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


                                FORM 10-K/A
                             (AMENDMENT NO. 1)
                                -----------


        |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

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


<S>                                                                                  <C>
                       The Netherlands                                               98-0202823
              (State or other jurisdiction of                                     (I.R.S. Employer
               incorporation or organization)                                    Identification No.)
        Blaak 16, 3011 TA Rotterdam, The Netherlands                                   2132 NA
          (Address of principle executive offices)                                   (Zip Code)
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    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,
                          TRADED ON EURONEXT PARIS
                                -----------


         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 Euronext Paris
on August 1, 2002 of (euro)0.16, the aggregate market value of the
Registrant's voting stock held by non-affiliates on such date was
approximately (euro)11,084,030. 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 August 30, 2002 was 160,555,222 Ordinary shares.




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                                                            TABLE OF CONTENTS


                                                                                                                           Page


                                                                  PART I
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 Item 1.       Business................................................................................................       1
 Item 2.       Properties..............................................................................................      17
 Item 3.       Legal Proceedings.......................................................................................      18
 Item 4.       Submission of Matters to a Vote of Security Holders.....................................................      18

                                                                  PART II
 Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters...................................      19
 Item 6.       Selected Financial Data.................................................................................      24
 Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations...................      25
 Item 7a.      Quantitative and Qualitative Disclosure about Market Risk...............................................      55
 Item 8.       Financial Statements and Supplementary Data.............................................................      55
 Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....................      56

                                                                 PART III
 Item 10.      Directors and Executive Officers of the Registrant......................................................      57
 Item 11.      Executive Compensation..................................................................................      64
 Item 12.      Security Ownership of Certain Beneficial Owners and Management..........................................      75
 Item 13.      Certain Relationships and Related Transactions..........................................................      77

                                                                  PART IV
 Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K........................................      80
</TABLE>




                                   PART I



         Forward Looking and Other Statements

         All assumptions, expectations and forecasts contained in this
report 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 of the date of filing
this Form 10-K with the U.S. 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.


Item 1. Business



         Overview


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

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

         As of December 31, 2001, we had a total of 946 customers, compared
to 787 customers as of December 31, 2000 in our continuing, French-based
operations. Our consolidated revenue for the year ended December 31, 2001
totaled (euro)75.9 million, an increase of approximately 229% over
consolidated revenue of (euro)23.0 million for the year ended December 31,
2000.

         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 and dial-up
Internet access and Internet data center services. In light of these
adverse market conditions, we implemented reorganization and restructuring
measures to adjust our operations to foreseeable market conditions,
reducing ongoing operating expenses and capital outlays. In particular, in
the last quarter of 2001, we implemented a major downsizing of our German
operations in view of the slowdown in German telecommunications markets
(particularly in the carrier and ISP segments). This restructuring
significantly reduced our operating expenses and capital outlays. Further,
in April 2002, in connection with our planned recapitalization described
below, we decided to sell our entire German operations. We completed this
sale in early May 2002. In addition, faced with a significant downturn in
the web hosting market, linked to the collapse of the ".com" market and
installed hosting overcapacity in Europe, we decided to scale down the
Internet data centers operations we had launched in France, Germany and the
United Kingdom. In France, we decided to integrate these activities with
our retail businesses, while in Germany and the United Kingdom, we have
exited these markets by selling our operations in these countries.

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


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


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


         Customers and route design

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

         Network design principles

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

         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 chambers immediately adjacent to our network route
                  in order 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 that is less
                  susceptible to disruptions in the event of breakage at
                  one point. Additionally, our external carrier
                  interconnections and Internet transit have alternative
                  routing capability that should assure access to
                  alternative carriers and to the Internet. Finally, we
                  chose vendors that we believe provide reliable and
                  quality equipment, such as Nortel Networks, Siemens,
                  Ciena, Cisco Systems and Riverstone Networks.

         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 nine
areas in France and four areas in Germany. Following the sale of our German
operations in May 2002, we no longer have MANs in Germany. As of December
31, 2001, we had deployed over 1,400 route kilometers of fiber in our MANs,
of which approximately 600 kilometers are leased on long-term contracts. In
addition, we lease bandwidth capacity for our leased inter-city network,
which interconnects our MANs. Having completed the expansion of our network
in accordance with our current business plan, we intend to concentrate on
network development to connect new customers to our existing MANs.


         Network construction and installation

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

         Network components

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

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

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

         Third-party agreements supporting our network


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

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


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

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

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

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

         High-capacity telecommunications services

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

         Voice services


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


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

         Data and Internet services

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

         Current data and Internet services.  We offer:

         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        IP Virtual Private Network Services (IP VPN), allowing
                  customers to connect all their sites and employees to
                  their IT systems through our IP platforms and networks as
                  if they were using their own private network.


         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 enhance our LAN to
LAN and IP VPN services by adding more classes of services, providing
customers with a network tailored to the specific quality requirements of
their applications. We plan to package some of the managed services we
currently supply on a tailored 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 946 connected business customers, including Aventis, EADS and
EDF.


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

         Internet service providers

         We target corporate customers that outsource their Internet
related IT systems, as well as Internet service providers, including mass
market Internet access providers, web agencies, and application and content
service providers. We are developing suites of services to respond to such
customers' specific needs, primarily in high-capacity access, co-location,
dial-up collect calls and various tailored managed services. The
Internet-related providers to whom we currently provide services include
Tiscali, Noos 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 Swisscom, Telia, Equant and Cable and Wireless.


Sales, marketing and distribution

         Customer acquisition and retention strategy


         As of December 31, 2001, we had a sales force of 143 based in our
local markets in France. As of June 30, 2002, our sales force included 159
employees. 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 for mediation systems and
(f) Nortel Networks, Siemens, Cisco Systems and Hewlett-Packard for network
supervision.


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

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


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


Competition

              Overview

         The ongoing liberalization of the European telecommunications
market has coincided with technological innovation to create a fast
changing and increasingly competitive market. 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. As a European member state, France is
required to end restrictions on the entry of new telecommunications
operators and adopt standardized regulations intended to promote
competition. Under the new regulatory structure, public telecommunications
operators can compete in local exchange services markets outside their home
countries, either alone or through existing joint ventures, subject to
restrictions on market concentration and anti-competitive mergers and
acquisitions.


         We compete primarily on the basis of:

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


         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 competitor will continue to be France
Telecom.


         Alternative telecommunications providers and IDC operators

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

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

         Alternative DSL operators have not yet developed significant
activity in France, 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

              General

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

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

         European Union


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


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

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

         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.


Employees

         As of December 31, 2001, we had 696 employees (including 550
employees in our continuing operations), compared to 775 (including 485
employees in our continuing operations) at December 31, 2000. In 2001, 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. Our total employee headcount continued to decrease in the
beginning of 2002, in particular, as a result of the workforce reductions
in Germany and the United Kingdom, the subsequent sale of our operations in
these countries in May 2002, the closure of our London offices and the
simplification of our corporate headquarters structure. As of August 31,
2002, we had 496 employees in our continuing operations.


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

Insurance coverage

         We have comprehensive construction, property, product and
professional liability insurance, covering risks relating to the
construction and operation of our network sites; as is customary for
similar telecommunications companies. We also have liability insurance for
our directors and officers and loss of revenue insurance. 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. Although, at this stage, we are not in a position to
predict the outcome of such discussions, we believe that this dispute would
not have a material adverse effect on our marketing activity or on our
financial condition or results of operations.


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 Blaak 16, 3011 TA, Rotterdam, The
Netherlands. We are registered with the Trade Register of the Amsterdam
Chamber of Commerce under number 34108119 and have our corporate seat at
Amsterdam, The Netherlands.


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



<PAGE>














[Graphic Omitted]















Item 2. Properties


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


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

<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(1):
  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(2):
  London                                                            3,000 September 2020
</TABLE>


----------------------------
(1)      In connection with the sale of our German operations in May 2002,
         these leases have been transferred to the purchaser of those
         operations.
(2)      In connection with the sale of our U.K. operations in May 2002,
         these leases have been transferred to the purchaser of those
         operations.


Item 3. Legal Proceedings


         The syndicate of co-owners of a building in which Completel SAS,
our operating subsidiary, installed certain telecommunications equipment,
brought an action against Completel SAS before the Tribunal de Grande
Instance of Paris alleging that the equipment was installed without
obtaining the necessary authorizations and caused noise disturbances in the
building. On May 11, 2001, the tribunal issued a decision, following a
preliminary injunction hearing (a) ordering Completel SAS 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 Completel SAS may have to undertake with respect to
the equipment to cease the disturbances. We appealed against this decision
and the proceeding is currently in progress. We also took measures to
reduce the noise disturbances and are involved in discussions to settle
this matter out of court. However there can be no assurance that we will be
able to reach a settlement. If the negotiations to settle out of court are
unsuccessful, we may be required to move the equipment and may be required
to do so in a short period of time. In such an event, we could suffer
disturbances to our network, which could have an impact on our activities.
Although at this stage we are not in a position to predict the outcome of
the negotiations, we estimate that the costs of either moving the equipment
or settling this dispute would not have a material adverse effect on our
financial condition or results of operations.

         We are not party to any other pending legal proceedings that we
believe would, individually or in the aggregate, have a material adverse
effect on our 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 August 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 Premier Marche of Euronext
Paris under the symbol "CTL." We voluntarily delisted our ordinary shares
from the Nasdaq National Market effective May 31, 2002.

         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 on March 27, 2000.






<TABLE>
<CAPTION>



                                                                                       Nasdaq(2)
                                                                                       ------
                               Number
                          of Shares Traded           Capital Traded
                              Including               Including
                       Non-Market Transactions   Non-Market Transactions         High             Low
                       -----------------------   -----------------------         ----             ---
                             (millions)           (millions of euro) (1)    (U.S. dollars)   (U.S. dollars)
<S>                          <C>                 <C>                       <C>              <C>
March 2000                                             (euro)                   23.56            19.94
2000 First Quarter                                     (euro)                   23.56            19.94
April 2000                      3.72                      193.07                22.75            15.25
May 2000                        8.64                      127.01                17.75            10.50
June 2000                       4.03                      54.13                 13.94            12.00
2000 Second Quarter                                    (euro)                   22.75            10.50
July 2000                       2 .43                     31.94                 13.38            11.13
August 2000                     5.65                      54.79                 11.38             7.94
September 2000                  6.79                      70.40                 10.87             7.13
2000 Third Quarter                                     (euro)                   13.38             7.13
October 2000                    6.04                      48.07                  8.25             5.25
November 2000                   5.77                      34.06                  7.13             3.50
December 2000                   4.60                      18.93                  4.13             3.00
2000 Fourth Quarter                                    (euro)                    8.25             3.00
January 2001                    9.15                      52.81                  6.25             3.13
February 2001                   7.38                      38.34                  6.00             3.75
March 2001                      7.69                      29.58                  4.59             2.75
2001 First Quarter                                     (euro)                    6.25             2.75
April 2001                      10.58                     29.52                  2.90             2.06
May 2001                        22.49                     89.48                  3.85             2.60
June 2001                     9.73 (3)                    31 (3)                 3.18             2.30
2001 Second Quarter                                    (euro)                    3.85             2.06
July 2001                       11.85                     28.28                  2.60             1.79
August 2001                     43.30                     73.02                  2.58             0.95
September 2001                  38.51                     25.03                  0.90             0.50
2001 Third Quarter                                     (euro)                    2.60             0.50
October 2001                    87.14                     114.46                 1.60             0.51
November 2001                   87.53                     99.65                  1.38             0.71
December 2001                   48.77                     47.18                  1.12             0.90
2001 Fourth Quarter                                    (euro)                    1.60             0.51
January 2002                    34.35                     36.53                  1.08             0.80
February 2002                   74.42                     57.95                  0.80             0.50
March 2002                     129.79                     103.96                 0.90             0.46
2002 First Quarter                                                               1.08             0.46
April 2002                      57.28                     34.09                  0.68             0.38
May 2002                       507.27                     139.23                 0.63             0.08
June 2002                      112.67                     29.22             NA(4)           NA/(4)
2002 Second Quarter                                                              0.63             0.08
July 2002                       34.54                      6.02            NA/(4)           NA/(4)


[Chart Continued]

<CAPTION>

                                                           Premier Marche of
                             Nasdaq (2)                   Euronext Paris S.A.
                             ------                       -------------------



                       High             Low              High             Low
                       ----             ---              ----             ---
                      (euro)           (euro)           (euro)           (euro)
<S>                   <C>             <C>             <C>              <C>
March 2000             24.40           20.74         (euro)           (euro)
2000 First Quarter     24.40           20.74         (euro)           (euro)
April 2000             23.60           16.55            23.30            16.51
May 2000               19.38           11.58            19.50            11.00
June 2000              14.96           12.61            14.24            12.24
2000 Second Quarter    23.60           11.58            23.30            11.00
July 2000              14.27           12.04            13.75            12.23
August 2000            12.27            8.69            11.80             8.95
September 2000         12.10            8.07            12.30             8.30
2000 Third Quarter     14.27            8.07            13.75             8.30
October 2000           9.34             6.23             9.65             6.25
November 2000          8.40             4.08             8.48             3.80
December 2000          4.70             3.22             4.81             3.65
2000 Fourth Quarter    9.34             3.22             9.65             3.65
January 2001           6.61             3.29             7.10             3.40
February 2001          6.40             4.08             6.46             4.20
March 2001             4.91             3.11             4.75             2.89
2001 First Quarter     6.61             3.11             7.10             2.89
April 2001             3.23             2.34             3.19             2.31
May 2001               4.35             2.91             4.51             2.81
June 2001              3.72             2.68             3.66             2.84
2001 Second Quarter    4.35             2.34             4.51             2.31
July 2001              3.04             2.04             2.98             2.06
August 2001            2.92             1.04             3.17             1.06
September 2001         0.98             0.54             1.13             0.47
2001 Third Quarter     3.04             0.54             3.17             0.47
October 2001           1.79             0.56             1.90             0.63
November 2001          1.53             0.80             1.56             0.77
December 2001          1.26             1.01             1.37             1.01
2001 Fourth Quarter    1.79             0.56             1.90             0.63
January 2002           1.19             0.93             1.30             1.01
February 2002          0.93             0.57             0.99             0.59
March 2002             1.03             0.52             1.10             0.64
2002 First Quarter     1.19             0.52             1.30             0.59
April 2002             0.77             0.43             0.73             0.48
May 2002               0.69             0.09             0.69             0.10
June 2002          NA/(4)          NA/(4)                0.33             0.17
2002 Second Quarter    0.77             0.09             0.73             0.10
July 2002          NA/(4)          NA/(4)                0.20             0.15

</TABLE>

Source: Euronext, Nasdaq
----------------------------

(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 transaction by which CompleTel
         Europe N.V. obtained 3,142,162 of its own shares in exchange for
         common units it held in CompleTel LLC. The amount of capital
         exchanged in this transaction 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 2001. The amount
         of capital exchanged during the course of this month, without
         taking into account this transaction was approximately 20.79
         million euro.

(4) We voluntarily delisted our ordinary shares from the Nasdaq National
Market effective May 31, 2002.





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 May 2002, we had 220 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 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                          11,476,416
plan (excluding shares reflected in row (a))
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 that 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                               --        --                   --
  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


[Chart Continued]

<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 these 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 remaining 3,135,892 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.





Item 6. Selected Financial Data


         The following selected consolidated financial data has been
derived from our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. Our consolidated financial statements as of and for the year
ended December 31, 2001 have been restated. The revisions that were applied
to these financial statements are described in Note 2 to our restated
consolidated annual financial statements included in this annual report.
The following selected financial data reflects the effect of our
discontinued operations in Germany and the United Kingdom as described in
Note 3 to our restated consolidated annual financial statements included in
this report. For comparative purposes, certain amounts derived from our
statement of operations for the period commencing January 8, 1998 and
ending December 31, 1998 have been reclassified. The selected consolidated
financial data set forth below is qualified by reference to, and should be
read in conjunction with, our 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>


                                                                                        Commencement of
                                                                                          operations
         Statement of             Year ended        Year ended        Year ended          (January 8,
          operations             December 31,      December 31,      December 31,          1998) to
             data:                   2001              2000              1999          December 31, 1998
                                  (restated)

                                        (euro, in thousands, except share and per share amounts)

<S>                                     <C>                <C>                <C>                   <C>
Revenue........................  (euro) 75,939     (euro) 22,951      (euro) 1,903              (euro) -
Operating
expenses:
Network costs..................         66,131            23,162             1,818                     -
Selling, general and
administrative.................         61,863            49,839            23,916                 3,754
Allocated costs from an
affiliate......................          5,402            12,090             6,195                 2,551

Non-cash compensation charges..          2,844            55,397               634                   164
Depreciation and amortization..         28,520            14,472             3,600                    40
Restructuring, impairment and
other charges..................          6,049                 -                 -                     -
                                     ----------         ---------         ---------              --------
Total operating
expenses.......................        170,809           154,960            36,163                 6,509
                                     ----------         ---------         ---------              --------
Operating loss.................        (94,870)         (132,009)          (34,260)               (6,509)
                                     ----------         ---------         ---------              --------
Other income (expense):

Interest
income..........................        12,728            22,186             2,388                     -
Interest expense, net of
capitalized
interest........................       (29,485)          (28,968)           (7,887)                    -
Foreign exchange loss and
other expense...................        (8,173)          (18,806)           (2,367)                    -
                                     ----------         ---------         ---------              --------
Total other income
(expense)........................      (24,930)          (25,588)           (7,866)                    -
Net loss from continuing
operations.......................     (119,800)         (157,597)          (42,126)               (6,509)
Discontinued
operations:
Loss from discontinued
operations.......................     (225,417)          (43,681)           (7,664)                    -
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           As of            As of            As of
                            December 31,    December 31,    December 31,     December 31,
                                2001            2000            1999             1998
                                                (euro, in thousands)
<S>                         <C>          <C>              <C>              <C>
Balance sheet data:
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 (deficit).........       121,916        415,960           43,071          (5,182)
</TABLE>



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

Overview


         General

         We have restated our previously audited consolidated annual
financial statements that were included in our Annual Report on Form 10-K
for the year ended December 31, 2001, which was filed with the U.S.
Securities and Exchange Commission on April 1, 2002. The revisions applied
to our financial statements are described in Note 2 to our consolidated
financial statements included in this report. Principally, these revisions
include the reclassification from restructuring, impairment and other
charges to selling, general and administrative expenses of (i)
approximately (euro)1.7 million associated with the repayment in 2001 of
certain loans made to senior employees and (ii) approximately (euro)1.4
million associated with the grant of an incentive bonus (structured as a
forgivable loan) to our former Chief Executive Officer. These expenses are
more fully described in Note 4 to our consolidated financial statements.

         Furthermore, we have amended our consolidated financial statements
to clarify or expand disclosure in the notes to these financial statements,
including in Note 2, under the captions "Network Equipment" and "Revenue
Recognition;" in Note 7, under the caption "Legal Proceedings;" in Note 9,
by the inclusion of expanded segment data; and in Note 11, by the inclusion
of expanded disclosure regarding impairment, restructuring and other
charges. In addition, in connection with the sale of our German and U.K.
operations in May 2002 (see Note 3), we have restated our financial
statements to report these operations' results in discontinued operations
in accordance with Statement of Financial Accounting Standards No. 144
("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets." Unless indicated otherwise, the following discussion refers only
to our consolidated financial statements, as amended, and not to our
previously filed financial statements. In particular, operating results
presented in the following discussion are the operating results of our
continuing operations in France. The operating results of our German and
U.K. operations are included in discontinued operations for all periods
presented.

         Our Business and Financial Condition

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

         We were incorporated in December 1998. Through a series of
transactions in January 1999, we became the holding company for our
telecommunications businesses, which commenced in January 1998 when
CompleTel LLC, our then 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 and 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, in the last quarter of 2001, we implemented a major downsizing
of our German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
This restructuring significantly reduced our operating expenses and capital
outlays. Further, in April 2002, in connection with our planned
recapitalization as described below, we decided to sell our entire German
operations. We completed this sale in early May 2002. In addition, faced
with a significant downturn in the web hosting market, linked to the
collapse of the ".com" market and installed hosting overcapacity in Europe,
we decided to scale down the Internet data centers operations we had
launched in France, Germany and the United Kingdom. In France, we decided
to integrate these activities with our retail businesses, while in Germany
and the United Kingdom, we have exited these markets by selling our entire
operations in these countries in May 2002.

         Having decided to concentrate our efforts solely in France, we
closed our London office and simplified our corporate headquarters
structure at the end of the second quarter of 2002. We also launched
ongoing measures to further reduce our selling, general and administrative
expenses in our corporate headquarters functions and Internet data center
operations.

         While we previously estimated our funding gap (that is, the
additional financing required to bring us to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, based on (i) the
anticipated elimination of interest payments upon the exchange or
retirement of our outstanding debt securities pursuant to the
recapitalization plan described below, (ii) the cash savings from the sale
of our German and UK operations and cost reductions at our European
headquarters, and (iii) the lower cash requirements related to selling,
general and administrative expenses and capital expenditures resulting from
our restructuring efforts, we currently estimate our funding gap to be
approximately (euro)30 million. We expect that, upon the completion of the
recapitalization plan described below, our existing cash balances and the
additional equity infusion, together with the anticipated cash flow from
our operations, will be sufficient to fully fund our restructured
operations to cash flow breakeven.

         Our Recapitalization Plan

         On May 15, 2002, we signed an agreement (the "Restructuring
Agreement") in support of a recapitalization plan (the "Recapitalization")
with an ad hoc committee of holders of our 14% senior discount notes due
2009 and 14% senior notes due 2010 (collectively, the "Notes"),
constituting over 75% of our outstanding Notes and with Meritage Private
Equity Funds ("Meritage") and DeGeorge Telcom Holdings ("DeGeorge Telcom"),
two of our principal shareholders. The Recapitalization will involve:

         o        a debt for equity swap in respect of our outstanding
                  Notes,

         o        the return to the holders of the senior notes due 2010 of
                  the outstanding balance in the escrow account established
                  to provide funds for interest payments on these senior
                  notes, and

         o        equity investments at the close of the Recapitalization
                  of approximately(euro)42.8 million in the aggregate.

         Means of implementation. We decided to effect the Recapitalization
by means of a pre-arranged Netherlands composition proceeding known as an
Akkoord, which requires, among other things, the approval of 75% of our
admitted creditors, by value. To avail ourselves of this proceeding, on May
29, 2002, we filed with the Dutch bankruptcy court for protection from our
creditors. At the same time, we submitted to the Dutch court a composition
plan whereby the holders of the Notes would receive Convertible Preferred B
shares and Ordinary shares as described below. On June 24, 2002, the
meeting of our creditors approved this composition plan, which approval was
confirmed by the Dutch court on September 4, 2002. The composition plan is
binding on all our non-preferred unsecured creditors, which consist almost
entirely of the holders of our Notes. Any additional creditors existing at
May 29, 2002, the effective date of the suspension of payments order, are
entitled to receive in respect of their claims Convertible Preferred B and
Ordinary shares under the same terms as the holders of our Notes. We
estimate that the aggregate amount of these additional claims is immaterial
and that the shares to be issued in respect of these claims, if any, would
constitute less than 1.0% of our share capital that would be outstanding at
the close of our Recapitalization, scheduled to occur in the third week of
September 2002. The Akkoord effectively eliminates our outstanding
indebtedness while permitting our operating subsidiaries to continue
operations without disruption.

         Exchange of the Notes for Convertible Preferred B shares and
Ordinary shares. The outstanding Notes will be exchanged for Convertible
Preferred B shares and Ordinary shares together representing approximately
39% of our share capital that we estimate would be outstanding at the close
of the Recapitalization (excluding the C shares described below). Pursuant
to the terms of our 14% senior notes due 2010, the outstanding balance in
the escrow account established to provide funds for interest payments on
those notes (approximately (euro)16.8 million) was distributed to holders
of those notes in September 2002.

         Equity investment of Meritage, DeGeorge Telcom and certain
Noteholders in exchange for Convertible Preferred shares and Ordinary
shares. The Recapitalization includes an equity investment of an aggregate
of (euro)30 million by Meritage and DeGeorge Telcom in return for the
issuance of convertible preferred A shares (the "Convertible Preferred A
Shares") and Ordinary shares, together representing approximately 40% of
our share capital that we estimate would be outstanding at the close of the
Recapitalization (excluding the C shares). Meritage and DeGeorge Telcom
will also be issued, on a pro rata basis, a number of C shares that will
cause them to hold, at the closing of the Recapitalization, the same number
of shares for voting purposes as the former holders of the Notes. In order
to limit the effect of the C shares strictly to the allocation of voting
power, the C shares are structured in a way that effectively gives them
only nominal economic value.

         In addition, certain of the holders of the senior notes due 2010
have committed to make an equity investment of approximately (euro)9.9
million (reflecting a reinvestment of a portion of the escrow funds to be
released to these holders) in return for the issuance of Convertible
Preferred A shares, Convertible Preferred B shares and Ordinary shares,
together representing approximately 14% of our share capital that we
estimate would be outstanding at the close of the Recapitalization
(excluding the C shares).

         We will pay a dividend equal to 11% per annum, compounded
quarterly, calculated over an amount of (euro)2,010.00 per share to the
holders of Convertible Preferred A shares and Convertible Preferred B
shares during the period commencing July 1, 2004, and until their
cancellation or conversion in accordance with their terms. Assuming 21,313
Convertible Preferred A shares and 14,926 Convertible Preferred B shares
are issued (that is, after giving effect to the investment of (euro)42.8
million in equity investments that we anticipate receiving at the closing
of our Recapitalization, and after giving effect to the intended 100-to-one
reverse split of the Preferred shares) and that none of the Convertible
Preferred A shares and Convertible Preferred B shares are converted or
cancelled prior to July 1, 2004, the aggregate annual dividend payable in
respect of the Convertible Preferred A shares and Convertible Preferred B
shares would be approximately (euro)8.3 million commencing in 2005.

         In accordance with their respective terms, in the event of a
liquidation of our holding company, CompleTel Europe N.V., the Convertible
Preferred A shares will rank senior to the Convertible Preferred B shares,
which, will rank senior to our Ordinary shares. In addition, upon
liquidation, the Convertible Preferred A shares and Convertible Preferred B
shares will be entitled to receive, prior to any distribution in respect of
the Ordinary shares, an amount in cash equal to (euro)2010.00 per share
(after giving effect to our intended reverse share splits), or
approximately (euro)72.8 million in the aggregate. Furthermore, on August
20, 2002, the extraordinary general meeting of our shareholders adopted a
resolution to authorize the redemption, on July 1, 2007, of all of the
Convertible Preferred A shares and Convertible Preferred B shares to be
issued as part of the Recapitalization, in accordance with their terms.
Upon the redemption of the Preferred shares, their holders will be entitled
to receive a redemption value of (euro)6,030.00 per share (after giving
effect to the 100-to-one reverse split of the Preferred shares). If at such
time we do not have access to sufficient funds to redeem all the then
outstanding Preferred shares, the holders of Convertible Preferred A shares
shall have the right to receive (euro)2,010.00 per share. After we
similarly pay the holders of Convertible Preferred B shares, we will
distribute any remaining surplus proportionally to the holders of
Convertible Preferred A shares and Convertible Preferred B shares up to the
remaining balance of (euro)4,020.00 per share. Assuming 21,313 Convertible
Preferred A shares and 14,926 Convertible Preferred B shares are issued
(after giving effect to the 100-to-one reverse split of the Preferred
shares) and that none of the Convertible Preferred A shares and Convertible
Preferred B shares are converted prior to the redemption date, the
aggregate redemption value due on the Convertible Preferred A shares and
Convertible Preferred B shares would be approximately (euro)218.5 million.

         Potential additional equity investment. The Restructuring
Agreement also contemplates that up to an additional (euro)3.3 million may
be invested in the form of the exercise of warrants for Ordinary shares
(which warrants are to be issued to our existing shareholders), and that up
to (euro)1.0 million may be invested by our management and senior employees
in return for the issuance of Convertible Preferred A shares and Ordinary
shares. In the event that warrants expire unexercised, we have undertaken
to make the Ordinary shares underlying those warrants available for
subscription by the holders of our Convertible Preferred A Shares and
Convertible Preferred B Shares. We have received a commitment from an
institutional investor to take up approximately 51% of these subscription
rights, if they are offered.

         Effect on share ownership and Supervisory Board composition.
Post-Recapitalization, but without giving effect to our warrant offering,
we anticipate that, the former holders of our Notes, Meritage and DeGeorge
Telcom would own, in the aggregate, approximately 97.4% of the economic
interests in our share capital that would be outstanding at the completion
of the Recapitalization. The remaining shares (representing 2.6% of the
economic interests in our share capital) would be held by our existing
shareholders, other than Meritage and DeGeorge Telcom.

         Conditions.  The completion of the Recapitalization is subject to,
                      among other things:

         o        the approval of the Recapitalization by our existing
                  shareholders, which approval took place at the
                  extraordinary general meeting of our shareholders held on
                  August 20, 2002;

         o        the approval of at least 75% of our admitted creditors,
                  by value, which approval took place at the meeting of
                  creditors held on June 24, 2002;

         o        the final sanction of the Dutch courts, which occurred on
                  September 4, 2002;

         o        the closure or sale of our operations outside of France,
                  which occurred in May 2002; and

         o        other customary conditions.

         Our Supervisory and Management Boards voted unanimously to approve
the Recapitalization.

         Going concern. Our ability to continue as a going concern is
dependent upon successful completion of the Recapitalization (or obtaining
alternative sources of financing if the Recapitalization is not complete).
There is no assurance that we will be able to effect the Recapitalization,
or that we will be able to secure alternative sources of financing if the
Recapitalization is not consummated. If we fail to effect the
Recapitalization, or to obtain sufficient alternative financing, we will
effectively cease to be able to conduct our business and be forced into
liquidation. In such event, we anticipate, based on our internal analyses,
that the proceeds of the liquidation would not suffice to pay off our
creditors and, therefore, there would be nothing left for distribution to
our shareholders. The independent auditors' report on our consolidated
financial statements for the year ended December 31, 2001, includes a
paragraph that states that we have been experiencing recurring losses from
operations and expect to fully utilize our existing cash resources by the
end of the third quarter of 2002, which raises substantial doubt about our
ability to continue as a going concern.


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 network
                  through our owned fiber and leased lines. A small portion
                  of our voice revenue is derived, however, from off-net
                  sites of customers who are otherwise connected to our
                  network, or, from customers awaiting completion of their
                  connection to our network. Voice revenue is based
                  primarily on traffic minutes billed. For the years ended
                  December 31, 2001, 2000 and 1999 revenue from voice
                  products accounted for(euro)29.1 million,(euro)6.9
                  million and(euro)0.3 million, or approximately 38%, 30%
                  and 16% of our total revenue, respectively.

         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 on intra-city dedicated assess, inter-city
                  dedicated access, or IP VPN services. We also derive
                  revenue by providing high-capacity Internet access and
                  related Internet services in each of the areas in which
                  our MANs operate. For the years ended December 31, 2001,
                  2000 and 1999 revenue from these services accounted
                  for(euro)9.9 million, (euro)2.1 million and(euro)0.4
                  million, or approximately 13%, 9% and 21%, of our total
                  revenue, respectively.


         Wholesale services.


         We derive revenue by providing data transmission capacity and
traffic termination services 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 to other telecommunications
                  service providers that require local connection to their
                  end-customers, transmission capacity to support gaps in
                  their networks, additional capacity or 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)8.9 million,(euro)3.7 million and(euro)0.4
                  million for the years ended December 31, 2001, 2000 and
                  1999 or approximately 12%, 16% and 21% of our total
                  revenue, respectively. We expect revenue from carrier and
                  termination services to represent a decreasing portion of
                  our total revenue.

         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. This
                  revenue, which is based primarily on traffic minutes,
                  accounted for (euro)26.2 million, (euro)7.9 million and
                  (euro)0.8 million for the years ended December 31, 2001,
                  2000 and 1999 or approximately 34%, 34% and 42%,
                  respectively, of our total revenues.


          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)1.9 million and (euro)2.4 million for the years ended December
31, 2001 and 2000, respectively, or 3% and 11% of our total revenue from
our continuing operations in those years. We did not report any revenue
from our Internet data centers, web hosting, Internet access and other
Internet-related services during the year ended December 31, 1999. 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.

         As of December 31, 2001, we had commercially launched services in
nine areas 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).

         Our three, five and ten largest customer in France generated
approximately 19%, 22% and 29% of our revenue for the year ended December
31, 2001, respectively. These customers include Tiscali/Liberty Surf, which
generated slightly over 14% of our total revenue for the year. For the year
ended December 31, 2000, our three, five and ten largest customers in
France and Germany generated approximately 21%, 26% and 35%, respectively,
of our revenue, including Tiscali/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        (until January 1, 2002), 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 variable costs, which are directly
related to revenue generated from a customer, such as traffic termination
and traffic collection costs directly related to voice minutes invoiced,
mostly to the incumbent operator. Other significant variable costs are
Internet access capacity purchased on a wholesale basis and resold to our
retail customers.

         In addition to these variable costs, we incur:

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

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

    c)   operating leases costs of bandwidth capacity to interconnect our
         MANs;

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

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

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

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

         Selling, general and administrative expenses


         Our selling, general and administrative expenses include costs
relating to our sales and marketing department, customer care, billing,
corporate administration, salaries and other personnel costs, as well as
legal and consultant fees. We expect that selling, general and
administrative expenses are likely to continue to decline as a 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
markets, and a national account team to service multiple location customers
and key account executives. As of December 31, 2001, we had 550 employees
in our continuing operations, compared to 485 as of December 31, 2000. As
of June 30, 2002, we had 496 employees in our continuing operations.


         Allocated costs from an affiliate


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


         Non-cash compensation charges


         We incur stock-based compensation expense under our fixed stock
option plan based on the deferred compensation recorded on the date of
grant. In addition, 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 initial public offering of our Ordinary shares 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.
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 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, operating expenses, capital expenditures, assets and
liabilities are, for the most part, denominated in euro, which became our
functional and reporting currency effective January 1, 2000. We invest all
excess cash in euro-denominated accounts. We are currently exposed to
changes in currency exchange rates primarily due to our 14% senior discount
notes due 2009. These notes currently 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. Assuming we complete our Recapitalization,
as described above, these notes will be exchanged into Ordinary shares and
Convertible Preferred B shares. We believe that after the completion of our
Recapitalization our exposure to exchange rate risks will be immaterial.

         Discontinued operations

         In May 2002, we disposed of our German and U.K. operations in
their entirety. In accordance with SFAS 144, we have restated our financial
statements for the years ended December 31, 2001, 2000 and 1999 to report
the results of these operations in discontinued operations.


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)75.9 million, compared to approximately (euro)23.0 million for the
year ended December 31, 2000. We attribute these increases in revenue to
our overall growth resulting from the continued implementation of our
business plan and the rapid deployment of our networks. Specifically, the
increase resulted from the steady growth of our customer base to 946
customers as of December 31, 2002, an increase in traffic over our
networks, which totaled 2.9 billion minutes in 2001, and a heightened
demand for services from existing customers.

         For the year ended December 31, 2001, revenue from retail services
totaled (euro)39.0 million (or 51% of our total revenue); revenue from
wholesale services totaled (euro)35.0 million (or 46% of our total
revenue); and revenue from Internet data centers, web hosting and other
Internet-related services totaled (euro)1.9 million (or 3% of our total
revenue). For the year ended December 31, 2000, revenue from retail
services totaled (euro)8.9 million (39% of total revenue), revenue from
wholesale services totaled (euro)11.7 million (51% of total revenue), and
revenue from Internet data centers, web hosting and other Internet-related
services totaled (euro)2.4 million (10% of total revenue).


         Operating expenses

         Network costs


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


         Selling, general and administrative expenses


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

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

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


         Allocated costs from an affiliate


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


         Non-cash compensation charges


         We incurred non-cash stock-based compensation expense of
approximately (euro)7.4 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)28.5 million for the year ended December 31, 2001, from approximately
(euro)14.5 million for the year ended December 31, 2000. The majority of
this increase resulted from the build-out of our MANs.


         Restructuring, impairment and other charges


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


<TABLE>
<CAPTION>

         These charges consist of the following (in millions):


<S>                                                                       <C>
Write-down of German and United Kingdom assets....................  (euro)142.7
Write-down of materials and supplies..............................          6.0
Restructuring charges(1)..........................................         15.8
Total.............................................................  (euro)164.5
                                                                    ===========
</TABLE>

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


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


         Impairment charges

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

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

         Restructuring charges

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

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


<TABLE>
<CAPTION>
                                                                                          Europe HQ
                                                                                             and
                                        France         Germany(5)         UK(5)             other            Total
                                        ------         ----------         -----           ---------          -----
<S>                                   <C>               <C>              <C>               <C>          <C>
Severance (1)                          (euro)1,151       (euro)2,399      (euro)527         (euro)603    (euro)4,680
Facilities and Network (2)                   1,558             5,194            992                 -          7,744
Other (3)                                       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 (4)                (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.

     (4)   Outstanding accruals are expected to be paid prior to December 31,
           2002.

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



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

<TABLE>
<CAPTION>
                                      Total number of employees to be        Total number of employees terminated
                                      terminated                             as of 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)12.8 million
during the year ended December 31, 2001, compared to (euro)22.2 million for
the year ended December 31, 2000. This decrease is the direct result of
lower cash and cash equivalents balances in 2001 compared to 2000.


         We incurred interest expense, net of approximately (euro)14.2
million of capitalized interest expense, of approximately (euro)29.5
million during the year ended December 31, 2001. For the year ended
December 31, 2000, interest expense 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)8.2 million, compared to (euro)18.8
million in foreign exchange loss and other expenses in the year ended
December 31, 2000. The foreign exchange loss and other expenses in the year
ended December 31, 2001 resulted primarily from an unrealized foreign
exchange loss related to our dollar-denominated senior discount notes due
2009. The foreign exchange loss in 2000 is attributable primarily to the
requirement that we invest the cash we raised in our debt and equity
offerings in U.S. treasury bills, pending receipt of an exemption from
regulations under the Investment Company Act of 1940. We received that
exemption in August 2000.

         Loss from discontinued operations

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

         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.

         Segment information

         General

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

         Historically, we have evaluated our development efforts according
to the geographic location of our markets. The key operating performance
measures used by our management in this evaluation include revenue growth
and a measure we refer to as Adjusted EBITDA. Earnings before deducting
interest, taxes, depreciation and amortization, or EBITDA, is a measure
commonly used in the telecommunications industry. In calculating Adjusted
EBITDA, which we believe is a more helpful performance measure of our
operating segments, we exclude (in addition to interest, taxes,
depreciation and amortization) non-cash compensation charges and foreign
exchange loss and other expenses, including restructuring, impairment and
other charges, as well as other non-recurring operating expenses. We
believe that Adjusted EBITDA provides both our management and investors
with a measure of the operating results of our segments that is unaffected
by the financing and accounting effects of gains and losses that are either
of a non-recurring nature or are not closely related to the operating
performance of these segments. For example, Adjusted EBITDA eliminates the
effect of one-time gains or losses such as restructuring, impairment and
other charges, which we believe are of a non-recurring nature. Adjusted
EBITDA also eliminates the effect of interest, foreign exchange loss and
other expenses, which we believe relate to general trends in global capital
markets (such as exchange and interest rates), but are not necessarily
indicative of our segments' operating performance. Finally, Adjusted EBITDA
eliminates the effect of non-cash compensation charges and credits, as
these reflect the closing price of our shares at the end of each fiscal
quarter and thus are influenced by trends in capital markets that are not
necessarily related to the operating performance of our segments.


         Adjusted EBITDA is not derived pursuant to generally accepted
accounting principles and therefore should not be considered 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.


         France

         As further described above, in France, we had revenue of
approximately (euro)75.9 million for the year ended December 31, 2001,
compared to approximately (euro)22.9 million for 2000.

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

         Adjusted EBITDA in France for the year ended December 31, 2001
totaled negative (euro)33.5 million, compared to negative (euro)54.9
million in 2000. This improvement reflected the increase in revenue, which
was only partially offset by the increase in operating expenses as we
achieved greater operating efficiencies.

         Germany

         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.
As of December 31, 2001, we had over 224 connected customers in Germany and
carried over 300 million 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. In May 2002, we sold our German operations to a
third party.

         Operating expenses, excluding non-cash compensation charges and
restructuring, impairment and other charges, in Germany totaled
approximately (euro)44.8 million for the year ended December 31, 2001,
compared to approximately (euro)35.3 million for 2000. This increase is
primarily a result of increased network costs associated with the growth in
our connected customer base and an increase in the number of our German
employees during the year, prior to our restructuring efforts. The number
of employees in Germany peaked at 339 in the 2001 prior to our
restructuring efforts. Additionally, depreciation and amortization in
Germany increased as a result of the build-out of our MANs in our German
markets.

         Adjusted EBITDA in Germany for the year ended December 31, 2001
totaled negative (euro)26.3 million, compared to negative (euro)32.3
million in 2000. Adjusted EBITDA excludes certain operating expenses that
we believe are of a non-recurring nature. In particular, we have excluded
from the computation of Adjusted EBITDA for 2001 impairment charges of
approximately (euro)130.3 million and restructuring charges of
approximately (euro)8.2 discussed above under "Operating
expenses--Restructuring, impairment and other charges." The improvement in
comparison to 2000 reflected the increased revenue from these operations,
as well as the restructuring measures we implemented during the second half
of 2001, which caused operating expenses to increase at a lower rate.

         The United Kingdom

         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. In May 2002, we sold our U.K. operations to a
third party.

         Operating expenses, excluding non-cash compensation charges and
restructuring, impairment and other charges, in the United Kingdom totaled
approximately (euro)12.2 million for the year ended December 31, 2001,
compared to approximately (euro)10.4 million for 2000. This increase is
primarily a result of increased costs associated with the growth in our
data center customer base and increased selling, general and administrative
expenses prior to our decision to restructure our United Kingdom business
in the second quarter of 2001.

         Adjusted EBITDA in the United Kingdom for the year ended December
31, 2001 totaled negative (euro)8.7 million, compared to negative (euro)4.8
million in 2000. Adjusted EBITDA excludes certain operating expenses that
we believe are of a non-recurring nature. In particular, we have excluded
from the computation of Adjusted EBITDA for 2001 impairment charges of
approximately (euro)12.4 million and restructuring charges of approximately
(euro)1.6 million discussed above under "Operating expenses--Restructuring,
impairment and other charges." The increase in negative Adjusted EBITDA for
2001 was primarily due to the high selling, general and administrative
expenses we incurred in connection with our efforts to expand our customer
base in the United Kingdom prior to our decision to restructure our U.K.
operations in the second quarter of 2001 and decreased revenue resulting
from our decision to restructure these operations and exit the U.K. market.

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)24.0 million for the year ended December 31, 2000, an
increase of (euro)22.1 million from (euro)1.9 million for the year ended
December 31, 1999. As adjusted for SAB 101, our revenue was (euro)23.0
million for the year ended December 31, 2000, compared to (euro)1.9 million
in 1999. We attribute this increase in revenue to the steady growth of
revenue from retail customers in the seven French areas in which our MANs
were operating and the increase in our total customer base 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.

         For the year ended December 31, 2000, revenue from retail services
totaled (euro)8.9 million (or 39% of our total revenue); revenue from
wholesale services totaled (euro)11.7 million (51% of our total revenue);
and revenue from Internet data centers, web hosting and other
Internet-related services totaled (euro)2.4 million (or 10% of our total
revenue).


         Operating expenses

         Network costs

         Our network costs for the year ended December 31, 2000 increased
to approximately (euro)23.2 million from (euro)1.8 million for the previous
year. This increase resulted primarily from the continued deployment of our
networks in France and the associated costs of establishing interconnection
and leasing arrangements. Additionally, the increase reflected increased
customer traffic, which resulted in higher interconnection payments to
France Telecom and other operators.

         Selling, general and administrative expenses


         For the year ended December 31, 2000, selling, general and
administrative expenses totaled approximately (euro)49.8 million, compared
to approximately (euro)23.9 million for the year ended December 31, 1999.
This increase resulted primarily from the rapid growth in the number of
personnel in France from 253, as of December 31, 1999, to 433, as of
December 31, 2000, and the related increase in wage and salary expense, as
well as our heavy reliance throughout that year on external consultants for
management information system implementation. Additionally, the increase
reflected 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)3.0 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)14.5 million for the year ended December 31, 2000, from approximately
(euro)3.6 million for the previous year. The majority of this increase
resulted from the build-out of our MANs. We started recording network
depreciation during the quarter ended June 30, 1999, when we initiated
network services.


         Other income and expense


         During the year ended December 31, 2000, we had interest income of
approximately (euro)22.2 million, compared with interest income of
approximately (euro)2.4 million for the year ended December 31, 1999. The
increase is the result of the investment of our IPO proceeds and proceeds
from our senior notes due 2010.


         During the year ended December 31, 2000, we incurred interest
expense of approximately (euro)29.0 million, net of approximately
(euro)10.1 million of capitalized interest. 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 is the cash interest due 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)18.8
million foreign exchange loss. The foreign exchange loss in 2000 is
attributable primarily to the requirement that we invest the cash proceeds
of 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. Additionally, we also recorded an
unrealized foreign exchange loss of (euro)5.0 million related to our U.S.
dollar-denominated senior discount notes.

         Loss from discontinued operations

         For the year ended December 31, 2000, we recorded a loss of
(euro)43.7 million from our discontinued operations in Germany and the
United Kingdom, compared to a loss of (euro)7.7 in the year ended December
31, 1999. This increase was primarily attributable to increased costs
associated with the increase in the employee headcount in these countries
and to significant network costs associated with the growth of our customer
base in Germany in 2000.

         Segment information

         General

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

         France

         As discussed above 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.

         Operating expenses, excluding non-cash compensation charges, in
France totaled approximately (euro)77.8 million for the year ended December
31, 2000, compared to approximately (euro)29.1 million for 1999. This
increase is primarily a result of increased network costs associated with
the growth in our connected customer base and an increase in French
employees to 433 as of December 31, 2000, from 253 as of December 31, 1999.
Additionally, depreciation and amortization in France increased as a result
of the build-out of our MANs in our French markets.

         Adjusted EBITDA in France for the year ended December 31, 2000
totaled negative (euro)54.9 million, compared to negative (euro)27.2
million in 1999. This increase was primarily the result of high network
costs associated with the growth of our customer base and the increase in
selling, general and administrative expenses associated with the growth in
our employee headcount discussed above.

         Germany

         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. The increase in revenue in Germany resulted from the
fact that we did not begin to carry traffic on our MANs in Germany until
November 1999. As of December 31, 2000, we had approximately 110 signed
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.

         Operating expenses, excluding non-cash compensation charges, in
Germany totaled approximately (euro)35.3 million for the year ended
December 31, 2000, compared to approximately (euro)5.3 million for 1999.
This increase is primarily a result of increased network costs associated
with the growth in our connected customer base and the development of our
MANs in Germany. During this period, selling, general and administrative
expenses increased because of the hiring of additional employees. Total
headcount in Germany increased to 213 employees as of December 31, 2000,
from 49 employees as of December 31, 1999. Additionally, depreciation and
amortization in Germany increased as a result of the build-out of our MANs
in our German markets.

         Adjusted EBITDA in Germany for the year ended December 31, 2000
totaled negative (euro)32.3 million, compared to negative (euro)5.3 million
in 1999. The primary reasons for this increase were the high network costs
and the high selling, general and administrative expenses we incurred in
our efforts to penetrate this market.

         The United Kingdom

         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. Miscellaneous dial-up services
contributed (euro)2.0 million, which represented 36% of our revenue in the
United Kingdom in 2000.

         Operating expenses, excluding non-cash compensation charges, in
the United Kingdom totaled approximately (euro)10.4 million for the year
ended December 31, 2000, compared to approximately (euro)2.3 million for
1999. This increase is primarily a result of the acquisition of the iPcenta
business and the increase in selling, general and administrative expenses
associated with anticipated growth in that market.

         Adjusted EBITDA in the United Kingdom for the year ended December
31, 2000 was negative (euro)4.8 million, compared to negative (euro)1.3
million in 1999. This increase was primarily the result of a sharp increase
in selling, general and administrative expenses associated with the growth
in our employee headcount during the year as a result of our acquisition of
the iPcenta business.


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 continuing operations................................ (euro)(50,206)(euro)(76,565)(euro)(28,357)
Cash flows from discontinued operations..............................       (52,625)      (20,325)      (11,234)
                                                                            --------      --------     --------
Net cash flows from operating activities.............................      (102,831)      (96,890)      (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 continuing 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 and the associated increased selling, general and marketing costs, an
increase in network costs and additional capital expenditures resulting
from planned network expansion.

         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 and the associated increased selling, general and marketing
costs, an increase in network costs and additional capital expenditures
outlays resulting from planned network expansion.


         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 build out
of our MANs.

         Our cash flow from investing activities was approximately
(euro)274.2 million for the year ended December 31, 2000, compared to a net
reduction of approximately (euro)69.6 million during the prior year. The
increase in cash flow 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.


         While we previously estimated our funding gap (that is, the
additional financing required to bring us to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, based on (i) the
anticipated elimination of interest payments upon the exchange or
retirement of our outstanding debt securities pursuant to the
recapitalization plan described above, (ii) the cash savings from the sale
of our German and UK operations and cost reductions at our European
headquarters, and (iii) the lower cash requirements related to selling,
general and administrative expenses and capital expenditures resulting from
our restructuring efforts, we currently estimate our funding gap to be
approximately (euro)30 million. We expect that, upon the completion of the
Recapitalization plan described above, our existing cash balances, the
additional equity infusion together with the anticipated cash flow from our
operations, will be sufficient to fully fund our restructured operations to
cash flow breakeven.

         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 CompleTel Europe N.V., our holding
company, and the remainder was retained by CompleTel LLC for start up
expenditures incurred on our behalf.

         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. These notes mature on
February 16, 2009.

         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 was pledged as security for the 14% senior notes due 2010.


         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.


         The proceeds from the offerings of our Notes and Ordinary shares
are held and managed by our wholly-owned subsidiary, CompleTel ECC BV,
which serves as our European centralized cash manager. We have loan
agreements in place whereby on a periodic as-needed basis, each of the
operating subsidiaries request funding from CompleTel ECC BV through the
establishment of inter-company loans. Consequently, we minimize the amount
of cash held by our subsidiaries and optimize the returns on our cash
resources by using centralized accounts.

         The following table presents our contractual obligations and
commercial commitments for the periods indicated, as of December 31, 2001:

<TABLE>
<CAPTION>

------------------------------------------ ----------------------------------------------------------------
               Description                                     Payments due by period
              of obligation                                     (euro, in thousands)
              or commitment
                                               Total             2002          2003-2004      thereafter
------------------------------------------ --------------- ----------------- -------------- ---------------
<S>                                            <C>                                              <C>
Long-term debt, principal                      221,203(1)                 -              -      221,203(1)
Long-term debt, interest                           231(1)                15             44          172(1)
Operating Leases                                   63,419            12,560         24,134          26,725
Other long-term debt                                6,532               200            609           5,723
------------------------------------------ --------------- ----------------- -------------- ---------------

Total obligations/commitments                     291,385            12,775         24,787         253,823
------------------------------------------ --------------- ----------------- -------------- ---------------
</TABLE>

(1) These amounts relate to indebtedness under our outstanding Notes, which
will be eliminated as part of our Recapitalization.


Capital Expenditures


         We made capital expenditures of approximately (euro)108.2 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)112.3 million and (euro)68.9 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)25 million to (euro)35 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 United 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 as of and for the year ended December 31, 2001.


         Revenue Recognition

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


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


         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;
                  and


         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 non-collectible. We maintain allowances for doubtful
accounts for estimated losses resulting from the inability of our customers
to make required payments. We have attempted to reserve for expected losses
based on our past experience and believe our reserves to be adequate. If
the financial condition of our customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may
be required.


         New Accounting Pronouncements

         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 142 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 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.


         We adopted SFAS 141 and 142 effective January 1, 2002.
Accordingly, we discontinued amortizing our remaining balances of goodwill
of approximately (euro)5.8 million effective January 1, 2002. The adoption
of these statements did not have a material impact on our results of
operations, financial position or cash flows.

         The goodwill amortization expense and net loss for the years ended
December 31, 2001, 2000 and 1999 are as follows (euro, in thousands):


<TABLE>
<CAPTION>

                                                                     Year Ended December 31,
                                                    ----------------------------------------------------------
                                                           2001                2000               1999
                                                    ------------------- ------------------- ------------------
<S>                                                      <C>                 <C>                 <C>
Reported net loss                                        (299,049)           (200,488)           (49,790)
     Add back: goodwill amortization..............            305                 441                179
Adjusted net loss ................................       (298,744)           (200,047)           (49,611)
                                                    =================== =================== ==================

Reported net loss per share.......................          (1.90)              (1.34)             (0.50)
Adjusted net loss per share.......................          (1.90)              (1.34)             (0.50)
                                                    =================== =================== ==================
</TABLE>
         In June 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS
143 establishes accounting requirements for retirement of obligations
associated with tangible long-lived assets, including (1) the timing of the
liability recognition, (2) initial measurement of the liability, (3)
allocation of cost to expense, (4) subsequent measurement of the liability,
and (5) related financial statement disclosure. SFAS 143 requires that the
fair value of the liability for an asset retirement obligation be
recognized in the period during which it is incurred, if a reasonable
estimate of fair value can be made. The associated asset retirement costs
are capitalized as part of the carrying value of the asset and depreciated
over the life of the associated asset. SFAS 143 require the measurement of
changes in the liability for an asset retirement obligation due to the
passage of time by applying an interest method of allocation to the amount
of the liability at the beginning of a reporting period. The interest rate
used to measure that change is the credit-adjusted-risk-free rate that
existed when the liability was initially measured. Finally, SFAS 143
requires such changes in liability for asset retirement obligations to be
recognized as an increase in the carrying amount of the liability and as an
expense classified as an operating item in the statement of income. SFAS
143 applies to fiscal years beginning after June 15, 2002. We do not
anticipate that the adoption of SFAS will have a material impact on our
results of operations, our financial position, or our cash flows.

         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. Other than the restatement of our financial
statements to report the results of our German and U.K. operations, which
we disposed of in May 2002, in discontinued operations the adoption of SFAS
144 on January 1, 2002 did not have a material impact on our results of
operations, financial position, or cash flows.

         In April 2002, the Financial Accounting Standards Board issued
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145
rescinds SFAS 4 "Reporting Gains and Losses from Extinguishment of Debt"
and also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings or describe their applicability
under changed conditions. SFAS 145 applies to fiscal years beginning after
May 15, 2002. We anticipate that the adoption of SFAS 145 will not have a
material impact on our results of operations, financial position, or cash
flows.


         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 during the third quarter of 2002. We believe that we will
require approximately (euro)30 million additional financing in excess of
our invested capital and current borrowings 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
are currently in the process of effecting our recapitalization plan and
anticipate that, upon the completion of the recapitalization, our cash
balances, together with the anticipated cash flow from our operations, will
provide us with sufficient capital to fully fund our business to cash flow
breakeven. However, there is no assurance that we will be able to effect
the recapitalization, or to secure alternative sources of financing if the
recapitalization is not consummated. If we fail to effect the
recapitalization, or to obtain sufficient alternative financing, we will
cease to be a going concern and be forced into liquidation. In such event,
we anticipate that the proceeds of the liquidation would not suffice to pay
off our creditors and, therefore, there would be nothing left for
distribution to our shareholders.


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)267.6 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 France, for wholesale carrier and dial-up Internet access and
Internet data center services.

         We may be unable to achieve or maintain operating profits or
positive cash flow in the future, in which case we will not be able to meet
our working capital requirements.


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

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




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

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

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

         o        operating and technical problems;


         o        adverse changes in the regulatory environment;


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

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


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

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


         The loss of key personnel, or our inability to recruit qualified
personnel, could materially adversely affect our business. Our future
development and success depends on our ability to attract and retain
skilled, qualified and experienced managerial, sales, marketing, operating,
engineering and technical personnel. Competition for qualified personnel in
the telecommunications industry in Europe is intense and many of our
competitors have greater financial resources and other competitive
advantages over us. Moreover, in connection with our restructuring, we made
significant reductions in our workforce. These workforce reductions, 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 in France generated
approximately 19%, 22% and 29% of our revenue for the year ended December
31, 2001, respectively. These customers include Tiscali/Liberty Surf, which
generated slightly over 14% of our total revenue for the year. There can be
no assurance that we will be able to retain these customers or other large
customers. The loss, or a decrease, of business from one or more of these
customers might result in our revenue decreasing proportionately.


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

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

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


We may be liable for information disseminated through our network.

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

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

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

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




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


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

         o        the dilution of our existing shareholder base in
                  connection with our recapitalization,

         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.



Item 7A. Quantitative and Qualitative Disclosures about Market Risk

         Investment portfolio and interest rate sensitivity




         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, operating expenses, capital expenditures, assets and
liabilities are, for the most part, denominated in euro, which is our
functional currency, effective January 1, 2000. Therefore, we are currently
exposed to changes in currency exchange rates primarily due to our U.S.
dollar denominated debt. The senior discount notes which we issued in
February 1999 currently 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. Assuming we complete our
Recapitalization, as described above, these notes will be exchanged into
Ordinary shares and Convertible Preferred B shares. We believe that, after
the completion of our Recapitalization, our exposure to exchange rate risks
will be immaterial.

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





         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



         Resignation of Arthur Andersen

         On June 21, 2002, we were notified by Arthur Andersen (The
Netherlands), our independent auditor since our inception, that Arthur
Andersen had resigned as our auditor. Arthur Andersen's resignation results
from the acquisition of Arthur Andersen's audit practice in The Netherlands
by Deloitte & Touche Accountants. Consequently, as of June 21, 2002, Arthur
Andersen no longer serves as our auditor.

         Arthur Andersen's reports on our consolidated financial statements
for the fiscal years ended December 31, 2000 and 2001, did not contain an
adverse opinion or a disclaimer of opinion and were not qualified as to
uncertainty, audit scope or accounting principles, except that Arthur
Andersen's report dated March 5, 2001 on our consolidated financial
statements for the year ended December 31, 2001, which was included in our
Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission on April 1, 2002, stated that our recurring losses from
operations and our expectation to utilize our existing cash resources
during 2002 raise substantial doubt about our ability to continue as a
going concern. During the two most recent fiscal years, and the interim
period through the date of Arthur Andersen's resignation, we had no
disagreements with Arthur Andersen on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedures, which, if not resolved to the satisfaction of Arthur Andersen,
would have caused them to make reference to the subject matter of the
disagreement in connection with their report on our consolidated financial
statement for these periods, and there were no reportable events within the
meaning of Item 304(a)(1)(v) of Regulation S-K.

         Engagement of Deloitte & Touche

         On July 17, 2002, our Supervisory Board appointed Deloitte &
Touche Accountants as our independent auditor. This action was unanimously
recommended by the members of our audit committee. We intend to include in
the agenda for our next annual general meeting, or our next extraordinary
general meeting, which is expected to be held during the fourth quarter of
2002, for the purpose of electing new directors following our
recapitalization, a proposal for the appointment of auditors by that
meeting.



         During the two most recent fiscal years ended December 31, 2001
and December 31, 2000, and the subsequent interim period through the date
of this report, we did not consult with Deloitte & Touche Accountants
regarding the application of accounting principles to any transaction,
completed or proposed, or the type of audit opinion that might be rendered
on our consolidated financial statements or any of the matters or events
set forth in Item 304(a)(2)(ii) of Regulation S-K.





                                  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:

<TABLE>
<CAPTION>


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

<S>                                             <C>    <C>
James E. Dovey(1).............................    58   Supervisory Director
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
</TABLE>

---------------
(1)   Mr. Dovey resigned from his role as the chairman of our Supervisory
      Board on August 20, 2002. Mr. Dovey has indicated that he will
      continue to serve as a member of our Supervisory Board until the
      completion of our Recapitalization. We anticipate that a new chairman
      will be appointed by our Supervisory Board following the completion
      of our Recapitalization.


         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 of the Supervisory
Board.


         Board of Management

         Current members

         Our Board of Management currently consists of the following
members:

<TABLE>
<CAPTION>

 Name                                             Age                        Position(s)

 ----                                             ---    --------------------------------------------------
<S>                                            <C>      <C>

Jerome de Vitry ..............................    40   Managing Director, President and Chief Executive
                                                       Officer, Chief Operating Officer, President of
                                                       CompleTel Headquarters SAS.
</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.


         Timothy A. Samples, who was elected as a member of our Board of
Management on May 30, 2001, resigned from this position and his positions
as our President and Chief Executive Officer, member of the Board of
Directors of iPcenta Limited, of CompleTel U.K. Limited and of CompleTel
Headquarters UK Limited effective May 17, 2002.


         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>  <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 the
Supervisory Board. In August 2002, Mr. Dovey resigned from his role as
Chairman of our Supervisory Board, but will continue to serve as a member
of our Supervisory Board until the completion of our Recapitalization. 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
remained 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 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 resigned his positions as our President and
Chief Executive Officer effective May 17, 2002. He was appointed to these
positions in March 2001, which appointment was subsequently approved by our
general meeting of shareholders 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 served as our Chief Financial Officer from
November 1, 2001 until his resignations in May 2002. 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 former 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 President and Chief Executive
Officer on May 22, 2002, replacing Timothy Samples. Mr. De Vitry was
appointed as our Chief Operating Officer in January 2001 and became a
member of our Board of Management at the end May 2001. Mr. de Vitry joined
us in February 1999, and from March 1999 until January 2001, he served as
the President of CompleTel Headquarters S.A.S and as Managing Director and
President of CompleTel GmbH. Prior to joining CompleTel, Mr. de Vitry was
Vice President of Radio Communications France for Alcatel Access System
Division from January 1995 until December 1999. From January 1993 until
December 1995, Mr. de Vitry was Vice President Marketing, Research and
Development for Alcatel Radio Transmissions Systems.


         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 Washington 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 U.S. 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


                           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 and resigned in May 2002;

         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>


                  Executive Compensation Summary Table

                                                                    Annual Compensation (1)
                                                     -----------------------------------------------------

                                                                                                 Aggregate
                                                                                Other Annual       Annual
     Name and Principal Position      Fiscal Year     Salary         Bonus      Compensation    Compensation
 -----------------------------------  -----------   ----------     ---------    ------------    ------------
                                                     ((euro))       ((euro))     ((euro))(2)       ((euro))
<S>                                         <C>        <C>           <C>           <C>            <C>
Tim Samples (1)(3)..................          2001       372,333       223,400       1,069,717      1,665,450
Former President and Chief                    2000            --            --              --             --
Executive Officer                             1999            --            --              --             --

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

Jerome de Vitry(6)(11)..............          2001       236,897            --              --        236,888
President, Chief Executive                    2000       147,661        79,428              --        227,089
 Officer and Chief                            1999       129,607        32,131              --        161,738
 Operating Officer

J. Lyle Patrick (1)(7)..............          2001        41,888            --           1,414         43,303
Former 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
Former Managing Director and                  2000       156,038        46,811              --        202,849
President of CompleTel UK Limited             1999        90,513         6,171              --         96,684
and iPcenta Limited
</TABLE>




<TABLE>
<CAPTION>

                                                  Long-Term
                                                 Compensation
                                               Number of Shares
                                              Underlying Awarded
     Name and Principal Position                   Options         Other Payouts
 -----------------------------------           -----------------   -------------
                                                                     ((euro))
<S>                                                  <C>            <C>
Tim Samples (1)(3)..................                   1,500,000                --
Former President and Chief                                    --                --
Executive Officer                                             --                --

William H. Pearson  (1)(4)(11)......                          --                --
Former Chairman of the                                        --                --
Supervisory Board, former President                           --                --
and Chief Executive Officer

Jerome de Vitry(6)(11)..............                     400,000        749,672(9)
President, Chief Executive                                    --          2,206(9)
 Officer and Chief                                            --                --
 Operating Officer

J. Lyle Patrick (1)(7)..............                     500,000                --
Former Chief Financial Officer                                --                --
                                                              --                --

David E. Lacey(1)(5)(11)............                          --                --
Former Chief Financial Officer                                --                --
                                                              --                --

Martin Rushe(1)(8)..................                          --    456,207(9)(10)
Former Managing Director and                                  --   133,330 (9)(10)
President of CompleTel UK Limited                             --                --
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 and resigned effective May 17, 2002.

(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
         ceased on June 30, 2002.

(6)      Mr. de Vitry was appointed as our President and Chief Executive
         Officer on May 22, 2002 instead of Mr. Samples. He was appointed
         as 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 and resigned effective May 17, 2002.

(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 connection with a forgivable 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 authorized 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 Euronext Paris, or the principal
stock exchange outside the United States on which the shares are traded, on
the date the option is granted. With regard to options granted to employees
resident in France, the exercise price may not be lower than the average
closing price of the shares on the Euronext Paris over the 20 trading days
preceding the grant. 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
Former 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 Executive Officer

J. Lyle Patrick.................           500,000            8.8%          1.19   December 15, 2011         349,799      909,371
Former 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>


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 March 1, 2001, we entered into an employment agreement
with Mr. Samples to serve as our President and Chief Executive Officer.
This employment agreement was terminated on May 17, 2002, upon Mr. Samples'
resignation from his positions as our President and Chief Executive Officer
pursuant to a resignation agreement and a non-qualified stock option
agreement, both dated May 17, 2002. The employment agreement, resignation
agreement and non-qualified stock option agreement for Mr. Samples included
the following terms.


         Salary. During the course of his employment, Mr. Samples was to
receive an annual base salary of U.S.$400,000.


         Bonus. As incentive to entering the employment agreement, we
granted Mr. Samples a forgivable loan in the amount of (euro)865,000, which
loan was forgiven in full in accordance with its terms. In addition to the
forgivable loan, at each anniversary of the effective date of his
employment agreement, Mr. Samples was entitled to receive an incentive
bonus of up to 50% of his annual base salary, subject to the achievement of
certain performance benchmarks. At the discretion of the Supervisory Board,
this bonus could have been increased by up to 200% of the annual base
salary for outstanding performance. For the first year of employment, we
agreed to pay Mr. Samples the said 50% bonus regardless of any performance
targets.

         Stock options. During his employment, Mr. Samples received options
to purchase 1,500,000 Ordinary shares in accordance with our 2000 Stock
Option Plan. In connection with Mr. Samples' resignation in May 2002, all
of these options became fully vested and exercisable, however, Mr. Samples
subsequently waived 1,000,000 of these options. These options will expire
on May 17, 2003. In addition, in connection with his resignation, we
agreed, conditional upon our achievement of sufficient cash resources to
fully fund our business plan to cash flow breakeven, to grant Mr. Samples
an option to purchase 7,333,333 Ordinary shares in accordance with our 2000
Stock Option Plan, pursuant to a non-qualified stock option agreement.
Pursuant to this non-qualified stock option agreement, this option will
vest in full on the first anniversary of the date upon which we obtain
sufficient cash resources to fully fund our business plan to cash flow
breakeven and will expire on May 17, 2007. The exercise price of this
option is (euro)0.03 per share.

         Severance. Pursuant to his employment agreement, Mr. Samples was
entitled to receive severance benefits under his employment agreement upon
termination or constructive termination of his employment without cause, or
upon termination or constructive termination within six months after a
change of control. The severance benefits payable upon such termination
were to equal his base salary, and his benefits were to continue for 12
months following termination in the event he was terminated after the first
anniversary of his employment. In each case, Mr. Samples was entitled to a
pro-rata portion of his performance bonus, based on the number of days he
was employed during the relevant fiscal year. In connection with his
resignation in May 2002, we entered into a resignation agreement with Mr.
Samples, pursuant to which we agreed to pay Mr. Samples a U.S.$400,000
lump-sum and a U.S.$25,000 "ex gratia" payment. In return, Mr. Samples
agreed to release us from all claims under any other agreement relating to
his employment.


         J. Lyle Patrick


         In November 2001, we entered into an employment agreement with J.
Lyle Patrick, our Chief Financial Officer. This employment agreement was
terminated on May 17, 2002, upon Mr. Patrick's resignation from his
position as our Chief Financial Officer pursuant to a resignation agreement
and a non-qualified stock option agreement, both dated May 17, 2002. The
employment agreement, resignation agreement and non-qualified stock option
agreement for Mr. Patrick included the following terms:


         Salary. During the course of his employment, Mr. Patrick was to
receive an annual base salary of U.S.$225,000.

         Bonus. At each calendar year, Mr. Patrick was 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 was subject to additional taxes and different taxes
than if he had 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 had been employed in the United States. Mr. Patrick was 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 was entitled to
accommodation expenses of up to (pound)5,000 per month.

         Stock options. During his employment, Mr. Patrick received options
to purchase 400,000 Ordinary shares in accordance with our 2000 Stock
Option Plan. In connection with Mr. Patrick's resignation in May 2002, all
of these options became fully vested and exercisable, however, Mr. Patrick
subsequently waived all of these options. In connection with his
resignation, we agreed, conditional upon our achievement of sufficient cash
resources to fully fund our business plan to cash flow breakeven, to grant
Mr. Patrick an option to purchase 3,666,666 Ordinary shares in accordance
with our 2000 Stock Option Plan, pursuant to a non-qualified stock option
agreement. Pursuant to this non-qualified stock option agreement, this
option will vest in full on the first anniversary of the date upon which we
obtain sufficient cash resources to fully fund our business plan to cash
flow breakeven and will expire on May 17, 2007. The exercise price of this
option is (euro)0.03 per share.

         Retention Agreement. Effective February 1, 2002, we entered into a
retention agreement with Mr. Patrick. Under that agreement, Mr. Patrick
received three monthly installments of U.S.$10,000.

         Severance. Mr. Patrick, or his respective beneficiaries, was
entitled to receive severance benefits if his employment was terminated due
to death, disability or non-performance, in an amount equal to his base
salary and benefits for three months. He was also entitled to receive
severance benefits equal to his base salary, benefits and bonuses for three
months after the date of termination if he was terminated without cause or
constructively terminated within six months after a change in control. In
the case of resignation or termination for a cause, no severance benefits
were due. In connection with his resignation in May 2002, we entered into a
resignation agreement and a non-qualified stock option agreement with Mr.
Patrick, pursuant to which we paid Mr. Patrick a lump sum of (euro)228,178
and granted him an option to purchase 3,666,666 Ordinary shares in
accordance with our 2000 Stock Option Plan. Mr. Patrick may also continue
to use the apartment that we provided him until August 31, 2002. In
addition, we agreed to pay the reasonable costs of Mr. Patrick's
repatriation to the United States, up to (euro)11,000. In return, Mr.
Patrick agreed to release us from all claims under any other agreement
relating to his employment.


         Jerome de Vitry


         In December 1998, we entered into an employment agreement with
Jerome de Vitry, which subsequently was amended effective January 1, 2001.
Effective June 1, 2002, in connection with the appointment of Mr. de Vitry
as our Chief Executive Officer, 2002, we entered into a new employment
agreement with Mr. de Vitry, which replaces his old employment agreement.
These employment agreements include the following terms.

         Salary. Under his old employment agreement, during the course of
his employment, Mr. de Vitry was entitled to receive an annual base salary
of(euro)190,561. Under his new employment agreement, Mr. de Vitry is
entitled to receive an annual base salary of(euro)248,000 from June 1, 2002
until December 31, 2003, and(euro)338,000 thereafter.

         Bonus. Under his old employment agreement, Mr. de Vitry was
entitled, at the end of each calendar year, to receive an incentive bonus
of up to 50% of his annual salary if he achieves certain performance
benchmarks. Under his new employment agreement, Mr. de Vitry will be
entitled to a performance bonus of up to(euro)300,000 and(euro)350,000 for
2002 and 2003, respectively, if he achieves certain performance benchmarks.

         Severance. Mr. de Vitry is entitled to three months notice in the
event of termination of his employment, other than for gross misconduct. In
addition, in the event of dismissal (other than for gross misconduct) or
constructive dismissal, or if Mr. de Vitry resigns within a six months
period following a change of control, he will be entitled to receive a
severance payment equal to(euro)262,500, in case of dismissal during 2002
or 2003, or(euro)350,000, if the dismissal occurs thereafter.

         Non-compete. In case of termination of his employment for any
reason, Mr. de Vitry will be prohibited from competing with us for a period
of one year from the termination of his employment. In the event that Mr.
de Vitry's employment is terminated other than for gross misconduct, he
will be entitled to a non-compete payment equal to(euro)262,500, in the
event his employment is terminated during 2002 or 2003, or(euro)330,000, in
case the termination occurs thereafter. Mr. de Vitry will not be entitled
to a non-compete payment in the event that we release him from his
non-compete obligations.

         Retention Bonus. Effective February 1, 2002, we entered into a
retention bonus agreement with Mr. de Vitry. Pursuant to this agreement, we
paid Mr. de Vitry (euro)100,000 upon signing the agreement, as well as
(euro)240,000 in five equal monthly installments of (euro)48,000, which
monthly payments were subject on upon his continued employment with us. In
addition, Mr. de Vitry is entitled to (euro)100,000 in the event that we
obtain sufficient cash resources to fund our business plan entirely while
maintaining a balanced cash flow before June 30, 2002, provided he is still
employed by us.

         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 was
increased to U.S.$180,250 for 2001). Mr. Lacey's employment agreement
provided for tax equalization.

         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 non-performance, 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, 2001, 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





         The following table sets forth information regarding the
beneficial ownership of our Ordinary shares as of July 20, 2002, unless
indicated otherwise, by:

         o        each of our "Named Executive Officers;"

         o        each member of our Supervisory Board;

         o        all our executive officers and members of our Supervisory
                  Board 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
<S>                                                                         <C>               <C>
Directors and Named Executive Officers:
Jerome de Vitry(1)(12)................................................             116,312                  *
James E. Dovey(2)(12)(13).............................................           3,975,532                2.5
Lawrence F. DeGeorge(3)(11)(12).......................................          26,706,043               16.8
James C. Allen(4)(12)(13).............................................             833,437                0.5
Paul J. Finnegan(10)..................................................                  --                  *
James H. Kirby(10)....................................................                  --                  *
James N. Perry, Jr.(10)...............................................                  --                  *
Timothy A. Samples(5).................................................             500,000                  *
William H. Pearson(6).................................................           6,509,215                4.1
J. Lyle Patrick(7)....................................................                  --                  *
David E. Lacey(8).....................................................           1,123,068                0.7
Martin Rushe(9).......................................................             209,258                  *
All directors and executive officers as a group (7 persons)...........          31,631,324               19.9
5% and other principal owners:
Madison Dearborn Partners(10)(12).....................................          64,573,990               40.6
DeGeorge Telcom Holdings Limited Partnership(11)(12)..................          26,208,676               16.5
Meritage Private Equity Funds(12)(13).................................           6,758,479                4.3
</TABLE>


-----------
*        Less than 0.5%.

(1)      These shares are owned indirectly by Mr. de Vitry through his
         ownership interest in CompleTel LLC.

(2)      1,333,663 of these shares are owned indirectly by Mr. Dovey
         through his ownership interest in CompleTel LLC. 2,637,079 shares
         are owned directly by Mr. Dovey. Mr. Dovey disclaims beneficial
         ownership as to the remaining 4,790 shares, which are owned by his
         wife.

(3)      497,367 of these shares are owned directly by Mr. DeGeorge. The
         remaining 26,208,676 shares are owned indirectly through DeGeorge
         Telcom Holdings Limited Partnership. Mr. DeGeorge is the Chairman
         and Chief Executive Officer of LPL Investment Group, Inc., which
         controls DeGeorge Telcom Holdings Limited Partnership.

(4)      32,554 of these shares are owned indirectly by Mr. Allen through
         his ownership interest in CompleTel LLC. 800,295 of the shares are
         owned directly by Mr. Allen. Mr. Allen disclaims beneficial
         ownership as to the remaining 588 shares, which are owned by his
         wife.

(5)      Mr. Samples received, on March 14, 2001, options to purchase
         1,500,000 of our shares. Effective May 17, 2002, Mr. Samples
         resigned his positions as our President, Chief Executive Officer
         and Managing Director. In accordance with his resignation
         agreement, 100% of his 1,500,000 options vested and became
         exercisable. Mr. Samples subsequently waived 1,000,000 of these
         options. Mr. Samples may be deemed to have beneficial ownership of
         the 500,000 Ordinary shares that he can acquire by exercising the
         remaining stock options. As a result of his resignation, Mr.
         Samples is no longer required to report his beneficial ownership
         in our Ordinary shares.

(6)      This information reflects Mr. Pearson's beneficial ownership in
         our Ordinary shares as of February 1, 2002. Mr. Pearson resigned
         his positions as the chairman and a member of our Supervisory
         Board in late February 2002. As a result of his resignation, Mr.
         Pearson is no longer required to report his beneficial ownership
         in our Ordinary shares.

(7)      Mr. Patrick resigned his position as our Chief Financial Officer
         effective May 17, 2002. In accordance with his resignation
         agreement, 100% of the 500,000 options that were granted to him
         under our 2000 stock option plan vested and became exercisable.
         Mr. Patrick subsequently waived all of these stock options in July
         2002.

(8)      This information reflects Mr. Lacey's beneficial ownership in our
         Ordinary shares as of November 1, 2001. Mr. Lacey resigned his
         positions as our Chief Financial Officer in late November 2001. As
         a result of his resignation, Mr. Lacey is no longer required to
         report his beneficial ownership in our Ordinary shares.

(9)      This information reflects Mr. Rushe's beneficial ownership in our
         Ordinary shares as of April 1, 2001. Mr. Rushe resigned his
         positions as a member of our Board of Management and president of
         our former subsidiary, iPcenta U.K. Limited in late May 2001. As a
         result of his resignation, Mr. Rushe is no longer required to
         report his beneficial ownership in our Ordinary shares.

(10)     2,924,659 of these shares are owned indirectly by Madison Dearborn
         Capital Partners II, L.P. through its ownership interest 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.

(11)     1,208,023 of these shares are owned indirectly by DeGeorge Telcom
         Holdings Limited Partnership through its ownership interest 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 Telcom Holdings Limited Partnership. The address
         of DeGeorge Telcom Holdings Limited Partnership is 639 Isbell
         Road, Suite 390, Reno, Nevada 89509.

(12)     CompleTel LLC owns some of our Ordinary shares directly, and some
         indirectly through its wholly owned subsidiary, CompleTel (N.A.)
         N.V. Holders of ownership 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 ownership interests. The
         address of CompleTel LLC is 10625 East Dorado Place, Englewood,
         Colorado 80111.

(13)     284,030 of these shares are owned indirectly by Meritage Private
         Equity Funds through its ownership interest in CompleTel LLC. The
         remaining shares are owned directly by Meritage Private Equity
         Funds. Messrs. Dovey and Allen are investment directors of
         Meritage Private Equity Funds. The address of Meritage Private
         Equity Funds is 1600 Wynkoop Street, Suite 300, Denver, Colorado
         80202.


Item 13. Certain Relationships and Related Transactions



         Restructuring Agreement

         On May 15, 2002, we signed an agreement in support of our
Recapitalization plan with an ad hoc committee of holders of our Notes and
with our principal shareholders. The Restructuring Agreement provides,
among other things, for an equity investment of an aggregate of (euro)30
million by Meritage and DeGeorge Telcom, who currently beneficially own
approximately 4.3% and 16.8% of our outstanding share capital,
respectively, in return for the issuance of Convertible Preferred A shares
and Ordinary shares representing approximately 40% of our share capital
that would be outstanding at the close of the Recapitalization. Further,
pursuant to our Recapitalization plan, several executive officers and other
senior employees will be given an opportunity make an equity investment of
less than (euro)1,000,000 in the aggregate, for the same purchase price per
share as Meritage and DeGeorge. In addition, pursuant to the Restructuring
Agreement, after the completion of our Recapitalization, we intend to
establish a stock option plan under which options to purchase up to 8% of
our share capital will be available for grant to senior employees and
executive officers. For additional information concerning our
Recapitalization plan, see Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

         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 liabilities 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 transferring 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 became due and payable
on August 19, 2002. This loan is secured by a pledge on 958,000 of our
shares.

         In April 2001, we granted Timothy Samples, our then Chief
Executive Officer, an incentive bonus, which was structured as a loan
agreement, pursuant to which we made a (euro)865,000 forgivable 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 was still employed by us.

         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.

         Tax equalization payments

         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.




                                  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:




         Independent Auditors' Report

         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 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




COMPLETEL EUROPE N.V. AND SUBSIDIARIES Independent Auditors'
Report...................................................................  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 for the Years
Ended December 31, 2001, 2000 and 1999 ..................................  F-4

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999.........................................  F-6

Notes to Consolidated Financial Statements...............................  F-7




<PAGE>



INDEPENDENT AUDITORS' REPORT

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

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

         In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
CompleTel Europe N.V. and subsidiaries as of December 31, 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 of America.

         The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has been
experiencing recurring losses from operations and expects to fully utilize
its existing cash resources by the end of the third quarter of 2002, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 1.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

         As discussed in Note 2, the accompanying 2001 consolidated
financial statements have been restated.



                                            Deloitte & Touche Accountants

Amstelveen, The Netherlands,
September 12, 2002.


                                    F-1

<PAGE>



<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
<S>                                                                                                 <C>               <C>
      CURRENT ASSETS:
           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, as of December 31, 2001 and 2000, respectively......................              15,757             13,883
           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 .............................................................              11,640             26,184
           Accrued payroll..................................................................              10,256              7,900
           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 7)

      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
                  2000, respectively........................................................              16,055             16,055
           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 4).................................................            (15,553)           (15,554)
                                                                                                       ---------           --------
      TOTAL SHAREHOLDERS' EQUITY............................................................             121,916            415,960
                                                                                                       ---------           --------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............................................       (euro)455,990      (euro)824,781
                                                                                                   =============      =============
</TABLE>

          The accompanying notes are an integral part of these consolidated
balance sheets.


                                    F-2

<PAGE>


<TABLE>
<CAPTION>

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

                                                              Year Ended
                                                           December 31, 2001           Year Ended              Year Ended
                                                              (Restated)           December 31, 2000        December 31, 1999
                                                          --------------------    ---------------------    --------------------
<S>                                                      <C>                      <C>                      <C>
REVENUE.............................................      (euro)       75,939      (euro)       22,951       (euro)      1,903

OPERATING EXPENSES:
   Network costs, excluding depreciation............                   66,131                   23,162                   1,818
   Selling, general and administrative (excluding non-
      cash compensation charges)....................                   61,863                   49,839                  23,916
   Allocated costs from an affiliate................                    5,402                   12,090                   6,195
   Non-cash compensation charges....................                    2,844                   55,397                     634
   Depreciation and amortization....................                   28,520                   14,472                   3,600
   Restructuring, impairment and other charges......                    6,049                        -                       -
                                                          --------------------    ---------------------    --------------------
         Total operating expenses...................                  170,809                  154,960                  36,163
                                                          --------------------    ---------------------    --------------------

OPERATING LOSS......................................                  (94,870)                (132,009)                (34,260)
                                                          --------------------    ---------------------    --------------------

OTHER INCOME (EXPENSE):
   Interest income..................................                   12,728                   22,186                   2,388
   Interest expense, net of capitalized interest....                  (29,485)                 (28,968)                 (7,887)
   Foreign exchange loss and other expense..........                   (8,173)                 (18,806)                 (2,367)
                                                          --------------------    ---------------------    --------------------
         Total other income (expense)...............                  (24,930)                 (25,588)                 (7,866)
                                                          --------------------    ---------------------    --------------------

NET LOSS FROM CONTINUING OPERATIONS                                  (119,800)                (157,597)                (42,126)

DISCONTINUED OPERATIONS:
   Loss from discontinued operations................                 (225,417)                 (43,681)                 (7,664)
                                                          --------------------    ---------------------    --------------------

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
                                                          ====================    =====================    ====================
</TABLE>

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


                                    F-3

<PAGE>



<TABLE>
<CAPTION>

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


                                                                                                                Other
                                                                              Additional                       Cumulative
                                                     Ordinary Shares           Paid-in        Deferred       Comprehensive
                                                 Number          Amount        Capital      Compensation         Loss
                                              -------------    ----------- --------------   -------------   ---------------
<S>                                          <C>             <C>            <C>               <C>             <C>
BALANCE, January 1, 1999....................    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 Offering........................     7,375,000            738          3,266                -                 -
 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 options....................             -              -         (1,122)           1,122                 -
 Amortization of deferred compensation......             -              -              -           54,211                 -
 Issuance of Ordinary shares as
 consideration for LLC units................     3,142,162            314         15,240                -                 -
 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)     747
                                              =============    =========== ==============   =============   ===============
</TABLE>



<TABLE>
<CAPTION>

                                                             Treasury           Total
                                                Accumulted  Stock at Cost    Comprehensive
                                                 Deficit     (Note 4)           Loss             Total
                                            --------------- -------------   ---------------- -------------

<S>                                          <C>             <C>           <C>               <C>
BALANCE, January 1, 1999....................(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 Offering........................              -            -                 -         4,004
 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 units................              -      (15,554)                -            -
 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)(299,321)  (euro)121,916
                                            =============== =============   ================ =============
</TABLE>


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

                             Page F-4 and F-5

<PAGE>




<TABLE>
<CAPTION>

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

                                                            Year Ended               Year Ended                  Year Ended
                                                         December 31, 2001        December 31, 2000          December 31, 1999
                                                       ----------------------  ------------------------   -------------------------
<S>                                                     <C>                     <C>                       <C>
 OPERATING ACTIVITIES:
 Loss from continuing operations....................                (73,632)                 (156,807)                    (42,126)
   Adjustments to reconcile loss from continuing
   operations to net cash flows provided by
   continuing operating activities:
     Depreciation and amortization..................                  28,520                    14,472                       3,600
     Non-cash compensation expense..................                   2,844                    55,397                         634
     Accretion of senior discount notes.............                  13,347                    10,932                       7,617
     Amortization of deferred financing costs.......                   1,596                     2,081                         226
     Gain on early extinguishment of debt...........                (46,168)                   (1,053)                           -
     Foreign exchange loss..........................                   6,926                    12,188                       1,849
     Changes in operating assets and liabilities net
     of the effects of acquisitions:
       Increase in accounts receivable..............                      87                  (10,657)                       (798)
        Decrease (increase) in prepaid expenses,
         VAT receivables and other current assets...                   9,167                  (29,361)                     (5,703)
       Decrease (increase) in other non-current assets                   370                     (647)                       (586)
       Increase in accrued liabilities and trade
       accounts payable ............................                   5,532                   28,299                      13,794
       Decrease in net affiliate payables/Receivables                  1,205                   (1,409)                     (6,864)
                                                       ----------------------  ------------------------   -------------------------
     Net cash used in continuing operations.........                (50,206)                  (76,565)                    (28,357)
     Net cash used in discontinued operations.......                (52,625)                  (20,325)                    (11,234)
                                                       ----------------------  ------------------------   -------------------------
 Net cash flows 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 (used in) financing
   activities.......................................                (29,679)                   678,762                     155,610
                                                       ----------------------  ------------------------   -------------------------

   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................................                       -                         -                           -
</TABLE>

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

                                    F-6

<PAGE>


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


(1) Organization And Nature Of Operations


The Company's Business and Financial Condition


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

         Since its inception, the Company has generated operating losses
and negative cash flow from its operating activities. The Company expects
to continue to experience operating losses and negative cash flows from
operations until it establishes a sufficient revenue-generating customer
base. While the Company is experiencing growth in its core retail activity
in France, and believes that this trend will continue, during 2001 and
beginning of 2002 it observed signs of general weakness in the European
markets for wholesale carrier and dial-up Internet access and Internet data
center services. In light of these adverse market conditions, the Company
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 implemented a
major downsizing of its German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
Further, in April 2002, in connection with its planned recapitalization as
described below, the Company decided to sell its entire German operations,
which sale was completed in early May 2002 (see Note 3, Discontinued
Operations). In addition, faced with a significant downturn in the web
hosting market, linked to the collapse of the ".com" market and installed
hosting overcapacity in Europe, the Company decided to scale down the
Internet data center operations it had launched in France, Germany and the
United Kingdom. In France, the Company decided to integrate these
activities with its retail businesses, while in Germany and the United
Kingdom the Company has exited these markets by selling its entire
operations in these countries in May 2002.

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

                                    F-7

         While the Company previously estimated its funding gap (that is,
the additional financing required to bring it to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, in light of (i) the
anticipated elimination of interest payments upon the exchange or
retirement of the Company's outstanding debt securities pursuant to the
recapitalization plan described below, (ii) the cash savings from the sale
of the Company's German and UK operations and cost reductions at the
Company's European headquarters, and (iii) the lower cash requirements
related to selling, general and administrative expenses and capital
expenditures resulting from the Company's restructuring efforts, the
Company currently estimates its funding gap to be approximately (euro)30
million. The Company expects that, upon the completion of the
Recapitalization plan described below, its existing cash balances and the
additional equity infusion, together with the anticipated cash flow from
its operations, will be sufficient to fully fund its restructured
operations to cash flow breakeven.

The Company's Recapitalization Plan

         On May 15, 2002, the Company signed an agreement (the
"Restructuring Agreement") in support of a recapitalization plan (the
"Recapitalization") with an ad hoc committee of holders of its 14% senior
discount notes due 2009 and 14% senior notes due 2010 (collectively, the
"Notes"), constituting over 75% of the Company's outstanding Notes and with
Meritage Private Equity Funds ("Meritage") and DeGeorge Telcom Holdings
("DeGeorge Telcom"), two of the Company's principal shareholders. The
Recapitalization will involve:

         o        a debt for equity swap in respect of the outstanding
                  Notes,

         o        the return to the holders of the senior notes due 2010 of
                  the outstanding balance in the escrow account established
                  to provide funds for interest payments on these senior
                  notes, and

         o        equity investments at the closing of the Recapitalization
                  of approximately(euro)42.8 million, in the aggregate.

         Means of implementation. The Company decided to effect the
Recapitalization by means of a pre-arranged Netherlands composition
proceeding known as an Akkoord, which requires, among other things, the
approval of 75% of the admitted creditors, by value. To avail itself of
this proceeding, on May 29, 2002, CompleTel Europe N.V. filed with the
Dutch bankruptcy court for protection from its creditors. At the same time,
it submitted to the Dutch court a composition plan whereby the holders of
the Notes would receive convertible preferred B shares (the "Convertible
Preferred B shares") and Ordinary shares as described below. On June 24,
2002, the meeting of its creditors approved this composition plan, which
approval was confirmed by the Dutch court on September 4, 2002. The
composition plan is binding on all of CompleTel Europe's non-preferred
unsecured creditors, which consist almost entirely of the holders of its
Notes. Any additional creditors existing at May 29, 2002, the effective
date of the suspension of payments order, are entitled to receive in
respect of their claims Convertible Preferred B shares and Ordinary shares
under the same terms as the holders of the Notes. The Company estimates
that the aggregate amount of these additional claims is immaterial and that
the shares to be issued in respect of these claims, if any, would
constitute less than 1.0% of CompleTel Europe's share capital that would be
outstanding at the close of the Recapitalization, scheduled to occur in the
third week of September 2002. The Akkoord effectively eliminates the
Company's outstanding indebtedness while permitting its operating
subsidiaries to continue operations without disruption.

         Exchange of the Notes for Convertible Preferred B shares and
Ordinary shares. The outstanding Notes will be exchanged for Convertible
Preferred B shares and Ordinary shares together representing approximately
39% of CompleTel Europe's share capital that the Company estimates would be
outstanding at the close of the Recapitalization (excluding the C shares
described below). Pursuant to the terms of the Company's 14% senior notes
due 2010, the outstanding balance in the escrow account established to
provide funds for interest payments on those notes in September 2002
(approximately (euro)16.8 million) was distributed to holders of those
notes.

                                    F-8

         Equity investment of Meritage, DeGeorge Telcom and certain
Noteholders in exchange for Convertible Preferred shares and Ordinary
shares. The Recapitalization includes an equity investment of an aggregate
of (euro)30 million by Meritage and DeGeorge Telcom in return for the
issuance of convertible preferred A shares (the "Convertible Preferred A
shares") and Ordinary shares, together representing approximately 40% of
the Company's share capital that the Company estimates would be outstanding
at the close of the Recapitalization (excluding the C shares). Meritage and
DeGeorge Telcom will also be issued, on a pro rata basis, a number of C
shares that will cause them to hold, at the close of the Recapitalization,
the same number of shares for voting purposes as the former holders of the
Notes. In order to limit the effect of the C shares strictly to the
allocation of voting power, the C shares are structured in a way that
effectively gives them only nominal economic value.

         In addition, certain of the holders of the senior notes due 2010
have committed to make an equity investment of approximately (euro)9.9
million (reflecting a reinvestment of a portion of the escrow funds to be
released to these holders) in return for the issuance of Convertible
Preferred A share, Convertible Preferred B shares and Ordinary shares,
together representing approximately 14% of CompleTel Europe's share capital
that the Company estimates would be outstanding at the close of the
Recapitalization (excluding the C shares).

         The Company will pay a dividend equal to 11% per annum, compounded
quarterly, calculated over an amount of (euro)2,010.00 per share to the
holders of Convertible Preferred A shares and Convertible Preferred B
shares during the period commencing July 1, 2004, and until their
cancellation or conversion in accordance with their terms. Assuming 21,313
Convertible Preferred A shares and 14,926 Convertible Preferred B shares
are issued (that is, after giving effect to the investment of (euro)42.8
million in equity investments that the Company anticipates receiving at the
closing of the Recapitalization, and after giving effect to the 100-to-one
reverse split of the Preferred shares) and that none of the Convertible
Preferred A shares and Convertible Preferred B shares are converted or
cancelled prior to July 1, 2004, the aggregate annual dividend payable in
respect of the Convertible Preferred A shares and Convertible Preferred B
shares would be approximately (euro)8.3 million commencing in 2005.

         In accordance with their respective terms, in the event of a
liquidation of CompleTel Europe, the Convertible Preferred A shares will
rank senior to the Convertible Preferred B shares, which, will rank senior
to CompleTel Europe's Ordinary shares. In addition, upon liquidation, the
Convertible Preferred A shares and Convertible Preferred B shares will be
entitled to receive, prior to any distribution in respect of the Ordinary
shares, an amount in cash equal to (euro)2010.00 per share (after giving
effect to the Company's intended reverse share splits), or approximately
(euro)72.8 million in the aggregate. Furthermore, on August 20, 2002,
CompleTel Europe's extraordinary general meeting of shareholders adopted a
resolution to authorize the redemption, on July 1, 2007, of all of the
Convertible Preferred A shares and Convertible Preferred B shares to be
issued as part of the Recapitalization, in accordance with their terms.
Upon the redemption of the Preferred shares, their holders will be entitled
to receive a redemption value of (euro)6,030.00 per share (after giving
effect to the 100-to-one reverse split of the Preferred shares). If at such
time the Company does not have access to sufficient funds to redeem all the
then outstanding Preferred shares, the holders of Convertible Preferred A
shares shall have the right to receive (euro)2,010.00 per share. After the
Company similarly pays the holders of Convertible Preferred B shares, the
Company will distribute any remaining surplus proportionally to the holders
of Convertible Preferred A shares and Convertible Preferred B shares up to
the remaining balance of (euro)4,020.00 per share. Assuming 21,313
Convertible Preferred A shares and 14,926 Convertible Preferred B shares
are issued (after giving effect to the 100-to-one reverse split of the
Preferred shares) and that none of the Convertible Preferred A shares and
Convertible Preferred B shares are converted prior to the redemption date,
the aggregate redemption value due on the Convertible Preferred A shares
and Convertible Preferred B shares would be approximately (euro)218.5
million.

                                    F-9

         Potential additional equity investments. The Restructuring
Agreement also contemplates that up to an additional (euro)3.3 million may
be invested in the form of the exercise of warrants for Ordinary shares
(which warrants are to be issued to the Company's existing shareholders),
and that up to (euro)1.0 million may be invested by the Company's
management and senior employees in return for the issuance of Convertible
Preferred A shares and Ordinary shares. In the event that warrants expire
unexercised, the Company has undertaken to make the Ordinary shares
underlying those warrants available for subscription by the holders of its
Convertible Preferred A Shares and Convertible Preferred B Shares. The
Company has received a commitment from an institutional investor to take up
approximately 51% of these subscription rights, if they are offered.

         Effect on share ownership and Supervisory Board composition.
Post-Recapitalization, but without giving effect to the Company's warrant
offering, the Company anticipate that, the former holders of the Notes,
Meritage and DeGeorge Telcom would own, in the aggregate, approximately
97.5% of the economic interests in the Company's share capital that would
be outstanding at the completion of the Recapitalization. The remaining
shares (representing 2.5% of the economic interests in the Company's share
capital) would be held by the Company's existing shareholders, other than
Meritage and DeGeorge Telcom.

         Conditions.  The completion of the recapitalization is subject to,
         among other things:

         o        the approval of the Recapitalization by the Company's
                  existing shareholders, which approval took place at the
                  Company's extraordinary general meeting of shareholders
                  held on August 20, 2002;

         o        the approval of at least 75% of the Company's admitted
                  creditors, by value, which approval took place at the
                  meeting of creditors held on June 24, 2002;

         o        the final sanction of the Dutch courts, which occurred on
                  September 4, 2002;

         o        the closure or sale of the Company's operations outside
                  of France, which occurred in May 2002; and

         o        other customary conditions.

         The Company's Supervisory and Management Boards voted unanimously
to approve the Recapitalization.

         Going concern. The Company's ability to continue as a going
concern is dependent upon successful completion of the Recapitalization (or
obtaining alternative sources of financing if the Recapitalization is not
complete). There is no assurance that the Company will be able to effect
the Recapitalization, or that the Company will be able to secure
alternative sources of financing if the Recapitalization is not
consummated. If the Company fails to effect the Recapitalization, or to
obtain sufficient alternative financing, it will cease to be able to
continue as a going concern and be forced into liquidation. In that event,
the Company anticipates, based on its internal analyses, that the proceeds
of the liquidation would not suffice to pay off its creditors and,
therefore, there would be nothing left for distribution to its
shareholders.

The Company's Organization

         As discussed further below, CompleTel Europe was an indirect
majority owned subsidiary of CompleTel LLC ("LLC"), a Delaware limited
liability company, through November 2000. An indirect 7% interest in
CompleTel Europe was acquired by purchasers of units in the 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.

                                    F10

         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.

                                   F-11

         Following CompleTel Europe's initial public offering ("IPO") (see
Note 5), LLC commenced certain transactions that provided its members the
ability to hold their interests in CompleTel Europe directly rather than
indirectly. In December 2000, an aggregate 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 4, LLC no longer
exercises majority voting control over CompleTel Europe and CompleTel
Europe is not a consolidated entity in the financial statements of LLC,
effective December 1, 2000. CompleTel L.L.C. is therefore not preparing
consolidated financial statements including CompleTel Europe N.V. for the
fiscal 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 accounting principles generally
accepted in the United States ("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 to the current year presentation.


Restatement

         These consolidated financial statements have been restated. The
restatement relates to the reporting of the operating results of the
Company's German and U.K. operations in discontinued operations (see Note
3). In addition, the restatements relates to the reclassification of an
expense of approximately (euro)1.7 million associated with the repayment in
2001 of certain loans made to senior employees and the reclassification of
an expense of approximately (euro)1.4 million associated with the
forgiveness of a loan, plus accrued interest and applicable taxes, to a
former executive officer of the Company. These expenses, which are
described more fully in Note 4 are included in the consolidated statement
of operations in selling, general and administrative expense and were
previously included in other expenses.

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.

                                   F-12

Cash and Cash Equivalents


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


Current, Non-current Investments, Restricted


         Restricted investments include investments in euro-denominated
securities related to the Senior Notes (Note 6) 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 (in thousands):


<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:

<TABLE>
<CAPTION>
                                                                                           Estimated
                                                                                           Useful Life
                                                                                           -----------

<S>                                                                                        <C>
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
</TABLE>

                                   F-13


<TABLE>
<CAPTION>

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

                                                                                            December 31,
                                                                                            2001         2000

<S>                                                                                        <C>           <C>
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
                                                                                     ============= =============
</TABLE>




Network Equipment

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


         The Company capitalized approximately (euro)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.

                                   F-14

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 on a straight-line basis.


         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, as of December 31, 2001, the Company assessed
all of its network assets and consequently recorded impairment losses in
2001 totaling (euro)130.3 million in Germany and (euro)12.4 in the United
Kingdom (see Note 11).


Revenue Recognition

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


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

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

         The Company's three largest customers generated approximately 19%
and 21% of its revenue for the years ended December 31, 2001 and 2000,
respectively. The Company's largest customer generated slightly over 14%
and 10% of total revenue for those years, respectively.


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:

                                   F-15

         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.


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


<TABLE>
<CAPTION>
Assets (Liabilities) as of December 31, 2001                             Carrying Amount               Fair Value
<S>                                                                               <C>                      <C>
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.

                                   F-16

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 4).


         For the years ended December 31, 2001, 2000 and 1999, basic and
diluted loss per Ordinary share is comprised of the following:


<TABLE>
<CAPTION>
                                                                                   2001          2000        1999
                                                                                   ----          ----        ----
<S>                                                                              <C>          <C>           <C>
  Loss from continuing operation................................................(euro)(0.76) (euro)(1.06)  (euro)(0.42)
  Loss from discontinued operations.............................................      (1.43)       (0.29)        (0.08)
  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)  (euro)(0.50)
                                                                                ============ ============  ============
</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 recorded net of tax and
referred to as translation adjustments. Cumulative translation adjustments
are recorded as a separate component of shareholders' equity.

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

                                   F-17

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 did not have a material impact on the financial position
or operating results of 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 142 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 an
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.



         The Company adopted SFAS 141 and 142 effective January 1, 2002.
The adoption of these statements did not have a material impact on its
results of operations, financial position, or cash flows.


                                   F-18


         The goodwill amortization expense and net loss of the Company for
the years ended December 31, 2001, 2000 and 1999 are as follows (in
thousands):



<TABLE>
<CAPTION>

                                                                     Year Ended December 31,
                                                    ----------------------------------------------------------
                                                           2001                2000               1999
                                                    ------------------- ------------------- ------------------
<S>                                                      <C>                 <C>                 <C>
Reported net loss                                        (299,049)           (200,488)           (49,790)
     Add back: goodwill amortization..............            305                 441                179
Adjusted net loss ................................       (298,744)           (200,047)           (49,611)
                                                    =================== =================== ==================
Reported net loss per share.......................          (1.90)              (1.34)             (0.50)
                                                    =================== =================== ==================
Adjusted net loss per share.......................          (1.90)              (1.34)             (0.50)
                                                    =================== =================== ==================
</TABLE>


         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" ("APB Opinion 30") 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. Other than the restatement of the Company's
financial statements to report the results of its German and U.K.
operations, which were disposed of in May 2002, in discontinued operations
the adoption of SFAS 144 on January 1, 2002 did not have a material impact
on the Company's results of operations, financial position, or cash flows.

         In April 2002, the Financial Accounting Standards Board issued
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145
rescinds SFAS 4 "Reporting Gains and Losses from Extinguishment of Debt"
and also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings or describe their applicability
under changed conditions. SFAS 145 applies to fiscal years beginning after
May 15, 2002. The company anticipates that the adoption of SFAS 145 will
not have a material impact on the Company's results of operations,
financial position, or cash flows.

(3) Discontinued Operations

         During 2001 and beginning of 2002 the Company observed signs of
general weakness in the European markets for carrier and dial-up Internet
access and Internet data center services. In light of these adverse market
conditions, the Company implemented reorganization and restructuring
measures in order to adjust its operations to foreseeable market
conditions, reducing ongoing operating expenses and capital outlays. In
particular, as described in Note 11, the Company implemented a major
downsizing of its German operations in the fourth quarter of 2001 in view
of the slowdown in German telecommunications markets (particularly in the
carrier and ISP segments). Finally, in April 2002, in connection with its
planned recapitalization as described in Note 1, the Company decided to
sell its entire German and U.K. operations.

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


                                   F-19


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

         The Company has accounted for these transactions in accordance
with SFAS 144. While SFAS 144 supercedes APB Opinion 30, 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). In
the sale transactions of both the German operations and U.K. operations,
both conditions of qualifying as a component of an entity are met, that is,
(a) the operations and cash flows of the component have been eliminated
from the ongoing operations of the Company as a result of the disposal
transaction, and (b) the Company will not have any significant continuing
involvement in the operations of the component after the disposal
transaction.

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

<TABLE>
<CAPTION>

                                                               Year Ended December 31,
                                                        2001             2000            1999
                                                        ----             ----            ----
<S>                                                    <C>               <C>               <C>
Revenue                                         (euro)21,970      (euro)8,589       (euro)958
Operating expenses                                  (244,405)         (52,351)         (7,577)
                                              ---------------   --------------   -------------
   Operating loss                                   (222,435)         (43,762)         (6,619)
Other income (expense)                                (2,982)               81         (1,045)
                                              ---------------   --------------   -------------
Loss from discontinued operations             (euro)(225,417)   (euro)(43,681)   (euro)(7,664)
                                              ===============   ==============   =============
</TABLE>

         Upon the sale of the German and U.K. operations in May 2002, the
Company recognized a loss of 3.9 million. The carrying values of the sold
assets, as of December 31, 2001 and 2000, were (euro)43.2 million and
(euro)164.0 million, respectively. These assets primarily consisted of
property plant and equipment. The carrying values of the sold liabilities,
as of December 31, 2001 and 2000, were (euro)38.4 million and (euro)54.5
million, respectively, and consisted of accounts payable and accrued
liabilities. Note 11 sets forth further discussion concerning the
impairment and restructuring charges relating to the Company's discontinued
operations.


                                   F-20


(4) Related Party Transactions

Employee Loans

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

         In December 2000, the Company loaned William Pearson, its then
President and Chief Executive Officer, the principal amount of U.S.$1.5
million. The principal amount, together with accumulated interest at the
annual rate of 7% was 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 granted Timothy Samples, its then Chief
Executive Officer ("CEO"), an incentive bonus, which was structured as a
loan agreement, pursuant to which the Company made a (euro)865,000
forgivable loan to the CEO. The loan accrued interest at 6%, compounded
quarterly, and became due February 28, 2002. In accordance with its terms,
the repayment of the loan (including interest and reimbursement of
associated tax liabilities) has been forgiven by the Company, as the CEO
was still employed by the Company. The charge related to the forgiveness of
this loan has been included in selling, general and administrative expense
in the accompanying 2001 statement of operations.


                                   F-21

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.

(5) Initial Public Offering

         On March 30, 2000, CompleTel Europe completed the IPO of its
Ordinary shares. In the offering, CompleTel Europe issued 31,280,000
Ordinary shares 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.

(6) Indebtedness

Senior Discount Notes

         In February 1999, the CompleTel Europe and CompleTel Holdings
completed an Offering of 147,500 units (the "Units") consisting of
approximately (euro)131.9 million aggregate principal amount of 14% Senior
Discount Notes due 2009 (the "Notes") issued by CompleTel Europe and
1,475,000 non-voting Class B Membership 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.


                                   F-22

         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 was pledged as security for interest payments on the
Senior Notes. The proceeds of these pledged securities were to 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.

         Long-term debt consists of the following (in thousands):

                                   F-23

<TABLE>
<CAPTION>

                                                                                                    December 31,
                                                                                                   2001            2000
                                                                                                   ----            ----

<S>                                                                                           <C>         <C>
      14% Senior Discount Notes, face amount $120.5 million, due 2009,
      effective rate of interest 15.1%, converted to euro at December 31,
      2001 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.


(7) 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):

<TABLE>
<CAPTION>

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


         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 noise 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 proceeding is currently in
progress. The Company has taken measures to reduce the noise disturbances
and is also 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 activities.
Although at this stage the Company is not in a position to predict the
outcome of the negotiations, the Company estimates that the costs of either
moving the equipment or settling this dispute would not have a material
adverse effect on its financial condition or results of operations.


                                   F-24

         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.


(8) Income Taxes

The Netherlands


         In general, a Dutch holding company may benefit from the so-called
"participation exemption." The participation exemption is a facility in
Dutch corporate tax law which allows a Dutch company to exempt, from Dutch
income tax, any dividend income and capital gains in relation to its
participation in subsidiaries which are legal entities residing in The
Netherlands or in a foreign country. Capital losses are also exempted,
apart from liquidation losses (under stringent conditions). Any costs in
relation to participations, to the extent these participations do not
realize Dutch taxable profit, are not deductible. These costs include costs
to finance such participation.

         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%, excluding 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):

                                   F-25

<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 (in thousands):
<TABLE>
<CAPTION>

                                                                             December 31,
                                                                          2001              2000
                                                                          ----              ----
<S>                                                                 <C>             <C>
 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)    --
                                                                  ================================
</TABLE>

                                   F-26


(9) 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.


         Historically, management has evaluated the Company's development
efforts and results according to the geographic location of its markets in
France, Germany and the UK. The key operating performance measures used by
management in this evaluation include revenue growth and a measure the
Company refers to as "Adjusted EBITDA." In calculating Adjusted EBITDA, the
Company excludes (in addition to interest, taxes, depreciation and
amortization) non-cash compensation charges and foreign exchange loss and
other expenses, including restructuring, impairment and other charges, as
well as other non-recurring operating expenses. The Company believes that
Adjusted EBITDA provides both management and investors with a measure of
operating results that is unaffected by the financing and accounting
effects of gains and losses that are either of a non-recurring nature or
are not closely related to the performance of its core business.


         Adjusted EBITDA is not derived pursuant to generally accepted
accounting principles and therefore should not be considered 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.


         As discussed in Note 3, the Company sold and discontinued its
operations in Germany and the United Kingdom in May 2002. Consequently, the
Company currently operates in a single geographic segment. Presented below,
is certain financial information concerning the Company's performance in
France, the Company's sole geographic segment. In addition, the tables
below include certain financial information concerning CompleTel Europe and
Others. This information includes costs that consist of the Company's
corporate headquarters, including IT expenses and assets, including
primarily cash, property and equipment.

                                   F-27


As of and for the year ended December 31, 2001 (euro, in thousands):

<TABLE>
<CAPTION>

                                                                            CompleTel
                                                           CompleTel       Europe and
                                                              France            Other         Total
<S>                                                        <C>             <C>              <C>
           Revenue:
              Retail: voice.......................            29,069                -         29,069
              Retail: Internet & data.............             9,927                -          9,927
             Total Retail.........................            38,996                -         38,996
             Carrier..............................             8,877                -          8,877
             ISP..................................            26,164                -         26,164
           Hosting................................             1,902                           1,902
                Total.............................            75,939                -         75,939
           Adjusted EBITDA........................           (33,514)        (23,943)        (57,457)
           Depreciation and amortization                                                     (28,520)
           Interest expense, net of interest
             income...............................                                           (16,757)
           Foreign exchange gain/loss and other
             expense..............................                                            (8,173)
           Non-cash compensation charges..........                                            (2,844)
           Restructuring, impairment and other
             charges..............................                                            (6,049)
                                                                                            --------
           Net loss from continuing operations....                                          (119,800)
           Loss before extraordinary item and
             cumulative effect of change in
             accounting principle.................           (74,518)        (270,699)      (345,217)
           Total long-lived assets, net...........           236,812           40,995        277,807
           Total assets...........................           285,251          170,739        455,990
           Expenditures for long-lived Assets.....            93,927           14,289        108,216


As of and for the year ended December 31, 2000 (in thousands):

                                                           CompleTel        CompleTel
                                                              France       Europe and
                                                                                Other         Total
           Revenue:
               Retail: voice.....................              6,860                -         6,860
               Retail: Internet & data...........              2,073                -         2,073
             Total Retail........................              8,933                -         8,933
             Carrier.............................              3,727                -         3,727
             ISP.................................              7,901                -         7,901
             Hosting.............................              2,390                -         2,390
               Total.............................             22,951                -        22,951
           Adjusted EBITDA.......................            (54,886)          (7,254)      (62,140)
           Depreciation and amortization                                                    (14,472)
           Interest expense, net of interest
             income...............................                                           (6,782)
           Foreign exchange gain/loss and other
             expense..............................                                          (18,806)
           Non-cash compensation charges..........                                          (55,397)
           Restructuring, impairment and other
             charges..............................                                               --
                                                                                           --------
           Net loss from continuing operations....                                         (157,597)
           Loss before extraordinary item and
             cumulative effect of change in
             accounting principle.................           (89,412)        (111,866)     (201,278)
           Total long-lived assets, net..........            156,004          142,619       298,623
           Total assets..........................            199,950          624,831       824,781
           Expenditures for long-lived Assets....            101,335           10,939       112,274


As of and for year ended December 31, 1999 (in thousands):

                                                            CompleTel       CompleTel
                                                               France      Europe and
                                                                                Other          Total
           Revenue:
               Retail: voice......................                286               -            286
               Retail: Internet & data............                408               -            408
             Total Retail.........................                694               -            694
             Carrier..............................                411               -            411
             ISP..................................                798               -            798
               Total .............................              1,903               -          1,903
           Adjusted EBITDA........................            (27,237)         (2,789)       (30,026)
           Depreciation and amortization                                                      (3,600)
           Interest expense, net of interest
             income...............................                                            (5,499)
           Foreign exchange gain/loss and other
             expense..............................                                            (2,367)
           Non-cash compensation charges..........                                              (634)
           Restructuring, impairment and other
             charges..............................                                                --
                                                                                             -------
           Net loss from continuing operations....                                           (42,126)
           Loss before extraordinary item and
             cumulative effect of change in
             accounting principle.................            (32,824)        (16,966)       (49,790)
           Total long-lived assets, net...........             67,904          24,042         91,946
           Total assets...........................             80,860          95,348        176,208
           Expenditures for long-lived Assets.....             68,854               -         68,854

</TABLE>

                                   F-28



(10) 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 4, certain of these
non-performance based time vesting units were contributed to CompleTel
Europe in exchange for newly issued CompleTel Europe Ordinary shares,
subject to the same vesting provisions of the original issuance of common
units. The Company 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.

                                   F-29

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                               Weighted
                                                                Number of         Average        Number of               Average
                                                                  Shares      Exercise Price       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>

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

                                                                       Year Ended                         Year Ended
                                                                   December 31, 2001                  December 31, 2000
                                                                   -----------------                  -----------------
                                                                 Number of                         Number of
                                                                  Options          Fair Value        Options          Fair  Value
                                                           ---------------         ----------      ---------          -----------
<S>                                                        <C>                    <C>            <C>                 <C>
Exercise Price:
Less than market price...................................              --                  --        383,740               15.45
Equal to market price....................................       5,694,918                1.73      2,129,157                6.19
Greater than market price................................              --                  --             --                  --
                                                           ---------------         ----------      ---------          -----------
Total....................................................       5,694,918                1.73      2,512,897                8.39
                                                           ===============         ==========      =========          ===========
</TABLE>





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

                                                Options Outstanding                           Options Exercisable
                                --------------------------------------------------------------------------------------------
                                                     Weighted
                                                      Average
                                      Number of      Remaining       Weighted Average      Number of                Weighted
                                       Options      Contractual          Exercise           Options               Average Exercise
                                    Outstanding     Life (Years)       Price(euro)        Exercisable              Price (euro)
                                ---------------     ------------     ----------------     -----------             ----------------
<S>                              <C>                <C>             <C>                   <C>                   <C>
Exercise Price Range (euro)
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>

                                   F-30

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.

<TABLE>
<CAPTION>

                                                                      Year Ended December 31,
                                                                    2001           2000            1999
                                                                    ----           ----            ----
<S>                                                                <C>             <C>             <C>
          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%
</TABLE>

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

         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.


(11) Restructuring, Impairment and Other Charges

         In connection with the Company's restructuring efforts during the
second half of 2001, the Company recognized approximately (euro)6.0 million
in restructuring and impairment charges in its continuing operations. In
addition, the Company recognized restructuring and impairment charges,
totaling (euro)158.5 million, in its discontinued operations in Germany and
the United Kingdom (See Note 3).

<TABLE>
<CAPTION>

         These charges consist of the following (in millions):

<S>                                                                             <C>
Write-down of German and United Kingdom assets.....................       (euro)142.7
Write-down of materials and supplies...............................               6.0
Restructuring charges(1)...........................................              15.8
                                                                                 ----
Total..............................................................       (euro)164.5
                                                                          ===========
</TABLE>

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


         (1)      Includes (euro)6.0 million of restructuring charges
                  recognized by CompleTel Europe and the Company's French
                  operations and reflected in loss from continuing
                  operations.

Impairment charges

         In light of adverse market conditions and the Company's efforts to
reduce its ongoing operating expenses and capital outlays, in the fourth
quarter of 2001 the Company decided to significantly scale-back its
operations in Germany and exit the market in the United Kingdom. As a

                                   F-31

result of its decision, and in light of the adverse conditions in these
markets, the Company determined, in accordance with its policy relating to
recoverability of long-lived assets, that it was unlikely to recover its
investment in these assets (whether by utilizing these assets in its
business or through disposition) and thus, that the values of its German
and U.K. assets (comprising network property and equipment, including
switches, network plant, customer access equipment and operational support
systems) were impaired as of December 31, 2001. Accordingly, the Company
recorded total charges of (euro)142.7 million to write-down the carrying
values of these assets to their estimated fair market values using a
discounted cash flow approach. These charges are included in discontinued
operations, as discussed further in Note 3.

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


Restructuring Charges

         The restructuring charges relate primarily to severance costs
associated with the reductions in the size of the Company's workforce in
France, Germany and the United Kingdom during 2001, and charges incurred as
a result of lease terminations and the renegotiation of interconnection
agreements in connection with the Company's decision to significantly
scale-back its operations in Germany and to exit the market in the United
Kingdom.

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


<TABLE>
<CAPTION>
Summary of 2001 Restructuring Charges
                                                                                     Europe HQ
                                            France      Germany(5)           UK(5)    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(4)............     (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.
     (4)   Outstanding accruals are expected to be paid prior to December 31,
           2002.
     (5)   Restructuring charges for the Company's operations in Germany and
           the United Kingdom are included in discontinued operations
           (see Note 3).


                                   F-32

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


<TABLE>
<CAPTION>

                                                                              Total number of employees terminated
                                        Total number of employees to be       as of December 31, 2001
                                        terminated
                                        ------------------------------------- --------------------------------------
<S>                                                      <C>                                 <C>
        France                                           144                                 122
        Germany                                          231                                 220
        UK                                                33                                  33
        Europe HQ and other                               21                                  15
                                        ------------------------------------- --------------------------------------
        Total                                            429                                 390
                                        ===================================== ======================================
</TABLE>



 (12)  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.

 (13) Quarterly Financial Data (unaudited)
<TABLE>
<CAPTION>

                                                                                                 Basic and
                                                                                             Diluted Net Loss
                                                      Revenue   Operating Loss     Net Loss      per Share
                                                      -------   --------------     --------      ---------
                                                      (in thousands of euro, except per share amounts)

<S>                                                   <C>           <C>          <C>                 <C>
2001
 First Quarter.................................        15,604       (17,897)       (40,602)            (0.26)
 Second Quarter................................        18,599       (28,674)       (50,520)            (0.32)
 Third Quarter.................................        19,787       (21,719)       (25,202)            (0.16)
 Fourth Quarter................................        21,949       (34,345)      (182,725)            (1.16)
 2000
 First Quarter.................................         1,490       (81,827)       (97,701)            (0.77)
 Second Quarter................................         3,224        (3,462)       (27,597)            (0.18)
 Third Quarter.................................         6,678       (10,785)       (35,913)            (0.23)
 Fourth Quarter................................        11,559       (35,572)       (39,277)            (0.16)
</TABLE>


                                   F-33


<PAGE>

         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 September 13, 2002.


                        COMPLETEL EUROPE N.V.

                        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 September 13,
2002.



 SIGNATURE
 ---------
James E. Dovey
--------------
James E. Dovey
Supervisory Director

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
Supervisory Director

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

Alexandre Westphalen
--------------------
Alexandre Westphalen
Vice President, Finance

Jerome de Vitry
---------------
Jerome de Vitry
President Chief Executive Officer and Managing Director

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


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




<PAGE>




                               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
          10.7(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
          10.26(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
             10.28 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(13) Employment Agreement, dated as of November 1, 2001,
                   between J. Lyle Patrick and Cabletel Management, Inc.
         10.36(14) Secondment Agreement, dated November 1, 2001, among
                   CableTel Management, Inc., J. Lyle Patrick and CompleTel
                   Headquarters UK Ltd.
         10.37(15) Retention Agreement, dated March 15, 2002, between
                   CableTel Management Inc. and Timothy A. Samples
         10.38(15) Retention Agreement, dated March 15, 2002, between
                   CableTel Management, Inc. and J. Lyle Patrick
         10.39(15) Summary of a Retention Agreement, dated March 15, 2002,
                   between CompleTel Europe N.V. and Jerome de Vitry
         10.40(16) Resignation Agreement, dated May 17, 2002, among
                   CompleTel Europe N.V., CableTel Management Inc. and
                   Timothy A. Samples
         10.41(16) Non-Qualified Stock Option Agreement, dated May 17,
                   2002, between CompleTel Europe N.V. and Timothy A.
                   Samples
         10.42(16) Resignation Agreement, dated May 17, 2002, between
                   CompleTel Europe N.V., CableTel Management, Inc. and J.
                   Lyle Patrick
         10.43(16) Non-Qualified Stock Option Agreement, dated May 17,
                   2002, between CompleTel Europe N.V. and J. Lyle Patrick
             10.44 Translation of Employment Agreement, dated July 16,
                   2002, between CompleTel SAS and Jerome de Vitry
              23.1 Consent of Deloitte & Touche Accountants
              24.1 Power of Attorney
              99.1 Certifications pursuant to 18 U.S.C. Section 1350
              99.2 Certifications pursuant to Rules 13a-14 and 15d -14
                   under the Securities Exchange Act of 1934

-----------

(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.

(15)     Previously filed as an exhibit to the Registrant's Annual Report
         on Form 10-K for the year ended December 31, 2001, filed with the
         Securities and Exchange Commission on April 1, 2002 and
         incorporated herein by reference.

(16)     Previously filed as an exhibit to the Registrant's Quarterly
         Report on Form 10-Q for the period ended March 31, 2002, filed
         with the Securities and Exchange Commission on May 15, 2002 and
         incorporated herein by reference.