<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

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

                                   FORM 10-Q

                                  (Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended September 30, 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 number: 000-28113

                                TELEMONDE, INC.
                                ---------------
            (Exact name of registrant as specified in its charter)

           Delaware                                             62-1795931
           --------                                             ----------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                          Identification Number)

230 Park Avenue, 10th Floor, New York, New York                  10169
-----------------------------------------------                  -----
(Address of Principal Executive Offices)                       (Zip Code)

      Registrant's telephone number, including area code: (646) 435-5645
                                                          --------------


         Indicate by check 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
             ---     ---

     As of November 1, 2001, Telemonde, Inc. had issued and outstanding
123,626,118 shares of common stock, $.001 par value per share.

                                       1
<PAGE>

                                TELEMONDE, INC.
                                ---------------

                                     INDEX

<TABLE>
<CAPTION>
                                                                          Page Number
                                                                          -----------
<S>                                                                       <C>
                        PART I - FINANCIAL INFORMATION

Item 1.       Financial Statements                                                3

              Independent Accountant's Report                                     3

              Consolidated Financial Statements:

              Consolidated Balance Sheets -
                  September 30, 2001 and December 31, 2000                        4

              Consolidated Statements of Income -
                  Three and nine months ended
                  September 30, 2001 and 2000                                     5

              Consolidated Statements of Cash Flow -
                  Three and nine months ended
                  September 30, 2001 and 2000                                     6

              Notes to Consolidated Financial Statements                          7

Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                          11

              Forward-Looking statements                                         11
              Overview                                                           12
              Industry Trends                                                    12
              Operating Risks                                                    13
              Results of Operations                                              14
              Liquidity and capital resources                                    15

Item 3.       Quantitative and Qualitative Disclosures About Market Risk         17


                          PART II - OTHER INFORMATION

Item 1.       Legal Proceedings                                                  18

Item 2.       Changes in Securities and Use of Proceeds                          18

Item 5.       Other Information                                                  18

Item 6.       Exhibits and Reports on Form 8-K                                   19

Signatures                                                                       19

Exhibits index                                                                   19
</TABLE>

                                       2
<PAGE>

INDEPENDENT ACCOUNTANT'S REPORT

To the Stockholders of
Telemonde Inc

We have reviewed the accompanying condensed consolidated balance sheet of
Telemonde, Inc. and subsidiaries as of September 30, 2001, and the related
consolidated statements of income and cash flows for the three and nine month
periods ended September 30, 2001 and 2000. These financial statements are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet as of December 31,
2000 and the related consolidated statements of income, stockholders' equity and
cash flows for the year then ended, not presented herein, and in our report
dated February 17, 2001, we expressed an unqualified opinion with an explanatory
paragraph on those consolidated financial statements. We reported that there is
substantial doubt about the ability of the Company to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability of recorded assets, or the amounts of liabilities, that might be
necessary in the event that the Company cannot continue in existence. In our
opinion the information set forth in the accompanying consolidated balance sheet
as of December 31, 2000 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.





                                                           MOORE STEPHENS
                                                           Chartered Accountants

St. Paul's House
London EC4P 4BN
November 13, 2001

                                       3
<PAGE>

PART I. - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.


                                TELEMONDE, INC.
                          Consolidated Balance Sheets
                      (US Dollars expressed in thousands)

<TABLE>
<CAPTION>
                                                                   At September30 2001     At December 31 2000
                                                                   -------------------     -------------------
                                                                            (Unaudited)               (Audited)
<S>                                                                <C>                     <C>
Assets

Cash and cash equivalents of which $2,070 is held by the           $              2,167    $              1,430
Company's subsidiary, DeserTel, and is restricted to local
trade accounts payable
Trade accounts receivable, net of allowance for doubtful                          3,508                   6,313
debts of $2,284 in 2001 and $2,025 in 2000
Prepayments and other debtors                                                     2,633                   9,403
                                                                     -------------------     -------------------
Total current assets                                                              8,308                  17,146
Property, plant and equipment                                                    13,372                  18,113
Intangible assets                                                                10,651                  23,618
                                                                     -------------------     -------------------
Total assets                                                       $             32,331    $             58,877
                                                                     ===================     ===================

Liabilities and stockholders' equity

Trade accounts payable                                             $             30,716    $             29,025
Other creditors and accrued expenses                                             11,382                  12,094
Deferred income                                                                     565                   3,595
Short term notes                                                                 13,526                  11,895
                                                                     -------------------     -------------------
Total current liabilities                                                        56,189                  56,609
                                                                     -------------------     -------------------

Trade accounts payable non-current                                                6,000                   6,000
                                                                     -------------------     -------------------

Minority interests                                                                   78                      90
                                                                     -------------------     -------------------

Stockholders' equity

Preferred stock                                                                      50                      50
Common stock                                                                        124                     109
Additional paid in capital                                                       72,290                  71,437
Retained deficit                                                              (102,400)                (75,418)
                                                                     -------------------     -------------------
Total stockholders' deficit                                                    (29,936)                 (3,822)
                                                                     -------------------     -------------------

Total liabilities and stockholders' equity                         $             32,331    $             58,877
                                                                     ===================     ===================
</TABLE>

See accompanying notes and independent accountant's report.

                                       4
<PAGE>

                                TELEMONDE, INC.

                       Consolidated Statements of Income
          (US Dollars expressed in thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Three months ended             Nine months ended
                                                                 -------------------            ------------------
                                                                     September 30                  September 30
                                                                     ------------                  ------------
                                                                      2001           2000           2001          2000
                                                                      ----           ----           ----          ----
<S>                                                        <C>              <C>           <C>            <C>
Revenues                                                   $         5,655  $       5,375 $       18,966 $      32,621

Cost of sales                                                        2,598          5,537         15,806        23,037

                                                             --------------   ------------  -------------  ------------
Gross margin                                                         3,057          (162)        3,160           9,584
                                                             --------------   ------------  -------------  ------------

Operating expenses
Selling, general and administrative expenses                         2,196          5,672          8,371        14,296

Non cash charge for amortization of goodwill                           989            869          2,967         2,707

Provision for contract terminations                                      0              0          2,500             0

Financing costs                                                          0          1,710             50         3,784

Non cash charge for impairment of goodwill                           5,000          2,968         11,632         5,210

Non cash charge for impairment of bandwidth                          2,800              0          2,800             0

Non cash charge reserve for doubtful debts                              77             32            478            32

                                                             --------------   ------------  -------------  ------------
Operating expenses                                                  11,062         11,251         28,798        26,029
                                                             --------------   ------------  -------------  ------------

Operating loss                                                     (8,005)       (11,413)       (25,638)      (16,445)
                                                             --------------   ------------  -------------  ------------

Other income (expense)
Interest income                                                          8            171            193           658

Interest expense                                                     (503)        (1,644)        (1,498)       (2,378)

Share of loss of associate                                               0              0              0         (400)

Foreign exchange gains (losses)                                      (671)            174           (51)           621

                                                             --------------   ------------  -------------  ------------
Total other expense                                                (1,166)        (1,299)        (1,356)       (1,499)
                                                             --------------   ------------  -------------  ------------

Loss before minority interests                                     (9,171)       (12,712)       (26,994)      (17,944)

Minority interests                                                      11           (36)             12          (59)

                                                             --------------   ------------  -------------  ------------
Loss for the period                                                (9,160)       (12,748)       (26,982)      (18,003)
                                                             ==============   ============  =============  ============

Loss per share - basic and diluted                                 ($0.07)        ($0.14)        ($0.23)       ($0.21)

</TABLE>

See accompanying notes and independent accountant's report.

                                       5
<PAGE>

                                TELEMONDE, INC.
                     Consolidated Statements of Cash Flow
                      (US Dollars expressed in thousands)
                                 (Uunaudited)

<TABLE>
<CAPTION>
                                                                                   Nine months ended September 30
                                                                                             2001            2000
                                                                                             ----            ----
<S>                                                                                  <C>            <C>
Operating activities
          Loss                                                                       $   (26,982)   $    (18,003)

          Adjustments to reconcile loss to net cash provided by operating
          activities:
                Reserve for doubtful debts                                                    315              32
                Amortization of goodwill                                                    2,967           2,707
                Depreciation                                                                2,020           1,922
                Fees satisfied by issuance of stock                                         1,363          12,211
                Fees satisfied by issuance of short term notes                                935               0
                Impairment of goodwill                                                     10,000           5,210
                Impairment of bandwidth                                                     2,800               0
                Minority interests                                                           (12)              75
                Goodwill of acquired subsidiary                                                 0         (1,404)
                Net assets of acquired subsidiary                                               0            (34)
                Unrealized gains on foreign currency transactions                           (100)               0
                (Increase) decrease in trade accounts receivable                            2,490         (3,027)
                (Increase) decrease in prepayments and other debtors                        6,770         (7,783)
                Increase (decrease) in trade accounts payable                               1,691           1,893
                Increase (decrease) in accrued expenses                                     (959)           8,218
                Increase (decrease) in deferred income                                    (3,030)           1,331
                                                                                       -----------    ------------
Net cash provided by operating activities                                                     268             686
                                                                                       -----------    ------------

Investing activities
           Purchase of property, plant and equipment                                         (74)           (786)
           Cash acquired on acquisition of subsidiary                                           0             170
                                                                                       -----------    ------------
           Net cash used in investing activities                                             (74)           (616)
                                                                                       -----------    ------------

Financing activities
          Repayment of short term notes                                                     (267)               0
          Proceeds from short term notes                                                      810           2,497
          Redemption of stock                                                                   0           (297)
                                                                                       -----------    ------------
          Net cash provided by financing activities                                           543           2,200
                                                                                       -----------    ------------

Net increase in cash and cash equivalents                                                     737           2,270

Cash and cash equivalents beginning of period                                               1,430              62
                                                                                       -----------    ------------

Cash and cash equivalents end of period                                              $      2,167   $       2,332
                                                                                       -----------    ------------

Supplemental disclosure of cash flow information:

          Interest paid                                                              $          5   $         823
</TABLE>

See accompanying notes and independent accountant's report.

                                       6
<PAGE>

                                TELEMONDE, INC.
                  Notes to Consolidated Financial Statements
                              September 30, 2001


1. The financial statements have been prepared on the going concern basis which
contemplates the realization of assets and the settlement of liabilities in the
ordinary course of business. As at September 30, 2001, we had a retained deficit
of $102.4 million and an excess of liabilities over assets of $29.9 million.

2. Pursuant to a Standstill Agreement, we owe Global Crossing $10 million for
services supplied and not paid for. This is repayable as to $4 million due on
November 30, 2001 and $6 million due on November 30, 2002. We have entered into
a new commitment to purchase $8 million of services from Global Crossing over
the next five years at the prevailing market prices at the time of purchase. If
we are unable to meet any of our obligations under the Standstill Agreement,
Global Crossing may take action to pursue us for $55 million under our original
obligations to them. We do not have the resources to meet the $4 million payment
currently due on November 30, 2001. In the event that we fail to meet an
obligation under the Standstill Agreement, our balance sheet would require
restating to reflect the liquidation value of assets and liabilities as at
September 30, 2001, summarized as follows:


                  Pro-Forma Balance Sheet (liquidation basis)
                      (US Dollars expressed in millions)

<TABLE>
<CAPTION>
                                                                   At September 30, 2001
                                                                   ---------------------
<S>                                                                <C>
Assets

Cash and cash equivalents                                              $          2.2
Trade accounts receivable                                                         2.3
                                                                         -------------
Total current assets                                                              4.5
Property, plant and equipment                                                       -
Intangible assets                                                                   -
                                                                         -------------
Total assets                                                           $          4.5
                                                                         =============

Liabilities and stockholders' deficit

Trade accounts payable                                                 $         79.8
Other creditors and accrued expenses                                             12.4
Deferred income                                                                   0.6
Short term notes                                                                 13.5
                                                                         -------------
Total current liabilities                                                       106.3
                                                                         -------------

Stockholders' deficit

Additional paid in capital                                                       72.5
Retained deficit                                                              (174.3)
                                                                         -------------
Total stockholders' deficit                                                   (101.8)
                                                                         -------------

Total liabilities and stockholders' equity                             $          4.5
                                                                         =============
</TABLE>

Management is in detailed discussion with Global Crossing in an effort to
extinguish or settle the liabilities it has to Global Crossing prior to November
30, 2001. These negotiations, if successful, would result in a full and final
settlement of all our obligations to Global Crossing.

3. In December 1998 and March 1999 (through wholly-owned subsidiaries) we
entered into agreements for the purchase of five STM-1 transatlantic IRU
telecommunications circuits from WorldCom. We did not take delivery of four of

                                       7
<PAGE>

these circuits resulting in a default of $26.3 million. Since December 1999,
WorldCom has agreed not to take proceedings in respect of the outstanding
liability pursuant to the terms of a standstill letter (as amended). Pursuant to
the standstill letter, in September 2000, WorldCom released us from $9 million
of our liability in exchange for 15,766,792 shares of our common stock. Our
current liability is $17.8 million.

4.  We have a debt obligation under a Capacity Option Agreement with
Communications Collateral Limited (CCL) under which we have been unable to
complete an agreed repurchase of capacity. Under the terms of a Forbearance
Agreement entered into in February 2000, as at September our outstanding debt to
CCL was $3.2 million. Interest is accruing on the outstanding amount at the rate
of 12.5% per annum. We have agreed to repay the outstanding balance at a rate of
$100,000 per month but in any event as quickly as practicable. Under a
Registration Rights Agreement dated September 1, 1999 and under the Forbearance
Agreement we have an obligation to issue CCL 8.2 million shares, which shares
relate to penalty obligations for failure to register CCL's shares for public
resale prior to February 15, 2000.

5.  We have a debt obligation under a Capacity Purchase Agreement to Gemini. As
at September 30, 2001, the outstanding debt was $2.1 million. As at September
30, 2001, we had paid Gemini $1.2 million, of which $0.8 million had reduced the
original principal sum. Interest is accruing at LIBOR plus 3%. Management is in
continued discussion with Gemini regarding this debt.

6.  We have a debt liability to Ebone Broadbrand Services Limited for capacity
supplied. As at September 30, 2001, the debt was (pound)2.3 million. Management
is in regular discussion with Ebone regarding this debt.

7.  We have a debt liability to the Inland Revenue, the collector of payroll
taxes in the United Kingdom, in the amount of $1.9 million. Management is in
discussion with the Inland Revenue regarding the payment of this debt. The
Inland Revenue may take steps to recover this debt in the event that it is not
settled on mutually acceptable terms.

8.  On March 13, 2001, we entered into an agreement with Parrington Associates
Limited whereby the company agreed to pay a commission of $1,050,000 in
consideration for services provided by Parrington Associates. The commission was
satisfied by a cash payment of $115,000 and notes payable of $935,000. The notes
bear interest at 1 per cent per month and are repayable in three installments
ending on September 30, 2001. No repayment has been made. Management is in
discussion with Parrington regarding an extension of the repayment terms.

9.  There is substantial doubt about our ability to continue as a going concern.
Management is addressing the ongoing solvency of the company including cutting
costs, seeking fresh financing and the focussing on the provision of high-margin
advisory services to the telecommunications sector. We have reduced our cost
base by reducing the number of employees, closing our subsidiary, telemonde.net
in Switzerland and by agreed reductions in pay to remaining employees, including
senior management who have accepted a pay cut of 75% until February 2002.
Nevertheless, our ongoing operating costs exceed projected operating revenues.
We issued short term notes amounting to $0.8 million in the nine months ended
September 30, 2001. We are seeking fresh capital, however there can be no
assurance that such capital will be available. We have generated revenues from
advisory services contracts amounting to $0.8 million in the nine months ended
September 30, 2001 and we anticipate that revenues of $2.5 million will be
booked in the last quarter of fiscal 2001.

10. Reference is made to the Notes to Consolidated Financial Statements
contained in our December 31, 2000 audited consolidated financial statements
included in our 2000 Annual Report and our 2000 Annual Report on Form 10-K filed
with the SEC on April 2, 2001. In the opinion of management, the interim
unaudited financial statements included herein reflect all adjustments
necessary, consisting of normal recurring adjustments, for a fair presentation
of such data on a basis consistent with that of the audited data presented
therein. The consolidated results of operations for interim periods are not
necessarily indicative of the results to be expected for a full year.

11. In our Quarterly Report for the quarter ended September 30, 2000 filed on
Form 10-Q with the SEC on November 14, 2000, we reflected a charge of $4.6
million arising from an amendment in the terms of a contract to provide
bandwidth. The sale had originally been reflected as revenue with a related cost
of sale in our Quarterly Reports for the quarter ended March 31, 2000 filed on
Form 10-Q/A-2 on June 9, 2000 and Form 10-Q filed on August 15, 2000. For the
purpose of the comparative financial statements, we have reflected this change
in the terms of the contract in the accompanying statement of income for the
three months ended

                                       8
<PAGE>

September 30, 2000 which results in an increase in net income of $4.6 million in
the quarter.

12. At September 30, 2001, we had issued and outstanding 123,626,118 shares of
common stock and 5,000,000 shares of preferred stock designated as Series A
Convertible Preferred Stock ("Series A Preferred Stock"). At December 31, 2000,
we had issued and outstanding 108,982,546 shares of common stock and 5,000,000
shares of Series A Preferred Stock. Each share of Series A Preferred Stock may
be converted into approximately 4.6 shares of our common stock and carries
voting rights equal to the voting rights and powers of the common stock. Holders
of Series A Preferred Stock are entitled to the number of votes equal to the
number of shares of common stock for which it is convertible. Additionally,
certain corporate actions require the affirmative vote of holders of at least 66
2/3% of the Series A Preferred Stock. Holders of Preferred Stock are entitled to
participate in dividends and distributions and receive preference to any
distributions in the event of liquidation, dissolution or winding up.

13. The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standard ("SFAS") No. 128, "Basic and Diluted EPS." The
calculation of basic earnings per share in accordance with SFAS No. 128 is as
follows:

                                               Three months ended September 30
                                                     2001          2000

Loss attributable to common stockholders         $ (9,160,000) $(12,748,000)

Average common shares issued and outstanding      123,626,118    90,520,233

Basic and diluted loss per share                 $      (0.07) $      (0.14)


                                               Nine months ended September 30
                                                     2001            2000

Loss attributable to common stockholders         $(26,982,000) $(18,003,000)

Average common shares issued and outstanding      116,485,294    86,155,670

Basic and diluted loss per share                  $     (0.23   $     (0.21)

No adjustment to earnings per share arises on the issue of warrants or
conversion rights as the effect is antidilutive.

14. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) is
defined as operating losses as adjusted for non cash items, including
depreciation, amortization of goodwill, impairment of goodwill and impairment of
bandwidth. EBITDA is intended to represent the cash-based result for the period.
It is not a recognized accounting measure and does not replace the results
reported in the Statement of Income. Our EBITDA for the three and nine months to
September 30, 2001 are:

                      (US Dollars expressed in thousands)

                     Three months              Nine months
                     2001     2000            2001     2000
                    1,476   (6,966)         (6,007)  (6,665)

15. We follow provisions of SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information". SFAS No. 131 establishes standards for
reporting information about operating segments in annual financial statements
and requires selected information about operating segments in interim financial
reports issued to stockholders. It also establishes standards for disclosures
about products and services and geographic areas. Operating segments are
components of an enterprise for which separate financial information is
available and which is evaluated regularly by a corporation's chief operating
decision maker, or decision making group, in deciding how to allocate resources
and assess performance. Operating segments are managed separately and represent
strategic business units that offer different products and serve different
markets.

Our reportable segments include bandwidth services, voice services (including
emerging markets) and advisory services. "Other services" includes development
businesses such as Internet services and other corporate charges and income and
assets (including goodwill) not attributable to a specific segment. The
following represents selected consolidated financial information for our
segments:

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                 Bandwidth           Voice         Advisory          Other        Total
                                  Services        Services         Services       Services
                                  --------        --------         --------       --------      --------
                                                     (US Dollars in millions)
<S>                               <C>             <C>              <C>            <C>           <C>
Three months ended
September 30, 2001

Revenues                               3.3             2.0              0.3            0.1           5.7
Gross margin                           1.8             0.8              0.5            0.0           3.1
Net loss                              (2.0)           (0.3)             0.3           (7.2)         (9.2)


Three months ended
September 30, 2000

Revenues                               1.0             3.2              0.9            0.3           5.4
Gross margin                          (1.3)            0.2              0.9            0.0          (0.2)
Net loss                              (4.4)           (1.5)             0.2           (7.0)        (12.7)


Nine months ended
September 30, 2001

Revenues                              12.0             5.8              0.8            0.4          19.0
Gross margin                           1.9             0.3              0.8            0.2           3.2
Net loss                              (5.4)           (2.6)            (0.2)         (18.8)        (27.0)


Nine months ended
September 30, 2000

Revenues                              17.5             7.8              5.6            1.7          32.6
Gross margin                           4.7            (0.2)             5.6           (0.5)          9.6
Net loss                              (3.0)           (4.3)             3.7          (14.4)        (18.0)

September 30, 2001

Total assets                          13.9             3.4              2.2           12.8          32.3

December 31, 2000

Total assets                          21.0             9.4              2.6           25.9          58.9
</TABLE>

16. In July 2001, the FASB issued SFAS No. 141 "Business Combinations". SFAS No.
141 addresses financial accounting and reporting for business combinations and
supersedes APB Opinion No. 16, "Business Combinations" and SFAS No. 38,
"Accounting for Preacquisition Contingencies of Purchased Enterprises". This
standard eliminates the pooling-of-interests method of accounting for business
combinations, requiring the purchase method of accounting. This standard also
revises the measures for accounting for negative goodwill and establishing
whether an intangible asset is a part of acquired goodwill. The provisions of
this Statement apply to all business combinations initiated after June 30, 2001.
This Statement also applies to all business combinations accounted for using the
purchase method for which the date of acquisition is July 1, 2001. The adoption
of this standard has not had a material impact on our financial position or
results of operations.

17. In July 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible
Assets". SFAS No. 142 provides guidance on accounting for goodwill and
intangible assets. This Statement requires that goodwill not be amortized. A
reduction in goodwill will only result from an impairment test if the test
reveals that the fair value of goodwill is below its carrying value. An acquired
intangible asset (other than goodwill) with an indefinite useful life should not
be amortized until its useful economic life is determined to be finite. These
assets should be annually tested for impairment (at a minimum). An acquired
intangible asset (other than goodwill) with a limited useful life should be
amortized over its useful economic life and reviewed for impairment in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of". The provisions of this


                                       10
<PAGE>

Statement are required to be applied starting with fiscal years beginning after
December 15, 2001. Goodwill and intangible assets acquired after June 30, 2001,
will be subject immediately to the nonamortization and amortization provisions
of this Statement. We do not believe that the adoption of this standard will
have a material impact on our financial position or results of operations.

18. In September 2001, the FASB issued SFAS No 144, "Accounting for Impairment
of Disposal of Long-Lived Assets". SFAS supersedes SFAS 121 "Accounting for
Impairment of Long-Lived Assets and Long-Lived Assets to be disposed of", bur
retains the basic requirements regarding when and how to measure an impairment
loss. SFAS applies to long-lived assets to be held or disposed of but
specifically excludes certain classes of assets such as goodwill and intangibles
not being amortized. We do not believe that the adoption of this standard will
have a material impact on our financial position or results of operations.

19. On March 29, 2001, we entered into an agreement with Home Run Limited to
extend the repayment period of the (UK Sterling) 5.0 million ($7.4 million)
facility advanced by Home Run. The loan bears interest at LIBOR plus 2 per cent
and is repayable on April 26, 2002. The loan is convertible into shares of our
common stock prior to the repayment date at the option of Home Run, based on a
conversion price of $0.16 per share.

20. In the quarter ended September 30, 2001, we received a non-interest bearing
short-term advance of $780,000 from Meynard Freres Limited (formerly known as
Hoolcross Limited) a company of which Mr Kevin Maxwell is a director and
beneficial shareholder. The advance was satisfied by the provision of advisory
services invoiced in the final quarter of fiscal 2001.

21. In accordance with the provisions of SFAS 121, we are obliged to evaluate
the carrying value of our long-lived assets when factors exist that may indicate
that the asset is impaired. We believe that recurring operating losses within
acquired subsidiaries, a significant downturn in the telecommunications market
and the availability of funding to fully exploit future business opportunities
have indicated that an ongoing review of goodwill for possible impairment is
necessary. The review was based on the expected future operating cash flows from
acquired businesses. The review indicated that significant uncertainties exist
relating to the expected future cash flows from acquired businesses. We took a
non-cash charge of $5 million for impairment of goodwill in the quarter ended
June 30, 2001. A further review has indicated that uncertainties have persisted
and economic and market conditions have deteriorated. As a result, we have made
an additional non-cash charge of $5 million in the quarter ended September 30,
2001. The total non-cash charge for impairment of goodwill during the none
months ended September 30, 2001 amounted to $10 million. We intend to have an
external valuation of goodwill at 31 December 2001 in anticipation of the
adoption of SFAS 142.

22. In accordance with the provisions of SFAS 121, we are obliged to evaluate
the carrying value of our long-lived assets when factors exist that may indicate
that the asset is impaired. We believe that the market for telecommunications
bandwidth has declined indicating that a review of bandwidth capacity for
possible impairment is necessary. The review was based on current market values
for the sale and acquisition of similar capacity on an IRU basis. The review
indicated that market prices have declined substantially. We have therefore made
a non-cash charge for impairment of bandwidth of $2.8 million in the quarter and
nine months ended September 30, 2001.

23. During the three and nine month period ended September 30, 2001, one
customer accounted for approximately 29% and 28% of revenues respectively.
Subsequent to September 30, 2001, minimal revenues have been derived from this
customer.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes "forward-looking statements" within
the meaning of the federal securities laws. Forward-looking statements are any
statements other than those relating to historical information or current
condition, including without limitation, statements regarding future margin
performance, customer retention capabilities, future revenues, strategy, and
pricing of services. Forward-looking statements can often be identified by the
use of forward-looking words such as "believes," "estimates," "expects,"
"intends," "may," "will," should," or "anticipates". In addition, from time to
time, we or our representatives have made or may make forward-looking
statements, orally or in writing. Forward-looking statements also may be


                                       11
<PAGE>

included in various filings that we have made or may make with the Securities
and Exchange Commission, in press releases or in oral statements made by or with
the approval of one of our authorized executive officers. Although we believe
that our expectations are based on reasonable assumptions, we can give no
assurance that our expectations will be achieved. The important factors that
could cause actual results to differ materially from those in the forward-
looking statements herein include certain risks identified in this Quarterly
Report and other risks referenced from time to time in our filings with the SEC,
including our 2000 Annual Report on Form 10-K filed with the SEC on April 2,
2001.

You should read the following discussion and analysis together with our
Financial Statements, including the notes, appearing elsewhere in this Quarterly
Report and in our Annual Report on Form 10-K.


Overview

We are an international communications business that offers telecommunications
and related services.

Our principal areas of business are: the sale and management of
telecommunications bandwidth, including the provision of internet transit
services; switched voice services - both wholesale switching of international
traffic and international route management; the provision of intelligent network
services in emerging markets; Internet and related services and
telecommunications advisory services. Our customers include leading global
telecommunications carriers, public telephone operators in developing countries,
Internet service providers, multimedia service providers and telecoms hotel
developers. We seek to capitalize on the increasing demand for high quality
international communications services which is being driven by the globalization
of the world's economies, the worldwide trend towards telecommunications
deregulation, the growth of voice, video, data and Internet traffic and the
increase in the amount of co-location space (space where telecommunications
operators house their networking equipment within telecoms hotels) required in
various parts of the world.

Various of our services are supplied to customers in emerging markets or
customers that wish to develop their services in emerging markets. We consider
an emerging market to be a market where the telecommunications industry can be
described as underdeveloped. An underdeveloped telecommunications industry is
one that lacks the level of technological infrastructure or expertise as is
prevalent in developed countries. Often this relates to countries where the
state continues to own the public telephony operator and competition is limited.
Emerging markets evolve from markets with strict barriers to entry, for example
as a result of a particular political regime. Geographically such markets can be
found in Eastern Europe, Africa, the Middle East, Asia-Pacific and Central and
Latin America.

We have restricted our focus to switched voice services and telecommunications
and corporate advisory services, whilst continuing to manage telecommunications
bandwidth and other services for existing customers.


Industry Trends

We believe that in the managed bandwidth and wholesale voice services markets, a
rapid consolidation of companies operating in this sector is beginning. This
consolidation is being driven by decreasing gross margins resulting in attempts
by companies to reduce their costs and as a result, reducing the requirement for
external sources of funding. This consolidation process is likely to see an
emergence of profitable and funded companies in this sector in 2002.

High value will continue to be available in the emerging markets sector for an
increasing number of communications supported services such as:

  .    Telecoms hotel infrastructure.

  .    Web hosting services including; data storage; server housing and support
       management; firewalls; IP delivery solutions; and contest mirroring.

  .    Route Management.

                                       12
<PAGE>

  . Value adding voice services provided over existing access infrastructures.

Markets with high telephone line market penetration rates, predominantly Western
Europe, North America, Japan and parts of the Asia-Pacific region, are likely to
see the emergence of truly broadband access networks and the developments of
user demand for focused services that address narrowly defined market segments
with high quality video and audio programming on a subscription basis. This will
lead to a continually developing range of content delivery solutions as the
economics of the balance between bandwidth and storage of content continues to
evolve. The ability to use assets in a variety of manners will be a key
component for success.

In the medium term, we believe that there will be a migration of broadcast video
services to a subscription base of digital end-users, with the capability to
edit out advertising. As a consequence, the advertisers will shift focus to
addressing customers through niche programming over broadband access networks.
These channels will become the new free to view channels. The broadcast
subscription digital networks will carry mainstream programming, with
advertisers using product placement as their channel to market.

With the continued globalization of the business of both services and
manufacturing, we will see the development of geographically and culturally
dispersed communities. We see a need for a comprehensive and targeted range of
services including international voice, data services (including web hosting,
data center and e-commerce services) and in particular content rich programming
to "bond" these communities together as a single unique cultural entity with a
clear sense of purpose and belonging.

We have seen an overall downturn in our markets which has made the selling of
telecommunications bandwidth services extremely difficult. We have seen
oversupply resulting in a number of our competitors ceasing to trade. Generally,
we have seen that customers are not purchasing additional capacity whilst
consolidation in our marketplaces continues. We are therefore concerned with
restricting and focussing our business whilst reducing our overheads to a
minimum.

Operating Risks

During our limited operating history we have experienced operating losses,
negative cash flow from operations and net losses.

We were organized in March 1998 and have a limited operating history. We have
incurred operating losses and negative cash flow since our inception. From the
date of inception to September 30, 2001 we have incurred losses of $102.4
million. Despite recognizing $96.8 million in revenues, we incurred a deficit on
total stockholders' equity of $29.9 million for the period from March 10, 1998
through September 30, 2001. We may continue to incur losses and negative cash
flow in the foreseeable future.

The continuation and size of our operating losses and negative cash flows in the
future will be affected by a variety of factors, including:

     .    The ability to put in place working capital facilities and to increase
          our capital base.

     .    The rate at which we add new customers and the prices those customers
          pay for our services.

     .    The ability to predict demand for our services.

     .    The ability of our local relationships in emerging markets to support
          our customers and meet our obligations.

     .    General economic, financial, competitive, legislative, regulatory,
          licensing, and other factors that are beyond our control.

We have financed, and expect to continue to finance, our net losses, debt
service, capital expenditures and other cash needs through flexible supplier
payments, the issuance of debt and the proceeds from sales of shares of common
stock.

We have a substantial level of indebtedness.

                                       13
<PAGE>

We have incurred a high level of debt. As of September 30, 2001, we had a
combined total liability of $62.2 million, including: $17.8 million due to
WorldCom; $10 million due to be repaid to Global Crossing as $4 million in
November 2001 and $6 million in November 2002 and a loan from Home Run Limited
of $7.4 million convertible into shares of Common Stock at their option. We are
also indebted to Communications Collateral Limited in the sum of $3.2 million,
Gemini in the sum of $2.1 million and the Inland Revenue in the sum of $1.9
million.

The amount of our debt could have important consequences for our future,
including, among other things:

     .    Cash from operations may be insufficient to meet the principal and
          interest on our debts as they become due.

     .    Payments of principal and interest on borrowings may leave us with
          insufficient cash resources for our operations.

     .    Restrictive debt covenants may impair our ability to obtain additional
          financing.

We have been unable to generate sufficient cash flow to meet certain of our debt
service requirements, and have triggered events of default on those obligations.
Failure to generate sufficient sums to maintain debt repayments may impair our
ability to develop or continue our current business and may cause us to cease
trading.


Results of Operations

For the three months ended September 30, 2001 compared with the three months
ended September 30, 2000.

Revenues for 2001 rose marginally to $5.7 million compared with $5.4 million for
2000. Bandwidth revenues increased by $2.3 million mainly from a short term
leasing contract which is now terminated. Voice services revenue fell by $1.2
million, and advisory services reflected a $0.6m shortfall.

Cost of sales for 2001 fell by $2.9 million to $2.6 million compared with $5.5
million for 2000 largely as a result of the reduced revenue levels on voice
services and negotiated bandwidth cost reductions.

Selling, general and administrative expenses were $2.2 million in 2001 compared
with $5.7 million in 2000. The decrease of $3.5 million consisted of $1.6
million arising from cost reduction policies, $0.5 million lower professional
fees and a one off charge for share options of $1.7 million in 2000.

Amortization of goodwill remained virtually unchanged at $1.0 million in 2001
and $0.9 million in 2000.

Impairment of goodwill at $5.0 million was $2.0 million higher than the 2000
figure of $3.0 million. In order to prepare ourselves for the recent accounting
standard SFAS 142 we have decided to implement a professional valuation of
goodwill at 31 December 2001. Our interim review at September 30, 2001 reflects
uncertainties regarding future cash flows from acquired businesses so we have
taken a charge of $5.0 million, prior to the year end valuation, against the
carrying value of goodwill.

Impairment of bandwidth was $2.8 million as compared to nil in 2000. Our interim
review at September 30, 2001 reflects a decline in market values related to
bandwidth capacity so we have taken a non-cash charge of $2.8 million.

Interest income was down from $0.2 million in 2000 to a negligible amount in
2001 reflecting the completion of an installment sales contract which generated
most of the interest income in 2000.

Interest expense fell by $1.1 million to $0.5 million in 2001 reflecting a one
off interest penalty of $1.0 million in 2000.

Foreign exchange losses were $0.7 million in 2001 compared with $0.2 million
gain in 2000 mainly arising from the weakening of the US dollar in 2001.

                                       14
<PAGE>

The loss for the three months ended September 30, 2001 was $9.2 million compared
with $12.7 million in 2000.


For the nine months ended September 30, 2001 compared with the nine months ended
September 30, 2000.

Revenues for 2001 fell by $13.6 million to $19.0 million compared with $32.6
million for 2000. Bandwidth revenues fell by $5.5 million to $12.0 million due
to customers preferring leasing contracts compared with major bandwidth sales of
$11.7 million in 2000. There was also a reduction in voice services revenue of
$3.3 million offset by a $1.3 million increase in attributable revenues arising
from the acquisition of a 75% controlling interest in our Oman based subsidiary
Desertel with effect from 1 April 2000. Advisory service revenues fell by $4.8
million.

Cost of sales for 2001 fell by $7.2 million to $15.8 million compared with $23.0
million for 2000 largely as a result of reduced revenue levels and mix.

Selling, general and administrative expenses were $8.4 million in 2001 compared
with $14.3 million in 2000. The decrease of $5.9 million consisted of $2.4
million arising from cost reduction policies, $1.5 million lower professional
fees and charges for share options of $2.4 million in 2000.

Amortization of goodwill increased marginally by $0.3 million to $3.0 million in
2001.

In 2001 there was a provision of $2.5 million relating to ongoing negotiations
with a customer which is also a supplier, which wishes to make a payment to us
to buy itself out of all current contracts.

Financing costs in 2001 were negligible compared with a $3.8 million relating to
share issuance in 2000 to professional financial advisers and a loan provider.

Impairment of goodwill at $11.6 million was $6.4 million higher than the 2000
figure of $5.2 million. In order to prepare ourselves for the adoption of the
recent accounting standard SFAS 142 we have decided to implement a professional
valuation of goodwill at December 31, 2001. Our interim review at September 30,
2001 reflects uncertainties regarding future cash flows from acquired businesses
so we have taken a further charge of $10.0 million, prior to the year end
valuation, against the carrying value of goodwill. In addition we have charged
the $1.6 million arising from the issue of shares in respect of the first year
earn out calculation in the contract to acquire EquiTel Communications Limited
in November 1999.

Impairment of bandwidth was $2.8 million as compared to nil in 2000. Our interim
review at September 30, 2001 reflects a decline in market values related to
bandwidth capacity so we have taken a non-cash charge of $2.8 million.

There was a provision for a doubtful debt of $0.5 million in 2001 with no
similar provision in the previous year.

Interest income was down from $0.7 million in 2000 to $0.2 million in 2001
reflecting the completion of an installment sales contract which generated $0.6
million of sales interest in 2000 and only $0.2 million in 2001.

Interest expense decreased to $1.5 million in 2001 from $2.4 million in 2000
reflecting our lower reliance on fixed borrowings.

Foreign exchange losses were $0.1 million in 2001 compared with gains of $0.6
million in 2000 reflecting the fluctuating US dollar over the last two years.

The loss for the nine months ended September 30, 2001 was $27.0 million compared
with $18.0 million in 2000.


Liquidity and Capital Resources

  Our liquidity requirements arise from:

     .    Purchases and maintenance of bandwidth capacity, network and switching
          equipment.

                                       15
<PAGE>

  .      Development of intelligent network platforms, which includes pre-paid
         calling cards and other value-added telephony services.

  .      Interest and principal payments on outstanding indebtedness.

  .      Net cash used in operating activities.

  .      Acquisitions of, and strategic investments in, businesses.

We have satisfied our liquidity requirements to date through operating cash
flows, short-term bridge financing, shareholder loans and equity subscriptions.

Net cash provided by operating activities was $0.3 million in the nine months
ended September 30, 2001 compared with $0.7 million in 2000.

Net cash used in investing activities in 2001 was $0.1 million compared with
$0.6 million in 2000.

Net cash provided by financing activities in 2001 was $0.5 million compared with
$2.2 million in 2000 which arose mainly from additional short-term notes.

Since inception through September 30, 2001, we have incurred losses of $94.6
million and have had negative cash flow from operating activities of $17.9
million.

The level of indebtedness of $62.2 million at September 30, 2001 has fallen
marginally from $62.6 million at December 31, 2000.

As a consequence of the significant fall of the market prices for bandwidth and
its impact on our operations and financial results in 1999, 2000 and continuing
in 2001, we have been unable to generate sufficient cash flow to meet certain of
our debt service requirements. We have completed certain renegotiations and have
made significant steps to reducing our debt service requirement.

Pursuant to a Standstill Agreement, we owe Global Crossing $10 million for
services supplied and not paid for. This is repayable as to $4 million due on
November 30, 2001 and $6 million due on November 30, 2002. We have entered into
a new commitment to purchase $8 million of services from Global Crossing over
the next five years at the prevailing market prices at the time of purchase. If
we are unable to meet any of our obligations under the Standstill Agreement,
Global Crossing may take action to pursue us for $55 million under our original
obligations to them. Management is in detailed discussion with Global Crossing
in an effort to extinguish or settle the liabilities it has to Global Crossing
prior to November 30, 2001. These negotiations, if successful, would result in a
full and final settlement of all our obligations to Global Crossing. If these
discussions are unsuccessful, the Standstill Period under the Agreement would
end allowing Global Crossing to take action to pursue us for $55 million under
our original obligations to them.

In December 1998 and March 1999 (through wholly-owned subsidiaries) we entered
into agreements for the purchase of five STM-1 transatlantic IRU
telecommunications circuits from WorldCom. We did not take delivery of four of
these circuits resulting in a default of $26.3 million. Since December 1999,
WorldCom has agreed not to take proceedings in respect of the outstanding
liability pursuant to the terms of a standstill letter (as amended). Pursuant to
the standstill letter, in September 2000, WorldCom released us from $9 million
of our liability in exchange for 15,766,792 shares of our common stock. Our
current liability is $17.8 million.

We have a debt obligation under a Capacity Option Agreement with Communications
Collateral Limited (CCL) under which we have been unable to complete an agreed
repurchase of capacity. Under the terms of a Forbearance Agreement entered into
in February 2000, as at June 30, 2001 our outstanding debt to CCL was $3.2
million. Interest is accruing on the outstanding amount at the rate of 12.5% per
annum. We have agreed to repay the outstanding balance at a rate of $100,000 per
month but in any event as quickly as practicable. Under a Registration Rights
Agreement dated September 1, 1999 and under the Forbearance Agreement we have an
obligation to issue CCL 8.2 million shares, which shares relate to penalty
obligations for failure to register CCL's shares for public resale prior to
February 15, 2000.

                                       16
<PAGE>

We have a debt obligation under a Capacity Purchase Agreement to Gemini. As at
September 30, 2001, the outstanding debt was $2.1 million. As at September 30,
2001, we had paid Gemini $1.2 million, of which $0.8 million had reduced the
original principal sum. Interest is accruing at LIBOR plus 3%. Management is in
continued discussion with Gemini regarding this debt.

We have a debt liability to Ebone Broadband Services Limited for capacity
supplied. As at September 30, 2001, the debt was (pound)2.3 million. Management
is in regular discussion with Ebone regarding this debt.

We have a debt liability to the Inland Revenue, the collector of payroll taxes
in the United Kingdom, in the amount of $1.9 million. Management is in
discussion with the Inland Revenue regarding this debt. The Inland Revenue may
take steps to recover this debt in the event that it is not settled or an
accommodation reached.

We entered into a convertible loan facility with Home Run Limited on April 27,
2000. Home Run provided us with a facility of (pound)5.0 million ($7.4 million).
The repayment terms have been extended to April 26, 2002. The extension was
granted on the basis of an adjustment to the conversion value based on the then
current market price of our shares of Common Stock. The loan may now be
converted at the option of Home Run into shares of Common Stock on the basis of
one share of Common Stock for every $0.16 of loan value outstanding.

At September 30, 2001 we had no material capital commitments.

The Board of Telemonde is concerned about the company's illiquidity and general
financial position. The Board is meeting regularly to keep the position under
review. The Board's view at present is that the company should not cease
trading, as the Board believes that on balance the stakeholders in the business,
including the company's creditors and shareholders, are likely to be better
served in the long-term if the company continues trading.

There is substantial doubt about our ability to continue as a going concern.
Management is addressing the ongoing solvency of the company including cutting
costs, seeking fresh financing and the focussing on the provision of high-margin
advisory services to the telecommunications sector. We have reduced our cost
base by reducing the number of employees, closing our subsidiary, telemonde.net
in Switzerland and by agreed reductions in pay to remaining employees, including
senior management who have accepted a pay cut of 75% until February 2002.
Nevertheless, our ongoing operating costs exceed projected operating revenues.
We issued short term notes amounting to $0.8 million in the nine months ended
September 30, 2001. We are seeking fresh capital, however there can be no
assurance that such capital will be available. We have generated revenues from
advisory services contracts amounting to $0.8 million in the nine months ended
September 30, 2001 and we anticipate that revenues of $2.5 million will be
booked in the last quarter of fiscal 2001.

We currently do not have the capital base or working capital facilities to meet
our projected commitments. We are currently seeking short-term debt finance. We
are seeking to raise additional equity in order to provide us with an increased
capital base for the future and to enable us to meet our debts as and when they
fall due.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposures relate to changes in foreign currency rates.
We are exposed to the risk of fluctuations in foreign currency exchange rates
due to the international nature and scope of our operations. In the future, we
expect to continue to derive a significant portion of our net revenue and incur
a significant portion of our operating costs outside the United States, and
changes in foreign currency exchange rates may have a significant effect on our
results of operations. We historically have not engaged in hedging transactions
to mitigate foreign exchange risk.

Our main exchange risk currently arises from fluctuations between the US dollar
and pounds sterling because whilst most of our fees are earned in US dollars,
many of our sales, general and administrative expenses are incurred in London in
pounds sterling.

Revenues from joint ventures in emerging markets will be mainly received in the
local currency of the country of operations (for example, in Omani rials in the
case of DeserTel). Much of the costs incurred are payable in the same local
currency. However, there will be an exchange risk on the profit or loss of the
local operations or joint venture arising from the fluctuation of the local

                                       17
<PAGE>

currency, against the pounds sterling (in which currency central sales, general
and administrative costs in London are mainly incurred).

                         PART II. - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

From time to time, Telemonde is party to litigation or other legal proceedings
that each company considers to be a part of the ordinary course of its business.

Telemonde is not involved in any legal proceedings nor is it party to any
pending or threatening claims that could reasonably be expected to have a
material adverse effect on its financial condition or results of operations.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

No securities of Telemonde which were not registered under the Securities Act of
1933, as amended (the "Securities Act"), have been sold by Telemonde during the
second quarter of 2001, except as follows:

On July 1, 2001 1,115,000 shares were issued to Mr Mark Hollo in satisfaction of
shares due to him in consideration of his services provided as a non-executive
director in the Year 2000.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001 1,115,000 shares were issued to Mr Miguel Tirado in satisfaction
of shares due to him in consideration of his services provided as an independent
non-executive director of Telemonde in the Year 2000.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001 475,000 shares were issued to Mr Paul Donofrio in satisfaction
of shares due to him in consideration of his services provided as an independent
non-executive director of Telemonde in the Year 2000.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001 200,000 shares were issued to Mr Mark Hollo in satisfaction of
shares due to him in consideration of services to be provided as an independent
non-executive director of Telemonde in the Year 2001.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001 200,000 shares were issued to Mr Miguel Tirado in satisfaction
of shares due to him in consideration of services to be provided as a
non-executive director of Telemonde in the Year 2001.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001 200,000 shares were issued to Mr Paul Donofrio in satisfaction
of shares due to him in consideration of his services to be provided as a
non-executive director in the Year 2001.

An exemption has been claimed under Section 4(2) of the Securities Act.

On July 1, 2001, 200,000 shares were issued to Mr Bradford Harries in
satisfaction of shares due to him in consideration of services to be provided as
a non-executive director in the Year 2001.

An exemption has been claimed under Section 4(2) of the Securities Act.


ITEM 5.  OTHER INFORMATION.

On September 20, 2001, Count Gottfried von Bismarck resigned as Director, Vice
President and Company Secretary. Count von Bismarck confirmed that he had not
resigned his Directorship because of any disagreement with Telemonde or his
fellow Directors on any matter relating to Telemonde's operations, policies or
practices.

                                       18
<PAGE>

On September 21, 2001, Mr Matthew Gould, Telemonde's General Counsel and an
Executive Vice President of the Company was appointed by the Board as Company
Secretary in place of Count von Bismarck.

With effect from August 1, 2001, Mr Nicholas Topham, Telemonde's Executive Vice
President-Strategy and Business Development and a director of the Company's
subsidiary Equitel Communications Limited resigned his positions and left the
group's employment to pursue other business opportunities.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits required by Item 601 of Regulation S-K are incorporated herein
         by reference and are listed on the attached Exhibit Index.

(b)      A Report on Form 8-K was filed on September 26, 2001 relating to the
         resignation of Count Gottfried von Bismarck as Director, Vice President
         and Company Secretary and the appointment of Mr Matthew Gould as
         Company Secretary.


                                  SIGNATURES
                                TELEMONDE, INC.

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.

                                TELEMONDE, INC.


Date:    November 13, 2001          /s/     ADAM N. BISHOP
     ---------------------         -------------------------------
                                   Adam N. Bishop, President and
                                   Chief Executive Officer


                                  EXHIBIT INDEX

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

   2.1*         Stock Purchase Agreement among Pac-Rim Consulting, Inc., Thomas
                Gelfand, Telemonde Investments Limited, and Rhone Financial
                Indemnity Re Limited, dated as of May 14, 1999.

   2.2*         Agreement Relating to the sale and Purchase of Shares in the
                Capital of EquiTel Communications Limited among (1) Telcoworld
                Limited and others, (2) Telemonde, Inc., and (3) Harry Pomeroy
                and Larry Trachtenberg, dated November 8, 1999.

   2.3*         Agreement and Plan of Merger of Telemonde, Inc., a Nevada
                corporation, into Telemonde, Inc., a Delaware corporation, dated
                October 29, 1999.

   2.4*         Share Purchase Agreement for the Sale and Purchase of all the
                issued share capital of TGA (UK) Limited, between the
                shareholders of TGA (UK) and Telemonde, Inc., dated August 9,
                1999.

   3.1(a)*      Certificate of Incorporation of Telemonde, Inc., filed June 29,
                1999.

   3.1(b)*      Certificate of Merger between Telemonde, Inc., a Nevada
                corporation, and Telemonde, Inc., a Delaware corporation.

   3.1(c)++     Certificate of Designation for Series A Convertible Preferred
                Stock, $.01 par value.

   3.2*         By-Laws of Telemonde, Inc.

   4.1*         Form of Common Stock Certificate.

                                       19
<PAGE>

   4.2*         Registration Rights Agreement between Telemonde, Inc. and
                Communications Collateral Limited, dated September 1, 1999.

   4.3++        Amended and Restated Registration Rights Agreement, dated as of
                December 14, 2000, among Telemonde, Inc., MCI WorldCom Global
                Networks U.S. Inc., MCI WorldCom Global Networks Limited, and
                Global Crossing Limited.

   10.1*        Warrant from Telemonde, Inc. to Communications Collateral
                Limited, dated September 1, 1999.

   10.2*        Consulting Agreement between Telemonde, Inc. and Gottfried von
                Bismarck, dated November 2, 1999 and effective as of July 1,
                1999.

   10.3*        Form of Employment Agreement between Executive Officers and
                Telemonde.

   10.3(a)*     Schedule of Employees covered by Form of Employment Agreement.

   10.4*        Capacity Sales Agreement between Gemini Submarine Cable System
                Limited and Telemonde International Bandwidth (Bermuda) Limited,
                April 3, 1998.

   10.4(a)*     Promissory Note from Telemonde, Inc. to Gemini Submarine Cable
                System Limited, dated August 27, 1999 for $1,300,000.

   10.4(b)*     Promissory Note from Telemonde, Inc. to Gemini Submarine Cable
                System Limited, dated August 27, 1999 for $1,400,000.

   10.4(c)+     Letter Agreement, dated October 27, 2000, from Gemini Submarine
                Cable System Limited to Telemonde International
                Bandwidth(Bermuda) Limited.

   10.5*        Capacity Purchase Agreement between Atlantic Crossing Ltd. and
                Telemonde Bandwidth (Bermuda) Limited, dated June 10, 1998.

   10.6*        Transmission Capacity Agreement among MCI WorldCom Global
                Networks U.S., Inc., and MFS Cableco (Bermuda) Limited, and,
                EquiTel Bandwidth Limited, dated December 1998.

   10.7*        Transmission Capacity Agreement among MCI WorldCom Global
                Networks U.S., Inc., and MCI Worldcom Global Networks Limited,
                and Telemonde International Bandwidth Limited, dated March 31,
                1999.

   10.7(a)**    MCI WorldCom Global Networks U.S., Inc. Standstill Letter to and
                accepted by Telemonde, Inc., Telemonde International Bandwidth
                Limited, Telemonde Networks Limited, Kevin Maxwell and Adam
                Bishop, dated December 31, 1999.

   10.7(b)**    MCI WorldCom Global Networks U.S., Inc. Capacity Swap Letter to
                and accepted by Telemonde International Bandwidth Limited, dated
                December 31, 1999.

   10.7(c)****  Amendment No. 1 to MCI WorldCom Global Networks U.S., Inc.
                Standstill Letter, dated May 11, 2000, to and accepted by
                Telemonde, Inc., Telemonde Networks Limited and Telemonde
                International Bandwidth Limited.

   10.7(d)****  Pledge Agreement, dated May 2, 2000, by and between Fastfirm
                Limited and MCI WorldCom Global Networks U.S., Inc. on behalf of
                itself and MCI WorldCom Global Network Limited.

   10.7(e)***** Debt Conversion Agreement, dated July 25, 2000, by and among
                Telemonde, Inc., MCI WorldCom Global Networks U.S., Inc. and MCI
                WorldCom Global Networks Limited.

   10.7(f)***** Amendment No. 2 to MCI WorldCom Global Networks U.S., Inc.
                Standstill Letter, dated July 25, 2000, to and accepted by
                Telemonde, Inc., Telemonde Networks Limited, Telemonde
                International Bandwidth Limited.

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<PAGE>

   10.7(g)***** Amendment No. 3 to MCI WorldCom Global Networks US., Inc.
                Standstill Letter, dated September 19, 2000, to and accepted by
                Telemonde, Inc., Telemonde Networks Limited, Telemonde
                International Bandwidth Limited.

   10.7(h)+     Amendment No. 4 to MCI WorldCom Global Networks U.S., Inc.
                Standstill Letter, dated November 13, 2000, to and accepted by
                Telemonde, Inc., Telemonde Networks Limited and Telemonde
                International Bandwidth Limited.

   10.8*        Transmission Capacity Agreement between Telemonde International
                Bandwidth Limited and Communications Collateral Limited and
                Capacity Option Agreement between Telemonde Investments Limited
                and Communications Collateral Limited, both dated April 15,
                1999.

   10.9*        Composite Guarantee and Debenture, among (1) Telemonde
                Investments Limited, (2) Telemonde International Bandwidth
                (Bermuda) Limited, Telemonde Bandwidth (Bermuda) Limited,
                Telemonde International Bandwidth Limited, and (3)
                Communications Collateral Limited, dated April 5, 1999.

   10.10*       Loan Facility Agreement between Telemonde Investments Limited
                and Communications Collateral Limited, dated April 15, 1999.

   10.11**      Forbearance Agreement, dated 12 January 2000, entered into by
                and among Communications Collateral Limited, Telemonde
                Investments Limited, Telemonde International Bandwidth Limited,
                Telemonde, Inc. and Kevin Maxwell.

   10.12**      Advisor Agreement between Sand Brothers & Co., Ltd. and
                Telemonde, Inc., dated October 27, 1999, and Amendment No. 1 to
                Advisor Agreement, dated November 10, 1999.

   10.13***     Executive Services Agreement by and between Telemonde, Inc. and
                Paul E. Donofrio, dated February 22, 2000.


   10.14+       Termination of Executive Services Agreement by and between
                Telemonde, Inc. and Paul E. Donofrio, dated as of October 31,
                2000.

   10.15++      Standstill Agreement, dated November 30, 2000, by and among
                Telemonde, Inc., Telemonde Bandwidth (Bermuda) Ltd., Global
                Crossing USA Inc., GT U.K. Ltd, GT Landing Corp. and Atlantic
                Crossing Ltd.

   10.16++      Capacity Commitment Agreement, dated December 14, 2000, by and
                between Global Crossing Bandwidth Inc. and Telemonde Inc.

   21+++        Subsidiaries of Registrant.


   *            Previously filed as an exhibit to the Registration Statement on
                Form 10, as filed with the SEC on November 15, 1999.

   **           Previously filed as an exhibit to the Registration Statement on
                Form 10/A-1, as filed with the SEC on March 3, 2000.

   ***          Previously filed as an exhibit to the Annual Report for the year
                ended December 31, 1999 on Form 10-K, as filed with the SEC on
                March 30, 2000.

   ****         Previously filed as an exhibit to the Company's Quarterly Report
                on Form 10-Q for the fiscal quarter ended June 30, as filed with
                the SEC on August 14, 2000.

   *****        Previously filed as an exhibit to the Company's Current Report
                on Form 8-K dated September 19, 2000, as filed with the SEC on
                September 21, 2000.

   +            Previously filed as an exhibit to the Company's Quarterly Report
                on Form 10-Q for the fiscal quarter ended September 29, 2000 as
                filed with the SEC on November 14, 2000

                                       21
<PAGE>

   ++           Previously filed as an exhibit to the Company's Current Report
                on Form 8-K dated December 29, 2000, as filed with the SEC on
                December 29, 2000.

   +++          Previously filed as an exhibit to the Company's Annual Report on
                Form 10-K for the year ended December 31,2000, as filed with the
                SEC on April 2, 2001.

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