part of its job to foster
open communication, the Committee shall meet periodically with management and
the independent auditors in separate executive sessions to discuss any matters
that the Committee or each of these groups believe should be discussed
privately . In addition, the Committee shall meet quarterly with the
independent auditors and management to discuss the annual audited financial
statements and quarterly financial results, including the Company's disclosure
under management's discussion and analysis of financial condition and results
of operations in its 20F and Document de Reference.

III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:

Documents/Reports/Accounting Information Review

1. Review this Charter periodically, at least annually, and recommend to the
Boards of Directors any necessary amendments as conditions dictate.

2. Review and discuss with management the Company's annual financial
statements, quarterly financial results, and all internal controls reports (or
summaries thereof). Review other relevant reports or financial information
submitted by the Company to any governmental body, or the public, including
management certifications as required by the Sarbanes-Oxley Act of 2002
(Sections 302 and 906) and relevant reports rendered by the independent
auditors (or summaries thereof).

3. Recommend to the Boards whether the financial statements should be included
in the Annual Report on Form 20 F. Review with financial management and the
independent auditors the quarterly results prior to its public release.

4. Review earnings press releases with management, including "pro-forma" or
"adjusted" non-GAAP information.

5. Discuss with management financial information and earnings guidance provided
to analysts and rating agencies. Such discussions may be on general terms
(i.e., discussion of the types of information to be disclosed and the type of
presentation to be made).



Independent Auditors

6. Appoint (subject to shareholder ratification, if applicable), compensate,
and oversee the work performed by the independent auditor for the purpose of
preparing or issuing an audit report or related work. Review the performance
of the independent auditors and remove the independent auditors if
circumstances warrant. The independent auditors shall report directly to the
audit committee and the audit committee shall oversee the resolution of
disagreements between management and the independent auditors in the event
that they arise.

7. Consider whether the auditor's performance of permissible nonaudit services
is compatible with the auditor's independence.

8. Review with the independent auditor any problems or difficulties and
management's response; review the independent auditor's attestation and report
on management's internal control; and hold timely discussions with the
independent auditors regarding the following:

      o     all critical accounting policies and practices;

      o     all alternative treatments of financial information within
            generally accepted accounting principles that have been discussed
            with management, ramifications of the use of such alternative
            disclosures and treatments, and the treatment preferred by the
            independent auditor;

      o     other material written communications between the independent
            auditor and management including, but not limited to, any
            management letter and schedule of unadjusted differences; and

      o     an analysis of the auditor's judgment as to the quality of the
            Company's accounting principles, setting forth significant
            reporting issues and judgments made in connection with the
            preparation of the financial statements.

9. At least annually, obtain and review a report by the independent auditor
describing:

      o     the firm's internal quality control procedures;

      o     any material issues raised by the most recent internal
            quality-control review, peer review, or by any inquiry or
            investigation by governmental or professional authorities, within
            the preceding five years, respecting one or more independent audits
            carried out by the firm, and any steps taken to deal with any such
            issues; and

      o     (to assess the auditor's independence) all relationships between
            the independent auditor and the Company.

10. Review and preapprove both audit and nonaudit services to be provided by
the independent auditor (other than with respect to de minimis exceptions
permitted by section 202 of the Sarbanes-Oxley Act of 2002). This duty may be
delegated to one or more designated members of the audit committee with any
such preapproval reported to the audit committee at its next regularly
scheduled meeting. Approval of nonaudit services shall be disclosed to
investors in periodic reports required by Section 13(a) of the Securities
Exchange Act of 1934.

11. Set clear hiring policies, compliant with governing laws or regulations,
for employees or former employees of the independent auditor.


Financial Reporting Processes and Accounting Policies


12. In consultation with the independent auditors, review the integrity of the
organization's financial reporting processes (both internal and external), and
the internal control structure (including disclosure controls).

13. Review with management major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Company's selection or application of accounting principles, and major issues
as to the adequacy of the Company's internal controls and any special audit
steps adopted in light of material control deficiencies.

14. Review analyses prepared by management (and the independent auditor as
noted in item 8 above) setting forth significant financial reporting issues
and judgments made in connection with the preparation of the financial
statements, including analyses of the effects of alternative accounting
methods on the financial statements.

15. Review with management the effect of regulatory and accounting
initiatives, as well as off-balance sheet structures, on the financial
statements of the Company.

16. Review and approve all related party transactions. 1

--------

1 "Related party transactions" are defined as follows:

      o     affiliates of the enterprise; entities for which investments are
            accounted for by the equity method by the enterprise; trusts for
            the benefit of employees, such as pension and profit-sharing trusts
            that are managed by or under the trusteeship of management;
            principal owners of the enterprise; its management; members of the
            immediate families of principal owners of the enterprise and its
            management; and other parties with which the enterprise may deal if
            one party controls or can significantly influence the management or
            operating policies of the other to an extent that one of the
            transacting parties might be prevented from fully pursuing its own
            separate interests. Another party is also a related party if it can
            significantly influence the management or operating policies of the
            transacting parties or if it has an ownership interest in one of
            the transacting parties and can significantly influence the other
            to an extent that one or more of the transacting parties might be
            prevented from fully pursuing its own separate interests.


17. Establish and maintain procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting, or auditing
matters.

18. Establish and maintain procedures for the confidential, anonymous
submission by Company employees regarding questionable accounting or auditing
matters.

19. Discuss policies with respect to risk assessment and risk management. Such
discussions should include the Company's major financial and accounting risk
exposures and the steps management has undertaken to control them.

Other Responsibilities

20. Review with the independent auditors and management the extent to which
changes or improvements in financial or accounting practices, as approved by
the Audit Committee, have been implemented. (This review should be conducted
at an appropriate time subsequent to implementation of changes or
improvements, as decided by the Committee.)

21. Perform any other activities consistent with this Charter, the Company's
by-laws and governing law, as the Committee or the Board deems necessary or
appropriate.


<PAGE>

                                                                 Exhibit 10.4

                          Consent of Deloitte & Touche


Independent Auditors' Consent


We consent to the incorporation by reference in Registration Statement No.
333-57208 of CompleTel Europe N.V. on Form S-8 of our report dated February
25, 2003, except for the matters referenced in Note 14 as to which the date is
April 10, 2003 (which report expresses an unqualified opinion and includes an
explanatory paragraph referring to the change in the Company's method of
accounting for goodwill in accordance with Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets as described in Note
2) appearing in the annual report on Form 20-F of CompleTel Europe N.V. for
the year ended December 31, 2002.


                                                 Deloitte & Touche Accountants

Amsterdam, The Netherlands
May 16, 2003