UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                                -----------

                                 FORM 10-K
                                -----------

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

                    For the year ended December 31, 2001

                                     or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

               For the transition period from ______to ______

                       Commission File No. 000-30075

                                -----------

                           COMPLETEL EUROPE N.V.
           (Exact name of Registrant as specified in its charter)

                The Netherlands                              98-0202823
       (State or other jurisdiction of                    (I.R.S. Employer
        incorporation or organization)                   Identification No.)

                 James E. Dovey                                2132 NA
                 Kruisweg 609                                (Zip Code)
      2132 NA Hoofddorp, The Netherlands
   (Address of principle executive offices)

    Registrant's telephone number, including area code: (31) 20 666 1701

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

        Securities registered pursuant to Section 12(g) of the Act:

          ORDINARY SHARES, ((euro)) 0.10 NOMINAL VALUE, QUOTED ON
                        THE NASDAQ NATIONAL MARKET,
                         TRADED ON THE PARIS BOURSE
                                -----------

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

         Based on the average of the bid and asked price on the Nasdaq
National Market on March 1, 2002 of U.S.$0.79, the aggregate market value
of the Registrant's voting stock held by non-affiliates on such date was
approximately U.S.$54,727,400. For purposes of this disclosure, ordinary
shares held by directors and certain executive officers and by each person
who owns or may be deemed to own 5% or more of our outstanding share
capital have been excluded since such persons may be deemed to be
affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.

         The number of shares outstanding of the Registrant's common stock
as of March 1, 2002 was 160,555,222 ordinary shares.




<TABLE>
<CAPTION>
                             TABLE OF CONTENTS

                                   PART I
                                                                                                                                Page
<S>           <C>                                                                                                            <C>
 Item 1.       Business.............................................................................................       1
 Item 2.       Properties...........................................................................................
 Item 3.       Legal Proceedings....................................................................................
 Item 4.       Submission of Matters to a Vote of Security Holders..................................................

                                                                  PART II
 Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters................................
 Item 6.       Selected Financial Data..............................................................................
 Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations................
 Item 7a.      Quantitative and Qualitative Disclosure about Market Risk............................................
 Item 8.       Financial Statements and Supplementary Data..........................................................
 Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................

                                  PART III
 Item 10.      Directors and Executive Officers of the Registrant...................................................
 Item 11.      Executive Compensation...............................................................................
 Item 12.      Security Ownership of Certain Beneficial Owners and Management.......................................
 Item 13.      Certain Relationships and Related Transactions.......................................................

                                                                  PART IV
 Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................................

</TABLE>




                                   PART I

Item 1. Business

Forward Looking Statements

         All assumptions, expectations and forecasts contained in the
following discussion regarding our future business plans and products and
services, financial results, performance, and the telecommunications
industry and operating environment and future events are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act
of 1934. Actual outcomes may differ materially because of a number of risks
and uncertainties, including these described under the caption "Risk
Factors." The forward-looking statements contained herein represent a
good-faith assessment of our future performance for which we believe there
is a reasonable basis. The forward-looking statements are generally
identified by the use of forward-looking words such as "plan," estimate,"
believe," "expect," "will," "should" and "may" and variations of these
terms, or by a discussion of strategy that involves risks and
uncertainties. We disclaim any obligation to update forward-looking
statements contained herein, except as may be required by law.

         All statements made herein are accurate only as of the date of
filing this Form 10-K with the Securities and Exchange Commission and may
be relied upon only as of that date. Unless otherwise indicated, all share
numbers reflect the five-for-one stock split we effected on February 25,
2000.

Overview

         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, with a focus on network deployment in France and, to a lesser
extent, in Germany. We deliver these services primarily to connected,
on-net customers over 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 effort on expanding our customer base in our MANs
in France. These are located in nine French cities: Paris, Lyon, Marseille,
Lille, Grenoble, Toulouse, Nice, Nantes and Strasbourg, We also have MANs
in four cities in Germany: Munich, Nuremberg, Berlin and Essen-Dortmund.
Our MANs are connected nationally and internationally by our leased
inter-city network.

         As of December 31, 2001, we had a total base of 1,170 connected
customers, compared to 654 connected customers as of December 31, 2000. Our
consolidated revenue for the year ended December 31, 2001 totaled
(euro)97.9 million, an increase of approximately 210% over consolidated
revenue of (euro)31.5 million for the year ended December 31, 2000.

         We are experiencing growth in our core retail activity in France,
and believe that this trend will continue. However, during 2001 and the
beginning of 2002 we observed signs of general weakness in the European
markets for carrier, dial-up Internet access and Internet data center
services. In light of these adverse market conditions, we have implemented
reorganization and restructuring measures to adjust our operations to
foreseeable market conditions, reducing ongoing operating expenses and
capital outlays. In particular, we have implemented a major downsizing of
our German operations in view of the slowdown in German telecommunications
markets (particularly in the carrier and ISP segments). We continue to
examine the structure and prospects of our German operations with a view to
eliminating unnecessary costs and cash flow requirements. In addition, we
face a significant downturn in the web hosting market, linked to the
collapse of the ".com" market and installed hosting overcapacity in Europe.
We have decided to respond to this downturn by scaling down the Internet
data centers operations we have launched in France, Germany and the United
Kingdom. In France and Germany, we intend to integrate these activities
with our retail businesses. In the United Kingdom, we plan to exit the
market and are currently evaluating various options to execute our plan.

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:

         o        substantially increased product offerings made possible
                  by direct fiber connection;

         o        higher revenue per customer;

         o        lower interconnection costs and improved operating
                  margins; and

         o        increased loyalty of customers and reduced churn.

         Our integrated network architecture includes voice switches, data
switches and routers, synchronous digital hierarchy (SDH) and dense
wavelength division multiplexing (DWDM) systems, customer premise equipment
and metropolitan area network fiber rings. 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 platform encompasses digital
telephone switches, data switches and Internet protocol, as well as SDH and
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:

         o        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 duct to the points of entry of buildings
                  immediately adjacent to the network route to expedite the
                  connection of new customers.

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

         o        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 which 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 Systems and Riverstone Networks.

         o        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.

         o        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, comprise 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 a 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 13
cities in France and Germany. As of December 31, 2001, we had deployed over
2,389 route kilometers of fiber in our MANs, substantially all of which
consists of fiber owned by us. In addition, we lease a total of
approximately 778 route kilometers for our leased inter-city network, which
connects our MANs nationally and internationally. 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". 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 lease 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 centers. We have established network operating
centers in a Paris suburb and in Essen-Dortmund, allowing centralized and
integrated management of all the equipment deployed in our MANs. These
centers continuously monitor 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 nationally and internationally. As of December 31, 2001, our
leased inter-city networks totaled 778 route kilometers. We lease (a) from
Global Crossing, a network loop linking our MANs in Berlin, Essen-Dortmund,
Munich and Nuremberg with Frankfurt, the location of our connection between
our German and French inter-city networks, (b) from Lambdanet, a network
loop linking our MANs in Paris, Strasbourg and Lille with the connection
point in Frankfurt (c) from Telia, a network loop linking our MANs in
Paris, Lyon, Toulouse and Nantes and (d) 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
entered into principal national interconnection agreements with the
incumbent and dominant mobile operators in France and Germany; that is,
France Telecom and its affiliate Orange, SFR and Deutsche Telekom. We also
have entered into agreements with other national and international
carriers, such as WorldCom, Inc., Telecom Developpement, Swisscom, Jazztel,
Versatel and Song Networks. 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 and Deutsche Telekom.

         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,
equipment installation and first, second and third level 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 free phone services and premium-rate services (known as "800
numbers" in France and "900 numbers" in the United States).

         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 such
services, which, until recently, we offered only in Germany. We also plan
to include audio conference services in our portfolio of 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:

         o        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.

         o        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.

         o        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.

         o        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 launch IP Virtual
Private Network services that will allow our customers to connect all their
sites and employees who are on the move to their IT system through our IP
platforms and network, as if they were using their own private network. We
plan to enhance our LAN to LAN service 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 base, 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:

         o        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;

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

         o        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,
2001, we had 1,170 connected business customers, including Aventis, EADS,
EDF and Siemens.

         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 and BackUp Avenue.

         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 KPNQwest, Riodata, Equant, Cable and Wireless and
Worldcom.

Sales, marketing and distribution

         Customer acquisition and retention strategy

         As of December 31, 2001, we had a sales force of 185, including
143 based in our local markets in France and 36 based in our local markets
in Germany. Tailored to our different target markets, our sales
organization includes:

         o        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 nationally;

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

         o        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 on-net prospects within 500 meters of our network backbone,
primarily driven by 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:

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

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

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

         o        access to technical support;

         o        escalation processes to deal with customer concerns;

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

         o        local 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 and supported by local representatives in charge of
local network management and office systems management. 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:

         o        geomarketing and sales force automation;

         o        customer order management, service provisioning and
                  activation;

         o        customer care and account management;

         o        network planning and design;

         o        customer rating, billing and collection;

         o        business financial systems; and

         o        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) TCSI and Siemens for mediation
systems and (f) Nortel Networks, Siemens, Cisco Systems and Hewlett-Packard
for network supervision. All the applications are operated from our central
data center in Paris with localized interfaces, local language and business
processes for each of our markets.

         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 our information
and billing applications are operated from our central data center in Paris
with localized interfaces, local language and business processes for each
market and country.

Competition

         Overview

         The ongoing liberalization of the European telecommunications
market has coincided with technological innovation to create a fast
changing and increasingly competitive market. It is 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
have exited the market during 2001.

         The European Union is actively stimulating competition among
telecommunications providers. European member states are 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:

         o        variety of services;

         o        network coverage;

         o        network quality and service reliability;

         o        price;

         o        customer service; and

         o        accurate and detailed billing.

         Incumbent telecommunications carriers

         We compete principally with incumbent public telecommunications
operators, France Telecom and Deutsche Telekom, and to a lesser extent with
other local or long distance carriers in our markets. Based on their
historically exclusive market positions, incumbent public
telecommunications operators generally have competitive advantages over new
entrants including:

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

         o        established relationships with local and national
                  regulatory authorities;

         o        established local and long-distance distribution facilities;

         o        existing rights-of-way;

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

         o        control over local telecommunications connectivity.

         We expect that our principal competitors will continue to be the
incumbent public telecommunications operators in each of our markets.

         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. In France, our
primary market, these operators include WorldCom (mostly in Paris, Lyon and
Strasbourg), COLT (in Paris, Lyon and Marseille and to a lesser extent
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 has been very limited in both
France and Germany. 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, 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 2001, a 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. During 2001, a number of specialized web
hosting companies (including the largest one, Exodus) withdrew from the
market or were consolidated into larger, less specialized companies in the
telecommunications industry.

         Regulation

         Overview

         National and local laws and regulations governing the provision of
telecommunications services differ significantly among the countries in
which we operate, although the fundamental principles on which these laws
and regulations are based derive from European directives that aim to
achieve harmonization across member states. The interpretation and
enforcement of such laws and regulations vary and could limit our ability
to provide various telecommunications services in different markets. In
addition to licenses in France and Germany, we also have obtained a license
under Section 214 of the U.S. Communications Act that permits us to
terminate calls in the United States that originate on our European
networks and to transport traffic originating in the United States to our
networks in France and Germany.

         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 Germany and
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 European Union ("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:

         o        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.

         o        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.

         o        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.

         o        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-oriented,
                  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.

         o        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. In addition, on July 26, 2000,
                  the European Commission rendered a decision that the
                  protection provided for personal data by the so-called
                  "Safe Harbor Principles" is adequate under European law.
                  According to the Safe Harbor Principles, U.S. companies
                  that receive personal data from the EU are encouraged to
                  file voluntary declarations with the U.S. Government to
                  adhere to certain data protection principles. In return,
                  EU law would assume that the data protection which these
                  U.S. companies provide is adequate under the EU's privacy
                  rules. Since November 2000, only a few U.S. companies
                  have filed Safe Harbor declarations. It is uncertain how
                  and when the European Commission and the Member States
                  would impose sanctions on U.S. companies that do not
                  comply with the Data Protection Directive requirements
                  and/or the Safe Harbor Principles.

         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 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
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 significant effect on our markets.

         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 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 for 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.

         Germany

         The German Telecommunications Act of July 25, 1996 ended the
network monopoly of Deutsche Telekom AG ("Deutsche Telekom") and
immediately liberalized all telecommunications activities in Germany, but
postponed liberalization of voice telephony until January 1, 1998. Since
January 1, 1998, the German telecommunications market has been completely
open to competition and a new regulatory authority, the Regulierungsbehorde
fur Telekommunikation und Post ("Reg TP"), has been installed.

         Under the German regulatory scheme, Reg TP grants licenses in four
license classes. A license is required for operation of transmission lines
that extend beyond the limits of a property and that are used to provide
telecommunications services for the general public. This infrastructure
license is divided into three classes: mobile radio license (class 1);
satellite license (class 2); and general infrastructure license, covering
all telecommunications services for the public which are not covered by the
mobile radio license or satellite license (class 3). In addition to the
infrastructure licenses, a license is required for operation of voice
telephony services based on self-operated telecommunications networks
(class 4). A class 4 license does not include the right to operate
transmission lines, and a class 3 license does not include the right to
provide voice telephony services. Licensees under classes 1, 2 and 3 have
the right to install transmission lines on, in and above public trafficways
such as public roads, squares, bridges and public waterways without
payment; however, when installing transmission lines, permission must be
obtained from the relevant authorities. In general, this permission cannot
be refused.

         In March of 1999, our German operating subsidiary, CompleTel GmbH,
was granted class 3 and class 4 licenses for three markets in Germany,
including our initial target market, which were subsequently amended in
July 1999 and in January, July and October 2000, to include among others,
our additional markets, including Hamburg, Mannheim, Stuttgart, Cologne,
Bonn, Dusseldorf and some cities in the Ruhr area. The licenses are of
unlimited duration. In March 2001, we were granted a national class 4
license to provide voice telephony services.

         Where a company is considered to have a dominant market position,
it is required under the TKG to grant access to its network or unbundled
parts to third parties, including competitors. Prices for access to and
interconnection with dominant operators' networks must be cost-oriented.
Irrespective of their market position, however, operators of public
telecommunications networks are obligated upon request, to make offers to
other operators for interconnection to their networks. If the parties
cannot reach an agreement on the terms of such interconnection, either
party may take the case to Reg TP, who will order the interconnection on
such terms as it may determine in accordance with the provisions of the
TKG. To date, interconnection has been the source of a major dispute
between Deutsche Telekom and its competitors. Several complaints currently
pending before Reg TP and German courts concern the content of the standard
interconnection offer of Deutsche Telekom. Although Reg TP has established
standard interconnection rates, Deutsche Telekom and some of its major
competitors have been unable to reach agreement on other aspects of
interconnection and network access, such as rates for access to the
unbundled local loop. Rates for unbundled access to the customer line have
been considered, and rates have been set by Reg TP which Deutsche Telekom's
competitors generally regard as too high and anti-competitive. Other
pending disputes concern the costs of billing services provided by Deutsche
Telekom to other carriers and rates for direct access to the end-user lines
of Deutsche Telekom.

         We entered into an interconnection agreement with Deutsche Telekom
in May 1999, which was amended several times subsequently. We expect
further amendments in the near future that will have to reflect rulings by
Reg TP that strengthen our position towards Deutsche Telekom by providing
shorter and more precisely defined periods for Deutsche Telekom to respond
to our orders. However, Deutsche Telekom is delaying these amendments. Our
interconnection agreement provides for an escape clause that allows
Deutsche Telekom to delay the provision of interconnection access for
technical reasons (e.g. if too many orders are placed by alternative
operators). There is concern that Deutsche Telekom may abuse its dominant
position by not performing properly its obligations under its
interconnection agreements. If that happens, we may not always be able to
roll-out our network as fast as we wish due to limitations in the
interconnection of our network with Deutsche Telekom's. Reg TP is
investigating Deutsche Telekom's behavior regarding interconnection;
however, we do not expect immediate improvements in Deutsche Telekom's
performance.

         In addition to interconnection fees, any tariffs charged by
dominant public fixed-networks operators, including end-user prices, are
subject to price control. Regulated prices must be cost-oriented based on
the costs of efficient service provision.

Employees

         As of December 31, 2001, we had 696 employees, compared to 775 at
December 31, 2000. In connection with our restructuring measures and our
efforts to adjust our operations to foreseeable market conditions and
reduce ongoing operating expenses, we made significant reductions to our
workforce in the United Kingdom and Germany. These reductions were
approximately 70% and 50%, respectively. We believe that our future success
will depend on our ability to attract and retain highly skilled, qualified
and experienced employees.

         Our French employees are covered by a collective bargaining
agreement governing the telecommunications industry. In Germany, our
employees are not subject to any collective bargaining agreement.

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 key person insurance on several
members of our senior management team, liability insurance for our
directors and officers and loss of revenue insurance. The main exclusions
of the policies are war and willful 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." We are currently involved in a dispute
regarding the scope of such limitation and are engaged in discussions to
settle this matter. However, at this stage, we are not in a position to
predict the outcome of such discussions, or the impact of the matter on our
marketing activity.

General corporate information

         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 Drentestraat 24, 1083 HK,
Amsterdam, 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.

         Below is a simplified organizational chart of our corporate
structure as of March 1, 2002.




[Graphic Omitted]




Item 2. Properties

         Our European headquarters are located in Paris, France. We also
have sales offices in each of our 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:

<TABLE>
<CAPTION>

 Location                                               Size (sq. meters) Lease Expiration Date
---------                                               ----------------- ---------------------
<S>                                                        <C>
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
Germany:
  Essen                                                             3,028 September 2004
  Berlin                                                            2,795 November 2009
  Munich                                                            3,958 July 2004
  Nuremberg                                                         1,800 December 2004
  Hamburg                                                           1,989 August 2010
United Kingdom:
  London                                                            3,000 September 2020
</TABLE>


Item 3. Legal Proceedings

         The syndicate of co-owners of a building in which CompleTel France
installed certain telecommunications equipment, brought an action against
the Company before the Tribunal de Grande Instance of Paris alleging that
the equipment was installed without obtaining the necessary authorizations
and caused disturbances in the building. On May 11, 2001, the tribunal
issued a decision, following a preliminary injunction hearing (a) ordering
the Company to restore the premises to their original state, and (b)
appointing an expert with the mandate of determining the liability, if any,
the damages sustained, if any, and the work which the Company may have to
undertake with respect to the equipment to cease the disturbances. The
Company appealed against this decision and the expertise is currently in
progress. The Company is involved in discussions to settle this matter out
of court, but there can be no assurance that the Company will be able to
reach a settlement. If the negotiations to settle out of court are
unsuccessful, the Company may be required to move the equipment and may be
required to do so in a short period of time. In such an event, the Company
could suffer disturbances to its network, which could have an impact on its
customers activities. However, at this stage of the litigation, the Company
is not in a position to predict the outcome of this matter or determine the
impact, if any, that it may have on its activities.

         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.

Item 4. Submission of Matters to a Vote of Security Holders

         No matter was submitted to a vote of our security holders from
September 30, 2001 to December 31, 2001.


                                  PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Market Information

         The following table presents information pertaining to our equity
capital as of March 1, 2002:

         Number of shares issued: . . . . . . . . . . . . . . . 160,555,222(1)
         Nominal value of shares: . . . . . . . . . . . . . . . . .(euro)0.10
         Issued equity capital: . . . . . . . . . . . . . . .(euro)16,055,522

--------------------
(1) Including 3,135,892 held by CompleTel Europe N.V.

         Our ordinary shares are traded on the Nasdaq National Market
System under the symbol "CLTL," and are traded on the Premier Marche of
Paris Bourse S.A. under the symbol "CTL." Both began trading on March 27,
2000, the date of our initial public offering.

         The following table shows the amounts traded and the range of high
and low closing sales prices for each month and each fiscal quarter since
our initial public offering.




<TABLE>
<CAPTION>

                                                                                       Nasdaq                          Nasdaq (2)
                                                                                       ------                          ------
                               Number
                          of Shares Traded            Capital Traded
                              Including                 Including
                       Non-Market Transactions   Non-Market Transactions        High           Low             High           Low
                       -----------------------   -----------------------        ----           ---             ----           ---
                             (millions)           (millions of euro) (1)   (U.S. dollars) (U.S. dollars)      (euro)         (euro)
<S>                          <C>                   <C>                      <C>            <C>              <C>         <C>
March 2000                                             (euro)                  $23.56         $19.94     (euro)24.40    (euro)20.74
2000 First Quarter                                     (euro)                  $23.56         $19.94     (euro)24.40    (euro)20.74
April 2000                      3.72                      193.07               $22.75         $15.25           23.60         16.55
May 2000                        8.64                      127.01               $17.75         $10.50           19.38         11.58
June 2000                       4.03                      54.13                $13.94         $12.00           14.96         12.61
2000 Second Quarter                                    (euro)                  $22.75         $10.50           23.60         11.58
July 2000                       2 .43                     31.94                13.38          11.13            14.27         12.04
August 2000                     5.65                      54.79                11.38           7.94            12.27          8.69
September 2000                  6.79                      70.40                10.87           7.13            12.10          8.07
2000 Third Quarter                                     (euro)                  $13.38         $7.13      (euro)14.27    (euro)8.07
October 2000                    6.04                      48.07                 8.25           5.25            9.34           6.23
November 2000                   5.77                      34.06                 7.13           3.50            8.40           4.08
December 2000                   4.60                      18.93                 4.13           3.00            4.70           3.22
2000 Fourth Quarter                                    (euro)                  $8.25          $3.00       (euro)9.34    (euro)3.22
January 2001                    9.15                      52.81                 6.25           3.13            6.61           3.29
February 2001                   7.38                      38.34                 6.00           3.75            6.40           4.08
March 2001                      7.69                      29.58                 4.59           2.75            4.91           3.11
2001 First Quarter                                     (euro)                  $6.25          $2.75       (euro)6.61    (euro)3.11
April 2001                      10.58                     29.52                 2.90           2.06            3.23           2.34
May 2001                        22.49                     89.48                 3.85           2.60            4.35           2.91
June 2001                     9.73 (3)                    31 (3)                3.18           2.30            3.72           2.68
2001 Second Quarter                                    (euro)                  $3.85          $2.06       (euro)4.35    (euro)2.34
July 2001                       11.85                     28.28                 2.60           1.79            3.04           2.04
August 2001                     43.30                     73.02                 2.58           0.95            2.92           1.04
September 2001                  38.51                     25.03                 0.90           0.50            0.98           0.54
2001 Third Quarter                                     (euro)                  $2.60          $0.50       (euro)3.04    (euro)0.54
October 2001                    87.14                     114.46                1.60           0.51            1.79           0.56
November 2001                   87.53                     99.65                 1.38           0.71            1.53           0.80
December 2001                   48.77                     47.18                 1.12           0.90            1.26           1.01
2001 Fourth Quarter                                    (euro)                  $1.60          $0.51       (euro)1.79    (euro)0.56
January 2002                    34.35                     36.53                 1.08           0.80            1.19           0.93
February 2002                   74.42                     57.95                 0.80           0.50            0.93           0.57
     Source Euronext, Nasdaq
</TABLE>


[Chart continued]


                                              Premier Marche of
                                             Euronext Paris S.A.
                                             -------------------



                                            High             Low
                                            ----             ---
                                           (euro)           (euro)
March 2000                              (euro)           (euro)
2000 First Quarter                      (euro)           (euro)
April 2000                                 23.30            16.51
May 2000                                   19.50            11.00
June 2000                                  14.24            12.24
2000 Second Quarter                   (euro)23.30      (euro)11.00
July 2000                                  13.75            12.23
August 2000                                11.80             8.95
September 2000                             12.30             8.30
2000 Third Quarter                    (euro)13.75      (euro)8.30
October 2000                                9.65             6.25
November 2000                               8.48             3.80
December 2000                               4.81             3.65
2000 Fourth Quarter                   (euro)9.65       (euro)3.65
January 2001                                7.10             3.40
February 2001                               6.46             4.20
March 2001                                  4.75             2.89
2001 First Quarter                    (euro)7.10       (euro)2.89
April 2001                                  3.19             2.31
May 2001                                    4.51             2.81
June 2001                                   3.66             2.84
2001 Second Quarter                   (euro)4.51       (euro)2.31
July 2001                                   2.98             2.06
August 2001                                 3.17             1.06
September 2001                              1.13             0.47
2001 Third Quarter                    (euro)3.17       (euro)0.47
October 2001                                1.90             0.63
November 2001                               1.56             0.77
December 2001                               1.37             1.01
2001 Fourth Quarter                   (euro)1.90       (euro)0.63
January 2002                                1.30             1.01
February 2002                               0.99             0.59




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

(1)      The U.S. dollar transactions were accounted for using the average
         monthly exchange rate.

(2)      The euro-equivalent of Nasdaq prices are calculated using the
         exchange rate in effect on the date such prices were reported on
         such market.

(3)      These numbers take into account the operation by which CompleTel
         Europe N.V. obtained 3,142,162 of its own shares in exchange for
         the shares it held in CompleTel LLC. The amount of capital
         exchanged on the occasion of this operation was calculated by
         applying to the number of shares of CompleTel Europe N.V. obtained
         the average of the highest and lowest prices on the Premier Marche
         of Euronext Paris S.A. during the course of the month of June. The
         amount of capital exchanged during the course of this month,
         without taking into account this operation, amounts to
         approximately 20.79 million euro.

Recent Sales of Unregistered Securities

         During the year ended December 31, 2001, we did not sell any
securities that were not registered under the U.S. Securities Act.

Holders

         As of March 1, 2002, we had 123 record holders of our ordinary
shares. This number excludes shareholders whose shares are held through
nominees, brokers or other agents.

Dividends

         We have never declared or paid any dividends. For the foreseeable
future, we plan to retain our earnings, if any, to reinvest in our
business. The terms of some of our existing debt facilities prevent us from
paying dividends. Further, Netherlands regulations limit our ability to pay
dividends from statutory capital equity.

Shares Authorized for Issuance under our 2000 N.V. Stock Option Plan

         Our 2000 Stock Option Plan is the only equity incentive plan that
we currently have outstanding. This 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. The plan
was approved by the general meeting of our shareholders held on December
10, 1999, and by our Board of Management on December 30, 1999.

         The following table presents summary data relating to our ordinary
shares authorized for issuance under our 2000 Stock Option Plan as of
December 31, 2001.
<TABLE>
<CAPTION>

<S>                                                                               <C>
Number of shares to be issued upon exercise of outstanding options (a)                       7,437,274
Number of shares remaining available for future issuance under
     the plan (excluding shares reflected in row (a))                                       11,476,416
Number of shares issued upon the exercise of options                                             6,270
                                                                                        --------------
Aggregate number of shares available under the plan                                         18,919,960
                                                                                            ==========
Weighted-average exercise price of outstanding options                                     (euro) 3.79
                                                                                           ===========
</TABLE>

         For more detailed information about our 2000 stock option plan,
see "Part III, Item 11-- Executive Compensation--Equity Incentive Plans"
and Note (9) to our consolidated financial statements.

Evolution of Equity Capital

         The following table shows the main transactions which have
affected our equity capital since our inception.

<TABLE>
<CAPTION>

               SUMMARY EVOLUTION OF EQUITY CAPITAL TABLE (1)

                                                                                           Nominal Amount
                                                                                           of Successive
                                                        Number of         Nominal           Increases in
         Year                    Operation               Shares         Face Value            Capital
    -------------            -----------------         ----------      ------------       ---------------
                                                                         ((euro))         ((euro)millions)

<S>                    <C>                             <C>              <C>               <C>
  2001                  Exercise of stock options                 --        --                   --
                        (2)
  November 2000         Increase in capital (2)            3,142,162        0.1                 0.3
  March 2000            Increase in capital               31,280,000        0.1                 3.1
                        (initial public offering)
  1999                  Option Plan (3)                           --        --                   --
  1999                  Increase in capital                       --        --                   --
  November 1999         Increase in capital               20,775,915        0.1                 2.1
  February 1999         Increase in capital                7,375,000        0.1                 0.7
  January 1999          Increase in capital               73,537,325        0.1                 7.4
  1998                  Increase in capital                       --        --                   --
  December 1998         Increase in capital                       --        --                  0.05
  1998                  Increase in capital                       --        --                   --
  December 1998         Creation                          24,444,820        0.1                 2.4
</TABLE>


[Chart continued]

<TABLE>
<CAPTION>

                                                  Equity
                           Number of              Capital                          Cumulated
                         Shares after              after            Issue            Issue
        Year              Operation              Operation         Premium          Premium
   -------------         ------------           -----------       ---------        ---------
                                             ((euro)millions)  ((euro)millions)  ((euro)millions)

<S>                          <C>                <C>               <C>             <C>
 2001                        160,555,222              --               --              638.0

 November 2000               160,555,222  (2)        16.1             15.2             638.0
 March 2000                  157,413,060             15.8             506.3            622.8

 1999                        126,133,060             12.7             26.3             116.5
 1999                        126,133,060             12.7              2.0             90.2
 November 1999               126,133,060             12.7             39.7             88.2
 February 1999               105,357,145             10.6              3.3             48.5
 January 1999                 97,982,145              9.9             43.4             45.2
 1998                         24,444,820              2.5              0.6              1.8
 December 1998                24,444,820              2.5              --               1.2
 1998                         24,444,820              2.4              1.2              1.2
 December 1998                24,444,820              2.4              --               --
</TABLE>



(1)   All share numbers reflect the five-for-one stock split we effected on
      February 25, 2000. For further information about the transactions
      specified in this table that occurred prior to our initial public
      offering, see footnote 1 to our consolidated financial statements.

(2)   A significant number of our shares were held by CompleTel LLC.
      Holders of CompleTel LLC units (including some of our directors and
      executive officers) effectively had an indirect ownership interest in
      our ordinary shares held by CompleTel LLC. In late November 2000,
      CompleTel LLC began to redeem its units in exchange for our shares
      held by it. Instead of redeeming their units, some holders
      contributed them to us in exchange for our newly issued shares. Thus,
      as shown in the November 2000 row of the table, we issued an
      additional 3,142,162 shares, the number of our shares represented by
      the 3,280 units so contributed to us. These shares were recorded at
      (euro)15.6 million, the fair market value of the shares on the date
      of issuance. As a result of such transactions, we held exchangeable
      common units of CompleTel LLC, which in turn held our shares. In
      April and June 2001, we unravelled this cross-holding structure by
      exchanging the 3,280 units that we held in CompleTel LLC for
      3,142,162 of our shares. 6,270 of these shares were granted to the
      stock option holders who exercised their options between January 1
      and June 30, 2001. The rest of them are currently held as treasury
      stock that is deprived of any financial and voting rights. This
      treasury stock is included in the "number of shares after operation"
      specified in the column with such title.

(3)   In accordance with U.S. G.A.A.P., we fixed an issue premium at the
      time we put our option plan into effect.


Item 6. Selected Financial Data

   The following selected consolidated financial data have been derived
from the audited consolidated financial statements which have been prepared
in accordance with accounting principles generally accepted in the United
States. The selected consolidated financial data set forth below are
qualified by reference to, and should be read in conjunction with, the
audited consolidated financial statements and notes thereto and also with
Item 7 "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<TABLE>
<CAPTION>

                                                                                              Commencment
                                                                                             of operations
                                   Year Ended          Year Ended          Year Ended       (January 8, 1998)
                                  December 31,        December 31,          December         to December 31,
Statement of operations data:         2001                2000              31, 1999             1998
                                          (euro, in thousands, except share and per share amounts)

<S>                               <C>                <C>                 <C>                       <C>
Revenue.......................     (euro) 97,909      (euro) 31,540       (euro) 2,861              (euro) -

Operating expenses:
   Network costs..............            86,855             33,038              2,307                     -
     Selling, general and
     administrative...........            95,181             79,606             30,302                 3,754
   Allocated costs from an
     affiliate................             5,402             12,090              6,195                 2,551
   Non-cash compensation
     charges..................             5,260             60,550                634                   164
   Depreciation and
     amortization.............            54,961             22,027              4,302                    40
   Restructuring, impairment
     and other charges........           167,555                  -                  -                     -
                                -----------------    ---------------     --------------    ------------------
        Total operating
        expenses..............           415,214            207,311             43,740                 6,509
                                -----------------    ---------------     --------------    ------------------

Operating loss................          (317,305)          (175,771)           (40,879)               (6,509)
                                -----------------    ---------------     --------------    ------------------

Other income (expense):
   Interest income............            12,867             22,394              2,447                     -
   Interest expense, net of
     capitalized interest                (29,485)           (28,968)            (7,893)                    -
    Foreign exchange loss and
     other expense............          (11,294)           (18,933)            (3,465)                     -
                                -----------------    ---------------     --------------    ------------------
         Total other  income
           (expense)..........          (27,912)           (25,507)            (8,911)                     -

Loss before extraordinary
   item and cumulative effect
   of change in accounting
   principle..................         (345,217)          (201,278)           (49,790)                (6,509)

Extraordinary item - Gain on
   early extinguishment of
   debt.......................           46,168              1,053                  -                     -

Cumulative effect of change
    in accounting
    principle.................                -              (263)                  -                     -

                                -----------------    ---------------     --------------    ------------------
Net loss                      (euro)   (299,049)   (euro)(200,488)     (euro) (49,790)        (euro) (6,509)
                                =================    ===============     ==============    ==================

Basic and diluted loss per
    ordinary share............     (euro) (1.90)     (euro) (1.34)       (euro) (0.50)         (euro) (0.27)
                                =================    ===============     ==============    ==================
Weighted average number of
ordinary shares outstanding...      157,417,898        149,806,721         99,056,060            24,444,820
                                =================    ===============     ==============    ==================
</TABLE>




<TABLE>
<CAPTION>

                                                      As of December 31,
                                        2001          2000          1999          1998
                                        ----          ----          ----          ----
                                                     (euro, in thousands)

 Balance sheet data:
<S>                                        <C>          <C>            <C>            <C>
Cash and cash equivalents..........  (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........       277,807       298,623        91,946         2,888
Total assets.......................       455,990       824,781       176,208         6,741
Long-term debt.....................       227,735       280,597        79,596            --
Total liabilities..................       334,074       408,821       133,137        11,923
Total shareholders' equity.........       121,916       415,960        43,071         5,182
</TABLE>


Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Overview

         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, with a focus on network deployment in France and, to a lesser
extent, in Germany. We deliver these services primarily to connected,
on-net customers over our fiber optic metropolitan area networks, or MANs.

         We were incorporated in December 1998. 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 former ultimate parent, was formed. We accounted for
these transactions as a reorganization of entities under common control,
similar to a pooling of interests. Accordingly, our historical results of
operations are presented as if we had been legally formed on January 8,
1998 and had performed all competitive local exchange carrier related
development activities since CompleTel LLC's inception.

         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 operations until we establish
a sufficient revenue generating customer base. We are experiencing growth
in our core retail activity in France, and believe that this trend will
continue. However, during 2001 and the beginning of 2002 we observed signs
of general weakness in the European markets for carrier, dial-up Internet
access and Internet data center services. In light of these adverse market
conditions, we have implemented reorganization and restructuring measures
to adjust our operations to foreseeable market conditions, reducing ongoing
operating expenses and capital outlays. In particular, we have implemented
a major downsizing of our German operations in view of the slowdown in
German telecommunications markets (particularly in the carrier and ISP
segments). We continue to examine the structure and prospects of our German
operations with a view to eliminating unnecessary costs and cash flow
requirements. In addition, we face a significant downturn in the web
hosting market, linked to the collapse of the ".com" market and installed
hosting overcapacity in Europe. We have decided to respond to this downturn
by scaling down the Internet data centers operations we have launched in
France, Germany and the United Kingdom. In France and Germany, we intend to
integrate these activities with our retail businesses. In the United
Kingdom, we plan to exit the market and are currently evaluating various
options to execute our plan. These restructuring measures, and the
application of asset impairment guidelines, have resulted in restructuring
and impairment charges of approximately (euro)167.6 million and significant
reductions of our workforce in Germany and the United Kingdom.

         We currently anticipate that we will fully utilize our existing
cash resources by mid-year 2002. We believe that we will require additional
financing in excess of our invested capital and current borrowings in the
range of (euro)60 million to (euro)90 million to bring us to cash flow
breakeven. Given our funding position, we believe that there is a
substantial doubt regarding our ability to continue as a going concern. We
have embarked on a process to seek additional forms of capital. However,
there can be no assurance that we will be able to obtain the additional
financing we need. If we fail to obtain sufficient additional financing, we
will effectively cease to be able to conduct our business. Certain of our
existing major investors have indicated that they would consider investing
an aggregate of up to (euro)30 million (of the estimated (euro)60 million
to (euro)90 million shortfall), subject to agreement on terms, as part of a
re-capitalization and restructuring that would provide us with sufficient
cash resources to fund our business plan to cash flow breakeven. These
terms would likely include the conversion into ordinary shares of
substantially all of our outstanding debt securities and very substantial
dilution to our existing shareholders.

Revenue

         Our revenue consists of revenue from three 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
overall revenue.

         o        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 owned fiber and leased lines. This
                  revenue is based primarily on traffic minutes billed.
                  Revenue from voice products accounted for (euro)35.5
                  million, or approximately 36% of our total revenue for
                  the year ended December 31, 2001. Revenue from voice
                  products totaled (euro)7.6 million, or approximately 24%
                  of total revenue for the year ended December 31, 2000.

         o        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. 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. Revenue from these
                  services accounted for (euro)11.4 million, or
                  approximately 12%, of our total revenue for the year
                  ended December 31, 2001. Revenue from data and Internet
                  services totaled (euro)2.8 million, or approximately 9%,
                  of total revenue for the year ended December 31, 2000.

         Wholesale services.

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

         o        Carrier and termination services. We derive revenue from
                  the services we provide on a wholesale basis to other
                  telecommunications service providers that require
                  transmission capacity to support gaps in their networks,
                  need additional capacity or require alternate routing, or
                  do not have their own transmission facilities. We also
                  terminate traffic for other operators. This revenue,
                  which is based primarily on transmission capacity
                  provided and traffic minutes terminated, accounted
                  for(euro)17.0 million, or approximately 17% of our
                  revenue in the year ended December 31, 2001. We expect
                  revenue from carrier and termination services to
                  represent a decreasing percent of our total revenue.
                  Revenue from carrier and termination services
                  totaled(euro)4.2 million, or approximately 13% of total
                  revenue for the year ended December 31, 2000.

         o        Internet dial-up. We also derive revenue from dial-up
                  Internet access to our ISP customers delivering the
                  traffic and plan to continue to do so in France and
                  Germany. This revenue, which is based primarily on
                  traffic minutes, accounted for (euro)27.2 million, or
                  approximately 28% of our overall revenue in the year
                  ended December 31, 2001. We expect our Internet dial-up
                  services revenue to represent a decreasing proportion of
                  our total revenue, as our revenue from our retail
                  services increases. Revenue from Internet dial up
                  services totaled (euro)8.9 million, or approximately 28%,
                  of total revenue for the year ended December 31, 2000.

         Internet data centers, web hosting, Internet access and other
Internet-related services

         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. Revenue from our Internet data centers,
web hosting, Internet access and other Internet-related services accounted
for (euro)6.8 million, or approximately 7%, of our total revenue for the
year ended December 31, 2001, compared to (euro)8.0 million, or 26% of our
total revenue, for the year ended December 31, 2000. We expect revenue from
our Internet data centers, web hosting, Internet access and other
Internet-related services to remain a small portion of our total revenue.

         In France and Germany, we derive revenue from all three of our
principal service offerings. As of December 31, 2001, we had commercially
launched services in nine cities in France (including Nantes, launched on
May 16, 2001 and Strasbourg, which was added following the completion of
the acquisition of Estel S.A. in late May 2001) and four cities in Germany.

         Our three, five and ten largest customers generated approximately
24%, 29% and 37% of our revenue for the year ended December 31, 2001,
respectively. These customers include Liberty Surf, which generated
slightly over 11% of our overall revenue for the year. For the year ended
December 31, 2000, our four largest customers in France and Germany
generated approximately 37% of our revenue, including Liberty Surf, which
generated slightly more than 10% of our total revenue for 2000.

Operating expenses

         Our primary operating expenses consist of:

         o        network costs,
         o        selling, general and administrative expenses,
         o        allocated costs from an affiliate,
         o        non-cash compensation charges,
         o        depreciation and amortization expenses, and
         o        restructuring, impairment and other charges.

         Network costs

         Our network costs include costs such as interconnection costs, the
cost of leasing high-capacity digital lines that interconnect our network
with the networks of other providers, the cost of leasing local loop lines
that connect our customers to our network, switch site rental and operating
and maintenance costs, as well as costs associated with our Internet data
centers, web hosting and other Internet-related services. We lease dark
fiber and conduit on a limited basis to establish and augment our MANs in
certain markets. We also lease fiber to connect our MANs, in order to
provide an IP backbone to support our Internet data centers, web hosting
and other Internet-related services. We incur other fixed costs, such as
switch site rent and network and switch maintenance, that normally are
incurred at the time of interconnection in anticipation of future revenue.
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 higher
incremental costs. As we continue to build our networks and revenue
increases, we believe that the incremental costs of deployment will
decrease as a percentage of our network costs.

         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 decline as a portion of our total
revenue and are undertaking efforts to control these expenses through
various means, such as restructuring and shifting expenditures away from
dependence on consultants towards the use of internal resources.

         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 account executives. As of December 31, 2001, we
had 696 employees, compared to 775 employees at December 31, 2000. This
decrease is primarily attributable to workforce reductions made in
connection with our restructuring in the United Kingdom and Germany. These
reductions were approximately 70% and 50%, respectively.

         Allocated costs from an affiliate

         Allocated costs from an affiliate include amounts we pay CableTel
Management, Inc. a wholly owned subsidiary of CompleTel LLC. They 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 (a) incurred by CompleTel
Headquarters Europe S.A.S, our wholly owned subsidiary, and (b) accounted
for as selling, general and administrative costs. 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. will be 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, based upon their value as determined at the time of our
initial public offering, we recorded compensation expense and deferred
compensation for performance-based vesting units that did not vest as a
result of the IPO but may vest upon a qualified sale by Madison Dearborn
Partners, one of our initial investors, or in May 2005. The deferred
compensation is being amortized to expense over the remaining vesting
period to May 18, 2005 (the deemed vesting date if vesting does not occur
earlier upon a qualified sale by Madison Dearborn Partners). We also record
compensation expense and deferred compensation for certain time vesting
units that vest at various times throughout the year, and that will be all
vested by November 2002. In addition to the above expenses, some of our
employees have purchased common units of CompleTel LLC, our former ultimate
parent, for which CompleTel LLC incurs non-cash compensation charges. For
accounting purposes, 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
life. Network equipment is depreciated on a straight line basis over an
estimated useful life of three to eight years.

         Other income and expense

         Other income includes interest income on the investment of the
proceeds from our debt and equity offerings.

         Interest expense recorded reflects interest on our 14% senior
notes due 2010, the accretion of our 14% senior discount notes due 2009 and
the amortization of deferred financing costs. We capitalize 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."

         Foreign exchange loss and other expense

         Our revenue, costs, 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. Therefore, we are exposed to changes in currency exchange rates
primarily due to our 14% senior discount notes due 2009. They expose us to
exchange rate fluctuations as the payment of principal and interest on
these notes will be made in U.S. dollars, while a substantial portion of
our future cash flow used to service these payments will be denominated in
other currencies, primarily the euro. While we believe that our exposure to
exchange rate risks is otherwise limited, there can be no assurance that we
will not be materially adversely affected by variations in currency
exchange rates.

Results of operations

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

         Revenue

         Revenue for the year ended December 31, 2001 increased to
(euro)97.9 million, compared to approximately (euro)31.5 million for the
year ended December 31, 2000. We attribute these increases in revenue to
our overall growth resulting from the implementation of our business plan
and the rapid deployment of our networks. Specifically, the increase
resulted from significant growth of our customer base, an increase in
traffic over our networks and a heightened demand for services from
existing customers. For the year ended December 31, 2001, revenue from
retail services totaled (euro)46.9 million; revenue from wholesale services
totaled (euro)44.2 million; and revenue from Internet data centers, web
hosting and other Internet-related services totaled (euro)6.8 million. For
the year ended December 31, 2000, revenue from retail services totaled
(euro)10.4 million, revenue from wholesale services totaled (euro)13.1
million, and revenue from Internet data centers, web hosting and other
Internet-related services totaled (euro)8.0 million.

         In France, we had revenue of approximately (euro)75.9 million for
the year ended December 31, 2001, compared to approximately (euro)22.9
million for 2000. Revenue from our French operations represented 77.5% of
our total revenue for the year ended December 31, 2001. We experienced
steady growth in revenue from retail customers in the nine French cities in
which our MANs operate and our overall connected customer base in France
grew to 946 customers, as of December 31, 2001. This increase in our
customer base and traffic resulted in a total of 2.9 billion minutes of use
carried over our networks in France in 2001. During the year ended December
31, 2001, revenue from our Internet data centers, web hosting and other
Internet-related services generated 2.5% of our revenue in France.

         In Germany, we had revenue of approximately (euro)18.5 million for
the year ended December 31, 2001, compared to (euro)3.0 million for 2000.
This revenue represented 18.9% of our total revenue for the year ended
December 31, 2001. As of December 31, 2001, we had over 224 connected
customers in Germany and carried over 0.3 billion minutes of use in Germany
during 2001. Revenue from our Internet data centers, web hosting and other
Internet-related services cumulatively generated 7.0% of our revenue in
Germany for the year ended December 31, 2001. We are currently in the
process of restructuring our German operations and have already implemented
measures to minimize the offering of Internet data centers, web hosting and
other Internet-related services in Germany.

         In the United Kingdom, we had revenue of approximately (euro)3.5
million for the year ended December 31, 2001, compared to approximately
(euro)5.6 million for 2000. We plan to exit this market and are currently
evaluating various options to execute our plan.

         Operating expenses

         Network costs

         Our network costs for the year ended December 31, 2001 increased
to approximately (euro)86.9 million from (euro)33.0 million for the year
ended December 31, 2000. This increase resulted primarily from the
continued deployment of our networks in France and Germany and the
associated costs of establishing interconnection and leasing arrangements.
The increase also resulted from increased customer traffic, which resulted
in higher interconnection payments to the incumbent telecommunications
operators.

         Selling, general and administrative expenses

         For the year ended December 31, 2001, selling, general and
administrative expenses totaled approximately (euro)95.2 million, compared
to approximately (euro)79.6 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. As a percentage of our total revenue, selling, general and
administrative expenses represented 97% of our total revenue for the year
ended December 31, 2001, compared to 253% 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 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 primarily a result of decreased 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)9.5 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 totaling approximately (euro)25.1
million. Additionally, we recorded a compensation credit of approximately
(euro)4.2 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)55.0 million for the year ended December 31, 2001, from approximately
(euro)22.0 million for the year ended December 31, 2000. The majority of
this increase resulted from the build-out of our MANs throughout France and
Germany.

         Restructuring, impairment and other charges

         In connection with the Company's restructuring efforts during the
second half of 2001, the Company recognized approximately (euro)167.6
million in restructuring, impairment and other charges which are reflected
in the accompanying consolidated statement of operations.

         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.....................................                 15.8
Other charges.............................................                  3.1
                                                                    -----------
Total.....................................................          (euro)167.6
                                                                    ===========

         The write-down of the Company's German and United Kingdom assets
results from the Company's decision to significantly scale-back its
operations in Germany and exit the market in the United Kingdom. As a
result of its restructuring, the Company determined, in accordance with its
policy relating to recoverability of long-lived assets, that the values of
its German and United Kingdom assets were impaired as of December 31, 2001.
Accordingly, the Company has recorded charges to write-down the remaining
carrying values of these assets to their estimated fair market values as
determined by the Company using a discounted cash flow approach. The
write-down of materials and supplies relates to the revaluation of certain
materials and supplies held by the Company resulting directly from the
decision by the Company to scale-back its operations in Germany, to the
lower of cost or market value as of December 31, 2001. As a result of the
decision to scale-back the Company's German operations, these materials and
supplies are in excess of what is needed by the Company to complete
construction of its networks. The restructuring charges relate primarily to
severance costs associated with the reductions in the size of the Company's
workforce in Germany and the United Kingdom, as well as charges relating to
lease terminations and renegotiated interconnection agreements. The other
charges of (euro)3.1 million relate to the costs associated with the
repayment of certain loans held by employees with a bank and the costs
associated with the forgiveness of a loan made to the CEO of the Company,
both as described more fully in Note 3, Related Party Transactions.

         Management expects the restructuring to be completed during the
first half of 2002.

<TABLE>
<CAPTION>

         The restructuring charges can be detailed as follows:

Summary of 2001 Restructuring Charges
                                                                                    Europe HQ
                                        France         Germany            UK        and 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)                                       20             601              50           2,694           3,365
                                    ---------------- -------------  --------------  -------  -----   -------------
                                             2,729           8,194           1,569           3,297          15,789
Paid during 2001                             1,025           2,251             546           2,228           6,050
                                    --------------    ------------   -------------  ------   -----    ------------
Accrual balance,
 December 31, 2001                     (euro)1,704     (euro)5,943     (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
           expected to be incurred in connection with the restructuring.

<TABLE>
<CAPTION>

                  The following table details the number of employees
involved in the restructuring:

                                Total number of employees to be         Total number of employees terminated as of
                                terminated                              December 31, 2001
                                     --------------------------------------- --------------------------------------------
<S>                                                             <C>                                          <C>
        France                                                     144                                          122
        Germany                                                    231                                          220
        UK                                                          33                                           33

        Europe HQ and other                                         21                                           15
                                     --------------------------------------- --------------------------------------------
        Total                                                      429                                          390
                                     ====================================================================================
</TABLE>

         Other income and expense

         We recorded interest income of approximately (euro)12.9 million
during the year ended December 31, 2001, compared to (euro)22.4 million for
the year ended December 31, 2000. This decrease is the result of decreasing
cash and cash equivalents balances.

         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 totaled 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 expense

         For the year ended December 31, 2001, we recorded foreign exchange
loss and other expenses of (euro)11.3 million, compared to (euro)18.9
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 and to losses on the sale of certain fixed assets. 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.

         Extraordinary Item

         We reported extraordinary items totaling (euro)46.2 million for
the year ended December 31, 2001. 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 totaling
(euro)49.9 million. In addition, the extraordinary item reflects a
(euro)6.0 million write-off of deferred financing costs.

         Net loss

         Our net loss for the year ended December 31, 2001 was (euro)299.0
million, compared to a net loss of approximately (euro)200.5 million for
the year ended December 31, 2000. This change resulted primarily from the
restructuring, impairment and other charges of (euro)167.6 million, as
described above.

         Adjusted EBITDA

         Many securities analysts use the measure of earnings before
deducting interest, taxes, depreciation and amortization, also commonly
referred to as "EBITDA," as a way of measuring the performance of a
company. We consider an adjusted measure we refer to as "Adjusted EBITDA,"
to be a helpful performance measure of our business. In calculating
Adjusted EBITDA, we also exclude non-cash compensation charges and foreign
exchange loss and other expenses, including restructuring, impairment and
other charges. For the years ended December 31, 2001 and 2000, these
expenses totaled (euro)184.1 million and (euro)79.5 million, respectively.
We had Adjusted EBITDA losses of approximately (euro)89.5 million and
(euro)93.2 million for the years ended December 31, 2001 and 2000,
respectively. We expect to continue to experience operating losses and
negative Adjusted EBITDA as a result of our development and market
expansion activities.

         Adjusted EBITDA is not derived pursuant to generally accepted
accounting principles and therefore should not be construed as an
alternative to operating income (loss), as an alternative to cash flows
from operating activities, or as a measure of liquidity. Furthermore, we
are not aware of any uniform standards for determining Adjusted EBITDA.
Presentations of Adjusted EBITDA may not be calculated consistently by
different companies in the same or similar businesses. As a result, our
reported Adjusted EBITDA may not be comparable to similarly titled measures
used by other companies.

    The following table summarizes our Adjusted EBITDA calculation for the
years ended December 31, 2001 and 2000 (amounts in thousands).

<TABLE>
<CAPTION>

                                                               2001               2000
                                                               ----               ----
<S>                                                            <C>              <C>
Net Loss.............................................    (euro)(299,049)  (euro)(200,488)
Interest expense (net of interest income)............            16,618            6,574
Income taxes.........................................                --               --
Depreciation and amortization........................            54,961           22,027
Non-cash compensation charges........................             5,260           60,550
Foreign exchange loss and other expense..............            11,294           18,933
Restructuring, impairment and
   other charges.....................................           167,555               --
Cumulative effect of change in accounting
   principle.........................................                --              263
Gain on early extinguishment of debt.................           (46,168)          (1,053)
                                                                -------         --------
Adjusted EBITDA......................................     (euro)(89,529)   (euro)(93,194)
                                                         ==============   ==============
</TABLE>


Year ended December 31, 2000 compared to year ended December 31, 1999

         Revenue

         In the fourth quarter of 2000, we adopted, effective January 1,
2000, Staff Accounting Bulletin 101, "Revenue Recognition in Financial
Statements" ("SAB 101"), which requires deferral and amortization of
certain installation and start-up revenues over the longer of the contract
period or the expected customer relationship. Previously such revenues were
recognized upon service activation. Unless otherwise indicated, all revenue
figures for the year ended December 31, 2000 reflect the adoption of SAB
101.

         Excluding the effect of SAB 101, our total revenue was
approximately(euro)33.6 million for the year ended December 31, 2000, an
increase of(euro)30.7 million from(euro)2.9 million for the year ended
December 31, 1999. As adjusted for SAB 101, our revenue was(euro)31.5
million for the year ended December 31, 2000. We attribute this increase in
revenue to our overall growth resulting from the implementation of our
business plan and the deployment of our networks. Specifically, the
increase resulted from growth of our customer base, increase in traffic
over our networks and a increased demand for services from existing
customers. For the year ended December 31, 2000, revenue from retail
services totaled(euro)10.4 million; revenue from wholesale services
totaled(euro)13.1 million; and revenue from Internet data centers, web
hosting and other Internet-related services totaled(euro)8.0 million.

         In France, we had revenue of approximately(euro)23.0 million for
the year ended December 31, 2000, compared to approximately (euro)1.9
million for the year ended December 31, 1999. Revenue from our French
operations represented 73% of our total revenue for the year ended December
31, 2000. We experienced steady growth of revenue from retail customers in
the seven French cities in which our MANs were then operating and our
overall signed customer base in France grew to 787 customers as of December
31, 2000. The increase in our customer base and traffic resulted in a total
of 671 million minutes of use carried over our networks in France in 2000.
During the year ended December 31, 2000, revenue from our Internet data
centers, web hosting and other Internet-related services generated 10% of
our revenue in France.

         In Germany, we had revenue of approximately(euro)2.9 million for
the year ended December 31, 2000, compared to no revenue for the year ended
December 31, 1999. This revenue represented 9% of our revenue for the year
ended December 31, 2000. The increase in revenue in Germany resulted from
the fact that the traffic on our MANs in Germany did not begin until
November 1999. As of December 31, 2000, we approximately signed 110
customers in Germany and carried over 44 million minutes of use in Germany.
Additionally, revenue from our Internet data centers, web hosting and other
Internet-related services cumulatively generated 10% of our revenue in
Germany for the year ended December 31, 2000.

         In the United Kingdom, we had revenue of approximately(euro)5.6
million for the year ended December 31, 2000, compared to
approximately(euro)1.0 million for the year ended December 31, 1999.
Revenue derived from our Internet data center in London, our web hosting
and other Internet-related services, represented 64% of revenue in the
United Kingdom for the year ended December 31, 2000. We also
derived(euro)2.0 million from miscellaneous dial-up services in the United
Kingdom during 2000, which represented 36% of our revenue in the United
Kingdom.

         Operating expenses

         Network costs

         Our network costs for the year ended December 31, 2000 increased
to approximately(euro)33.0 million from(euro)2.3 million for the previous
year. This increase resulted primarily from the continued deployment of our
networks in France and Germany and the associated costs of establishing
interconnection and leasing arrangements. The increase also resulted from
increased customer traffic, which resulted in higher interconnection
payments to the incumbent telecommunications operators.

         Selling, general and administrative expenses

         For the year ended December 31, 2000, selling, general and
administrative expenses totaled approximately (euro)79.6 million, compared
to approximately (euro)30.3 million for the year ended December 31, 1999.
This increase primarily resulted from the rapid growth in the number of
personnel, the expenses related to wages and salaries and our heavy
reliance throughout the year on external consultants for management
information system implementation. The increase also resulted from
administrative and start-up costs associated with the launches of our
Internet data centers facilities.

         Allocated costs from an affiliate

         For the year ended December 31, 2000, we recorded
approximately(euro)12.1 million of costs allocated from an affiliate,
compared with approximately(euro)6.2 million for the year ended December
31, 1999. This increase was primarily a result of increased personnel,
legal and accounting costs allocated from CableTel Management, Inc.

         Non-cash compensation charges

         We incurred amortization of stock-based compensation expense of
approximately(euro)7.0 million under our fixed stock option plan for the
year ended December 31, 2000. This amount was based on deferred
compensation at the date of grant totaling approximately (euro)25.1
million.

         We incurred additional stock-based compensation expense of
approximately (euro)41.9 million upon completion of our initial public
offering in March 2000 due to the resulting vesting of certain CompleTel
LLC performance-based vesting common units held by our employees in
connection with a qualified public offering. This compensation expense was
based on the IPO price of (euro)17.50 per share. In addition, based upon
our value as indicated in the IPO, we recorded compensation expense and
deferred compensation at the IPO date of approximately (euro)24.0 million
and (euro)74.9 million, respectively, for performance-based vesting units
that would not have vested as a result of the IPO but that may vest upon a
qualified sale by Madison Dearborn Partners or in May 2005 based on a
deemed vesting date. For the year ended December 31, 2000, we reduced
previously recorded compensation expense by approximately (euro)17.9
million and deferred compensation by approximately (euro)63.8 million,
based on the closing price per share on December 31, 2000. These 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)22.0
million for the year ended December 31, 2000, from approximately(euro)4.3
million for the previous year. The majority of this increase resulted from
the build-out of our MANs throughout France and Germany. We started
recording network depreciation during the quarter ended June 30, 1999 when
we initiated network services.

         Other income and expense

         We recorded interest income of approximately(euro)22.4 million
during the year ended December 31, 2000. For the year ended December 31,
1999, interest income totaled approximately(euro)2.4 million. The increase
is the result of the investment of our IPO proceeds and proceeds from our
senior notes due 2010.

         We incurred interest expense, net of approximately(euro)10.1
million of capitalized interest, of approximately(euro)29.0 million during
the year ended December 31, 2000. For the year ended December 31, 1999,
interest expense totaled approximately(euro)7.9 million, net of capitalized
interest of approximately(euro)1.4 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 loss and other expense

         For the year ended December 31, 2000, we recorded an(euro)11.4
million foreign exchange loss related to our investment in U.S. treasury
bills, which we were required to invest in pending receipt of an exemption
from regulations under the Investment Company Act of 1940, we also recorded
an unrealized foreign exchange loss of(euro)5.0 million related to our U.S.
dollar-denominated senior discount notes.

         Net loss

         Our net loss for the year ended December 31, 2000 was(euro)200.5
million, compared to a net loss of approximately(euro)49.8 million for the
prior year. This increase resulted primarily from total non-cash
compensation charges of approximately(euro)60.6 million, in addition to the
general increases in the operating expenses as described above.

Statements of Cash Flows

         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. As of December 31, 1999, we
had cash and cash equivalents of approximately (euro)57.1 million.

         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          1999
                                                                            ----         ----          ----
                                                                                 (euro, in thousands)


<S>                                                                          <C>             <C>            <C>
Cash flows from operating activities.........................          (euro)(102,831) (euro)(96,890) (euro)(39,591)

Cash flows from investing activities.........................                (147,035)      (274,192)       (69,630)

Cash flows from financing activities.........................                 (29,679)        678,762       155,610

Effect of exchange rates on cash.............................                    (540)         (3,097)        9,254
                                                                                 -----        -------         -----


Net increase (decrease) in cash and cash equivalents.........                (280,085)        304,583        55,643

Cash and cash equivalents at beginning of period.............                 361,698          57,115         1,472
                                                                              -------          ------         -----


Cash and cash equivalents at end of period...................            (euro)81,613   (euro)361,698  (euro)57,115
                                                                         ============   =============  ============
</TABLE>



         Cash flows from operating activities

         During the year ended December 31, 2001, we used approximately
(euro)102.8 million in operating activities, a (euro)5.9 million increase
from the approximately (euro)96.9 million used in 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.

         During the year ended December 31, 2000, we used approximately
(euro)96.9 million in operating activities, a (euro)57.3 million increase
from the approximately (euro)39.6 million used in operating activities for
1999. This increase was primarily related to the substantial organization
and start-up costs we continued to incur in the development of our networks
during 2000.

         Cash flows from investing activities

         We used approximately (euro)147.0 million in investing activities
during the year ended December 31, 2001, compared to using approximately
(euro)274.2 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 buildout
of our MANs.

         Our cash flow from investing activities was approximately
(euro)274.2 million for the year ended December 31, 2000, compared to using
approximately (euro)69.6 million during the prior year. The increase was
primarily due to investment of the proceeds from our IPO during the first
quarter of 2000 in property and equipment and the purchase of approximately
(euro)69.7 million of securities to secure interest and principal payments
under our senior notes due 2010.

        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.

         We had approximately (euro)678.8 million of cash flows from
financing activities during the year ended December 31, 2000, compared to
(euro)155.6 million for the year ended December 31, 1999. The increase was
due to the net proceeds from our IPO and our senior notes due 2010, less
approximately (euro)14.9 million used to repurchase a portion of our
outstanding senior discount notes due 2009. Cash flows from financing
activities during 1999 resulted from proceeds from our senior discount note
offering and equity contributions from CompleTel LLC.

Liquidity and Capital Resources

         The telecommunications business is capital intensive. We used and
will continue to need large amounts of capital to fund capital
expenditures, working capital, debt service and operating losses. As of
December 31, 2001, we had (euro)81.6 million of unrestricted cash and cash
equivalents, and (euro)24.8 million of restricted investments.

         We currently anticipate that we will fully utilize our existing
cash resources by mid-year 2002. We believe that we will require additional
financing in excess of our invested capital and current borrowings in the
range of (euro)60 million to (euro)90 million to bring us to cash flow
breakeven. Given our funding position, we believe that there is a
substantial doubt regarding our ability to continue as a going concern. We
have embarked on a process to seek additional forms of capital. However,
there can be no assurance that we will be able to obtain the additional
financing we need. If we fail to obtain sufficient additional financing, we
will effectively cease to be able to conduct our business. Certain of our
existing major investors have indicated that they would consider investing
an aggregate of up to (euro)30 million (of the estimated (euro)60 million
to (euro)90 million shortfall), subject to agreement on terms, as part of a
re-capitalization and restructuring that would provide us with sufficient
cash resources to fund our business plan to cash flow breakeven. These
terms would likely include the conversion into ordinary shares of
substantially all of its outstanding debt securities and very substantial
dilution to our existing shareholders.

         In March 2000, we completed the initial public offering of our
ordinary shares. We issued 31,280,000 ordinary shares in exchange for gross
proceeds of approximately (euro)551.4 million.

         Since January 1998, CompleTel LLC, our former ultimate parent, has
received (euro)114.3 million in private equity contributions, of which
(euro)63.0 million was contributed to our French operating subsidiary,
(euro)42.3 million was contributed to our German operating subsidiary,
(euro)2.3 million was contributed to us, and the remainder was retained by
CompleTel LLC for start up expenditures incurred on our behalf.

         In April 2000, we completed an offering of an aggregate (euro)200
million 14% senior notes due 2010. A portion of the proceeds were used to
repurchase U.S.$27.0 million ((euro)27.6 million) principal amount at
maturity of our existing 14% senior discount notes due 2009. We lent
approximately (euro)78.0 million of the net proceeds to our wholly-owned
subsidiary which used the funds to invest in a portfolio of securities
which is pledged as security for the 14% senior notes due 2010. We are
using the proceeds of these pledged securities to make the first six
interest payments on the 14% senior notes due 2010.

         In February 1999, we and CompleTel Holdings LLC completed a units
offering consisting of U.S. dollar denominated 14% senior discount notes
due 2009 and class B interests in CompleTel Holdings LLC resulting in gross
proceeds in respect of the units of approximately (euro)67.1 million, of
which (euro)63.1 million was allocated to the 14% senior discount notes due
2009, which represents a substantial discount from the (euro)131.9 million
aggregate stated principal amount at maturity of the notes. The remaining
(euro)4.0 million was allocated to the class B interests of CompleTel
Holdings LLC. Cash interest will not accrue on the 14% senior discount
notes due 2009 prior to February 15, 2004. Commencing February 15, 2004,
cash interest on the notes will accrue at 14% per annum and will be payable
in cash on August 15 and February 15 of each year. The notes mature on
February 16, 2009. In April 2000, we repurchased (euro)27.6 million
principal amount at maturity for (euro)14.9 million.

         During the year ended December 31, 2001, as part of our effort to
improve our financial position, we repurchased a total of (euro)78.1
million principal amount of our senior notes due 2010 for a total purchase
price of (euro)28.9 million, including (euro)17.7 million in restricted
cash released from the escrow established for these notes. We purchased
these bonds in the open market.

Capital Expenditures

         We made capital expenditures of approximately (euro)165 million
during the year ended December 31, 2001. 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 of approximately (euro)230.2 million and (euro)97.1 million,
respectively, for property and equipment necessary to deploy networks in
our initial markets. The decrease in capital expenditures for 2001 is
attributable to (a) the completion of the build out of our MANs during the
year and (b) our increased concentration on network development to connect
new customers to our existing MANs, which generally involves lower expenses
in comparison to deployment of new MANs.

         Assuming we obtain the additional funding we need, we currently
estimate that we will make aggregate capital expenditures of approximately
(euro)45 million to (euro)55 million for the year ending December 31, 2002,
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, delays in obtaining necessary rights-of-way, or
major changes in market conditions.

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 Unites States. 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.

         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 receipt and
amortized to revenue over either the longer of the underlying contract
period or the expected customer relationship. Due to our relatively short
history, it is difficult to estimate the expected term of our customer
relationships. For the purpose of determining the expected terms of
customer relationship, we have examined trends in the marketplace for more
established companies in addition to using our historical experience.

         Recoverability of Long Lived Assets

         We assess the impairment of long-lived assets 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:

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

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

         o        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 uncollectable. 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

         In June 2001, the Financial Accounting Standards Board authorized
the issuance of Statement of Financial Accounting Standards ("SFAS") No.
141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 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 141 than its predecessor, APB Opinion No. 16 although
in some instances previously recognized intangibles will be subsumed into
goodwill.

         Under SFAS 142, goodwill will no longer be amortized on a straight
line basis over its estimated useful life, but will be tested for
impairment on an annual basis and whenever indicators of impairment arise.
The goodwill impairment test, which is based on fair value, is to be
performed on a reporting unit level. A reporting unit is defined as a SFAS
No. 131 (see Note 8) operating segment or one level lower. Goodwill will no
longer be allocated to other long-lived assets for impairment testing under
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." Additionally, goodwill on equity
method investments will no longer be 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 will not be amortized.
Instead, they will be carried at the lower of cost or market value and be
tested for impairment at least annually. All other recognized intangible
assets will continue to be amortized over their estimated useful lives.

         SFAS 141 and 142 are effective for fiscal years beginning after
December 15, 2001. We do not anticipate that the adoption of these
statements will have a material impact on our results of operations or
financial position.

         In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets". SFAS No. 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 No. 144 there is no longer a requirement to allocate goodwill to
long-lived assets to be tested for impairment. It also establishes a
probability weighted cash flow estimation approach to deal with situations
in which there are a range of cash flows that may be generated by the asset
being tested for impairment. SFAS No. 144 also establishes criteria for
determining when an asset should be treated as held for sale.

         SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001 and interim periods within those fiscal years, with early
application encouraged. The provisions of the Statement are generally to be
applied prospectively. We do not anticipate that adoption of SFAS No. 144
will have a material impact on our results of operations or financial
position.

Risk Factors

We need additional capital to enable us to implement our business plan. If
we fail to secure sufficient additional financing, our business will be
adversely affected and we may effectively cease to be able to conduct our
business.

         We currently anticipate that we will fully utilize our existing
cash resources by mid-year 2002. We believe that we will require additional
financing in excess of our invested capital and current borrowings in the
range of (euro)60 million to (euro)90 million to bring us to cash flow
breakeven. Given our funding position, we believe that there is a
substantial doubt regarding our ability to continue as a going concern. We
have embarked on a process to seek additional forms of capital. However,
there can be no assurance that we will be able to obtain the additional
financing we need on commercially reasonable terms or at all. If we fail to
obtain sufficient additional financing, we will effectively cease to be
able to conduct our business. In that event, if we declare bankruptcy or
attempt to liquidate our operations or sell our subsidiaries, it is
unlikely that any amount would be available, after satisfaction of our
liabilities, for distribution to our shareholders. Moreover, even if we are
able to obtain additional debt or equity investment, we anticipate that any
such investment would be conditioned on substantial dilution to our
existing shareholders and on either conversion of our outstanding debt
securities to a significantly more junior ranking position within our
overall capital structure, or the repurchase of those debt securities below
current market prices. While we have commenced preliminary discussions with
our bondholders concerning a potential restructuring, those discussions may
not proceed satisfactorily or result in an agreement.

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, 2001, we have incurred
cumulative operating losses of (euro)540.5 million and have cumulative
negative Adjusted EBITDA before non-cash compensation expense and other
non-cash charges, including currency exchange rate gains and losses, of
(euro)225.0 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:

         o        finance our business activities;

         o        attract and retain customers with substantial network
                  traffic;

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

         o        attract and retain experienced, qualified personnel;

         o        price our services competitively; and

         o        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 recently observed signs of general weakness in the European markets,
including in France and Germany, for carrier, dial-up Internet access and
Internet data center services. This slowdown in the European
telecommunications markets could slow the growth in our revenue and our
ability to achieve profitability. In response to these adverse market
trends, we have adopted some reorganization and restructuring measures to
adjust our operations to current and anticipated market conditions. These
include the scaling back of our Internet data center operations and of our
provision of voice and data services in Germany. However, we may be unable
to successfully implement these measures, or other future restructuring
measures, and their implementation may not have the desired effect on our
operations and financial condition. Moreover, in light of current and
anticipated market conditions and the restructuring of our operations, we
determined, in accordance with our policy relating to recoverability of
long-lived assets, that the values of our German and U.K. assets were
impaired. Accordingly, we have recorded charges to write-down the remaining
carrying values of these assets to their estimated fair market values,
resulting in the write-off of substantial portions of our investment in
these operations.

         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 or debt service requirements.

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.

Our indentures impose significant limitations on how we conduct our
business, and a default could significantly impact our ability to operate
our business.

         We have significant indebtedness under the indentures governing
our 14% senior discount notes due 2009 and 14% senior notes due 2010. The
following table shows our debt and equity levels as of December 31, 2001.

<TABLE>
<CAPTION>

 December 31, 2001                                                                  Actual
 -----------------                                                                  ------
<S>                                                                                  <C>
Total long-term debt........................................................   (euro)227.7
Shareholders' equity........................................................   (euro)121.9
Total long-term debt as a percentage of total capitalization................         65.1%
</TABLE>


         Our indentures impose significant operating and financial
restrictions on us. These restrictions may limit, among other things, our
ability to:

         o        incur additional indebtedness;

         o        pay dividends on, redeem or repurchase our shares or make
                  payments on subordinated indebtedness;

         o        create dividend and other payment restrictions affecting
                  our restricted subsidiaries;

         o        make investments and certain other restricted payments;

         o        issue and sell shares of restricted subsidiaries;

         o        issue guarantees and incur indebtedness by our restricted
                  subsidiaries;

         o        engage in transactions with shareholders and affiliates;

         o        create liens securing indebtedness;

         o        sell assets or terminate operations; and

         o        engage in mergers and consolidations.

         If we fail to comply with the covenants and restrictions in our
indentures, we could trigger defaults under such indentures even if we are
able to pay our debt.

         To the extent that we enter into any future debt agreements, we
expect that such debt agreements would contain customary covenants for such
indebtedness that would require us, among other things, to achieve and
maintain specified minimum financial and operating results and that would
contain restrictions similar to those in our existing debt agreements.

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:

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

         o        operating and technical problems;

         o        adverse changes in the regulatory environment in our
                  markets;

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

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

         o        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. We may also encounter difficulties presented by the existence of
differing technical standards between the countries in which we deploy
networks. 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.

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.

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 MANs in recently liberalized markets 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 incumbent public telecommunications operators, other existing
telecommunications providers and 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 our markets may also
attract other facilities-based operators to enter the markets we serve and
intensify competition.

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

         o        greater financial resources, market presence and network
                  coverage;

         o        brand name recognition and customer loyalty;

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

         o        established relationships with local and national
                  regulatory authorities.

         We also are dependent upon these incumbent public operators, 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.

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, we recently made significant reductions in
our workforce in Germany and the United Kingdom. These workforce
reductions, as well as our limited financial resources, 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.

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 generated approximately
24%, 29% and 37% of our revenue for the year ended December 31, 2001,
respectively. These customers include Liberty Surf, which generated
slightly over 11% of our overall 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.

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.

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.

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 and Germany. 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 our customers have announced restructurings or
have filed for bankruptcy, calling into question their continuing demand
for our products and services.

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

         The telecommunications industry is subject to a significant degree
of regulation. We need telecommunications licenses and other equivalent
authorizations to operate in each of the countries in which we conduct 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.

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

         Under European Union directives, each individual member state must
pass domestic laws to implement the European Union directives, but has
significant latitude to do so according to its own national policies.
France and Germany have had a legal obligation to liberalize their markets
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.

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 until January 17, 2002. 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.

Foreign currency exchange rate fluctuations may adversely affect our
financial results.

         Our operations are not significantly exposed to changes in
currency exchange rates, because our revenue, costs, assets and liabilities
are, for the most part, denominated in euro. However, the 14% senior
discount notes due 2009 expose us to exchange rate fluctuations, because
the payment of principal and interest on these notes will be made in
dollars, and a substantial portion of our future cash flows used to service
these payments will be denominated in euro. While we intend to take steps
to minimize exchange rate risks, we find it impractical to protect against
all exchange rate risk exposure and, as a result, we will continue to
experience foreign currency gains and losses. We cannot assure you that our
financial results will not be materially adversely affected by variations
in currency exchange rates.

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 as we attempt to
reorganize our capital structure. This reflects a variety of factors,
including,

         o        the likely need to dilute our existing shareholder base
                  in order to attract further investment,

         o         anticipated fluctuations in our financial performance,

         o        perceived overhang in the debt or equity markets for
                  telecommunications companies,

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

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

         o        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. 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.

Our access to the US capital markets and our ability to make timely SEC
filings could be impaired if the SEC ceases accepting financial statements
audited by Arthur Andersen LLP and its non-US affiliates, or if Arthur
Andersen becomes unable to make the required representations to us or if
for any other reason it is unable to perform required accounting services
for us.

         Our independent public accountant, Arthur Andersen has informed us
that on March 14, 2002, its US affiliate, Arthur Andersen LLP, was indicted
by the US Department of Justice on federal obstruction of justice charges
arising from the US government's investigation of Enron Corp. As an SEC
reporting company, we are required to file with the SEC periodic financial
statements audited by an independent public accountant. The SEC has said
that it will continue accepting financial statements audited by Arthur
Andersen LLP and its non-US affiliates so long as they are able to make
certain representations to their auditing clients. We have received the
required representations from Arthur Andersen. However, our access to the
US capital markets and our ability to make timely SEC filings could be
further impaired if the SEC ceases accepting financial statements audited
by Arthur Andersen LLP and its non-US affiliates or if Arthur Andersen
becomes unable to make the required representations to us or if for any
other reason it is unable to perform required accounting services for us.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Investment portfolio and interest rate sensitivity

         Our investment policy is limited by the indentures for our
outstanding notes. We are restricted to investing in financial instruments
with a maturity of one year or less (with certain limited exceptions). We
are required to utilize investments that meet high credit quality
standards, such as obligations of the U.S. government or any European
Economic Community member government or any agency thereof guaranteed by
the country, certificates of deposits, money market deposits, and
commercial paper with a rating of A-1 or P-1.

         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 revenues, costs, assets and liabilities are, for the most
part, denominated in euro, which is our functional currency, effective
January 1, 2000. Therefore, we are exposed to changes in currency exchange
rates due to our U.S. dollar denominated debt. The senior discount notes
which we issued in February 1999 expose us to exchange rate fluctuations as
the payment of principal and interest on the notes will be made in dollars,
and a substantial portion of our future cash flows used to service these
payments will be denominated in euro. We intend to manage exchange rate
risk by incurring financing liabilities denominated in the currency of the
country of operations.

         Based on the total December 31, 2001 US dollar borrowings under
the senior discount notes, a hypothetical 10% variance in the US dollar to
euro exchange rate would create additional foreign exchange results of
approximately euro 9.0 million.

         Our operating subsidiaries' monetary assets and liabilities are
subject to foreign currency exchange risk if purchases of network equipment
and services are denominated in currencies other than the subsidiary's own
functional currency. However, the majority of such purchases to date have
been based on each subsidiary's functional currency.

         The spot rates for the euro are shown below expressed in dollar
per one euro.


December 31, 1998...........................................   U.S.$1.181(1)
December 31, 1999...........................................   U.S.$1.007
December 31, 2000...........................................   U.S.$0.942
December 31, 2001...........................................   U.S.$0.8901
-----------

(1)      Based on the exchange rate as of January 4, 1999, the date on which
         the Euro Noon Buying Rate was first quoted.

Item 8. Financial Statements and Supplementary Data

         The information required by this Item 8 is incorporated into Part
II of this report by reference to the financial statements listed in Item
14 of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

         There have been no disagreements with our independent accountants
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure or any reportable events.




                                  PART III

Item 10. Directors and Executive Officers of the Registrant

         For purposes of this annual report (1) "directors" include the
individuals who are members of our Supervisory Board; (2) "executive
officers" include individuals who are members of the Board of Management;
and (3) "employees" include employees of our operating subsidiaries and
employees of CableTel Management, Inc., who are seconded to our operating
subsidiaries pursuant to certain agreements with CableTel Management, Inc.

Supervisory Board and Board of Management

         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.

         Our articles of association provide for at least three members to
serve on the Supervisory Board. Under Dutch law, members of the Supervisory
Board cannot serve as members of our Board of Management, nor may a person
serve as a member of the Supervisory Board after the annual general meeting
of shareholders during the fiscal year of such person's 72nd birthday.

         The members of the Supervisory Board are appointed by the general
meeting of shareholders from a non-binding nomination, drawn up by the
Supervisory Board. Resolutions of the general meeting of shareholders can
only be adopted validly in a meeting in which at least one-third of the
issued capital is represented.

         Decisions of the Supervisory Board generally require the approval
of a majority of the votes cast. Members of the Supervisory Board may be
suspended or dismissed by the general meeting of shareholders at any time.
A resolution of the general meeting of shareholders to suspend or dismiss
members of the Supervisory Board not pursuant to a proposal thereto by the
Supervisory Board requires a majority of two-thirds of the votes cast,
representing more than half of the issued capital. A resolution of the
general meeting of shareholders to suspend or dismiss members of the
Supervisory Board pursuant to a proposal thereto by the Supervisory Board
requires an absolute majority of the votes cast. A suspension may not last
longer than three months in total, even after having been extended one or
more times. In case no decision on a termination of the suspension or
dismissal has been made following such time, the suspension will end.

         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 will have no more than three
members, and the Supervisory Board will designate 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 shall be
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 shall be 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 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.

         The general meeting of shareholders may suspend and dismiss the
members of the Board of Management. The Supervisory Board may also suspend
the members of the Board of Management. Other than upon a proposal thereto
by the Supervisory Board, the general meeting of shareholders may only
suspend or dismiss members of the Board of Management with a majority of
two-thirds of the votes cast representing more than half of the issued
capital. Upon a proposal thereto by the Supervisory Board, the general
meeting of shareholders may suspend or dismiss members of the Board of
Management with an absolute majority of the votes cast. Even after having
been extended, a suspension shall not last for more than three months. If
no decision has been reached after that time on the lifting of the
suspension or the removal from office, the suspension shall cease to exist.
The remuneration and other conditions of employment of each member of the
Board of Management will be determined by the Supervisory Board.

           The following tables show the composition of our Supervisory
Board and Board of Management.

         Supervisory Board

         Current members

         Our Supervisory Board currently consists of the following six
members:



 Name                              Age                  Position(s)
 ----                              ---    -----------------------------------

James E. Dovey..................   58   Supervisory Director and Chairman
James C. Allen..................   55   Supervisory Director
Lawrence F. DeGeorge............   56   Supervisory Director
Paul J. Finnegan................   48   Supervisory Director
James H. Kirby..................   33   Supervisory Director
James N. Perry, Jr..............   40   Supervisory Director

        Former members

      William H. Pearson resigned from our Supervisory Board in late
February 2002.  Mr. James E. Dovey replaced him as Chairman.

      Royce Holland resigned from our Supervisory Board on January 11,
2002. James Kirby replaced him on the audit committee.


         Board of Management

         Current members

         Our Board of Management currently consists of the following
members:

<TABLE>
<CAPTION>

 Name                                             Age                        Position(s)
 ----                                             ---    --------------------------------------------------

<S>                                               <C>
Tim Samples...................................    45   Managing Director, President and Chief Executive
                                                       Officer of CompleTel Europe N.V., member of the Board
                                                       of Directors of iPcenta Limited, of CompleTel Limited
                                                       (UK) and of CompleTel Headquarters UK Limited
Jerome de Vitry ..............................    40   Managing Director, Chief Operating Officer, President
                                                       of CompleTel Headquarters SAS, Managing Director and
                                                       President of CompleTel GmbH
</TABLE>

         Former members

           Hansjorg Rieder and Martin Rushe resigned from their positions
as members of our Board of Management shortly before our annual meeting in
May 2001 and no longer work for us.


           David E. Lacey, who was elected as a member of our Board of
Management on May 30, 2001, resigned from this position and his position as
our Chief Financial Officer on November 1, 2001. He was replaced by Mr. J.
Lyle Patrick. Mr. Patrick will be appointed to our Board of Management,
subject to shareholder approval.


         Other significant employees

         In addition to our executive officers identified above, our key
employees include the following persons.

<TABLE>
<CAPTION>

 Name                                               Age                      Position(s)
 ----                                               ---   ------------------------------------------------
<S>                                                 <C>
John M. Hugo.....................................   41    Corporate Controller and Chief Accounting Officer
Jean-Marie le Monze(1) ..........................   38    Chief Technology Officer
Marie-Laure Ducamp-Weisberg(2)...................   41    Vice President Legal Affairs and General Counsel
</TABLE>

-----------

(1)      Jean-Marie le Monze replaced Richard Clevenger as our Chief
         Technology Officer effective July 1, 2001.

(2)      Marie-Laure Ducamp-Weisberg replaced Anna Lascar as our Vice
         President Legal Affairs and General Counsel at the beginning of
         December 2001. Ms. Lascar terminated her employment with us at the
         end of December 2001.



         Further information about directors, executive officers and other
significant employees



         James E. Dovey was appointed as Chairman of our Supervisory Board
in late February 2002 upon the resignation of Mr. William Pearson from this
Board. Mr. Dovey served as our Chief Executive Officer from our inception
through December 1999. He became our Managing Director in January 2000. He
stepped down from that position and was elected Chairman of our Supervisory
Board in March 2000, upon the consummation of the initial public offering
of our ordinary shares. In May 2001, he stepped down from such position,
but remains a member of our Supervisory Board. One of the co-founders of
CompleTel LLC, Mr. Dovey has over 30 years' experience in the
telecommunications industry. In 1987, Mr. Dovey founded United Cable
International, a joint venture between United Cable and United Artists,
where he served as CEO until 1990 when that company (by then renamed TCI
International) merged with the United Kingdom assets of US WEST Inc. to
form TeleWest Communications, plc. Mr. Dovey continued to serve as CEO of
TeleWest until his return to the U.S. in late 1992. From 1992 to 1994, Mr.
Dovey acted as a private consultant on a variety of U.S. and international
telecommunications and cable television projects for TCI, US WEST Inc. and
other clients. From 1992 to 1995, Mr. Dovey served as Deputy Chairman for
the United Kingdom communications company, IVS Cable International, which
developed switched voice and data services in areas such as Oxford,
Salisbury and Andover until the business was sold in 1995. In 1994, Mr.
Dovey co-founded SPD CableTel Management, Inc., where he actively explored
various entrepreneurial opportunities in the U.S. for providing converged
cable and telephony services prior to co-founding CompleTel LLC in January
1998.

         William H. Pearson resigned from his position as Chairman and
member of our Supervisory Board in late February 2002. He was appointed to
this position following his election to our Supervisory Board in May 2001.
From March 2000 and until such election, he served as a member of our
Management Board. From March 2000 to March 2001, he was our President and
Chief Executive Officer. Mr. Pearson, one of the co-founders of CompleTel
LLC, has served as President of European Operations of CompleTel LLC since
its inception and as its Chief Executive Officer since January 2000. In
1994, Mr. Pearson co-founded SPD CableTel Management, Inc. with Mr. Dovey.
Between 1980 and 1994, Mr. Pearson held a variety of senior management
positions with US WEST Inc. From 1983 to 1989, Mr. Pearson worked in US
WEST's cellular division, including starting up its marketing department in
1983, becoming head of strategic planning in 1986, and managing the Rocky
Mountain region from 1987 to 1988. In 1989, Mr. Pearson relocated to the
United Kingdom, and he served as Senior Vice President of Marketing and
Planning for TeleWest from 1990 to 1992, where he worked to develop US
WEST's cable telephony strategy, and as Executive Director of Business
Development for US WEST International from 1993 to 1994, where he evaluated
numerous local loop opportunities in Western Europe and Latin America. In
1992, Mr. Pearson was an adjunct professor of graduate-level marketing at
the University of Wisconsin-Madison School of Business.

         James C. Allen 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 WorldCom Inc., a publicly traded U.S. international
telecommunications company, 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 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.

         Paul J. Finnegan 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 May 1998. Mr. Finnegan is a Managing Director of
Madison Dearborn Partners, Inc., a private investment firm, where he
specializes in investing in companies in the communications industry. Prior
to co-founding Madison Dearborn Partners in 1993, Mr. Finnegan was a vice
president at First Chicago Venture Capital for 11 years. He currently
serves on the boards of directors of Allegiance Telecom, Inc. and Rural
Cellular Corporation, each of which is publicly traded, and of several
private companies, including GigaRed LLC, iplan networks, Telemundo
Holdings, Inc. and Reiman Holding Company, LLC. He also is a member of the
board of trustees of The Skyline Fund, a small-cap mutual fund.

         James H. Kirby served as a member of our Supervisory Board since
the consummation of the initial public offering of our shares in March
2000. In January 2002, Mr. Kirby was appointed by our Supervisory Board as
a member of our Audit Committee, replacing Mr. Royce Holland. Mr. Kirby has
also served as a Director of CompleTel LLC since May 1998. Mr. Kirby is a
Managing Director of Madison Dearborn Partners, Inc., a private investment
firm where he specializes in investing in companies in the communications
industry. Prior to joining Madison Dearborn Partners in 1996, Mr. Kirby
worked in investment banking and private equity investing at Lazard Freres
& Co. LLC and The Beacon Group LLC. He currently serves on the boards of
directors of several private companies, including iplan networks, GigaRed
LLC, Madison River Communication, LLC, New Radio Tower GmbH, Prontonet
S.p.A., Star Technology Group Limited, OnCue Ltd. and PaeTec
Communications.

         James N. Perry, Jr. served as a member of our Supervisory Board
since the consummation of the initial public offering of our shares in
March 2000. He also has served as a Director of CompleTel LLC since May
1998. Mr. Perry is a Managing Director of Madison Dearborn Partners, Inc.,
a private investment firm where he specializes in investing in companies in
the communications industry. Prior to co-founding Madison Dearborn Partners
in 1993, Mr. Perry was an investment officer at First Chicago Venture
Capital for eight years. He currently serves on the boards of directors of
Allegiance Telecom, Inc., Focal Communications Corporation, VoiceStream
Wireless Corporation, which are publicly traded companies, and Clearnet
Communications, a privately held company.

         Timothy A. Samples was appointed as our Chief Executive Officer in
March 2001. Our shareholders approved this appointment and elected him to
our Management Board at the end of May 2001. Between February 2000 and
February 2001, Mr. Samples served as President and Chief Executive Officer
of FirstMark Communications Europe. From September 1997 to February 2000,
he served as Managing Director of One2One. Between 1986 and 1997, Mr.
Samples held a number of senior level positions within MediaOne Group
(formerly part of US West Inc.), most recently as Vice President Domestic
Wireless Operations and Investment from June 1996 to September 1997 and as
Vice President and General Manager South West Region from June 1992 to June
1996 to US West New Vector.

         J. Lyle Patrick became our Chief Financial Officer as of November
1, 2001. Prior to joining CompleTel, Mr. Patrick was the Group Vice
President and Chief Financial Officer of McLeodUSA, a Midwest based
competitive local exchange carrier, a post he held since 1997. Prior to
McLeodUSA, Mr. Patrick was the Executive Vice President and CFO of
Consolidated Communications, a regional telecommunications company which
merged with McLeodUSA in 1997. Prior to joining Consolidated
Communications, he was a partner of Arthur Andersen, CompleTel's current
accounting firm, from 1984 through 1988. Mr. Patrick has been active
throughout the telecommunications industry and has served as Chairman of
CompTel (U.S.- based competitive association), Chairman of the Illinois
Telecommunications Association, and on the Board and several committees of
the United States Telephone Association.

         David E. Lacey resigned from his position as a member of our Board
of Management and our Chief Financial Officer on November 1, 2001. He was
appointed to these positions in March 2000, upon the consummation of the
initial public offering of our ordinary shares. He joined CompleTel LLC in
December 1998 and was appointed Chief Financial Officer and Treasurer of
CompleTel LLC at that time. Prior to joining CompleTel LLC, Mr. Lacey
served in a variety of positions for Storage Technology Corporation,
including, from June 1996 to December 1998, as Executive Vice President and
Chief Financial Officer, from February 1995 to May 1996 as Interim Chief
Financial Officer and Corporate Vice President, and from October 1989 to
February 1995, as Corporate Controller.

         Jerome de Vitry was appointed 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.

         John M. Hugo was appointed our Corporate Controller and Chief
Accounting Officer in March 2000, upon the consummation of the initial
public offering of our ordinary shares. Mr. Hugo joined CompleTel LLC as
its Corporate Controller in April 1999. Prior to joining CompleTel LLC, Mr.
Hugo was the Assistant Corporate Controller for Jones Intercable, Inc. from
1994 to 1999. From 1988 to 1993, Mr. Hugo was employed with Arthur
Andersen's audit and business advisory services division.

         Marie-Laure Ducamp Weisberg joined us in October 2001. As of
January 2, 2002, after a transition period, Ms. Weisberg replaced Anna
Lascar, who was our General Counsel since our founding in 1998. Ms.
Weisberg started her career in Paris in 1979 with the law firm Brizay,
Meilichon, Prats, Moitry. She was later actively involved in merger and
acquisition, joint venture and corporate finance advisorship with
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel P.A. in Miami
(1981-1982), Mayer Brown & Platt in Wshington DC (1983-1985) and Latham &
Watkins in New York (1986-1989). In 1992 Marie-Laure joined Chanel in New
York as Assistant General Counsel for international affairs and General
Counsel for their subsidiary Holland & Holland. In 1999, Marie-Laure joined
the London offices of Paul, Hastings as Senior Attorney within the
Corporate Department, where she advised on telecommunications, media and
information systems industry licensing, investment, joint venture and other
corporate finance issues.

         Jean-Marie Le Monze was appointed our Chief Technology Officer in
May 2001. Mr Le Monze joined us in July 1998 and successively served as
Vice-President Engineering and Vice-President Engineering and Operations of
our French operating subsidiary. Prior to joining us, Mr. Le Monze spent
four and a half years in the United Kingdom where he served as Director of
Network & Services and Director of Digital Services of General Cable PLC, a
UK-based cable TV and telecommunication operator. From 1991 to 1993, Mr. Le
Monze was the Head of Data Communication at Matra Communication, the second
largest telecommunication provider in France. Before that date, Mr. Le
Monze served in a variety of positions as a consulting and
telecommunications advisor.


Committees of the Supervisory Board

         We have established three Supervisory Board committees, including:

         o        an audit committee;

         o        a compensation committee; and

         o        an executive committee.

         The audit committee. The members of the audit committee include
Messrs. Allen, DeGeorge and Kirby. Mr. Kirby joined our audit committee in
January 2002, replacing Mr. Royce Holland, who resigned from his positions
as member of our Supervisory Board, and its audit committee. 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.

         The compensation committee. The members of the compensation
committee include Messrs. Allen, DeGeorge and Finnegan. 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
include Messrs. Dovey, Finnegan and DeGeorge. 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.

Beneficial ownership reporting compliance

         Under Section 16(a) of the Securities Exchange Act of 1934,
members of our Supervisory Board and Board of Management and certain other
officers and persons holding more than 10% of our ordinary shares are
required to file forms reporting their beneficial ownership of our ordinary
shares and subsequent changes in that ownership with the Securities and
Exchange Commission. Based solely upon a review of copies of such reports
filed on Forms 3, 4 and 5, and amendments thereto furnished to us, we are
not aware of any failure by any of our directors, executive officers or
principal shareholders to comply on a timely basis with all Section 16(a)
filing requirements during the fiscal year ended December 31, 2001.

Compensation of members of the Supervisory Board

         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. Additionally, we
maintain directors' and officers' indemnity insurance coverage. Except for
Mr. Dovey, who was compensated for his services as Chairman of our
Supervisory Board, our Supervisory Directors receive no other compensation
for services provided as members of our Supervisory Board, as members of
boards of any of our subsidiaries, or as members of any board committee.

         Mr. Dovey was compensated for his services as Chairman of our
Supervisory Board until he stepped down from this position on May 30, 2001.
Mr. Dovey, continues serve as a member of our Supervisory Board and was
re-appointed to the position of Chairman in late February 2002, and
currently receives compensation of $1,000 per month for his services. The
total amount paid to Mr. Dovey during the year ended December 31, 2001 was
$60,201 ((euro)67,245).

Item 11. Executive Compensation

Compensation of named executive officers

         The following table sets forth in summary form all compensation
paid, for each year in the three-year period ended December 31, 2001, to
each of:

         a)   the person who became our Chief Executive Officer at the end
              of May 2001;

         b)   other than our Chief Executive Officer, the two persons who
              were serving as our executive officers at the end of 2001;

         c)   the person who was our Chief Executive Officer last year
              until the end of May 2001; and

         d)   other than this former Chief Executive Officer, two of our
              former executive officers who served as such for part of last
              year (together with the persons specified above, our "Named
              Executive Officers").



<TABLE>
<CAPTION>

         Summary compensation of named executive officers

                                                                 Annual Compensation (1)              Long-Term
                                                   ------------------------------------------------   Compensation
                                                                                                      -----------------

                                                                                         Aggregate    Number of Shares
                                                                           Other Annual     Annual    Underlying Awarded
     Name and Principal Position      Fiscal Year   Salary       Bonus    Compensation  Compensation      Options      Other Payouts
 -----------------------------------  ----------- ----------   ---------  ------------  ------------   -------------   -------------
                                                   ((euro))    ((euro))   ((euro))(2)     ((euro))                        ((euro))
<S>                                    <C>       <C>            <C>       <C>           <C>               <C>              <C>
Tim Samples (1)(3)..................     2001      372,333          --     1,069,717     1,442,050         1,500,000             --
President and Chief Executive
 Officer............................     2000          --           --            --            --                --             --
                                         1999          --           --            --            --                --             --

William H. Pearson  (1)(4)(11)......     2001     168,480           --       389,639       558,119                --             --
Former Chairman of the Supervisory       2000     205,349      162,750       187,710       555,809                --             --
Board, former President and Chief
Executive Officer                        1999     172,572      172,572        73,796       418,940                --             --

Jerome de Vitry(6)(11)..............     2001     236,897           --            --       236,888           400,000     749,672(9)
Chief Operating Officer                  2000     147,661       79,428            --       227,089                --       2,206(9)
                                         1999     129,607       32,131            --       161,738                --             --

J. Lyle Patrick (1)(7)..............     2001      41,888           --         1,414        43,303           500,000             --
Chief Financial Officer                  2000          --           --            --            --                --             --
                                         1999          --           --            --            --                --             --

David E. Lacey(1)(5)(11)............     2001     202,805           --        53,108       255,913                --             --
Former Chief Financial Officer           2000     189,875       94,938       111,235       396,048                --             --
                                         1999     159,659       79,829            --       239,488                --             --

Martin Rushe(1)(8)..................     2001      70,871           --            --        70,871                --  456,207(9)(10)
Former Managing Director and             2000     156,038       46,811            --       202,849                -- 133,330 (9)(10)
President of CompleTel UK Limited        1999      90,513        6,171            --        96,684                --              --
and iPcenta Limited
</TABLE>




 (1)     Compensation amounts for Messrs. Pearson, Samples, Patrick and
         Lacey were converted from U.S. dollars to euro using the following
         average exchange rates for the relevant fiscal years: for 1999,
         U.S.$1.00 = (euro)0.9392; for 2000, U.S.$1.00 = (euro)1.0850; for
         2001, U.S.$1.00 = (euro)1.1170. Compensation amounts for Mr. Rushe
         were converted from pounds sterling to euro using the average
         exchange rates for the relevant fiscal years.

(2)      Includes perquisites and other benefits paid in excess of 10% of
         the total annual salary and bonus received by such officer during
         the last fiscal year. These amounts consist of housing allowances,
         moving expenses and travel expenses associated with the relocation
         of these executives to Paris and London and their ongoing foreign
         service.

(3)      Mr. Samples was appointed as our Chief Executive Officer in March 2001.

(4)      Mr. Pearson served as our Chief Executive Officer from March 2000
         to March 2001. After his resignation from this position, he
         continued to receive compensation of $1,000 per month. These
         compensation payments ceased effective February 28, 2002.

(5)      Mr. Lacey joined us in December 1998 and served as our Chief
         Financial Officer from March 2000 through November 2001. Under the
         terms of his resignation, Mr. Lacey is to continue to receive
         compensation of $1,000 per month. These compensation payments
         shall cease on June 30, 2002.

(6)      Mr. de Vitry was appointed as our Chief Operating Officer in
         January 2001. On May 30, 2001, he was elected as one of our
         Managing Directors. He also serves as President of CompleTel
         Headquarters S.A.S. and as Managing Director and President of
         CompleTel GmbH.

(7)      Mr. Patrick was appointed as our Chief Financial Officer in early
         November 2001.

(8)      Mr. Rushe resigned from his positions as member of our Board of
         Management and President of iPcenta UK Limited in late May 2001.

(9)      For 2000, these amounts include (a) (euro)888 and (euro)488, which
         was the value to Messrs. de Vitry and Rushe, respectively, of
         interest free loans we made in support of the repayment of
         interest under loans in the amounts of (euro)567,000 and
         (euro)309,000, made to Messrs. de Vitry and Rushe, respectively,
         by a commercial bank in connection with our initial public
         offering, and (b) (euro)1,318 and (euro)718, respectively, of loan
         insurance payments we made in connection with these commercial
         loans. The value of the interest free loans we extended to Messrs.
         de Vitry and Rushe, has been computed based on the difference
         between the 0% interest rate on the interest free loans we
         provided and the 4.95% annual interest rate accrued on the
         commercial loans.

         For 2001, these amounts include (a) amounts we paid to the
         commercial bank covering Messrs. de Vitry and Rushe's for loan
         shortfalls, (b) the value of the interest free loans and insurance
         payments we extended in connection with the commercial loans, and
         (c) reimbursement of taxes. The total value of the payments and
         benefits made to Messrs. De Vitry and Rushe during 2001 in
         connection with these commercial loans was (euro)749,672 and
         (euro)408,451, respectively. See Item 13--Certain Relationships
         and Related Transactions.

(10)     Includes(euro)47,756 and(euro)132,124 we forgave during 2001 and
         2000, respectively, in conncetion with a forgivenable loan, dated
         March 23, 2000, we made to Mr. Rushe. See Item 13-Certain
         Relationships and Related Transactions.

(11)     As of December 31, 2001, each of the following Named Executive
         Officers owned restricted units of CompleTel LLC, our former
         ultimate parent. Their ownership of these units constitutes an
         indirect ownership interest in our ordinary shares held by
         CompleTel LLC. The total number and market value (based on the
         price of our ordinary shares on the Nasdaq National Market) of the
         restricted shares underlying these units owned by each of the
         Named Executive Officers as of December 31, 2001 were as follows:
         Mr. Pearson, 1,468,325 (U.S.$1,380,226); Mr. Lacey, 199,266
         (U.S.$187,310); Mr. de Vitry, 116,311 (U.S.$109,332). For
         information on the vesting of these CompleTel LLC units, see
         "Employee investments in CompleTel LLC units."




Equity incentive plans

         General

         Since our inception, we have provided two forms of equity
incentive plans to our employees. Prior to our initial public offering,
executive management and selected key employees were given the opportunity
to indirectly invest in our equity capital by purchasing ownership
interests in CompleTel LLC, a limited liability company which held our
shares. After our initial public offering in March 2000, we established a
stock option plan. For further information about our stock option plan, see
Item 5--"Market for Registrant's Common Equity and Related Stockholder
Matters--Shares Authorized for Issuance under the CompleTel Europe N.V.
2000 Stock Option Plan." Set forth below are further details about these
two forms of equity ownership by our senior employees.

         Employee investments in CompleTel LLC units

         Prior to our initial public offering, in 1998 and 1999, executive
management and selected key employees of us and of CompleTel LLC, our
ultimate parent at the time, purchased common ownership interests in
CompleTel LLC. These interests consisted of (a) non-performance time
vesting units and (b) performance vesting units of CompleTel LLC. In
general, employees' ownership interests in the non-performance units
rateably vest over a four year period, subject to the employees' continued
employment by CompleTel LLC or its subsidiaries (including us and our
subsidiaries). Accordingly, upon termination of employment for any reason,
vesting ceases and CompleTel LLC becomes entitled to repurchase all
unvested units of the former employees at their original cost.

         Employees' ownership interests in performance vesting units are
subject to these time vesting conditions and to performance vesting
conditions, based upon the valuation of CompleTel LLC's equity securities.
In the event that any performance units remain unvested (due to failure to
meet the specified equity valuation targets) after the expiration of the
performance-vesting period on May 18, 2005, such units will be forfeited.

         In the fourth quarter of 2000, CompleTel LLC began to redeem its
non-performance time vesting units in exchange for the number of our
ordinary shares owned by CompleTel LLC corresponding to each redeeming
holder's pro rata interest in those shares. Instead of redeeming their
non-performance time vesting units, some holders contributed their units to
us in exchange for our newly issued ordinary shares. Some of the units that
were redeemed or contributed remained subject to time vesting restrictions;
these units were exchanged for shares subject to equivalent vesting
provisions. No performance vesting units were redeemed or contributed as
part of these transactions. Our employees who received our shares in these
redemption and contribution transactions may, under certain circumstances,
have the right to require us to register their shares under a registration
rights agreement, dated as of November 23, 1999, as amended by a first
supplement dated as of March 24, 2000.

         As of December 31, 2001, after giving effect to vesting that
occurred on that date, outstanding CompleTel LLC non-performance vesting
units representing indirect ownership interest in approximately 3,300 of
our ordinary shares remained unvested, and approximately 4.8 million of our
ordinary shares issued or distributed to our employees in consideration for
unvested non-performance CompleTel LLC units remained subject to similar
time vesting restrictions. In addition, as of December 31, 2001,
outstanding CompleTel LLC performance vesting units representing an
indirect ownership interest in approximately 1 million of our ordinary
shares remained unvested.

         Our 2000 stock option plan

         Our 2000 Stock Option Plan is the only equity incentive plan that
we currently have outstanding. This 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. As of
December 31, 2001, 667 employees, and two members of our Board of
Management held options under the plan, or shares acquired pursuant to the
exercise of such options. No options were held by members of our
Supervisory Board. For summary data relating to "our shares autorized for
issuance under our 2000 stock option plan", see the subsection with this
title under Item 5.

         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 the grant and in
two additional 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 United States vest in annual increments of 25%,
commencing on the first anniversary date of the grant. The options are
valid for a period of 10 years from the date of their grant by the Managing
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. Subject to
the exception noted below, the fair market value is deemed to be the
closing price of the shares on the Paris Bourse, 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 Paris Bourse over the 20 trading days
preceding the grant. With regard to options granted to employees resident
in the United Kingdom, so long as the shares are not listed on the London
Stock Exchange or the New York Stock Exchange, fair market value is
determined by the Shares Valuation Division of the Inland Revenue in the
United Kingdom.

Options granted during Fiscal Year ended December 31, 2001

         General

         All options granted during the fiscal year ended December 31,
2001, were granted under our 2000 Stock Option Plan.

         During 2001, six of the holders of stock options granted under our
2000 Stock Option Plan exercised their stock options, for 6,270 of our
ordinary shares. However, none of our executive officers and senior
employees included in the tables below have exercised any stock options
during 2001.

         Options grants to members of our Supervisory Board

         Members of our Supervisory Board generally do not participate in
our equity incentive plans. Accordingly, during the fiscal year ended
December 31, 2001, we did not grant any stock options to members of our
Supervisory Board.

         Options granted to our Named Executive Officers

         The following table sets forth information relating to the options
granted during the fiscal year ended December 31, 2001 to each of our Named
Executive Officers. None of our Named Executive Officers had vested options
as of December 31, 2001.

<TABLE>
<CAPTION>

                                                                                                           Potential Realizable
                                                                                                         Value at Assumed Annual
                                                                                                           Rates of Stock Price
                                                           Individual Grants                             Appreciation for Option
                                                                                                                   Term
                                    -----------------------------------------------------------------    -------------------------

                                                      Percent of
                                                    Total Options
                                      Number of       Granted to
                                        Shares       Employees in
                                     Underlying       Fiscal Year    Exercise        Expiration
 Name and Principal Position          Options            2001         Price            Date (s)               5%           10%
 ---------------------------          --------           ----         ------           --------               --           ---
                                                                     ((euro)per                         ((euro))          ((euro))
                                                                       Share)
<S>                                 <C>                 <C>            <C>       <C>                      <C>             <C>
Named Executive Officers
Tim Samples ....................      1,500,000           26.3%          3.94      March 14, 2011               0            0
President and Chief Executive
 Officer

William H. Pearson..............             --              --            --                  --              --           --
Former Chairman of the
Supervisory Board

Jerome de Vitry.................        400,000            7.0%          6.81    January 30, 2011               0            0
Chief Operating Officer

J. Lyle Patrick.................        500,000            8.8%          1.19   December 15, 2011         349,799      909,371
Chief Financial Officer

David E. Lacey..................             --              --            --                  --              --           --
Former Chief Financial Officer

Martin Rushe....................             --              --            --                  --              --           --
Former Managing Director and
President of CompleTel
UK Limited and iPcenta
Limited

</TABLE>

As of March 1, 2002, outstanding options held by members of our Board of
management were 1,900,000, corresponding to 1,900,000 of our ordinary
shares.

Stock options granted to other senior employees

The following table sets forth information relating to the stock options
granted in the fiscal year ended on December 31, 2001 to the group
comprising the ten employees (other than Named Executive Officers) who were
granted the most stock options during 2001.

<TABLE>
<CAPTION>

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

                                                Percent of Total
                            Number of Shares   Options Granted to    Weighted-Average
                               Underlying         Employees in        Exercise Price
                                Options         Fiscal Year 2001      ((euro)per Share)
                                -------         ----------------     ------------------

<S>                           <C>                 <C>                  <C>
Ten Employees as a Group      1,462,160           25.7%                1.09
</TABLE>


Employment agreements

         William H. Pearson

         In May 1998, CompleTel LLC's wholly owned subsidiary, CableTel
Management, Inc., entered into an employment agreement with Mr. Pearson.
This employment agreement was amended effective January 1, 2000, and was
terminated on May 30, 2001, upon Mr. Pearson's resignation from his
positions as our President, Chief Executive Officer and Managing Director.
The employment agreement for Mr. Pearson, who was seconded to us, included
the following terms.

Salary. During the course of his employment, Mr. Pearson was entitled to
receive an annual base salary of U.S.$183,750, U.S.$189,263 and
U.S.$250,000 for 1999, 2000 and 2001, respectively.

Bonus. At the end of each calendar year, Mr. Pearson was entitled to
receive an incentive bonus of up to 55% of his annual salary, subject to
achievement of certain performance benchmarks.

Tax equalization. As an expatriate, Mr. Pearson was subject to additional
taxes and different taxes than if he lived and worked in the United States.
Consequently, his employment agreement contained tax equalization
provisions designed to ensure that he was to be placed in substantially the
same economic position as if he were employed in the United States.

Severance. Mr. Pearson, or his respective beneficiaries, was entitled to
receive severance benefits if his employment were to be terminated due to
death, disability or non-performance, in an amount equal to his base salary
and benefits for nine months. He was also entitled to receive severance
benefits equal to his base salary, benefits and bonuses for 24 months after
the date of termination if he were to be terminated without cause or
constructively terminated within six months after a change in control. In
case of resignation or termination for a cause, no severance benefits were
due.

         On May 30, 2001, Mr. Pearson stepped down from his positions as
our President, Chief Executive Officer and Managing Director. As of that
date, Mr, Pearson was no longer employed by us. However, he continued to
receive compensation of $1,000 per month. These compensation payments have
ceased on February 28, 2002.

         Tim Samples

         Effective as of March 1, 2001, we entered into an employment
agreement with Mr. Samples to serve as our President and Chief Executive
Officer. The employment agreement for Mr. Samples includes the following
terms:

 Salary. During the course of his employment, Mr. Samples is to receive an
annual base salary of U.S.$400,000, which salary may be increased by our
Supervisory Board.

 Bonus. As incentive to entering the employment agreement, we granted Mr.
Samples a forgivable loan in the amount of (euro)865,000. The loan was
forgiven in accordance with its terms, as Mr. Samples is still employed
with us. In addition to the forgivenable loan, at each anniversary of the
effective date of his employment agreement, Mr. Samples will be entitled to
receive an incentive bonus of up to 50% of his annual base salary if he
achieves certain performance targets set by our Supervisory Board. At the
discretion of the Supervisory Board, this bonus may be increased by up to
200% of the annual base salary for outstanding performance. For the first
year of employment, we have agreed to pay Mr. Samples the said 50% bonus
regardless of any performance targets.

 Options. Mr. Samples received options to purchase 1,500,000 ordinary
shares in accordance with our 2000 Stock Option Plan and certain special
provisions approved by our Board of Management and Supervisory Board.

 Severance. Mr. Samples will be entitled to receive severance benefits if
he is terminated or constructively terminated without cause, or if he is
terminated or constructively terminated within six months after a change of
control. The severance benefits payable upon such termination shall equal
his base salary, and his benefits will continue for 24 months following
termination in the event he is terminated prior to the first anniversary of
his employment, or for 12 months following termination in the event he is
terminated after the first anniversary of his employment. In each case, Mr.
Samples will be entitled to a pro-rata portion of his performance bonus,
based on the number of days he is employed during the relevant fiscal year.

         J. Lyle Patrick

         In November 2001, CableTel Management, Inc. entered into an
employment agreement with J. Lyle Patrick, our Chief Financial Officer. The
employment agreement with Mr. Patrick, who is seconded to us, includes the
following terms.

 Salary. During the course of his employment, Mr. Patrick is to receive an
annual base salary of U.S.$225,000. This amount may be increased by our
Compensation Committee.

 Bonus. At each calendar year, Mr. Patrick is entitled to receive an
incentive bonus of up to 50% of his base salary, subject to meeting certain
performance targets.

 Tax equalization, cost of living adjustments and housing. As an
expatriate, Mr. Patrick is subject to additional taxes and different taxes
than if he lived and worked in the United States. Consequently, his
employment agreement contains tax equalization provisions designed to
ensure that he is to be placed in substantially the same economic position
as if he were employed in the United States. Mr. Patrick is also entitled
to cost of living adjustments, reflecting the difference in the cost of
goods and services in England as opposed to the United States, as
determined by an independent advisor. In addition, he is entitled to
accommodation expenses of up to (pound)5,000 per month.

 Severance. Mr. Patrick, or his respective beneficiaries, will be entitled
to receive severance benefits if his employment is terminated due to death,
disability or non-performance, in an amount equal to his base salary and
benefits for three months. He will also be entitled to receive severance
benefits equal to his base salary, benefits and bonuses for three months
after the date of termination if he were to be terminated without cause or
constructively terminated within six months after a change in control. In
case of resignation or termination for a cause, no severance benefits are
due.

Jerome de Vitry

         In December 1998, we entered into an employment agreement with
Jerome de Vitry, which subsequently was amended effective January 1, 2001.
The employment agreement for Mr. de Vitry includes the following terms.

 Salary. During the course of his employment, Mr. de Vitry is to receive an
annual base salary of(euro)190,561.

 Bonus. At the end of each calendar year, Mr. de Vitry is entitled to
receive an incentive bonus of up to 50% of his annual salary if he achieves
certain performance benchmarks.

 Severance. Under French labor law and the collective bargaining agreement
applicable to telecommunications businesses, Mr. de Vitry is entitled to
three months notice in the event of termination of his employment contract
other than for gross misconduct. In the event that we release him from his
obligation to perform his notice period, he is entitled to his base salary,
contractual bonuses and accrued paid vacation entitlements until the
expiration of such notice period. After two years employment with us, Mr.
de Vitry is entitled to a severance indemnity equal to 3% of his annual
base salary, contractual bonuses and accrued paid vacation entitlements for
each year of employment, unless termination of his employment is based on
gross misconduct. This amount will increase to 4% of base salary,
contractual bonuses and accrued paid vacation entitlements after nine years
of employment. In addition, in the event his employment with us is
terminated other than for gross misconduct, Mr. de Vitry is entitled to a
non-compete payment in an amount equal to 75% of his annual base salary.
Mr. de Vitry is not entitled to such indemnity in the event that we release
him from his non-compete obligations.

         David E. Lacey

         In December 1998, CableTel Management, Inc. entered into an
employment agreement with Mr. Lacey, our Chief Financial Officer at the
time. This agreement subsequently was amended effective January 1, 2000.
The employment agreement of Mr. Lacey, who was seconded to us, included the
following terms.

 Salary. During the course of his employment, Mr. Lacey was entitled to
receive an annual base salary of U.S.$175,000 (which amount has been
increased to U.S.$180,250 for 2001). Mr. Lacey's employment agreement
provided for tax equalization. However, as of December 28, 2000, Mr. Lacey
was no longer an expatriate.

 Bonus. At the end of each calendar year, beginning in 1999, Mr. Lacey was
entitled to receive an incentive bonus of up to 50% of his annual salary,
subject to achievement of certain performance benchmarks.

 Severance. Mr. Lacey, or his beneficiaries, were entitled to receive
severance benefits in an amount equal to his base salary and benefits for
three months in the event his employment was to be terminated due to his
death, disability, or nonperformance, or terminated without cause, or
terminated within six months after a change of control. In case of
resignation or termination for cause, no severance benefits were due.

         On November 1, 2002, Mr. Lacey resigned from his position as our
Chief Financial Officer. In accordance with the terms of his resignation,
Mr. Lacey is to continue to receive compensation of $1,000 per month for
consultancy services. These compensation payments shall cease on June 30,
2002.

         Martin Rushe

         In June 1999, our wholly owned subsidiary, iPcenta Limited,
entered into a service agreement with Mr. Rushe. Mr. Rushe's employment
with us terminated in late May 2001. His employment agreement included the
following terms.

 Salary. During the course of his employment Mr. Rushe was entitled to
receive an annual base salary of(pound)65,000, subject to review in January
of each year.

 Bonus. During the course of his employment, Mr. Rushe was entitled to
receive an annual incentive bonus of up to 25% of his base salary, based on
certain requirements concerning the performance of iPcenta.

 Pension and Other Benefits. Mr. Rushe was eligible to join our
contributory pension scheme. The contribution was 5% of his base salary
with CompleTel contributing 12% of his base salary.

Compensation committee interlocks and insider participation

         The members of our compensation committee include Messrs. Allen,
DeGeorge and Finnegan. All these individuals also serve on the board of
CompleTel LLC. In addition, Mr. Dovey, member and Chairman of our
Supervisory Board is a member of CompleTel LLC's board.


Item 12. Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth information regarding the
beneficial ownership of our ordinary shares as of March 1, 2002 by:

         o        each of our Named Executive Officers, except for Mr.
                  Martin Rushe, a former executive officer who is no longer
                  required to report his benficial ownership in our
                  ordinary shares;

         o        each member of our Supervisory Board and persons
                  nominated to become members of our Supervisory Board;

         o        all our executive officers and members of our Supervisory
                  Board as a group;

         o        all members of our personnel, as a group;

         o        each shareholder who is known to us to own beneficially
                  more than 5% of our ordinary shares as of such date.

<TABLE>
<CAPTION>

                                                                                                   CompleTel Europe N.V.
Name of Beneficial Owner                                                                          Shares Owned        Percentage
                                                                                                                       of Shares

Directors and Named Executive Officers:
<S>                                                                                                <C>                    <C>
William H. Pearson(1)(9)..................................................................           6,509,215              4.1%
Timothy A. Samples(2).....................................................................             375,000                 *
J. Lyle Patrick...........................................................................                  --                 *
Jerome de Vitry(3)(9).....................................................................             583,509                 *
James E. Dovey(4)(9)......................................................................           6,050,506               3.8
Lawrence F. DeGeorge(5)(8)(9).............................................................          26,706,043              16.6
James C. Allen(6)(9)......................................................................             833,437               0.5
Paul J. Finnegan(7).......................................................................                  --                 *
James H. Kirby(7).........................................................................                  --                 *
James N. Perry, Jr(7).....................................................................                  --                 *
David E. Lacey............................................................................           1,123,068               0.7
All directors and executive officers as a group (10 persons)..............................          40,682,710              25.3
5% Owners:
Madison Dearborn Partners(7)(9)...........................................................          64,573,990              40.2
DeGeorge Telecom Holdings Limited Partnership(8)(9).......................................          26,208,676              16.3
-----------
</TABLE>

*        Less than 0.5%.

(1)      1,463,592 of these shares are owned indirectly by Mr. Pearson, and
         4,733 indirectly by Haj LLC, through their respective ownership
         interests in CompleTel LLC. 2,951,435 of the remaining shares are
         owned directly by Mr. Pearson, 97,764 by Haj LLC, and 1,991,691
         directly by Haj Pearson LLC. Mr. Pearson has sole voting power for
         each of these entities.

(2)      Mr. Timothy Samples received on March 14, 2001, options to
         purchase 1,500,000 of our shares. As of March 14, 2002, 25% of
         these options would be vested and thus Mr. Samples may be deemed
         to have beneficial ownership of the 375,000 ordinary shares that
         he can acquire by exercising these stock options.

(3)      116,312 of the shares are owned indirectly by Mr. de Vitry through
         his ownership interests in CompleTel LLC. The remaining 467,197
         shares are directly owned by him.

(4)      1,333,663 of these shares are owned indirectly by Mr. Dovey
         through his ownership interest in CompleTel LLC. 4,237,841 of the
         remaining shares are owned directly by Mr. Dovey and 479,002
         directly by Dovey Family Partners LLLP. Mr. Dovey has sole voting
         power for the Dovey Family Partners LLLP.

(5)      497,367 of these shares are owned directly by Mr. DeGeorge. The
         remaining 26,208,676 shares are owned indirectly through DeGeorge
         Telecom Holdings Limited Partnership. Mr. DeGeorge is the Chairman
         and Chief Executive Officer of LPL Investment Group, Inc., which
         controls DeGeorge Telecom Holdings Limited Partnership.

(6)      32,554 of these shares are owned indirectly by Mr. Allen through
         his ownership interests in CompleTel LLC. 800,295 of the shares
         are owned directly by Mr. Allen. The remaining 588 shares are
         owned by Mr. Allen's wife, as to which Mr. Allen disclaims
         beneficial ownership.

(7)      2,924,659 of these shares are owned indirectly by Madison Dearborn
         Capital Partners II, L.P. through its ownership interests in
         CompleTel LLC. The remaining 61,649,331 shares are owned directly.
         Messrs. Finnegan, Kirby and Perry are managing directors of
         Madison Dearborn Partners, Inc., the general partner of the
         general partner of Madison Dearborn Capital Partners II, L.P. The
         address of Madison Dearborn Partners is Three First National
         Plaza, Chicago, Illinois 60602.

(8)      1,208,023 of these shares are owned indirectly by DeGeorge Telecom
         Holdings Limited Partnership through its ownership interests in
         CompleTel LLC. The remaining 25,000,653 shares are owned directly.
         Mr. DeGeorge has sole voting and investment power over the shares
         owned by DeGeorge Telecom Holdings Limited Partnership. The
         address of DeGeorge Telecom Holdings Limited Partnership is 639
         Isbell Road, Suite 390, Reno, Nevada 89509.

(9)      CompleTel LLC owns some of our ordinary shares directly, and some
         indirectly through its wholly owned subsidiary, CompleTel (N.A.)
         N.V. Holders of common interests in CompleTel LLC could be deemed
         to be beneficial owners of our ordinary shares that are owned by
         CompleTel LLC, because (a) CompleTel (N.A.) N.V.'s power to vote
         and dispose of our outstanding ordinary shares is exercised by
         CompleTel (N.A.) N.V.'s sole managing director, who is appointed
         by CompleTel LLC as sole owner of all the voting interests in
         CompleTel (N.A.) N.V. and (b) CompleTel LLC's power to vote and
         dispose of its equity interests in CompleTel (N.A.) N.V. is
         exercised by CompleTel LLC's board of managers, which is elected
         by the holders of CompleTel LLC's common interests. The address of
         CompleTel LLC is 6300 South Syracuse Way, Suite 320, Englewood,
         Colorado 80111.

Madison Dearborn Partners and Lawrence F. DeGeorge have directly or
indirectly been our principal shareholders since our founding in December,
1998. Their ownership percentage in our shares has decreased subsequent to
modifications in our share capital (see item 12, "Security Ownership of
Certain Beneficial Owners and Management"), from 52.1% and 21.5% as of our
founding date, to 40.2% and 16.6% at March 1, 2002, respectively. Mr.
Pearson and Mr. Dovey have also been significant shareholders in our
company since its creation. Their respective ownership percentage in our
shares has decreased from 6.3% and 6.2% as of our founding, to 4.1% and
3.8% at March 1, 2002.

To our knowledge, none of our shares were pledged as of March 1, 2002,
except for those securing our loan to Bill Pearson, as described in item 13
below.

Item 13. Certain Relationships and Related Transactions

Employee loans

         In March 2000, iPcenta Limited, our then wholly-owned indirect
subsidiary, loaned Martin Rushe, at the time, one of our Managing Directors
and the President of our subsidiary, CompleTel UK Limited, the principal
amount of U.S.$206,500 ((euro)220,000) to purchase 100 common units of
CompleTel 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 Mr. Rushe to receive a pro rata number of our ordinary shares when
and if CompleTel 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 Mr. Rushe for tax liabilitie arising as a result of this
arrangement. We forgave a total of (euro)179,880 of this loan, including
principal and interest and reimbursement of associated tax liabilities.
Following the termination of Mr. Rushe's employment with us in late May
2001, approximately $92,502 ((euro)101,752) of the loan became due and
payable. This amount was settled by Mr. Rushe by transfering to us
CompleTel LLC units he owned, representing approximately 42,914 of our
ordinary shares and having market value equal to the amount due for
repayment as of the date of transfer.

         In December 2000, we loaned William Pearson, at the time, our
Managing Director, 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 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 from
our Supervisory Board on February 22, 2002, the loan is due and payable on
August 19, 2002. This loan is secured by a pledge on 958,000 of our shares.

         In April 2001, CompleTel Europe and Timothy A. Samples, our Chief
Executive Officer, entered into a loan Agreement and a Promissory Note,
pursuant to which we made a (euro)865,000 loan to Mr. Samples. The loan
accrued interest at 6%, compounded quarterly, and became due February 28,
2002. In accordance with its terms, we forgave the repayment of the loan
(including interest and reimbursement of associated tax liabilities), as
Mr. Samples is still employed by us.

         Certain of our U.S. employees have been employed under expatriate
agreements and were relocated to Paris and London. In accordance with their
expatriate agreements, these employees are subject to tax equalization
provisions whereby they are placed in substantially the same economic
position as if they were employed in the United States. Based on such
employees' year-end tax status, we pay taxes on behalf of these employees,
however, the tax liability is the responsibility of these employees. For
the year ended December 31, 2001, these amounts totaled approximately
(euro)270,000 and have been classified as part of affiliate receivables in
our consolidated balance sheet.

         In March 2000, a limited number of our employees obtained interest
bearing loans in an approximate aggregate principal amount of (euro)2
million from a commercial bank to purchase shares in our initial public
offering. 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, we entered into certain arrangements with these employees and the
lending bank, including indemnity letters under which we 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 111,827 ordinary shares
pledged to it by the employees and used the proceeds from such sale to
reimburse the amount of the loans. We 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.

                                  PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

Financial Statements

         The following financial information is incorporated by reference
into Part II of this report and is filed as part of this report:

Financial Statements of CompleTel Europe N.V.

         Report of Independent Accountants

         Consolidated Balance Sheets as of December 31, 2001 and 2000

         Consolidated Statements of Operations for the years ended December
         31, 2001, 2000 and 1999

         Consolidated Statements of Shareholders' Equity (Deficit) for the
         years ended December 31, 2001, 2000 and 1999

         Consolidated Statements of Cash Flows for the years ended December
         31, 2001, 2000 and 1999

         Notes to Consolidated Financial Statements

Financial Statement Schedules

         Schedules have been omitted, because the information required to
be shown in the schedules is not applicable or is included elsewhere in our
financial statements or the notes thereto.

Exhibits

         The exhibits filed in response to Item 601 of Regulation S-K are
listed in the Exhibit Index starting on page II-2 of this report.

Reports on Form 8-K

         On November 15, 2001, we filed a Current Report on Form 8-K, in
which we reported our financial results for the third quarter 2001. No
financial statements were filed with that report.

         On November 27, 2001, we filed a Current Report on Form 8-K, in
which we reported the completion of the repurchase of (euro)17.4 million
principal amount at maturity of our Senior Notes due 2010. No financial
statements were filed with that report.




                       INDEX TO FINANCIAL STATEMENTS



<TABLE>
<CAPTION>

I. COMPLETEL EUROPE N.V.
<S>                                                                                                       <C>
   Report of Independent Accountants....................................................................... F-1
   Consolidated Balance Sheets as of December 31, 2001 and 2000............................................ F-2
   Consolidated Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999.............. F-3
   Consolidated Statements of Shareholders' Equity (Deficit) for the Years Ended December 31, 2001, 2000    F-4
   and 1999................................................................................................
   Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999.............. F-5
   Notes to Consolidated Financial Statements.............................................................. F-6
</TABLE>


REPORT OF INDEPENDENT ACCOUNTANTS

To CompleTel Europe N.V.:

         We have audited the accompanying consolidated balance sheets of
COMPLETEL EUROPE N.V. (an N.V. registered in the Netherlands) and
subsidiaries (the "Company") as of December 31, 2001 and 2000 and the
related consolidated statements of operations, shareholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 2001. 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. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

         In our opinion, the 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, 2001 and 2000 and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.

         The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1
to the financial statements, the Company has suffered recurring losses from
operations and expects to fully utilize its existing cash resources by
mid-year 2002 which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any
adjustments relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might
result should the Company be unable to continue as a going concern.

                                                              ARTHUR ANDERSEN

Amstelveen, The Netherlands, March 5, 2002.



<TABLE>
<CAPTION>

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

                                                                                                    December 31,       December 31,
                                                                                                            2001               2000
                                                                                                            ----               ----
                                   ASSETS
      CURRENT ASSETS:
<S>                                                                                                       <C>               <C>
         Cash and cash equivalents                                                                  (euro)81,613      (euro)361,698
         Short-term investments, restricted                                                               16,694             28,030
         Accounts receivable, net of allowance for doubtful receivables of(euro)1,530 and
             (euro)733, respectively                                                                      15,757             13,883
       as of  December 31, 2001 and 2000, respectively
        Affiliate receivables                                                                              2,121              1,500
        VAT receivables                                                                                   24,472             41,900
        Prepaid expenses and other current assets                                                         11,494             12,986
                                                                                                       ---------          ---------
                 Total current assets                                                                    152,151            459,997
                                                                                                       ---------          ---------


      NON-CURRENT ASSETS:
        Property and equipment, net                                                                      277,807            298,623
        Licenses and other intangibles, net of accumulated
             amortization of(euro)640 and(euro)611, respectively                                           7,897              6,858
        Deferred financing costs, net                                                                      7,525             15,129
        Non-current investments, restricted                                                                8,085             41,709
        Other non-current assets                                                                           2,525              2,465
                                                                                                       ---------          ---------

                Total non-current assets                                                                 303,839            364,784
                                                                                                       ---------          ---------

      TOTAL ASSETS                                                                                 (euro)455,990      (euro)824,781
                                                                                                   =============      =============




                                                     LIABILITIES AND SHAREHOLDERS' EQUITY
      CURRENT LIABILITIES:
        Network vendor payables                                                                     (euro)37,356       (euro)54,341
        Accrued liabilities                                                                               21,896             34,084
        Trade accounts payable                                                                            45,694             37,600
        Affiliate payables                                                                                 1,393              2,199
                                                                                                       ---------          ---------
                Total current liabilities                                                                106,339            128,224
                                                                                                       ---------          ---------
      LONG-TERM DEBT                                                                                     227,735            280,597

      COMMITMENTS AND CONTINGENCIES (Note 6)

      SHAREHOLDERS' EQUITY:
         Ordinary shares, nominal value(euro).10 per share, 383,332,650 shares authorized;
                160,555,222 shares issued and outstanding at December 31, 2001 and                        16,055             16,055
                2000, respectively
         Additional paid-in capital                                                                      690,093            706,821
          Deferred compensation                                                                         (11,192)            (33,196)
         Other cumulative comprehensive loss                                                                747               1,019
          Accumulated deficit                                                                          (558,234)           (259,185)
         Treasury stock, at cost (Note 3)                                                               (15,553)            (15,554)
                                                                                                       ---------          ---------

      TOTAL SHAREHOLDERS' EQUITY                                                                         121,916            415,960
                                                                                                       ---------          ---------

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                   (euro)455,990      (euro)824,781
                                                                                                   =============      =============
                              The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>




<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, 2001       December 31, 2000        December 31, 1999
                                                          --------------------    ---------------------    --------------------
<S>                                                    <C>                      <C>                      <C>
REVENUE............................................. (euro)            97,909 (euro)            31,540 (euro)            2,861

OPERATING EXPENSES:
   Network costs....................................                   86,855                   33,038                   2,307
   Selling, general and administrative..............                   95,181                   79,606                  30,302
   Allocated costs from an affiliate................                    5,402                   12,090                   6,195
   Non-cash compensation charges....................                    5,260                   60,550                     634
   Depreciation and amortization....................                   54,961                   22,027                   4,302
   Restructuring, impairment and other charges......                  167,555                        -                       -
                                                          --------------------    ---------------------    --------------------
         Total operating expenses...................                  415,214                  207,311                  43,740
                                                          --------------------    ---------------------    --------------------

OPERATING LOSS......................................                (317,305)                (175,771)                (40,879)
                                                          --------------------    ---------------------    --------------------

OTHER INCOME (EXPENSE):
   Interest income..................................                   12,867                   22,394                   2,447
   Interest expense, net of capitalized interest....                 (29,485)                 (28,968)                 (7,893)
   Foreign exchange loss and other expense..........                 (11,294)                 (18,933)                 (3,465)
                                                          --------------------    ---------------------    --------------------
         Total other income (expense)...............                 (27,912)                 (25,507)                 (8,911)

LOSS BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING PRINCIPLE...................
                                                                    (345,217)                (201,278)                (49,790)

EXTRAORDINARY ITEM - Gain on early extinguishment of
   debt                                                                46,168                    1,053                       -

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

                                                          --------------------    ---------------------    --------------------
NET LOSS                                             (euro)         (299,049)(euro)          (200,488)(euro)          (49,790)
                                                          ====================    =====================    ====================

BASIC AND DILUTED LOSS PER ORDINARY ...........SHARE
                                                     (euro)            (1.90)(euro)             (1.34)(euro)            (0.50)
                                                          ====================    =====================    ====================

WEIGHTED AVERAGE NUMBER OF ................ORDINARY
SHARES OUTSTANDING..................................              157,417,898              149,806,721              99,056,060
                                                          ====================    =====================    ====================



                        The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>






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





                                                                                                                          Other
                                                              Ordinary Shares            Additional                    Cumulative
                                                        ----------------------------      Paid-in        Deferred     Comprehensive
                                                           Number          Amount         Capital      Compensation        Loss
                                                        --------------   -----------  ---------------- ------------  --------------
<S>                                                        <C>           <C>          <C>              <C>           <C>
BALANCE, December 31, 1998........................         24,444,820 (euro)  2,444  (euro)  1,880   (euro)   (462)  (euro)   (137)
 Issuance of ordinary shares in connection with
 corporate Reorganization.........................         73,537,325         7,354         43,512               -               -
 Issuance of ordinary shares in connection with Units       7,375,000           738          3,266               -               -
 Offering.........................................
 Issuance of ordinary shares in connection with
 capital contributions.............................        20,775,915         2,077         39,597               -               -
 Deemed contributions by LLC related to allocation of
 non-cash compensation charges.....................                 -             -          2,055          (2,055)              -
 Issuance of stock options.........................                 -             -         26,153         (26,153)              -
 Amortization of deferred compensation.............                 -             -              -             634               -
 Cumulative translation adjustment.................                 -             -              -               -             865
 Net loss..........................................                 -             -              -               -               -
                                                        --------------   -----------  ---------------- ------------  --------------

BALANCE December 31, 1999.........................        126,133,060        12,613        116,463         (28,036)            728

 Issuance of ordinary shares in connection with
 initial public offering, net of underwriters' discount
 and offering costs...............................         31,280,000         3,128        509,408               -               -
 Deemed contributions by LLC related to allocation of
 non-cash compensation charges....................                  -             -         66,832         (60,493)              -
 Issuance of stock options, net of forfeited stock                  -             -         (1,122)          1,122               -
 options..........................................
 Amortization of deferred compensation............                  -             -              -          54,211               -
 Issuance of ordinary shares as consideration for LLC       3,142,162           314         15,240               -               -
 units............................................
 Cumulative translation adjustment................                  -             -              -               -             291
 Net loss.........................................
                                                        --------------   -----------  ---------------- ------------  --------------
                                                                    -             -              -               -               -
                                                                    -             -              -               -               -
BALANCE, December 31, 2000........................        160,555,222        16,055        706,821         (33,196)          1,019

 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 ...............                  -             -              -               -            (272)
 Net loss.........................................                  -             -              -               -              --
                                                        --------------   -----------  ---------------- ------------  --------------

BALANCE, December 31, 2001........................        160,555,222(euro)  16,055(euro)  690,093(euro)   (11,192(euro) (euro)747
                                                        ==============   ===========  ================ ============  ==============

<CAPTION>

                                                                                                      Total
                                                              Accumulated    Treasury Stock at     Comprehensive
                                                                Deficit       Cost (Note 3)           Loss            Total
                                                        -   --------------   -----------------     -------------    ---------
<S>                                                         <C>              <C>                   <C>              <C>
BALANCE, December 31, 1998........................         (euro)  (8,907)   (euro)       -     (euro)  (6,645)   (euro) (5,182)
 Issuance of ordinary shares in connection with
 corporate Reorganization.........................                      -                 -                  -           50,866
 Issuance of ordinary shares in connection with Units                   -                 -                  -            4,004
 Offering.........................................
 Issuance of ordinary shares in connection with
 capital contributions.............................                     -                 -                  -           41,674
 Deemed contributions by LLC related to allocation of
 non-cash compensation charges.....................                     -                 -                  -                -
 Issuance of stock options.........................                     -                 -                  -                -
 Amortization of deferred compensation.............                     -                 -                  -              634
 Cumulative translation adjustment.................                     -                 -                865              865
 Net loss..........................................               (49,790)                -            (49,790)         (49,790)
                                                        -   --------------   -----------------     -------------    ------------

BALANCE December 31, 1999.........................                (58,697)                -            (48,925)          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                   -          (15,554)                  -                -
 units............................................
 Cumulative translation adjustment................                      -                 -                291              291
 Net loss.........................................                                        -           (200,488)
                                                        -   --------------   -----------------     -------------    ------------
                                                                 (200,488)                -                            (200,488)
                                                                ---------                 -                            ---------
BALANCE, December 31, 2000........................               (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)
 Net loss.........................................               (299,049)               --                            (299,049)
                                                        -   --------------   -----------------     -------------    ------------
                                                                                          -           (299,049)
BALANCE, December 31, 2001........................         (euro)(558,234)   (euro) (15,553)    (euro)(299,231)  (euro) 121,916
                                                        =   ==============   =================     =============    ============


The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>




<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, 2001         December 31, 2000          December 31, 1999
                                                     ------------------------  ------------------------   -------------------------
 OPERATING ACTIVITIES:
<S>                                                          <C>                       <C>                          <C>
   Net loss......................................             (euro)(299,049)           (euro)(200,488)              (euro)(49,790)
   Adjustments to reconcile net loss to net cash
   flows provided by operating activities:
     Depreciation and amortization...............                     54,961                    22,027                      4,302
     Non-cash compensation expense...............                      5,260                    60,550                        634
     Accretion of senior discount notes..........                     13,347                    10,932                      7,617
     Amortization of deferred financing costs....                      1,596                     2,081                        226
     Impairment of property, equipment and
        intangibles..............................                    150,070                         -                          -
     Gain on early extinguishment of debt........                    (46,168)                   (1,053)                         -
     Foreign exchange loss.......................                      5,687                    15,615                          -
     Changes in operating assets and liabilities:
       Increase in accounts receivable...........                     (1,874)                  (12,174)                   (14,548)
        Decrease (increase) in prepaid expenses,
         VAT receivables                                              18,920                   (39,634)                    (1,409)
         and other current assets................
       Decrease (increase) in other non-current                          (60)                   (1,647)                      (582)
       assets....................................
       Increase (decrease) in accrued liabilities
       and trade     ............accounts payable                     (4,094)                   48,885                     21,205
       Decrease in net affiliate payables/
         Receivables.............................                     (1,427)                   (1,984)                    (7,246)
                                                     ------------------------  ------------------------   -------------------------
         Net cash flows provided by (used
           in)operating activities...............                   (102,831)                  (96,890)                   (39,591)
                                                     ------------------------  ------------------------   -------------------------

 INVESTING ACTIVITIES:
   Expenditures for property and equipment.......                   (149,852)                 (227,496)                   (93,009)
   Increase (decrease) in network vendor payables                    (16,985)                    25,748                    27,514
   Expenditures for licenses and other intangibles                      (936)                   (2,705)                    (4,135)
    Acquisitions, net of cash acquired...........                    (12,886)                        -                          -
   Offering proceeds and investment earnings placed
   in    escrow..................................                          -                   (69,739)                   (70,146)
   Proceeds from escrowed offering and investment
   earnings......................................                     33,624                         -                     70,146
                                                     ------------------------  ------------------------   -------------------------
         Net cash flows used in investing activities                (147,035)                 (274,192)                   (69,630)
                                                     ------------------------  ------------------------   -------------------------

 FINANCING ACTIVITIES:
   Net proceeds from senior discount notes.......                          -                         -                     63,063
   Proceeds from issuance of ordinary shares
   and subsequent capital contribution
                                                                           -                         -                     96,544
   Net proceeds from initial public offering.....                          -                   512,536                          -
   Net proceeds from senior notes................                          -                   192,995                          -
   Repurchase of senior discount notes...........                          -                   (14,867)                         -
   Repurchase of senior notes from cash and cash
     equivalents.................................                    (11,236)                        -                          -
   Repurchase of senior notes from restricted
       investments...............................                    (17,721)                        -                          -
   Deferred financing costs......................                       (722)                  (11,902)                    (3,997)
                                                     ------------------------  ------------------------   -------------------------
         Net cash flows provided by financing                        (29,679)                  678,762                    155,610
                                                     ------------------------  ------------------------   -------------------------
   activities

   Effect of exchange rates on cash..............                       (540)                                               9,254
                                                     ------------------------  ------------------------   -------------------------
                                                                                                (3,097)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                    (280,085)                  304,583                     55,643
CASH AND CASH EQUIVALENTS, beginning of ...period
                                                                     361,698                    57,115                      1,472
                                                     ------------------------  ------------------------   -------------------------

CASH AND CASH EQUIVALENTS, end of period.........   (euro)            81,613 (euro)            361,698   (euro)            57,115
                                                     ======================== =========================   =========================
SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Cash paid for interest..........................               (euro)25,488              (euro)14,000                          -
 Cash paid for taxes.............................                          -                         -                          -
                        The accompanying notes are an integral part of
these consolidated financial statements.
</TABLE>




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



(1) Organization And Nature Of Operations

         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 the services of other providers
and then retail the services to customers.

         The Company provides telecommunications and Internet-related
services to business and government end-users, carriers and Internet
service providers in targeted metropolitan areas, with a focus on network
deployment in France and, to a lesser extent, in Germany. It delivers these
services primarily to connected, on-net customers over its fiber optic
metropolitan area networks, or MANs. The Company has MANs in nine cities in
France, including Paris, Lyon, Marseille, Lille, Grenoble, Toulouse, Nice,
Nantes and Strasbourg, and four cities in Germany, including Munich,
Nuremberg, Berlin and Essen-Dortmund. The construction of the Company's
MANs was completed during the last quarter of 2001, and the Company is now
focusing its efforts on expanding its customer base in these MANs. The
Company's MANs are connected nationally and internationally by its leased
inter-city network.

         Since 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, during 2001 and
beginning of 2002 it observed signs of general weakness in the European
markets for carrier, dial-up Internet access and Internet data center
services. In light of these adverse market conditions, the Company has
implemented 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 has implemented a
major downsizing of its German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
We continue to examine the structure and prospects of our German operations
with a view to eliminating unnecessary costs and cash flow requirements. In
addition, faced with a significant downturn of the web hosting market,
linked to the collapse of the ".com" market and installed hosting
overcapacity in Europe, it has decided to scale down the Internet data
centers operations it has launched in France, Germany and the United
Kingdom. In France and Germany, the Company has decided to integrate these
activities with its retail businesses, while in the United Kingdom, the
Company intends to exit the market and is currently evaluating various
options to execute its plan.

          The Company currently anticipates that it will fully utilize its
existing cash resources by mid-year 2002. The Company believes that it will
require additional financing in excess of its invested capital and current
borrowings in the range of (euro)60 million to (euro)90 million to bring it
to cash flow breakeven. Given its funding position, the Company believes
that there is a substantial doubt regarding its ability to continue as a
going concern. The Company has embarked on a process to seek additional
forms of capital. However, there can be no assurance that it will be able
to obtain the additional financing it needs. If the Company fails to obtain
sufficient additional financing, it will effectively cease to be able to
conduct its business. Certain of the Company's existing major investors
have indicated that they would consider investing in the Company an
aggregate of up to (euro)30 million (of the estimated (euro)60 million to
(euro)90 million shortfall), subject to agreement on terms, as part of a
re-capitalization and restructuring that would provide the Company with
sufficient cash resources to fund its business plan to cash flow breakeven.
These terms would likely include the conversion into ordinary shares of
substantially all of CompleTel Europe outstanding debt securities and a very
substantial dilution to its existing shareholders.

         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 Offering. 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.

         As of December 31, 1998, LLC's other direct and indirect
wholly-owned subsidiaries consisted of CableTel Management Inc.
("Management Co."), CompleTel Holding I B.V. ("BVI"), CompleTel Holding II
B.V. ("BVII"), its French operating subsidiary, CompleTel SAS ("CompleTel
France") (formerly known as CompleTel S.A.R.L.), its UK operating
subsidiary, CompleTel UK Limited ("CompleTel UK"), and its German operating
subsidiary, CompleTel GmbH ("CompleTel Germany"). As of December 31, 1998,
LLC's operating companies were held indirectly through BVI and BVII.
CompleTel Europe had no material assets or operations as of December 31,
1998.

         In January 1999, LLC formed CompleTel Services SAS, CompleTel
Holdings LLC ("CompleTel Holdings"), CompleTel ECC B.V. ("CompleTel ECC"),
CompleTel (N.A.) N.V. ("NANV") and CompleTel SPC ("CompleTel SPC").
CompleTel Holdings was formed to issue the equity component of the
Offering. CompleTel ECC was formed to be the group's European corporate
center and to hold the proceeds of the Offering, through an escrow account,
until the Company received certain financing commitments. Through a series
of transactions in the restructuring, LLC contributed approximately
(euro)51 million of equity, consisting of cash of approximately (euro)46
million and accounts receivable of approximately (euro)5 million, to
CompleTel France through CompleTel SPC. Also, through a series of
restructuring transactions, CompleTel SPC became a wholly-owned subsidiary
of BVI. BVI was contributed to CompleTel Europe in exchange for the
issuance of 73,537,325 additional ordinary shares and CompleTel Europe
became a wholly-owned subsidiary of NANV. Furthermore, LLC contributed its
100% interest in NANV to CompleTel Holdings in exchange for all 19,596,429
Class A Membership Interests in CompleTel Holdings. The Non-Voting Class B
Membership Interests in CompleTel Holdings were issued substantially to
unrelated parties in connection with the Offering. In connection with this
issuance by CompleTel Holdings of its Non-Voting Class B Membership
Interests, CompleTel Europe issued 7,375,000 additional ordinary shares to
NANV and NANV issued additional ordinary shares to CompleTel Holdings in
consideration of a cash contribution to CompleTel Europe totaling
approximately (euro)4 million. This corporate reorganization has been
accounted for as a reorganization of entities under common control, similar
to a pooling of interests. Accordingly, the accompanying consolidated
financial statements retroactively reflect the new corporate organizational
structure of CompleTel Europe as if CompleTel Europe had been incorporated
as of January 8, 1998. The incorporation is reflected through a deemed
issuance, on January 8, 1998, of 24,444,820 shares of CompleTel Europe in
exchange for a subscription receivable from LLC of approximately
(euro)46,000, which was paid on December 14, 1998. Furthermore, the
accompanying consolidated financial statements have been prepared as though
CompleTel Europe had performed all competitive local exchange carrier
("CLEC") related development activities in Western Europe since the
inception of LLC. The accompanying consolidated financial statements of
CompleTel Europe include its direct and indirect wholly-owned subsidiaries
consisting of BVI, BVII, CompleTel France, CompleTel Germany, CompleTel UK,
CompleTel ECC, CompleTel SPC, CompleTel Headquarters U.K. Limited, iPecenta
Germany GmbH, CompleTel Escrow B.V., CompleTel Headquarters Europe SAS.

         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 20,775,915
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 4), 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 61,671,987 shares of CompleTel
Europe were distributed to members of LLC. As a result of this distribution
and the contribution transaction described in Note 3, 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 year 2001.

(2) Summary Of Significant Accounting Policies

Basis of Presentation

         The accompanying consolidated financial statements of the Company
have been prepared in accordance with United States generally accepted
accounting principles ("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

         In April 1999, the Company executed a stock split through which
its 431 ordinary shares then outstanding were converted into 21,071,429 of
the Company's ordinary shares. Additionally, the Company increased its
authorized ordinary shares to 105,330,800. Subsequent to December 31, 1999,
the Company completed a 5-for-1 stock split through which its then
outstanding ordinary shares totaling 25,226,612 were converted into
126,133,060 ordinary shares. Additionally, the Company increased its
authorized ordinary shares to 625,000,000 and changed the nominal value of
its ordinary shares to (euro).10 per ordinary share. 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 all
marketable securities and commercial paper with original maturities of
ninety days or less at the date of acquisition to be cash equivalents.

Current, Non-current Investments, Restricted

         Restricted investments include investments in euro-denominated
securities related to the Senior Notes (Note 5) and have been classified
based on the expected expiration of such requirements.

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. The following table reflects the movement in the Company's
allowance for doubtful receivables:

<TABLE>
<CAPTION>
                                                                             2001               2000
                                                                             ----               ----
<S>                                                                              <C>                 <C>
Allowance for doubtful receivables, beginning of year .............        (euro)733           (euro)31
Additional provisions..............................................            4,748                702
Receivables write-offs.............................................           (3,951)                 -
                                                                             -------            -------
Allowance for doubtful receivables, end of year....................      (euro)1,530          (euro)733
                                                                         ===========          =========
</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 amounts due to
the Company's subsidiaries for value added taxes ("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 being 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 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,
                                                2001          2000
                                                ----          ----

Network equipment.......................... (euro)276,206 (euro)207,587
Office furniture and equipment.............         3,602         5,186
Computer equipment and software............         7,152        10,891
Leasehold improvements.....................         4,096         8,239
Materials and supplies ....................         5,525         8,429
Buildings..................................           205           205
                                                --------- -------------

Property and equipment, in service.........       296,786       240,537
Less: accumulated depreciation.............      (49,573)      (24,963)
                                                 --------    ----------

Property and equipment, in service, net....       247,213       215,574
Construction in progress...................        30,594        83,049
                                                 --------    ----------

Property and equipment, net................ (euro)277,807 (euro)298,623
                                            ============= =============



         The Company capitalized approximately (euro)14.2 million and
(euro)10.1 million of interest for the years ended December 31, 2001 and
2000, respectively.

         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.

License Costs and Other Intangibles

         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.

         The excess of investments in consolidated subsidiaries over the
net fair value of the tangible assets at acquisition is amortized on a
straight-line basis over an average life of ten years.

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. 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. Measurement of an impairment loss for an asset held for sale would
be based on its fair market value less the estimated costs to sell. In
accordance with this policy, the Company recorded impairment losses in 2001
totaling (euro)130.3 million in Germany and (euro)12.4 in the United
Kingdom (see Note 10).

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 receipt and
amortized to revenue over either the longer of the underlying contract
period or the expected customer relationship.

         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 24%
of its revenue for the year ended December 31, 2001. The Company's largest
customer generated slightly over 11% of total revenue for the year.

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:

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

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

   o      Long-term debt - the fair value is based on quoted market values.

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

<S>                                                                               <C>                      <C>
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

Assets (Liabilities) as of December 31, 2000                             Carrying Amount              Fair Value
Short-term and non-current investments.....................                 (euro)69,739             (euro)69,739
Long-term debt.............................................                (euro)280,597            (euro)182,388
</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 are pushed down from LLC to the Company
and recorded as a deemed capital contribution, with an offsetting entry to
deferred compensation. Deferred compensation is amortized to expense over the
vesting period of the related stock-based awards. Non-cash compensation
charges are primarily attributable to employees whose salary and benefits were
otherwise recorded in selling, general and administrative expenses.

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

         Statement of Financial Accounting Standards 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 Loss Per Ordinary Share

         Basic loss per ordinary share is determined by dividing net loss by
the weighted average number of ordinary shares outstanding during each period.
Diluted loss per share includes the effects of potentially issuable ordinary
shares, but only if dilutive. Because the Company was in a loss position in
2001, 2000 and 1999, there are no differences between basic and diluted loss
per ordinary share for the Company through December 31, 2001. Under the
Company's employee incentive plans 213,928 and 99,482 shares were exercisable
as of December 31, 2001 and 2000, respectively, and no shares where
exercisable as of December 31, 1999. The weighted average ordinary shares
outstanding for 2000 excludes the issuance in November 2000 of 3,142,162
ordinary shares for LLC units contributed to the Company (See Note 3).

<TABLE>
<CAPTION>
  For the years ended December 31, 2001 and 2000, basic and diluted loss per ordinary share is comprised of the following:

                                                                                          2001      2000
<S>                                                                                       <C>       <C>
  Loss before extraordinary item and accounting change.................................(euro)(2.19) (euro)(1.35)
  Extraordinary item...................................................................       0.29         0.01
  Cumulative effect of change in accounting principle..................................          -            -
                                                                                       -------------------------
  Basic and diluted loss per ordinary share............................................(euro)(1.90) (euro)(1.34)
                                                                                       =========================
</TABLE>

Foreign Operations and Foreign Exchange Rate Risk

         Through December 31, 1999, the functional currency for the
Company's foreign operations was the applicable local currency for the
affiliate company and the functional currency for CompleTel Europe was the
U.S. dollar. Effective January 1, 2000, CompleTel Europe and each of its
subsidiaries, except those in the U.K. adopted the euro as their functional
currency. Additionally, the Company adopted the euro as its financial
reporting currency. As a result, the Company has restated prior period
amounts by translating prior period U.S. dollar amounts into the euro.

         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 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.

         The Company's subsidiaries periodically have payables that are
denominated in a currency other than their own functional currency. The
Company has not historically hedged foreign currency denominated
transactions for receivables or payables related to operations.
Accordingly, the Company may experience economic loss and a negative impact
on earnings and equity with respect to its holdings solely as a result of
foreign currency exchange rate fluctuations, which include euro devaluation
against the foreign currency.

Accounting for Derivative Instruments and Hedging Activities

         Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS 133"),
establishes accounting and reporting standards for derivative instruments,
including certain instruments embedded in other contracts, and for hedging
activities. SFAS 133 requires that an entity recognize all derivatives as
either assets or liabilities and measure those instruments at fair value.
It also specifies the accounting for changes in the fair value of a
derivative instrument depending on the intended use of the instrument and
whether (and how) it is designated as a hedge. The adoption, on January 1,
2001, of SFAS 133 was not material to the Company.


New Accounting Standards

         In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 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 141 than its predecessor, APB Opinion No. 16 although in some
instances previously recognized intangibles will be subsumed into goodwill.

         Under SFAS 142, goodwill will no longer be amortized on a straight
line basis over its estimated useful life, but will be tested for
impairment on an annual basis and whenever indicators of impairment arise.
The goodwill impairment test, which is based on fair value, is to be
performed on a reporting unit level. A reporting unit is defined as a SFAS
No. 131 (see Note 8) operating segment or one level lower. Goodwill will no
longer be allocated to other long-lived assets for impairment testing under
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." Additionally, goodwill on equity
method investments will no longer be 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 will not be amortized.
Instead, they will be carried at the lower of cost or market value and be
tested for impairment at least annually. All other recognized intangible
assets will continue to be amortized over their estimated useful lives.

         SFAS 141 and 142 are effective for fiscal years beginning after
December 15, 2001. The Company does not anticipate that the adoption of
these statements will have a material impact on its results of operations
or its financial position.

         In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets". SFAS No. 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 No. 144 there is no longer a requirement to allocate goodwill to
long-lived assets to be tested for impairment. It also establishes a
probability weighted cash flow estimation approach to deal with situations
in which there are a range of cash flows that may be generated by the asset
being tested for impairment. SFAS No. 144 also establishes criteria for
determining when an asset should be treated as held for sale.

         SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001 and interim periods within those fiscal years, with early
application encouraged. The provisions of the Statement are generally to be
applied prospectively. The Company does not anticipate that adoption of
SFAS No. 144 will have a material impact on its results of operations or
its financial position.

(3) 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 reimbursd 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 42,914 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 has 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 111,827 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
restructuring, impairment and other charges in the accompanying 2001
consolidated statement of operations.

         In December 2000, the Company loaned 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
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
this executive's resignation on February 22, 2002, the loan is due and
payable on August 19, 2002.

         In April 2001, the Company and its new Chief Executive Officer
("CEO"), entered into a Loan Agreement and a Promissory Note, pursuant to
which the Company made a (euro)865,000 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) has been forgiven by the
Company, as the CEO is still employed by the Company.

Tax Equalization Payments

         Certain of the Company's U.S. employees have been employed under
expatriate agreements and were relocated to Paris and London. In accordance
with their expatriate agreements, these employees were subject to tax
equalization provisions whereby they were placed in substantially the same
economic position as if they were employed in the United States. Based on
such employees' year-end tax status, the Company paid taxes on behalf of
these employees, however, the tax liability is the responsibility of these
employees. For the year ended December 31, 2001, these amounts totaled
approximately (euro)270,000 and have been classified as part of affiliate
receivables in the accompanying consolidated balance sheet.

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, 2000 and 1999 the Company recorded approximately
(euro)5.4 million, (euro)12.1 million and (euro)6.2 million respectively,
for billings under the Management Agreements. In early 2002, the Company
completed the acquisition of Management Co. for U.S.$1.0. from LLC.
Accordingly, effective January 1, 2002, all the expenses incurred by
Management Co. will be accounted for as selling, general and administrative
costs.

Contribution of LLC Common Units for CompleTel Europe NV Ordinary Shares

         In late 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 3,142,162 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 3,142,162 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 remain subject to the same vesting
provisions as the original award.

(4) 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 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, 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.

(5) 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 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 Notes are guaranteed by
LLC on a senior unsecured basis. As LLC is a holding company with no
operations other than the operations to be conducted by CompleTel Europe
and its subsidiaries, it is unlikely that LLC would have sufficient funds
to satisfy CompleTel Europe's obligations on the Notes if CompleTel Europe
is unable to satisfy its own obligation on the Notes. Of the approximately
(euro)67.1 million gross proceeds from the Offering, approximately
(euro)63.1 million was attributed to the 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 represents additional discount on the Notes.

         Cash interest will not accrue on the Notes prior to February 15,
2004, with the Notes accreting to their stated principal amount at maturity
at an effective interest rate of approximately 15.1%. The accretion is
being charged to interest expense. Commencing February 15, 2004, cash
interest on the Notes will accrue at 14% per annum and will be payable in
cash on August 15 and February 15 of each year. The Notes mature February
15, 2009.

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 is pledged as security for the Senior Notes. The proceeds
of these pledged securities will be used to make the first six interest
payments on the Senior Notes. The remaining proceeds from the Senior Notes
offering have been 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.

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, an extraordinary gain of
approximately (euro)49.9 million, net of related deferred financing costs
which were also written off, was recognized.

<TABLE>
<CAPTION>
         Long-term debt consists of the following (in thousands):

                                                                                                       December 31,
                                                                                                   2001           2000

<S>                                                                                                <C>              <C>
      14% Senior Discount Notes, face amount $120.5 million, due 2009,
      effective interest rate of 15.5%, converted to euro at December 31, 2001 and 2000
      exchange rates of  0.886 and 0.942, respectively...................................     (euro)99,333     (euro)80,597
      14% Senior Notes, due 2010.........................................................          121,870          200,000
      Other long-term debt...............................................................            6,532                -
                                                                                             -------------     ------------
                                                                                             (euro)227,735    (euro)280,597
</TABLE>

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.

(6) 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, employee residences 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):

2002........................................................         12,560
2003........................................................          9,708
2004........................................................          7,604
2005........................................................          6,822
2006........................................................          5,444
Thereafter..................................................         21,281
                                                                     ------
Total.......................................................   (euro)63,419
                                                               ============


         Total rent expense for the years ended December 31, 2001, 2000 and
1999 was approximately (euro)5.6 million, (euro)4.3 million and (euro)1.4
million, respectively.

Management Employment Agreements

         Certain employees of Management Co. that have been seconded to
CompleTel Europe's subsidiaries are parties to employment agreements. The
agreements generally provide for a specified base salary, as well as a
bonus set as a specified percentage of the base salary. The bonus is based
on attainment of certain identified performance measures. The employment
agreements generally provide for cost of living differentials, relocation
and moving expenses, automobile allowances and income tax equalization
payments, if necessary, to keep the employee's tax liability the same as it
would be in the United States.

Legal Proceedings

         The syndicate of co-owners of a building in which CompleTel France
installed certain telecommunications equipment, brought an action against
the Company before the Tribunal de Grande Instance of Paris alleging that
the equipment was installed without obtaining the necessary authorizations
and caused disturbances in the building. On May 11, 2001, the tribunal
issued a decision, following a preliminary injunction hearing (a) ordering
the Company to restore the premises to their original state, and (b)
appointing an expert with the mandate of determining the liability, if any,
the damages sustained, if any, and the work which the Company may have to
undertake with respect to the equipment to cease the disturbances. The
Company appealed against this decision and the expertise is currently in
progress. The Company is involved in discussions to settle this matter out
of court, but there can be no assurance that the Company will be able to
reach a settlement. If the negotiations to settle out of court are
unsuccessful, the Company may be required to move the equipment and may be
required to do so in a short period of time. In such an event, the Company
could suffer disturbances to its network, which could have an impact on its
customers activities. However, at this stage of the litigation, the Company
is not in a position to predict the outcome of this matter or determine the
impact, if any, that it may have on its activities.

         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.

(7) Income Taxes

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.

         As of December 31, 2001, CompleTel Netherlands had generated net
operating losses ("NOL") carryforwards for income tax purposes totaling
approximately (euro)220 million. For Dutch corporate income tax purposes,
NOL carryforwards may be carried forward indefinitely. The above mentioned
losses have not been established be 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%.

Germany

         As of December 31, 2001, CompleTel Germany had generated NOL
carryforwards for income tax purposes totaling approximately (euro)105
million. For German income tax purposes, NOL carryforwards may be carried
forward indefinitely. The current statutory tax rate for Germany is
approximately 40%.

France

         As of December 31, 2001, CompleTel France had no 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. Start-up costs are capitalized for French tax purposes. The Company
considers the majority of these costs as eligible for the deferred
depreciation regime for French tax purposes, resulting in an indefinite
carryforward life of the corresponding amortization expense. The current
statutory rate for France is 33 1/3%, exculding surcharge.

         The Company has recorded a valuation allowance equal to the total
net deferred tax assets as of December 31, 2001 and 2000, 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. Any
reductions in the valuation allowance will reduce future provisions for
income tax expense. 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, 2001, 2000 and 1999
(in thousands):

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                                     -----------------------
                                                                   2001               2000               1999
                                                                   ----               ----               ----
<S>                                                             <C>                 <C>                <C>
Expected income tax benefit at the weighted average
 statutory rate of 39.56%.........................        (euro)118,303       (euro)79,313       (euro)19,697
Stock-based compensation..........................               (2,080)           (23,953)              (256)
Other.............................................                   --                 --                 77
Valuation allowance...............................             (116,223)           (55,360)           (19,518)
                                                              ---------           --------           --------
 Total income tax benefit                             (euro)         --    (euro)       --    (euro)       --
                                                      =================    ===============    ===============
</TABLE>

         Deferred tax assets are as follows:

                                                  December 31,
                                                   2001            2000
                                                   ----            ----
 Deferred tax assets:
   Operating loss carryforwards           (euro)132,130    (euro)73,722
   Capitalized start-up costs                        --             728
   Depreciation and amortization                 61,085           3,641
                                                 ------           -----
 Total deferred tax assets                      193,215          78,091
   Less valuation allowance                    (193,215)        (78,091)
                                          ------------------------------
                                          ------------------------------
   Net deferred taxes                          (euro)--        (euro)--
                                               (euro)--        (euro)--
                                          =============     ============

(8) 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 separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.

         Management currently evaluates the Company's development efforts
according to the geographic location of its markets. The key operating
performance criteria used in this valuation includes revenue growth and
operating income before interest, taxes, depreciation, amortization,
non-cash compensation expenses, restructuring, impairment and other charges
and other non-cash items, including foreign exchange gains or losses
("Adjusted EBITDA").

         Adjusted EBITDA is not derived pursuant to generally accepted
accounting principles and therefore should not be construed as an
alternative to operating income (loss), as an alternative to cash flows
from operating activities, or as a measure of liquidity. Furthermore, the
Company is not aware of any uniform standards for determining Adjusted
EBITDA. Presentations of Adjusted EBITDA may not be calculated consistently
by different companies in the same or similar businesses. As a result, the
Company's reported Adjusted EBITDA may not be comparable to similarly
titled measures used by other companies.

         Certain financial information reflecting the Company's development
efforts by geographic location is presented below.

As of and for the year ended December 31, 2001:

<TABLE>
<CAPTION>
                                                                                                        CompleTel
                                                     CompleTel      CompleTel      CompleTel      Europe and
                                                        France        Germany             UK           Other       Consolidated
<S>                                                   <C>            <C>             <C>            <C>                <C>
Revenue...........................................      75,939         18,479          3,491               -             97,909
Adjusted EBITDA...................................     (33,514)       (26,307)        (8,669)        (21,039)           (89,529)
Total long-lived assets, net......................     236,812         25,791             62          23,039            285,704
Total assets......................................     285,251         40,963          2,255         127,521            455,990
Expenditures for long-lived assets................      93,927         52,475          4,283          14,289            164,974

As of and for the year ended December 31, 2000:

                                                                                                   CompleTel
                                                     CompleTel      CompleTel      CompleTel      Europe and
                                                        France        Germany             UK           Other       Consolidated
Revenue...........................................      22,951          2,955          5,634              --             31,540
Adjusted EBITDA...................................     (54,886)       (32,350)        (4,758)         (1,200)           (93,194)
Total long-lived assets, net......................     156,004        127,946          9,669          11,862            305,481
Total assets......................................     199,950        176,323         14,914         433,594            824,781
Expenditures for long-lived assets................     101,335        108,798          9,129          10,939            230,201


As of and for the year ended December 31, 1999:

                                                                                                   CompleTel
                                                     CompleTel      CompleTel      CompleTel      Europe and
                                                        France        Germany             UK           Other       Consolidated
Revenue...........................................       1,903             --            958              --              2,861
Adjusted EBITDA...................................     (27,237)        (5,305)        (1,346)         (2,055)           (35,943)
Total long-lived assets, net......................      67,904         25,843            865           1,891             96,503
Total assets......................................      80,860         67,674          1,724          25,950            176,208
Expenditures for long-lived assets................      68,854         27,435            855              --             97,144
</TABLE>



(9) Employee Incentive Plans

LLC Common Units

         Certain employees of the Company and LLC have 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 vest 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 3, 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 accounts 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 totaled approximately (euro)4.0 million.
This deferred compensation is being amortized over the vesting period for
the applicable award, generally four years.

         The performance based vesting units are, 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"). If any
performance based vesting units remain unvested on May 18, 2005, there
shall be deemed to have occurred a sale of the LLC's securities by MDP at
fair market value. Any performance based vesting units that do not vest
upon such a deemed sale will be forfeited. The Company has determined that
based on the current market capitalization of the Company, the likelihood
of an MDP sale meeting the multiple-of-invested-capital test is remote.
Accordingly, deferred compensation will only be calculated based on
remaining performance based vesting units that are held by former preferred
unit holders.

         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 vest upon a qualified sale by MDP, or in
May 2005 based on a deemed vesting date. The additional deferred
compensation is amortized to expense over the remaining vesting period to
May 18, 2005 (deemed vesting date if not prior due to a qualified sale by
MDP as defined in the executive securities agreements). The recorded amount
of compensation expense and deferred compensation for these variable awards
are adjusted at each quarterly reporting date to reflect management's
estimate of the number of such units that will ultimately vest and the fair
market value of those units as of the end of each reporting period based on
the then current market value of the ordinary shares of CompleTel Europe.
Accordingly, as of December 31, 2001, CompleTel Europe reduced the
initially recorded amount of compensation expense by approximately
(euro)21.8 million and deferred compensation by approximately (euro)70.7
million based on the closing price per share on December 31, 2001.

         The compensation charges described above, are included in non-cash
compensation charges in the accompanying consolidated statements of
operations for the year ended December 31, 2001. Also included in non-cash
compensation charges for the year ended December 31, 2001 is (euro)9.5
million 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 Plan

         In December 1999, the Company adopted the CompleTel Europe N.V.
2000 Stock Option Plan (the "Option Plan"). The Option Plan provides for
the grant of options to purchase ordinary shares of CompleTel Europe to
employees of the Company.

         Options granted 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.

         A summary of stock option activity for the Option Plan is as
follows:

<TABLE>
<CAPTION>
                                                                     Year Ended                            Year Ended
                                                                  December 31, 2001                    December 31, 2000
                                                                  -----------------                    -----------------
                                                                            Weighted Average
                                                          Number of Shares     Exercise Price      Number of      Weighted Average
                                                                   -------     --------------
                                                                                                      Shares        Exercise Price
                                                                                 (euro)                             (euro)
<S>                                                              <C>             <C>              <C>               <C>
Outstanding at the beginning of the period.............          3,882,977               6.10      2,035,230                  2.92
Granted during the period..............................          5,694,918               2.71      2,512,897                  8.39
Cancelled during the period............................        (2,134,351)               4.93      (665,150)                  5.02
Exercised during the period............................            (6,270)               2.92            --                     --
                                                          ----------------                    ---------------               ------
Outstanding at the end of the period...................          7,437,274               3.79      3,882,977                  6.10
                                                          ================                    ===============
Exercisable at the end of the period...................            213,928               6.43         99,482                  2.92
                                                          ================                    ===============
</TABLE>


<TABLE>
<CAPTION>
         The combined weighted-average fair values and weighted-average
exercise prices of options granted are as follows:

                                                                          Year Ended                       Year Ended
                                                                      December 31, 2001                December 31, 2000
                                                                      -----------------                -----------------
                                                                     Number of                       Number of
                                                                       Options       Fair Value         Options       Fair  Value
 Exercise Price:
<S>                                                                  <C>              <C>             <C>                   <C>
Less than market price...................................                   --          --              383,740            15.45
Equal to market price....................................            5,694,918        2.71            2,129,157             6.19
Greater than market price................................                               --                   --               --
                                                               ---------------                  ---------------
Total....................................................            5,694,918        2.71            2,512,897             8.39
                                                               ===============                  ===============
</TABLE>

<TABLE>
<CAPTION>
         The following table summarizes information about stock options
outstanding, vested and exercisable as of December 31, 2001:


                                                Options Outstanding                           Options Exercisable
                                --------------------------------------------------------------------------------------------
                                --------------------------------------------------------------------------------------------
                                                        Weighted
                                                         Average
                                      Number of        Remaining    Weighted Average      Number of
                                       Options      Contractual      Exercise Price        Options         Weighted Average
                                     Outstanding    Life (Years)        (euro)           Exercisable  Exercise Price (euro)
                                     -----------    ------------     --------------      -----------    -------------------
 Exercise Price Range (euro)
<C>                                   <C>                   <C>                 <C>          <C>                       <C>
0-4............................       6,027,353             4.70                2.94        115,028                    2.92
4-10...........................       1,001,691             3.95                7.16         53,904                    7.36
10-15..........................         245,730             3.50               12.93         31,873                   12.93
>15............................         162,500             3.25               17.50         13,123                   17.50
                                  -------------                                           ---------
Total..........................       7,437,274             4.46                3.79        213,928                    6.43
                                  =============                                           =========
</TABLE>

Pro Forma Fair Value Disclosures

         The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards 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.

                                              Year Ended December 31,
                                        2001           2000            1999
                                        ----           ----            ----
  Risk-free interest rate.........     4.15%           6.0%            6.4%
  Expected dividend yield.........        0%             0%              0%
  Expected lives outstanding...... 5.5 years      5.5 years       5.5 years
  Expected volatility.............     70.0%          70.0%           17.1%

         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.

         Had compensation cost for the Option Plan been determined based
upon the fair value of options on their date of grant, the Company's net
losses for the years ended December 31, 2001, 2000 and 1999, would have
been increased by approximately (euro)2.0 million, (euro)2.0 million and
(euro)54,000, respectively. The related loss per share for the years ended
December 31, 2001, 2000 and 1999, would have been (euro)1.91, (euro)1.35
and (euro)0.50, respectively.

(10) Restructuring, Impairment and Other Charges

         In connection with the Company's restructuring efforts during the
second half of 2001, the Company recognized approximately (euro)167.6
million in restructuring, impairment and other charges which are reflected
in the accompanying consolidated statement of operations.

         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....................................              15.8
Other charges............................................               3.1
                                                                 ----------
Total....................................................       (euro)167.6
                                                                ===========

          The write-down of the Company's German and United Kingdom assets
results from the Company's decision to significantly scale-back its
operations in Germany and exit the market in the United Kingdom. As a
result of its restructuring, the Company determined, in accordance with its
policy relating to recoverability of long-lived assets, that the values of
its German and United Kingdom assets were impaired as of December 31, 2001.
Accordingly, the Company has recorded charges to write-down the remaining
carrying values of these assets to their estimated fair market values as
determined by the Company using a discounted cash flow approach. The
write-down of materials and supplies relates to the revaluation of certain
materials and supplies held by the Company resulting directly from the
decision by the Company to scale-back its operations in Germany, to the
lower of cost or market value as of December 31, 2001. As a result of the
decision to scale-back the Company's German operations, these materials and
supplies are in excess of what is needed by the Company to complete
construction of its networks. The restructuring charges relate primarily to
severance costs associated with the reductions in the size of the Company's
workforce in Germany and the United Kingdom, as well as charges relating to
lease terminations and renegotiated interconnection agreements. The other
charges of (euro)3.1 million relate to the costs associated with the
repayment of certain loans held by employees with a bank and the costs
associated with the forgiveness of a loan made to the CEO of the Company,
both as described more fully in Note 3, Related Party Transactions. Salary
costs related to these employees have been included under selling, general and
administrative in the consolidated statement of operations.

         Management expects the restructuring to be completed during the
first half of 2002.

         The restructuring charges can be detailed as follows:

<TABLE>
<CAPTION>
Summary of 2001 Restructuring Charges
                                                                                    Europe HQ and
                                        France         Germany            UK        other               Total
Severance (1)                          (euro)1,151     (euro)2,399       (euro)527       (euro)603     (euro)4,680
<S>                                      <C>             <C>               <C>          <C>                  <C>
Facilities and Network (2)                   1,558           5,194             992               -           7,744
Other (3)                                       20             601              50           2,694           3,365
                                    ---------------- -------------  --------------  --------------   -------------
                                             2,729           8,194           1,569           3,297          15,789
Paid during 2001                             1,025           2,251             546           2,228           6,050
                                    --------------    ------------   -------------  --------------    ------------

Accrual balance,
 December 31, 2001                    (euro)1,704      (euro)5,943     (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
           expected to be incurred in connection with the restructuring.



                  The following table details the number of employees
involved in the restructuring:

                                Total number of    Total number of employees
                                employees to be    terminated as of
                                terminated         December 31, 2001
                                ----------       -------------------
                                ----------       -------------------
        France                        144                       122
        -----------------------
        -----------------------
        Germany                       231                       220
        -----------------------
        UK                             33                        33

        Europe HQ and other            21                        15
        ======================= ----------       -------------------
                                ----------       -------------------
        Total                         429                       390
        ======================= ==========       ===================

 (11)  Acquisitions

         On May 31, 2001 CompleTel France acquired 100% of a local network
telecommunications operator in France. 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)6.2
million as goodwill.

 (12) Quarterly Financial Data (unaudited)


                                                                   Basic and
                                                                   Diluted
                                Operating                          Net Loss
                     Revenue       Loss           Net Loss         per Share
                     -------       ----           --------         ---------
                     (in thousands of euro, except per share amounts)
 2001
 First Quarter        19,656       (32,107)       (40,602)            (0.26)
 Second Quarter       24,496       (41,944)       (50,520)            (0.32)
 Third Quarter        25,770       (38,824)       (25,202)            (0.16)
 Fourth Quarter       27,987      (204,430)      (182,725)            (1.16)
 2000
 First Quarter         2,527       (88,334)       (97,701)            (0.77)
 Second Quarter        5,035       (20,595)       (27,597)            (0.18)
 Third Quarter         8,889       (29,229)       (35,913)            (0.23)
 Fourth Quarter       15,089       (37,613)       (39,277)            (0.16)



Pursuant to the requirements of the Securities Exchange Act of 1934,
CompleTel Europe N.V. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 28, 2002.

                                  COMPLETEL EUROPE N.V.
                                  By:     Timothy A. Samples
                                         ---------------------------------------
                                         Name: Timothy A. Samples
                                         Title: Managing Director, President
                                                and Chief Executive Officer
                                  By:     Jerome de Vitry
                                         ---------------------------------------
                                         Name: Jerome de Vitry
                                         Title: Managing Director,
                                                Chief Operating Officer

         Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of
CompleTel Europe N.V. and in the capacities indicated on [o], 2002.




 SIGNATURE
 ---------

James E. Dovey
--------------------
James E. Dovey
Supervisory Director and Chairman and
Authorized United States Representative

James C. Allen
--------------------
James C. Allen
Supervisory Director

Lawrence F. DeGeorge
--------------------
Lawrence F. DeGeorge
Supervisory Director

Paul J. Finnegan
--------------------
Paul J. Finnegan
Supervisory Director

James H. Kirby
--------------------
James H. Kirby
Supervisory Director

James N. Perry, Jr.
-------------------
James N. Perry, Jr.
Supervisory Director

Timothy A. Samples
-------------------
Timothy A. Samples
President, Chief Executive Officer and Managing Director

Jerome de Vitry
------------------
Jerome de Vitry
Chief Operating Officer and Managing Director

J.Lyle Patrick
------------------
J.Lyle Patrick
Chief Financial Officer

John M. Hugo
------------------
John M. Hugo
 Chief Accounting Officer and Corporate Controller

 *By:

          Name: John M. Hugo
          Title: Attorney-in-Fact






                               EXHIBIT INDEX


 Exhibit No.       Description

    3.1(13)        Articles of Association of CompleTel Europe N.V., as amended
     4.1(3)        14% Senior Discount Notes Indenture, dated February 16, 1999,
                   among CompleTel Europe N.V. as issuer, CompleTel
                   ECC B.V. as guarantor and U.S. Bank Trust National
                   Association as trustee
    4.1A(3)        Amended and Restated CompleTel LLC Guaranty Agreement,
                   dated July 14, 1999, by CompleTel LLC in favor of the
                   noteholders
     4.2(2)        14% Senior Notes Indenture, dated April 13, 2000, between
                   CompleTel Europe N.V. as issuer and The Chase
                   Manhattan Bank as trustee
    4.2A(2)        Pledge Agreement, dated April 13, 2000, by and among
                   CompleTel Europe N.V., CompleTel Escrow B.V. and The Chase
                   Manhattan Bank as trustee and securities intermediary
   10.1(14)        CompleTel Europe N.V. 2000 Stock Option Plan, as amended
    10.2(9)        Second Amended and Restated Registration Agreement,
                   dated November 23, 1999, by and among CompleTel LLC and
                   the Holders named therein
    10.3(2)        First Supplement, dated March 24, 2000, to Second
                   Amended and Restated Registration Agreement, dated
                   November 23, 1999, by and among CompleTel LLC and the
                   Holders named therein
    10.4(4)        Purchase Agreement, dated August 4, 1999, between
                  CompleTel GmbH and Siemens AG 10.5(3) Supply Agreement, dated
                  January 8, 1999, between CompleTel SAS and Matra Nortel
                  Communications 10.6(3) Arrete, dated November 17, 1998, as
                  amended by Arrete dated November 7, 2000 (which extended the
                  license to an
                  additional region) authorizing CompleTel SAS to set up
                  and operate a telecommunications network open to the
                  public and to supply the public with the telephone
                  service in certain regions of France, as published
                  December 13, 1998
 10.5(3)          Supply Agreement, dated January 8, 1999, between CompleTel
                  SAS and Matra Nortel Communications
 10.6(3)          Arrete, dated November 17, 1998, as amended by Arrete dated
                  November 7, 2000 (which extended the license to an additional
                  region) authorizing CompleTel SAS to set up and operate a
                  telecommunications network open to the public and to supply
                  the public with the telephone service in certain regions
                  of France, as published December 13, 1998
 10.7(11)         Extension of French License, dated November 17, 2000
  10.8(3)         License, dated January 11, 1999, granted by the
                  Secretary of State for Trade and Industry to CompleTel
                  UK Limited under Section 7 of the Telecommunications Act
                  1984
  10.9(1)         German License Certificate Class 3 for the Operation and
                  Performance of Public Telecommunications German license
                  certificate Class 3 for the Operation and Performance of
                  Public Telecommunications Services by the Licensee or
                  Others, dated March 8, 1999
 10.10(1)         German License Certificate Class 4 for the Operations of
                  Voice Telephone Service on the Basis of a Self-Operated
                  Telecommunications Network, dated March 8, 1999
 10.11(5)         Extension of Class 3 German License, dated July 1999
 10.12(5)         Extension of Class 4 German License, dated July 1999
 10.13(6)         Extension of Class 3 German License, dated January 2000
 10.14(6)         Extension of Class 4 German License, dated January 2000
 10.15(7)         Extension of Class 3 German License, dated July 2000
 10.16(7)         Extension of Class 4 German License, dated July 2000
10.17(11)         Form of Extension of Class 3 German License, dated
                  October 2000, together with schedule identifying the
                  licenses granted
10.18(11)         Form of Class 4 German National License, dated March 21, 2001
 10.19(6)         Amended Employment Agreement by and between CableTel
                  Management, Inc. and William H. Pearson, dated June 30, 2000
 10.20(6)         Amended Employment Agreement by and between CableTel
                  Management, Inc. and David Lacey, dated June 30, 2000
10.21(11)         Service Agreement, dated June 11, 1999, between
                  iPcenta Limited and Martin Rushe
10.22(11)         Employment Agreement, dated February 2001, between
                  CompleTel Headquarters Europe SAS and Jerome de Vitry
10.23(6)          Amended and Restated Executive Securities Agreement by and
                  between CompleTel LLC and Martin Rushe, dated January
                  15, 2000
10.24(11)         Repurchase and Restriction Agreement, dated November 27,
                  2000, between CompleTel LLC and Martin Rushe 10.25(11)
                  Form of Contribution and Restriction Agreement, dated
                  November 27, 2000, between CompleTel LLC and the Executive
                  Officers identified in the attached schedule
10.25(11)         Form of Contribution and Restriction Agreement, dated
                  November 27, 2000, between CompleTel LLC and the Executive
                  Officers identified in the attached schedule.
10.26(2)          Promissory Note, dated March 23, 2000, between Martin
                  Rushe as maker and iPcenta Limited as payee 10.27(2) Letter
                  Agreement, dated March 23, 2000, between Martin Rushe
                  and iPcenta Limited
10.27(2)          Letter Agreement, dated March 23, 2000 between Martin Rushe
                  and iPcenta Limited
    10.28         Promissory Note, as amended, dated December 21, 2000,
                  between William Pearson as maker and CompleTel Europe N.V.
                  as payee
10.29(11)         Form of Loan Agreement, dated March 31, 2000, between
                  CompleTel Europe N.V. and Employee relating to loan from
                  Paribas to the Employee, together with schedule
                  identifying the final agreements entered into under the
                  form
10.30(11)         Form of Letter Agreement between CompleTel Europe N.V.
                  and Employee relating to loan from Paribas to the
                  Employee, together with schedule identifying the final
                  agreements entered into under the form
10.31(12)         Employment Agreement, dated as of March 1, 2001, between
                  Timothy A. Samples and Cabletel Management, Inc.
10.32(12)         Secondment Agreement, dated April 2001, by and among
                  CableTel Management, Inc., Timothy A. Samples and CompleTel
                  Headquarters UK Ltd.
10.33(12)         Non-qualified Stock Option Agreement, dated as of March 14,
                  2001, between CompleTel Europe N.V. and Timothy A. Samples
10.34(12)         Loan Agreement and Promissory Note, dated April 2, 2001,
                  between Timothy A. Samples and CompleTel Europe N.V.
    10.35         Employment Agreement, dated as of November 1, 2001, between
                  J. Lyle Patrick and Cabletel Management, Inc.
    10.36         Secondment Agreement, dated November 1, 2001, among CableTel
                  Management, Inc., J. Lyle Patrick and CompleTel
                  Headquarters UK Ltd.
     23.1         Consent of Arthur Andersen


-----------

(1)      Previously filed as an exhibit to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-4, file number
         333-82305, filed with the Securities and Exchange Commission on
         August 27, 1999 and incorporated herein by reference.

(2)      Previously filed as an exhibit to the Registrant's Quarterly
         Report on Form 10-Q for the period ended March 31, 2000 and
         incorporated herein by reference.

(3)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-4, file number 333-82305, filed with the
         Securities and Exchange Commission on July 2, 1999 and
         incorporated herein by reference.

(4)      Previously filed as an exhibit to the Post-Effective Amendment No.
         1 to the Registrant's Registration Statement on Form S-4, file
         number 333-82305, filed with the Securities and Exchange
         Commission on January 31, 2000 and incorporated herein by
         reference.

(5)      Previously filed as an exhibit to Amendment No. 2 to the
         Registrant's Registration Statement on Form S-4, file number
         333-82305 filed with the Securities and Exchange Commission on
         September 14, 1999 and incorporated herein by reference.

(6)      Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-4, file number 333-41126, filed with the
         Securities and Exchange Commission on July 11, 2000 and
         incorporated herein by reference.

(7)      Previously filed as an exhibit to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-4, file number
         333-41126, filed with the Securities and Exchange Commission on
         July 21, 2000 and incorporated herein by reference.

(8)      Previously filed as an exhibit to Amendment No. 2 to the
         Registrant's Registration Statement on Form F-1, file number
         333-30834, filed with the Securities and Exchange Commission on
         March 22, 2000 and incorporated herein by reference.

(9)      Previously filed as an exhibit to Amendment No. 1 to the
         Registrant's Registration Statement on Form F-1, file number
         333-30834, filed with the Securities and Exchange Commission on
         March 6, 2000 and incorporated herein by reference.

(10)     Previously filed as an exhibit to the Registrant's Registration
         Statement on Form S-8, file number 333-57208, filed with the
         Securities and Exchange Commission on March 19, 2001 and
         incorporated herein by reference.

(11)     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.

(12)     Previously filed as an exhibit to the Registrant's Quarterly
         Report on Form 10-Q for the period ended March 31, 2001, filed
         with the Securities and Exchange Commission on May 15, 2001 and
         incorporated herein by reference.

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

(14)     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.