**Exhibit99.1**

 

**RISK FACTORS**

 

Statements in this Form10-Q that are not historical facts are “forward-looking statements” (as definedin the Private Securities Litigation Reform Act of 1995). Forward-lookingstatements include, but by way of example only, statements regarding thebenefits of the Company’s corporate development program and projectionsregarding financial impacts of new product roll-out and cost reductions ingeneral. These statements, when made, are intended to reflect VIA management’sthen current views with respect to future events and expectations and aresubject to a number of risks, assumptions and uncertainties, including thosediscussed below, which could cause our actual results to differ materially fromthose projected in such statements.

 

***WE HAVE A HISTORY OFNEGATIVE CASH FLOW AND WE MAY NEVER ACHIEVE POSITIVE CASH FLOW***

 

For the three and nine months ended September 30,2004, we experienced a net loss from continuing operations of($5,981) million and ($30,765) million respectively. We will not beable to continue to support our operations, deliver quality customer service,and improve our financial reporting infrastructure without material increasesin revenues. Our immediate goal is to generate recurring and positive cashflows on a consolidated basis. This goal, however, is predicated on theassumption that we can increase revenues and continue to reduce costs. If weare unable to increase our revenues or otherwise reduce our costs, we willcontinue to experience negative cash flow.

 

***WE ARE IMPLEMENTINGA NEW BUSINESS PLAN, WHICH MAY NOT BE SUCCESSFUL***

 

In March 2003, we adopted a new businessplan for 2003-2005. We have implemented many initiatives in 2003 and 2004 fromthe Strategic Plan and will continue to do so during the balance of 2004 andthrough 2005. As a part of the implementation of our Strategic Plan we have,among other things, initiated a shift in our business model from a focus ondial-up and leased line Internet access services to web-hosting and Internetsecurity services and from relying on the resale of services that other partiesprovide to developing and focusing on our own product platforms andtechnologies..  The implementation of ourStrategic Plan has also led to the outsourcing of a number of finance andnetwork administrative functions. The Strategic Plan may not succeed, mayresult in increased costs, and may not provide anticipated increased revenues.

 

***Wehave outsourced certain functions, and our providers may not deliver theanticipated level of service and functionality.***

 

We have outsourced certain network, financeand administration systems and processes to third party vendors. We cannot beassured that these third parties will continue to deliver the anticipated anddesired results. These third parties may not provide the anticipated level ofservice and functionality. This may increase our costs, which will negativelyaffect our results of operations. Our use of these outsource providers requiresus to rely on the contractual relationships we maintain with them and we willnot be able to control directly their quality of service or level ofcooperation. As a result, we have lost a certain degree of day-to-day controlover the outsourced functions and we are dependant on continued adherence tocontractual service descriptions and service level agreements. We mayexperience disputes with outsourcing providers to enforce our rights or addressservice issues. These issues may affect negatively our ability to deliverquality service to our customers and deliver accurate financial reporting onour operations.

 

***Thesuccess of our product development plans depends on our ability to identifyvendors and others who can provide quality and dependable service and tosuccessfully negotiate agreements with these vendors and providers so that wecan deliver the products and services profitably to our customers.***

 

Our product development plans (which are akey element of our refocused business model) call for the introduction of moresophisticated products and services as well as products that will enhance ourability to serve as a single-source provider of communications solutions. Whenwe launch new products and services, we typically partner with technologyvendors and other third party providers. The development and success of our newproducts and services depends on our ability to identify vendors and providerswho can provide quality and dependable service. In addition, we mustsuccessfully negotiate satisfactory agreements with these vendors and providersso that we can deliver the products and services profitably to our customers.Our success with new products and services and existing products and servicesalso depends on our ability to integrate sale, provisioning and billing forthese products and services into our sales force training and into our othersystems and processes. Our goal of generating recurring and positive cash flowson a consolidated basis depends, in part, on successfully introducing newproducts and services, such as Amen’s low cost dedicated server product and VIAExpress units’ suite of low-cost web-hosting, security and DSL products. Onceproducts and services are launched we must aggressively build market share inorder to achieve the anticipated revenue forecasted for the new products andservices. If we are unsuccessful in our marketing efforts, encounter anysignificant delays in introducing new products and services, or are unable tosuccessfully sell new products and services once they have been introduced, ourfinancial performance will be negatively impacted.

 

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***Oursales force reorganization into VIA Express and Industry Solutions requires usto upgrade our direct sales force, recruit reseller candidates and provide themwith necessary back-office solutions, and build or acquire end-to-end automatedcustomer acquisition, order entry, provisioning and billing solutions.***

 

Our new sales strategy requires that we focusour direct sales force on selling more sophisticated, higher margin, value-addedservices and channel our more basic products such as access and sharedweb-hosting to indirect and web-based sales. As a part of the new emphasis onour VIA Express channel, we have reduced and will continue to reduce our directsales force in certain country operations. The termination of sales staff,efforts to recruit new sales professionals and the training of our sales forcemay distract us from generating or impair our ability to generate new revenues.As a result, our operating results may suffer. As we reorganize our salesforce, we may experience higher turnover and the loss of more key salespersonsthan anticipated. Our sales strategy also calls for enhancing our indirect andautomated web sales capabilities. This component of our strategy depends onsuccessfully identifying and recruiting capable reseller candidates anddelivering back-office solutions enabling them to maximize sales opportunities,as well as address customer support issues. For web-based sales, our strategydepends on building or acquiring end-to-end automated customer acquisition,order entry, provisioning and billing solutions. If we fail to successfullyimplement and execute any one or more of these components, our sales strategymay not succeed and our operating results will be negatively impacted.

 

***Wemay not be able to keep up with rapid technological and other competitivechanges affecting our industry.***

 

The markets in which we compete arecharacterized by rapid consolidation of competitors, changing technology,evolving industry standards, frequent enhancements to existing services andproducts, the introduction of new services and products and changing customerdemands. These market characteristics are heightened by the emerging nature ofthe Internet and the trend for companies from many industries to offer Internet-basedproducts and services. In addition, the widespread adoption of new Internet,networking, or telecommunications technologies or other technological changescould require us to incur substantial expenditures to modify or adapt ourservices or infrastructure. Our future success will depend on our ability torespond to changing technologies on a timely and cost-effective basis. Ouroperating results may be adversely affected if we cannot successfully develop,introduce, or market new services and products. In addition, if we fail toanticipate or respond adequately to changes in technology and customerpreferences, or any significant delays in other product development efforts,such failure could have a material adverse effect on our business, financialcondition and operating results.

 

***OUR ACQUISITIONSTRATEGY MAY NOT ACHIEVE THE FAVORABLE RESULTS WE ARE SEEKING***

 

We have been engaged in a corporatedevelopment program to explore and evaluate acquisition and divestmentopportunities to complement or enhance our existing infrastructure, productofferings, channel strategies or customer base. A proactive acquisition and divestment program brings with it certainrisks, including the following:

 

•                                          Whilewe have established a small team of internal resources to conduct these andother transactions, we expect that broader participation from management willbe required in the course of the due diligence, negotiation and post-closingactivities as suitable targets are identified. Senior management may bedistracted from normal executive responsibilities and implementation of theStrategic Plan. This may slow the pace of operational improvements and other,revenue generating, activities;

 

•                                          Wemay face significant integration issues in connection with acquisitions or otherissues related to divestments. This may distract senior management, createunanticipated costs and may cause the quality of our services to suffer,resulting in the loss of customers and revenue; and

 

•                                          Wewill seek to build legal protections into acquisition and divestmentagreements. However, we may purchase undisclosed liabilities or experiencelower than projected operating results in newly acquired companies, or berequired to retain ongoing liabilities of disposed entities, which couldadversely affect our future operating results.

 

As a part of our corporate developmentprogram, during 2004 we have acquired the web-hosting group Amen and fivecountry operations of PSINet Europe, and we have sold VIA NET.WORKS UKlimited.  Our financial goals for 2005are partly dependant on successfully integrating the PSINet operations andachieving the financial benefits, which translate into lower costs to ourcompany as a whole, from that acquisition that we have forecasted.  A significant portion of the financialbenefits will be derived from the synergies obtained through the reduction ofredundant staff from both VIA and PSINet operations.  Labor laws in Europe provide significantprotection to employees.  If weexperience undue delays in our integration program due to the requirements ofcountry-specific labour laws or other unanticipated difficulties or costs interminated these employees, a further reduction in our overall operating costscould be delayed and our results may suffer.

 

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***RESTRUCTURING OF OURORGANIZATION, CONSOLIDATION OF EXISTING FUNCTIONS AND ADDITIONAL EMPLOYEERESPONSIBILITIES MAY RESULT IN OUR INABILITY TO RETAIN OR RECRUIT KEY PERSONNEL***

 

In 2004, we are continuing our efforts toreduce costs. These efforts include, but are not limited to replacingnon-performing sales professionals and refocusing our sales force, and refiningour web sales tool to automate and standardize orders, pricing and other systemdata related to access services. Many of these measures consolidate existingfunctions and require employees to take on additional responsibilities. Inaddition, these measures may result in greater organizational uncertainty, lowmorale and a higher than anticipated employee turnover. Over the past twoyears, we have experienced significant management turnover. Our success alsodepends on attracting and retaining key management, many of whom may bedifficult to replace. If we are unable to find suitable replacements for anyone or more of these key employees, our ability to implement these measures andthe success of our Strategic Plan may be negatively impacted. There can be noassurances that our operations will not suffer from unanticipated employeedepartures or from our inability to quickly engage qualified replacements.

 

***WE MAY NOT REALIZETHE ANTICIPATED FINANCIAL AND COMMERCIAL BENEFITS OF OUTSOURCING SOME OF OURFINANCIAL AND ADMINISTRATIVE FUNCTIONS AND AS A RESULT MAY SUFFER MATERIAL LOSS***

 

In the past, we have experienced operationaldifficulties with efforts to upgrade or deploy new back office systems. Ourdecision to outsource certain network, IT, finance and administration systemsto a shared service center may result in unanticipated difficulties such asloss or impairment of data integrity.

 

Our outsourcing providers provide their ownpersonnel to manage the outsourced functions. This results in a reduction ofour own organizational competencies and may create problems in coordinatingthese functions with the continued implementation of our Strategic Plan. We mayalso experience delays in response or failure to maintain software and systemupgrades. Outsourcing providers may not meet our requirements and theirpersonnel may fail to provide quality service. As a consequence, our overallcosts may rise. If we experience difficulties with a provider, we may wish tobring the outsourced services back in-house or terminate our relationship withthe provider and procure a different provider. As the number of providers islimited, it may be difficult or even impossible to transfer to anotherprovider. Further, because our outsourcing plans call for a significantreduction in staff we may lack the ability in the short term to return theservices in-house. Contractual difficulties may also impede our ability toterminate the outsourcing relationship. This may lead to costly and distractingdisputes and litigation.

 

***FAILURE TO ATTRACTAND RETAIN SENIOR MANAGEMENT AND CERTAIN OTHER KEY EMPLOYEES MAY ADVERSELYAFFECT OUR ABILITY TO CONDUCT OUR BUSINESS***

 

Our future success depends on the continuedservice and performance of our senior management and certain other keyemployees. In the past, we have been dependent on certain specialized systemspersonnel to operate, maintain and upgrade our systems. In an effort to reduceour costs, we have outsourced many of these responsibilities to outsidepersonnel, who may be less experienced and less knowledgeable than our formeremployees. In the past we have made significant headcount reductions and expectto make further reductions in the future. These reductions and our reliance onoutside personnel may impair our ability to attract and retain seniormanagement and certain other key employees. Our inability to attract and retainsenior management and certain other key employees could adversely affect ourbusiness, financial condition and operating results.

 

***IF DEMAND FOR OURPRODUCTS AND SERVICES DOES NOT INCREASE AS WE EXPECT, OUR ABILITY TO INCREASEOUR REVENUES WILL BE NEGATIVELY AFFECTED***

 

If the demand for our current and plannedInternet and web-hosting services fails to develop, or develops more slowlythan we anticipate, we may not be able to increase our revenues at the rate wehave projected. Obstacles to demand for our products and services include:

 

•                                          publicconcern about the economic viability of Internet services providers and theInternet industry in general;

 

•                                          failureof regulators to take adequate steps to prevent incumbent and largertelecommunications providers from monopolizing the market;

 

•                                          lackof developed infrastructure to support Internet applications and access tobroadband services; and

 

•                                          limitedaccess to Internet services.

 

In particular, we depend on increasing demandfor Internet services by SMEs. Demand by SMEs is dependent on the extent to

 

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which they and their customers and suppliers adopt the Internet as ameans of doing business, and they utilize Internet technologies to deal withinternal business processes. Demand will also depend on whether there is acontinuing economic downturn, which may result in reduced spending by SMEs onInternet products and services. Furthermore, as competition reduces prices forInternet access in many of our markets, we are increasingly dependent on ourability to sell high margin services such as security services, web-hosting,and ecommerce solutions. Finally, an increasing number of Internet servicesproviders are going out of business in our key markets. This results incustomer reluctance to rely on businesses such as ours for critical businessfunctions.

 

***COMPETITION FORCUSTOMERS IN OUR MARKETS MAY CAUSE US TO REDUCE OUR PRICES OR INCREASESPENDING, WHICH MAY NEGATIVELY AFFECT OUR REVENUES AND OPERATING RESULTS***

 

Some of our competitors have greater marketpresence, brand recognition and financial, technical and personnel resourcesthan we have. Although our competitors and their resources vary depending onthe market and the country, these competitors may include local and regionalInternet services providers, telecommunications companies and cable companies.Some of our competitors, in particular the telecommunications companies, havelarge existing networks and customer bases. Increasing competition may createpressure to reduce our prices while at the same time improving our products andservices. There is no assurance that the price and performance of our servicesand products will be superior relative to the services and products of ourcompetitors. As a result, we may experience a loss of competitive position thatcould result in lower prices, fewer customer orders, reduced revenues, reducedprofit margins and loss of market share.

 

***OUR BRAND NAMES ANDTRADEMARKS ARE DIFFICULT AND COSTLY TO PROTECT AND AS A RESULT WE MAY BECOMEINVOLVED IN TRADEMARK INFRINGEMENT LITIGATION***

 

We are aware of other companies using orclaiming to have rights to use trademarks that are similar to our marks andvariations of those marks, including the VIA NET.WORKS mark. The protectivesteps we have taken may be inadequate to deter misappropriation of ourproprietary information. We may be unable to detect the unauthorized use of, ortake appropriate steps to enforce, our intellectual property rights. The usersof these or similar marks may be found to have senior rights if they were everto assert a claim against us for trademark infringement. If an infringementsuit were instituted against us, even if groundless, it could result insubstantial litigation expenses. Failure to protect our intellectual propertyadequately could harm our brand and affect our ability to compete effectively.Further, defending our intellectual property rights could result in theexpenditure of significant financial and managerial resources, which couldadversely affect our business, financial condition and operating results.

 

We are currently engaged in litigation with athird party telecommunications provider in Spain, who opposed the SpanishTrademarks and Patents Official Agency’s granting the Spanish Amen groupcompany the trademark “Amen”. The Spanish Trademarks and Patents OfficialAgency granted and authorized the Spanish Amen group company the use of thetrademark “Amen” within Spain. Nevertheless, the third-party telecommunicationsprovider has appealed this decision. If this appeal were to be successful, wecould be forced to cease using the Amen mark and may be required to paydamages, although we believe that any such damages would be immaterial.

 

In connection with our acquisition of fivePSINet Europe companies, we received rights to use the “PSINet” name inBelgium, France, The Netherlands, Switzerland and Germany. These rights werelimited to the limited license rights held by the seller, PSINet Europe B.V.,which it received from the parent company, PSINet Inc. as a part of the seller’soriginal acquisition of the PSINet Europe companies from PSINet Inc. in theU.S. bankruptcy proceedings. The PSINet brand and domain name is used in theU.S. by Cogent Communications. The brand is also used in the UK by TelstraCorporation in connection with its purchase of PSINet UK from PSINet EuropeB.V. As a part of our acquisition, we entered into an agreement with Telstraunder which Telstra agreed not to use the brand in our PSINet Europeanterritories and we agreed not to use the brand in the United Kingdom.  The legitimate use of the brand by otherparties will tend to diminish the value of the brand to VIA and could lead toconfusion in the marketplace.  As aresult, we may have to incur additional costs in order to effectively leveragethe brand in our territories.

 

***FLUCTUATIONS IN THEEXCHANGE RATE BETWEEN THE U.S. DOLLAR AND THE VARIOUS CURRENCIES IN WHICH WECONDUCT BUSINESS MAY AFFECT OUR OPERATING RESULTS***

 

We record the revenues and expenses of ourlocal operations in their local currencies and translate these amounts intoU.S. dollars for purposes of reporting our consolidated results. As a result,fluctuations in foreign currency exchange rates may adversely affect ourrevenues, expenses and results of operations as well as the value of our assetsand liabilities. Fluctuations in foreign currency exchange rates may also adverselyaffect the comparability of period-to-period results. For example, if theaverage value of the Euro decreases in relation to the U.S dollar during aquarterly period as compared to the prior period, each Euro will convert tofewer U.S dollars during that quarterly period than the prior period and wewill report lower revenue growth than what would have been calculated in localcurrencies for that period. In addition, we hold foreign currency balances thatwill create foreign exchange gains or losses, depending upon the relativevalues of the foreign currency at the beginning and end of the reportingperiod, affecting our net income and earnings per share. In projecting futureoperating results, we make certain assumptions about the fluctuation of thehome currencies of our operations. If these

 

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assumptions turn out to be materially inaccurate, our actual operatingresults may be materially different from our projections.

 

***REGULATORY ANDECONOMIC CONDITIONS IN THE COUNTRIES WHERE WE OPERATE ARE UNCERTAIN, AND MAYDECREASE DEMAND FOR OUR SERVICES, INCREASE OUR COSTS, OR OTHERWISE REDUCE OURBUSINESS PROSPECTS***

 

Our operating companies are located incountries with rapidly changing regulatory and economic conditions that mayaffect the Internet services industry. New laws or regulations pertaining tothe Internet or telecommunications, or the application or interpretation ofexisting laws and regulations, could decrease demand for our services, increaseour costs, or otherwise reduce our profitability or business prospects.Examples of the types of laws and regulations that could adversely affect usinclude laws that:

 

•                                          imposetaxes on transactions made over the Internet;

 

•                                          imposetelecommunications access fees on Internet services providers or other increasesin access, transit or general telecommunications costs;

 

•                                          prohibitthe transmission of various types of information and content over the Internet;

 

•                                          imposerequirements that Internet services providers protect users’ privacy, monitorcontent, or permit government interception of data traffic; and

 

•                                          increasethe likelihood or scope of competition from telecommunications or cablecompanies.

 

For example, a number of European countrieshave enacted legislation that requires Internet services providers to establishtechnical means to permit national authorities to intercept data traffic ofidentified customers. The application of these laws to Internet servicesproviders has been subject to significant opposition from Internet servicesproviders industry groups in Germany, the United Kingdom and the Netherlands,among others, because of the substantial cost Internet services providers wouldincur in order to comply with these laws. Ultimately, these requirements mayimpose significant costs on our operations in these countries, which wouldnegatively impact our operating results. These laws could also increase ourcompetition or change our competitive environment so that customer demand forour products and services is affected adversely.

 

In addition to risks we face from new laws orregulations, we face uncertainties in connection with the application ofexisting laws to the Internet. It may take years to determine the manner inwhich existing laws governing issues like property ownership, libel, negligenceand personal privacy will be applied to communications and commerce over theInternet.

 

***WE RELY ONTELECOMMUNICATIONS PROVIDERS IN OUR MARKETS TO PROVIDE OUR CUSTOMERS WITHRELIABLE ACCESS TO OUR SERVICES, AND FAILURES OR DELAYS IN PROVIDING ACCESS COULDLIMIT OUR ABILITY TO SERVICE OUR CUSTOMERS AND IMPACT OUR REVENUES ANDOPERATING RESULTS***

 

Our customers typically access our serviceseither through their normal telephone lines or dedicated lines provided bylocal telecommunications providers specifically for the purposes of accessingand utilizing the Internet. Our customers are usually required to maintaintheir telephone line to utilize certain of our resold voice services or musthave a preexisting voice service prior to switching to our voice service,depending on the resold voice service we offer. In some of our markets, weexperience delays in delivery of new telephone or dedicated lines that preventour customers from utilizing our services. These delays result in lostrevenues. Additionally, some local telecommunications providers that provideInternet services provide delivery of telephone or dedicated lines to their ownInternet customers on a preferential basis, which may cause us to lose currentand potential customers. We also lease network capacity and VPNs fromtelecommunications providers and rely on the quality and availability of theirservice. These companies may experience disruptions of service, which coulddisrupt our services to, or limit Internet access for, our customers. We maynot be able to replace or supplement these services on a timely basis or in acost-effective manner, which may result in customer dissatisfaction and lostrevenues. In addition, to the extent that alternative local access providersfail in any particular market, the incumbent telecommunications providers willexperience less competitive price pressure for access, which could increase ourcost structures and impair our profit margins.

 

***WE DEPEND ON THERELIABILITY OF OUR NETWORK AND SYSTEMS, AND A FAILURE OR A BREACH OF OURSECURITY MEASURES COULD RESULT IN A LOSS OF CUSTOMERS AND REDUCED REVENUES***

 

We are able to deliver services only to theextent that our network and systems are protected against damages fromtechnical, network or system failures, computer viruses, natural disasters andunauthorized access or intentional acts or omissions caused by third parties.Any failure, accident or security breach that causes interruptions in ouroperations could impair our ability to provide services to our customers andnegatively impact our revenues and results of operations. To the extent thatany disruption or security breach results in a

 

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loss or damage to our customers’ data or applications, or inappropriatedisclosure of confidential information, we may incur liability as a result. Inaddition, we may incur additional costs to remedy the damages caused by thesedisruptions or security breaches. Although we currently possess errors andomissions insurance and business interruption insurance, these policies may notprovide effective coverage upon the occurrence of a material event or acombination of events.

 

***WE MAY BE LIABLE FORINFORMATION DISSEMINATED OVER OUR NETWORK***

 

We may face liability for information carriedon or disseminated through our network. Alternatively, we may incur costsassociated with efforts to prevent access to certain information from ournetwork as required by governmental authorities. The laws governing thesematters vary from jurisdiction to jurisdiction. Some types of laws that may resultin our liability for information disseminated over our network include:

 

•                                          lawsdesigned to protect intellectual property, including trademark and copyrightlaws;

 

•                                          lawsrelating to publicity and privacy rights and laws prohibiting defamation;

 

•                                          lawsrestricting the collection, use and processing of personal data; and

 

•                                          lawsprohibiting the sale, dissemination or possession of offensive or pornographicmaterial.

 

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