<PAGE>   1
================================================================================

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

                                    FORM 20-F

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

    [ ]      REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

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

                   For the fiscal year ended December 31, 2000

                                       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 333-11910

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

                     MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
             (Exact name of Registrant as specified in its charter)

                         MAXCOM TELECOMMUNICATIONS, INC.
                 (Translation of Registrant's name into English)

                              UNITED MEXICAN STATES
                 (Jurisdiction of incorporation or organization)

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

                                MAGDALENA NO. 211
                                COLONIA DEL VALLE
                               03100 MEXICO, D.F.
                    (Address of principal executive offices)

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

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT.

<TABLE>
<CAPTION>
    TITLE OF EACH CLASS                NAME OF EACH EXCHANGE ON WHICH REGISTERED
    -------------------                -----------------------------------------
<S>                                             <C>
13 3/4% Series B Senior Notes                            None
         Due 2007
</TABLE>

 SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      None

 SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d)
                                  OF THE ACT:
                                      None

INDICATE THE NUMBER OF OUTSTANDING SHARES OF EACH OF THE ISSUER'S CLASSES OF
CAPITAL OR COMMON STOCK AS OF THE CLOSE OF THE PERIOD COVERED BY THE ANNUAL
REPORT:

<TABLE>
<S>                                                   <C>
                  Series A shares, no par value          1,276,428
                  Series B shares, no par value          1,226,373
                  Series C shares, no par value          5,622,822
                  Series N shares, no par value          5,622,822
</TABLE>

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
                                    YES X   NO
                                        -     --
INDICATE BY CHECK MARK WHICH FINANCIAL STATEMENT ITEM THE REGISTRANT HAS ELECTED
TO FOLLOW:

                                ITEM 17     ITEM 18 X
                                        --          -
================================================================================


<PAGE>   2


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               ----

<S>                                                                              <C>
PART I............................................................................1
      ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS..............1
      ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE............................1
      ITEM 3.  KEY INFORMATION....................................................1
      ITEM 4.  INFORMATION ON THE COMPANY........................................11
      ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS......................28
      ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES........................37
      ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.................42
      ITEM 8.  FINANCIAL INFORMATION.............................................48
      ITEM 9.  THE OFFER AND LISTING.............................................49
      ITEM 10. ADDITIONAL INFORMATION............................................49
      ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........65
      ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES............65

PART II..........................................................................66
      ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES...................66
      ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
               USE OF PROCEEDS...................................................66
      ITEM 15. RESERVED..........................................................66
      ITEM 16. RESERVED..........................................................66

PART III.........................................................................67
      ITEM 17. FINANCIAL STATEMENTS..............................................67
      ITEM 18. FINANCIAL STATEMENTS.............................................F-1
      GLOSSARY OF TELECOMMUNICATIONS TERMS......................................G-1
      ITEM 19. EXHIBITS.........................................................E-1
</TABLE>

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

Unless otherwise specified, all references to "U.S. dollars," "dollars," "U.S.$"
or "$" are to United States dollars, and references to "Ps." and "pesos" are to
Mexican pesos. We publish our financial statements in pesos that are adjusted to
reflect changes in purchasing power due to inflation. Thus, unless otherwise
specified, our financial data is presented in constant pesos of December 31,
2000 purchasing power. Amounts presented in this annual report may not add up or
may be slightly inconsistent due to rounding.

Unless otherwise provided, this annual report contains translations of peso
amounts into U.S. dollars solely for the convenience of the reader based on the
exchange rate reported by the Federal Reserve Bank of New York as its noon
buying rate for pesos at December 29, 2000, which was Ps.9.62 per U.S.$1.00. The
currency conversions should not be construed as representations that the peso
amounts actually represent such dollar amounts. Additionally, these conversions
should not be construed as representations that these peso amounts have been or
could have been converted into U.S. dollars at those or any other rates of
exchange.

This annual report contains forward-looking statements. Statements that are not
statements of historical fact, including statements about our beliefs and
expectations are forward-looking statements. The words "anticipates,"
"believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts,"
"projects," "targets" and similar words are intended to identify these
statements, which necessarily involve known and unknown risks and uncertainties.
Accordingly, our actual results of operations may be different from our current
expectations, and the reader should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only


                                       i
<PAGE>   3

as of the date they are made, and we do not undertake any obligation to update
them in light of new information or future developments.

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

We will provide without charge to each person to whom this report is delivered,
upon written or oral request, a copy of any or all of the documents incorporated
by reference into this annual report (other than exhibits, unless such exhibits
are specifically incorporated by reference in such documents). Written requests
for such copies should be directed to Maxcom Telecomunicaciones, S.A. de C.V.,
Magdalena No. 211, Colonia del Valle, 03100 Mexico, D.F., Attention: Director,
Investor Relations. Telephone requests may be directed to 011-52-5147-1125.







                                       ii

<PAGE>   4



                                   PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

ITEM 3.  KEY INFORMATION

A.   SELECTED FINANCIAL DATA

     The following tables present selected consolidated financial information of
Maxcom and its consolidated subsidiary. We have extracted some of this
information from the audited consolidated financial statements of Maxcom as of
December 31, 2000 and 1999 and for the years ended December 31, 2000, 1999 and
1998, appearing elsewhere in this annual report and you should read this
information in conjunction with such consolidated financial statements.

     The consolidated financial statements have been prepared in accordance with
Mexican GAAP, which differs in significant respects from U.S. GAAP. Pursuant to
Mexican GAAP, we have prepared the financial statements and the selected
financial data presented below in accordance with Bulletin B-10 of the Mexican
Institute of Public Accountants, which provides for the recognition of certain
effects of inflation.

     Note 17 of the consolidated financial statements presents the principal
differences between Mexican GAAP and U.S. GAAP and contains a reconciliation of
Maxcom's net income and stockholders' equity to U.S. GAAP.

     The U.S. dollar amounts provided below are translations from the peso
amounts, solely for the convenience of the reader, at the noon buying rate at
December 29, 2000 of Ps.9.62 per U.S.$1.00. You should not construe these
translations as representations that the peso amounts actually represent such
U.S. dollar amounts or could be converted into U.S. dollars at the rate
indicated as of any dates mentioned in this annual report.



                                       1
<PAGE>   5
<TABLE>
<CAPTION>
                                                  AS OF AND FOR THE YEAR ENDED DECEMBER 31,
                                               ------------------------------------------------
                                                 1996(1)(2)        1997(2)          1998(2)
                                               -------------- --------------- -----------------
                                                 THOUSANDS OF CONSTANT DECEMBER 31, 2000 PESOS
                                                   AND THOUSANDS OF U.S. DOLLARS, EXCEPT FOR
                                                               PER SHARE DATA(4)(5)
<S>                                           <C>             <C>             <C>
STATEMENT OF OPERATIONS DATA:
Mexican GAAP
Telecommunications revenues.................

Operating costs and expenses:
   Network operating cost...................
   Selling, general and administrative
     expenses...............................
   Depreciation and amortization............

     Total operating costs and expenses.....

Operating loss..............................

Comprehensive (income) financing cost:
   Interest expense.........................
   Interest income..........................
   Exchange loss, net.......................
   Gain on net monetary position............

     Total comprehensive cost of financing..

Other income, net...........................

Net loss....................................
Net loss per share..........................
Dividends per share.........................
Weighted average shares outstanding.........

U.S. GAAP
Net (loss)..................................   Ps.   (5,628)   Ps.  (58,357)    Ps.  (97,519)
Net loss per share..........................         (1,126)            (43)             (12)
Dividends per share.........................             --              --               --

BALANCE SHEET DATA:
Mexican GAAP
Cash and cash equivalents...................   Ps.       34    Ps.   53,397     Ps.  421,980
Restricted cash.............................             --              --            2,026
Working capital(6)..........................            141          14,774           39,533
Frequency rights............................             --         114,614          114,614
Telephone network systems and equipment.....            291           1,256          270,009
Preoperating expenses.......................          6,132          68,653          210,647
Total assets................................          6,598         252,694        1,058,809
Total debt..................................             --              --          228,971
Capital stock and additional paid-in capital          6,598         252,694          829,838
Deficit.....................................             --              --               --
Shareholders' equity........................   Ps.    6,598    Ps.  252,694     Ps.  829,838

U.S. GAAP
Shareholders' equity........................   Ps.      466    Ps.  182,957     Ps.  688,112

OTHER FINANCIAL DATA:
Mexican GAAP
EBITDA(7)...................................   Ps. (127,570)   Ps. (173,338)    $    (18,019)
Capital expenditures........................   Ps.    6,423    Ps.  126,145     Ps.  437,412
Ratio of earnings to fixed charges(8).......             --              --               --

U.S. GAAP
EBITDA(7)...................................   Ps.   (6,132)   Ps.  (65,604)    Ps. (147,738)
Ratio of earnings to fixed charges(9).......             --              --               --
</TABLE>


<TABLE>
<CAPTION>
                                                AS OF AND FOR THE YEAR ENDED DECEMBER 31,
                                               -------------------------------------------
                                                   1999(2)(3)        2000         2000
                                               --------------- -------------- ------------
                                                 THOUSANDS OF CONSTANT DECEMBER 31, 2000
                                                   PESOS AND THOUSANDS OF U.S. DOLLARS,
                                                      EXCEPT FOR PER SHARE DATA(4)(5)
<S>                                           <C>             <C>            <C>
STATEMENT OF OPERATIONS DATA:
Mexican GAAP
Telecommunications revenues.................    Ps.   96,099   Ps.  266,064   $     27,657
                                               --------------- -------------- ------------
Operating costs and expenses:
   Network operating cost...................          47,751        107,765         11,202
   Selling, general and administrative
     expenses...............................         176,037        331,166         34,425
   Depreciation and amortization............          80,919        201,040         20,898
                                               --------------- -------------- ------------
     Total operating costs and expenses.....         304,707        639,971         66,525
                                               --------------- -------------- ------------
Operating loss..............................        (208,608)      (373,907)       (38,868)
                                               --------------- -------------- ------------
Comprehensive (income) financing cost:
   Interest expense.........................          50,450        399,979         41,578
   Interest income..........................         (10,946)       (97,951)       (10,182)
   Exchange loss, net.......................          10,401         10,705          1,113
   Gain on net monetary position............         (21,756)       (90,101)        (9,366)
                                               --------------- -------------- ------------
     Total comprehensive cost of financing..          28,149        222,632         23,143
                                               --------------- -------------- ------------
Other income, net...........................             119           (471)           (49)
                                               --------------- -------------- ------------
Net loss....................................    Ps. (236,638)  Ps. (597,010)  $    (62,060)
Net loss per share..........................             (23)           (52)         (5.41)
Dividends per share.........................              --             --             --
Weighted average shares outstanding.........      10,964,827     11,463,677     11,463,677

U.S. GAAP
Net (loss)..................................    Ps. (275,007)  Ps. (552,758)  $    (57,459)
Net loss per share..........................             (29)           (48)         (4.98)
Dividends per share.........................              --             --             --

BALANCE SHEET DATA:
Mexican GAAP
Cash and cash equivalents...................    Ps.  167,430   Ps.1,072,261   $    111,462
Restricted cash.............................          20,362        568,878         59,135
Working capital(6)..........................           5,152       (164,934)       (17,145)
Frequency rights............................         112,002        106,208         11,040
Telephone network systems and equipment.....         859,532      1,197,136        124,442
Preoperating expenses.......................         317,523        463,969         48,230
Total assets................................       1,482,001      3,243,518        337,164
Total debt..................................         876,419      2,801,783        291,246
Capital stock and additional paid-in capital         842,220      1,275,383        132,576
Deficit.....................................        (236,638)      (833,648)       (86,658)
Shareholders' equity........................    Ps.  605,582   Ps.  441,735   $     45,918

U.S. GAAP
Shareholders' equity........................    Ps.  386,274   Ps.  266,679   $     27,721

OTHER FINANCIAL DATA:
Mexican GAAP
EBITDA(7)...................................
Capital expenditures........................    Ps.  774,870   Ps.  679,296   $     70,613
Ratio of earnings to fixed charges(8).......              --             --             --

U.S. GAAP
EBITDA(7)...................................    Ps. (230,474)  Ps. (173,338)  $    (18,019)
Ratio of earnings to fixed charges(9).......              --             --             --
</TABLE>




                                       2
<PAGE>   6


NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

(1)  This financial period began on the date of our incorporation, February 28,
     1996.
(2)  All amounts incurred in operations from February 28, 1996 (date of
     incorporation), to May 1, 1999 (commencement of operations), were
     capitalized as "preoperating expenses" under Mexican GAAP. Therefore no
     amounts are reported in the table.
(3)  We commenced commercial operations on May 1, 1999. In accordance with
     Mexican GAAP, our financial statements reflect eight months of operations.
(4)  Pursuant to Mexican GAAP, financial data for all periods in the financial
     statements have, unless otherwise indicated, been restated in constant
     pesos of December 31, 2000. Restatement into December 31, 2000 pesos is
     made by multiplying the relevant nominal peso amount by the inflation index
     for the period between the end of the period to which such nominal peso
     amount relates and December 31, 2000. The inflation index used in this
     annual report for 1996 figures is 1.6797, for 1997 figures is 1.4516, for
     1998 figures is 1.2238 and for 1999 figures is 1.0896.
(5)  Peso amounts were converted to U.S. dollars at the exchange rate of Ps.9.62
     per U.S.$1.00 reported by the Federal Reserve Bank of New York as its noon
     buying rate for pesos on December 31, 2000. Such conversions are for the
     convenience of the reader and should not be construed as representations
     that the peso amounts actually represent such U.S. dollar amounts or could
     be converted into U.S. dollars at the rate indicated, or at all.
(6)  Working capital is defined as current assets (excluding cash and cash
     equivalents and restricted cash) less current liabilities (excluding
     current maturities of long-term debt).
(7)  EBITDA represents earnings before income taxes, comprehensive (income) cost
     of financing and depreciation and amortization. We have included
     information concerning EBITDA (which is not a measure of financial
     performance under Mexican GAAP or U.S. GAAP) because we believe it is a
     standard financial statistic commonly reported and widely used by analysts
     and other interested parties. We understand that EBITDA is also used by
     investors as one measure of an issuer's ability to service or incur
     indebtedness. We also understand that EBITDA may be defined differently by
     other companies that disclose a similarly titled account. You should not
     construe EBITDA as an alternative to operating income or as a measure of
     liquidity or cash flows from operating activities. For a description of the
     differences between Mexican GAAP and U.S. GAAP, see "Item 5. Operating and
     Financial Review and Prospects--U.S. GAAP reconciliations."
(8)  Our earnings have been insufficient to cover fixed charges under Mexican
     GAAP since we started incurring debt in 1998, 1999 and 2000. Fixed charges
     include interest expense plus capitalized interest plus the portion of
     operating lease rental expense that represents the interest factor. The
     fixed charge coverage deficiency for the years ended December 31, 1998,
     1999 and 2000 amounted to Ps.19.4 million (U.S.$2.0 million), Ps.224.8
     million (U.S.$23.4 million) and Ps.597.0 million (U.S.$62.1 million),
     respectively.
(9)  Our earnings have been insufficient to cover fixed charges under U.S. GAAP
     since we started incurring debt in 1998, 1999 and 2000. Fixed charges
     include interest expense plus capitalized interest plus the portion of
     operating lease rental expense that represents the interest factor. The
     fixed charge coverage deficiency for the years ended December 31, 1998,
     1999 and 2000 amounted to Ps.110.3 million (U.S.$11.6 million), Ps.299.1
     million (U.S.$31.5 million) and Ps.612.4 million (U.S.$63.7 million),
     respectively.





                                       3
<PAGE>   7


EXCHANGE RATES

         The following table sets forth, for the periods indicated, the
period-end, average, high and low noon buying rates, in each case for the
purchase of U.S. dollars, all expressed in nominal pesos per U.S. dollar. The
noon buying rate at June 27, 2001 was Ps.9.07 per U.S.$1.00.

<TABLE>
<CAPTION>
                                                                               NOON BUYING RATE (1)
                                                                PERIOD END     AVERAGE       HIGH          LOW
                                                               ------------   ---------   ----------    ---------
<S>                                                             <C>           <C>          <C>          <C>
Year ended December 31, 1996...............................        7.88          7.64         8.05         7.33
Year ended December 31, 1997...............................        8.07          7.92         8.41         7.72
Year ended December 31, 1998...............................        9.90          9.15        10.63         8.04
Year ended December 31, 1999...............................        9.48          9.56        10.60         9.24
Year ended December 31, 2000...............................        9.62          9.47        10.09         9.98

Month ended December 31, 2000..............................                                   9.62         9.37
Month ended January 31, 2001...............................                                   9.97         9.67
Month ended February 20, 2001..............................                                   9.78         9.66
Month ended March 31, 2001.................................                                   9.71         9.49
Month ended April 30, 2001.................................                                   9.42         9.19
Month ended May 31, 2001...................................                                   9.29         8.95
</TABLE>

----------------------
(1)  Source:  Federal Reserve Bank of New York.
(2)  Average of month-end rates for annual data.

B.       CAPITALIZATION AND INDEBTEDNESS

         Not applicable.

C.       REASONS FOR OFFER AND USE OF PROCEEDS

         Not applicable.

D.       RISK FACTORS

FACTORS RELATING TO MAXCOM

You will not be able to evaluate fully our historical performance because we
began commercial operations only recently

         We have a very limited operating history, as we began commercial
operations on May 1, 1999. In addition, other than in the City of Puebla, we
have not yet begun operations in the Gulf region of Mexico, which is an area
that we expect to be material to our results of operations. You have limited
meaningful historical operating or financial information about us upon which to
base an evaluation of our performance and an investment in our securities.

We anticipate that we will have negative cash flow until we develop a
sufficiently large customer base

         The development of our business and the installation and expansion of
our network, services and customer base require significant expenditures. Our
planned capital expenditures for 2001 are approximately U.S.$58 million. These
expenditures, together with operating expenses, will adversely impact our cash
flow and profitability until an adequate customer base is established. We have
generated negative cash flow from operating activities since our incorporation
in 1996 and expect to generate insufficient cash flow to cover our fixed charges
through 2002. We cannot assure you that we will be able to establish an adequate
customer base to generate sufficient positive cash flow from our core
operations.

                                       4
<PAGE>   8

         During the second half of 2000 we had to revise our business plan to
reflect a slower growth than anticipated. We also conducted a line-by-line
profitability analysis which resulted in the termination of 18,506 lines which
were either unused or low revenue generators.

         If we cannot generate significant revenues, achieve and sustain
profitability or generate positive cash flow from operating activities in the
future, we will not be able to meet our debt service or working capital
requirements, and the value of our securities, as a result, would be materially
reduced.

Our results for 1999 and 2000 will be adjusted downward

         Maxcom has recently detected an inaccuracy in its accounting policy
regarding the capitalization of installation expenses for line disconnections.
Capitalized installation expenses for customers that were disconnected were not
properly written off from the balance sheet and charged in the income statement.

         Maxcom estimates that this inaccuracy should not be superior to an
aggregate of U.S.$1.6 million for years 1999 and 2000, with the majority of this
amount related to the 2000 financial statements.

         Once the exact effect of this inaccuracy is confirmed, Maxcom will
adjust its financial statements accordingly as a charge to the 2001 statements.

We expect to incur net losses through at least 2002

         Our cash flow from operations for the year 2000 was insufficient to
cover our fixed charges. In addition, we are required to amortize all previously
capitalized general and administrative preoperating expenses and to depreciate
all previously capitalized comprehensive cost of financing. As a result, we
expect to incur net losses through at least 2002.

We may need additional financing

         We may require additional financing in the future to service our
indebtedness and fund our operations. We cannot assure you that we will have
sufficient resources and that, if needed, any financing will be available in the
future or on terms acceptable to us. In addition, our ability to incur
additional indebtedness is restricted by the terms of our existing indebtedness.

We may be unable to build out our network on a timely manner or without undue
cost

         Our ability to achieve our strategic objectives will depend, in large
part, upon the successful, timely and cost-effective buildout of our network.
Factors that could affect such buildout include, among other things:

            -  our inability to obtain permits to use public rights of way;

            -  our inability to obtain the financing necessary for such
               buildout;

            -  unforeseen delays, costs or impediments relating to the granting
               of state and municipal permits for our buildout;

            -  delays or disruptions resulting from physical damage, power loss,
               defective equipment or the failure of third-party suppliers or
               contractors to meet their obligations in a timely and
               cost-effective manner; and

            -  regulatory and political risks relating to Mexico, such as the
               temporary seizure or permanent expropriation of assets, import
               and export controls, political instability, changes in the
               regulation of telecommunications and any future restrictions on
               the repatriation of profits or on foreign investment.

         Although we believe that our cost estimates and buildout schedule are
reasonable, we cannot assure you that the actual construction costs or time
required to complete the buildout will not substantially exceed current


                                       5
<PAGE>   9

estimates. Any significant cost overrun or delay could materially affect our
cash flow and our ability to repay our debt.

We depend on key personnel; if they were to leave us, we would have insufficient
qualified employees

         Our operations are managed by a small number of key management
personnel, the loss of whom could materially affect our operations. In June and
July 2000, our then chief executive, chief operating and chief marketing
officers resigned. In April 2001, our chief financial officer also resigned. We
have since appointed new officers for all these positions. The significant
turnover we have experienced at our upper management levels has affected our
ability to develop and execute our business strategies. The success of our
company depends in part upon our ability to hire and retain highly skilled and
qualified management personnel. The competition for highly qualified management
personnel in the telecommunications industry is intense and, accordingly, we
cannot assure you that we will be able to hire or retain the management
personnel necessary for our success.

We may not have sufficient administrative, operational or financial resources to
grow as rapidly as we would like

         Our expected rapid growth will place a significant strain on our
administrative, operational and financial resources. We anticipate that
continued growth will require us to recruit and hire a substantial number of new
managerial, finance, sales and marketing, accounting and support personnel. If
we are unable to attract and retain personnel who can manage our growth
effectively, our growth may be limited and the quality of our service may be
impaired. This occurrence could adversely affect our results of operations and
financial condition.

We depend on Telmex for interconnection

         Telmex exerts significant influence on all aspects of the
telecommunications markets in Mexico, including interconnection agreements. We
use Telmex's network to service virtually all of our customers. Our
interconnection agreement with Telmex expires on September 15, 2002. We cannot
assure you that once this agreement expires we will be able to obtain the
services we require from Telmex on terms and conditions that permit us to offer
services at rates that are both profitable and competitive.

Our increased leverage could affect our ability to service our debt

         We are highly leveraged. In 2000, our earnings were insufficient to
cover fixed charges by an amount equal to Ps.552.8 million.

         Our ability to meet our debt service requirements will depend on our
future performance, which is subject to a number of factors, many of which are
outside our control. We cannot assure you that we will generate sufficient cash
flow from operating activities to meet our debt service and working capital
requirements. In addition, our high leverage could affect our access to credit
or our ability to pursue business opportunities.

         The indenture governing our U.S.$300 million 13 3/4% Series B Senior
Notes due 2007, which we refer to in this annual report as the "notes," limits
but does not prohibit our incurrence of additional indebtedness and we expect to
incur additional indebtedness in the future. However, our significant level of
indebtedness may impair our ability to raise additional indebtedness on
commercially reasonable terms when required or with terms that will not limit
our ability to develop our business.

         Furthermore, our significant leverage, through the related debt service
burden, could adversely affect:

            -  our ability to fund capital expenditures, acquisitions or
               operating losses or to refinance existing indebtedness;

            -  our flexibility in planning for, or reacting to, changes in our
               business and market conditions; and

            -  our ability to compete in our markets.

                                       6
<PAGE>   10

We are subject to restrictive covenants

         The terms of our notes impose significant operating and financial
restrictions. These restrictions will affect, and in many respects significantly
limit or prohibit, our ability to, among other things:

            -  borrow money;

            -  pay dividends in stock;

            -  make investments;

            -  use assets as security in other transactions, and

            -  sell assets or merge into other companies.

         If we do not comply with these restrictions, we could be in default
even if we are able to service our debt. If there were a default, holders of the
notes could demand immediate payment of the aggregate principal amount and
accrued interest on the notes outstanding. This could lead to our bankruptcy or
reorganization for the benefit of our creditors or to our inability to pay our
obligations.

We may not be able to finance a change of control offer

         We will be required to offer to repurchase all the notes if a change of
control (as defined in the indenture governing the notes) occurs. An agreement
among our principal shareholders provides that if we do not carry out a public
equity offering prior to May 21, 2005, some of our shareholders will have the
right to:

            -  sell substantially all of our assets;

            -  merge or consolidate us into another company; or

            -  require parties to the shareholders agreement to sell their
               shares and distribute the proceeds to some of our shareholders.

         Although there is doubt as to whether this provision would be
enforceable under Mexican law, any such occurrence would likely constitute a
change of control under the indenture governing the notes. However, it is
possible that we will not have sufficient funds at the time of the change of
control to make the required repurchase. Certain important corporate events,
such as leveraged recapitalizations that would increase the level of our
indebtedness, would not constitute a change of control.

If we do not successfully install and operate accounting, billing, customer
service and management information systems, we may not be able to achieve
desired operating efficiencies

         Sophisticated information and processing systems are vital to our
operations and growth and our ability to monitor costs, render monthly invoices
for services, process customer orders, provide customer service and achieve
operating efficiencies. We intend to install the accounting, information and
processing systems necessary to provide services efficiently. However, we cannot
assure you that we will be able to successfully install or operate such systems
or that they will perform as expected.

Our operations are dependent upon our ability to protect our network
infrastructure

         Our operations are dependent upon our ability to protect our network
infrastructure against damage from fire, earthquakes, floods, power loss, and
similar events and to construct networks that are not vulnerable to the effects
of such events. The occurrence of a natural disaster or other unanticipated
problem at our facilities or at the sites of our switches could cause
interruptions in the services we provide. The failure of a switch would result
in the interruption of service to the customers served by that switch until
necessary repairs are effected or replacement equipment is installed. Any damage
or failure that causes interruptions in our operations could have a material
adverse effect on our business, financial condition and results of operations.

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<PAGE>   11

A significant portion of our revenues is represented by a small number of
customers

         Currently, our three largest customers account for more than 30% of our
revenues. We believe that this customer concentration will be reduced over time
as the size of our operations grows. However, our revenues could be negatively
affected at least in the short term if one or more of our largest customers
cancel our service.

We could be affected by the "by-pass" traffic

         Pursuant to COFETEL regulations, the only legal way to transport
international long distance calls in Mexico is through the international
settlement rate system. However, alternative ways to route and terminate
international long distance calls at a lower cost in countries that exchange a
significant amount of traffic with Mexico exist. Some estimates show that, given
the disparity between international settlement rates and domestic
interconnection rates that would be payable under an alternative arrangement, an
increasing portion of the long distance market between Mexico and the United
States is being served by entities that "by-pass" the international settlement
rate system. This practice is deemed illegal by COFETEL.

         Maxcom complies with all relevant regulations relating to local and
long distance services and cannot confirm whether any of its high-volume
customers is engaging in "by-pass" activities. Under Mexican legislation, Maxcom
is not required to investigate whether any such high-volume customers are
engaged in "by-pass" activity. Maxcom is required, however, to obey any
COFETEL's formal order to disconnect a customer deemed to be engaged in
"by-pass" activity by COFETEL.

         Mexican regulatory authorities have announced their intention to
reinforce audits of persons or companies engaging in "by-pass" activity. Major
Mexican long distance carriers signed on December 2000 a cooperation agreement
to combat "by-pass" in Mexico. If as a consequence of such actions, the
regulatory authorities determine that any of our high-volume customers (such as
Internet service providers) are engaged in such "by-pass" activity, Maxcom's
revenues could be negatively affected.

FACTORS RELATING TO THE MEXICAN TELECOMMUNICATIONS INDUSTRY

We face significant increasing competition which may negatively affect our
operating margins

         The telecommunications industry in Mexico is becoming highly
competitive. We compete with our rivals primarily on the basis of features,
pricing and customer service. We face significant competition from Telmex in all
of the areas where we operate. As the former state-owned telecommunications
monopoly, Telmex has significantly greater financial and other resources than
those available to us, a nationwide network and concession and an established
customer base.

         We also face significant competition from recent entrants, particularly
in Mexico City. Some of these recent entrants may have significantly greater
financial and other resources than us. In addition, we could face increased
competition if the Mexican government grants more concessions or if new,
competing technologies are developed. Competition may limit our ability to grow
or maintain our customer base or to implement price increases to keep pace with
inflation.

If the Mexican government grants more concessions, the value of our concessions
could be severely impaired

         The telecommunications industry is regulated by the Mexican government.
Our concessions are not exclusive and the Mexican government could grant
concessions covering the same geographic regions and frequency bands to other
entrants. We cannot assure you that additional concessions to provide services
similar to those we plan to provide will not be granted and that the value of
our concessions will not be adversely affected as a result.

We could lose our concessions if we do not comply fully with their terms

         The terms of our concessions require us to satisfy a number of
technical, buildout and financial conditions. We believe we are currently in
compliance with all of these terms. However, we cannot assure you that we will
be able to comply in the future. A failure to comply could result in a
termination of our concessions, and the Mexican

                                       8
<PAGE>   12

government would not be required to compensate us. If any of our concessions
were to be terminated, we could be unable to engage in our core business and
would likely be unable to repay our indebtedness.

Fraud increases our expenses

         The fraudulent use of telecommunications networks imposes a significant
cost upon service providers, who must bear the cost of services provided to
fraudulent users. We suffer loss of revenue as a result of fraudulent use, and
also cash costs due to our obligation to reimburse carriers for the cost of
services provided to fraudulent users. Although technology has been developed to
combat this fraudulent use and we installed it in our operations, this
technology does not eliminate fraud entirely. In addition, since we rely on
other long distance carriers for interconnection, some of which do not have
anti-fraud technology in their network, we are particularly exposed to this risk
in our long distance service. In the year 2000, we incurred approximately Ps.6.3
million in expenses for the prevention and detection of fraud.

The technology we use may be made obsolete by the technology used by our
competitors

         All companies in the global telecommunications industry must adapt to
rapid and significant changes in technology. While we have been installing what
we believe to be a technologically advanced fiber optic network with a microwave
overlay, we cannot assure you that this technology will not be challenged by
competition from new or improved digital technologies in the near future.
Technological changes may adversely affect our competitive position, require
substantial new capital expenditures and/or require write-downs of obsolete
technology.

The Mexican government could temporarily seize or permanently expropriate our
assets under certain circumstances

         The Mexican government has the authority to temporarily seize all
assets related to a telecommunications concession in the event of natural
disaster, war, significant public disturbance, threats to internal peace or for
economic reasons, and for other reasons related to national security. In
addition, the Mexican government has the statutory right to permanently
expropriate any telecommunications concession and claim any related assets for
reasons of public interest. Mexican law provides for compensation in connection
with losses and damages related to temporary seizure or expropriation. However,
we cannot assure you that the actual compensation paid would be adequate or that
such payment would be timely.

FACTORS RELATING TO MEXICO

If Mexico experiences future political and economic crises, our business could
be affected negatively

         We are a Mexican company with all of our operations in Mexico.
Accordingly, the political and economic environment within Mexico can have a
significant impact on our financial condition and results of operations.

         The Mexican government has exercised, and continues to exercise,
significant influence over the Mexican economy. Mexican governmental actions
concerning the economy and state-owned enterprises could have a significant
impact on Mexican private sector entities in general and on us in particular,
and on market conditions, prices and returns on Mexican securities, including
our securities. In July 2000, Mexico held national elections, which were won by
Vicente Fox, the candidate of the National Action Party (Partido Accion
Nacional). This represented the first time in over 70 years that a party other
than the Institutional Revolutionary Party (Partido Revolucionario
Institucional) won the Presidency. In addition, no single party has a majority
on the national congress. We cannot predict the impact this result might have on
the Mexican economy, particularly on the growth and deregulation of the
telecommunications industry.

         In the past, Mexico has experienced economic crises, caused by internal
and external factors, characterized by exchange rate instability, high
inflation, high domestic interest rates, economic contraction, a reduction of
international capital flows, a reduction of liquidity in the banking sector and
high unemployment. These economic conditions substantially reduced the
purchasing power of the Mexican population and, as a result, the demand for
telecommunications services.

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<PAGE>   13

         Crises such as these could have a material adverse effect on our
financial condition and results of operations and on the market value of our
securities.

Foreign ownership restrictions may limit our ability to raise equity capital

         Mexican law provides that no more than 49% of the full voting stock of
a Mexican corporation holding a concession to provide telecommunications
services to other than cellular services may be held by non-Mexicans.
Non-Mexicans represent 49% of our full voting stock. As a result, any future
sales of equity securities to non-Mexicans must involve securities with limited
voting rights or would require a proportional purchase of voting stock by
Mexicans. This national ownership requirement may limit our ability to raise
capital from non-Mexican investors in the future.

We may lose money because of peso devaluations

         While our revenues are almost entirely denominated in pesos, the
majority of our obligations, and all of our long-term debt, are denominated in
U.S. dollars. We are exposed to peso devaluation risk. The peso has devalued
substantially against the U.S. dollar in the past and may devalue significantly
in the future. For example, the noon buying rate rose from Ps.3.45 per U.S.$1.00
on December 19, 1994 to Ps.5.00 per U.S.$1.00 on December 31, 1994 and Ps.7.74
per U.S.$1.00 on December 31, 1995, representing a 124.6% devaluation of the
peso relative to the U.S. dollar. In 1998, the peso devalued 22.7% relative to
the U.S. dollar.

         We do not currently have in place hedging arrangements with respect to
this risk because we do not believe them to be cost effective for us. Further
declines in the value of the peso relative to the U.S. dollar could adversely
affect our ability to meet our U.S. dollar-denominated obligations, including
the notes. In addition, any further devaluation of the peso may negatively
affect the value of Mexican securities such as ours. Although the peso-to-dollar
exchange rate remained relatively stable in 1999 and 2000, there may be
significant devaluations in the future.

Developments in other countries may impact the price of our securities

         We cannot assure you that the price of our securities will not be
adversely affected by events elsewhere, especially in the United States and in
emerging market countries. Mexican financial and securities markets are, to
varying degrees, influenced by economic and market conditions in other
countries. Although economic conditions are different in each country, investor
reaction to developments in one country has had and can have significant effects
on the prices of securities of issuers in other countries, including Mexico. The
financial crisis that began in October 1997 in several Asian nations, spread to
Russia and is currently affecting Brazil and Argentina, has had a significant
negative impact on the financial and securities markets in many emerging market
countries, including Mexico. The effects of this crisis may worsen, or new
crises may occur, which may negatively affect the price of our units, notes,
warrants and shares or our financial condition and results of operations.

Our financial statements do not give you the same information as financial
statements prepared under United States accounting principles

         We prepare our financial statements in accordance with Mexican GAAP.
These principles differ in significant respects from U.S. GAAP, including in the
treatment of the capitalization of preoperating expenses, the amortization of
frequency rights, the capitalization of interest, vacation expenses and deferred
income taxes and employees' profit sharing, and in the presentation of cash flow
information. In particular, all Mexican companies must incorporate the effects
of inflation directly in their accounting records and in published financial
statements. The effects of inflation accounting under Mexican GAAP are not
eliminated in the reconciliation to U.S. GAAP. For this and other reasons, the
presentation of Mexican financial statements and reported earnings may differ
from that of companies in other countries.

Our creditors may suffer a U.S. dollar shortfall if they obtain a judgment or a
distribution in bankruptcy

         In the event that we are declared bankrupt, we will have the right to
discharge our obligations by paying our creditor in pesos at the exchange rate
in effect on the date of the declaration of such bankruptcy. In the event that a
creditor is awarded a judgment from a court enforcing our U.S.
dollar-denominated obligations under the notes, we will have the right to
discharge our obligations by paying such creditor in pesos at the exchange rate
in

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<PAGE>   14

effect on the day of payment of such judgment. Such rate is currently determined
by the Mexican Central Bank (Banco de Mexico) every banking day in Mexico and
published the following banking day in the Official Gazette of the Federation
(Diario Oficial de la Federacion). As a result of such currency conversion, a
creditor could face a shortfall in U.S. dollars. No separate actions exist or
are enforceable in Mexico for compensation for any such shortfall.

         You should also be aware that if we are declared bankrupt, our debt
obligations, including the notes, will cease to accrue interest and payment of
any of our debt obligations would depend on the outcome of the bankruptcy
proceedings, which are often very lengthy.

We may not be able to make payments in U.S. dollars

         In the past, the Mexican economy has experienced balance of payment
deficits and shortages in foreign exchange reserves. While the Mexican
government does not currently restrict the ability of Mexican or foreign persons
or entities to convert pesos to foreign currencies generally, and U.S. dollars
in particular, it has done so in the past and could do so again in the future.
We cannot assure you that the Mexican government will not institute a
restrictive exchange control policy in the future. Any such restrictive exchange
control policy could prevent or restrict our access to U.S. dollars to meet our
U.S. dollar obligations and could also have a material adverse effect on our
business, financial condition and results of operations. We cannot predict the
impact of any such measures on the Mexican economy.

ITEM 4.  INFORMATION ON THE COMPANY

A.       HISTORY AND DEVELOPMENT OF THE COMPANY

         Maxcom Telecomunicaciones, S.A. de C.V. is a limited liability company
(sociedad anonima de capital variable) with indefinite life organized under the
laws of Mexico on February 28, 1996. We were originally organized under the name
"Amaritel, S.A. de C.V." We changed our legal name to "Maxcom
Telecomunicaciones, S.A. de C.V." on February 9, 1999. Our legal name is also
our commercial name.

         Our principal offices are located at Magdalena No. 211, Colonia del
Valle, 03100 Mexico D.F. and our general phone number is (52) 5-147-1111. Our
website address, the contents of which are not part of this annual report, is
www.maxcom.com.mx. Our agent in the United States is Puglisi & Associates, 850
Library Avenue, Suite 204, P.O. Box 885, Newark, Delaware 19715.

         In February 1997, we were awarded Mexico's first competitive wireline
local long distance telephony concession, which covers the Federal District of
Mexico and over 100 cities and towns in the Gulf region and has a term of 30
years. Our concession was expanded in September 1999 to cover over 80% of the
Greater Mexico City area, and a total of 115 cities and towns in the Gulf
region.

         In October 1997, we were awarded seven nationwide point-to-point and
three regional point-to-multipoint microwave concessions, each for 20 years.

         We commenced commercial operations on May 1, 1999.

         For the three years ended December 31, 2000, we invested approximately
U.S.$147.3 million in capital expenditures, primarily for the buildout of our
infrastructure.

         For 2001, we plan to invest approximately U.S.$58 million in capital
expenditures, primarily for the purchase and installation of telecommunications
equipment. Of this amount, we had already spent approximately U.S.$2.7 million
by March 31, 2001.

B.       BUSINESS OVERVIEW

         We are a growing facilities-based telecommunications company operating
in the competitive local exchange carrier market in Mexico. We commenced
commercial operations on May 1, 1999. We are focused on developing our network
and support infrastructure required to provide local as well as long distance
and other value-

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<PAGE>   15

added services to targeted businesses and residential customers within our
concession areas. In particular, we believe that the cities of Mexico and
Puebla, where we currently operate, are attractive from a telecommunications
growth perspective, due to the combination of a relatively large population, low
subscriber line penetration by international standards and strong economic
growth. We anticipate a large and growing demand for telephony services in these
regions.

         We position ourselves as a single-source provider of telecommunications
services to our customers. In addition to our existing local, long distance and
data services, we offer value-added products such as digital high-speed data
connectivity and Internet access. We are currently expanding the functionality
of our network to offer other broadband services.

         In order to support our market positioning, we follow a marketing
strategy that is focused on differentiating ourselves from competitors. A key
element in this strategy is superior customer service, centered on what is most
important to our customers. According to our market research, our target
customers value highly, among other things, around-the-clock customer care
availability, rapid-response time and timely and accurate billing.

         At December 31, 2000, we had 26,910 lines in service for 11,264
customers. Our order backlog was 6,445 lines at December 31, 2000. During 2000,
we installed a total of 27,983 lines. However, in the second half of 2000 we
conducted a line-by-line profitability analysis which resulted in the
termination of 18,506 lines which were either unused or low revenue generators.
This analysis allowed us to optimize the use of our capacity.

         The Mexican government has announced that the increase in teledensity
rates continues to be one of its top priorities. In February 1997, we were
awarded Mexico's first competitive wireline local/long distance telephony
concession, which covers the Federal District of Mexico and over 100 cities and
towns in the Gulf region, and has a term of 30 years. Our concession was
expanded in September 1999 to cover over 80% of the Greater Mexico City area,
and a total of 115 cities and towns in the Gulf region. Mexico City, with a
population of approximately 20 million people, is one of the world's most
heavily populated metropolitan areas. The Gulf region has the greatest
concentration of oil, natural gas and maritime industries in Mexico. We were
also awarded a nationwide point-to-point and three regional point-to-multipoint
microwave concessions in October 1997, each for 20 years.

         The construction of our telecommunications network is based on a
smart-build, customer-driven, modular platform that utilizes a combination of
fiber optic, copper wire and microwave transmission technology. This methodology
enables us to provide service quickly to our target markets, reduces the time
lag between the incurrence of capital expenditures and the generation of service
revenues and increases flexibility to accommodate a changing market environment.
To operate our network, we have constructed two central switching offices
located in Mexico City and the City of Puebla, with a 170-kilometer fiber optic
link connecting the two cities. As of December 31, 2000, we had in service two
state-of-the-art Lucent Technologies 5ESS switches.

         We believe that the combination of our attractive wireline and
microwave concession areas, our smart-build network construction strategy, our
position as a customer service-oriented provider and our state-of-the-art
network will allow us to benefit from the expected growth of the Mexican
telecommunications industry.

STRATEGY

         We intend to capitalize on our competitive strengths to become a
leading telecommunications provider in our markets in Mexico. Our new management
team is currently in the process of defining a new strategy of growth and
expansion. This new strategy will necessarily include the following components:

Capture unmet demand for telephony services

         We seek to capture unmet demand by targeting small and medium-sized
businesses and middle and high-usage residential customers that are looking to
expand their telecommunications capacity or that do not currently receive the
type of products and services we offer. We believe that the potential for
expansion in the Mexican telecommunications market is significant given the
current low teledensity rate, which was 12.7 telephone lines per 100 inhabitants
at the end of 2000, the increasing level of competition and the continued
development of the Mexican economy.

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<PAGE>   16

Build our network on a demand-driven, modular basis

         We build our network based on customer demand. We first identify
clusters in our markets through various market research techniques. We then
carry out the network buildout in tandem with increased sales and promotional
efforts targeted at customers within the cluster. This parallel track minimizes
the time lag between the incurrence of capital expenditures and the generation
of service revenues, and allows a choice of technology and construction method
based on the particular needs of the cluster. We refer to this approach as our
"smart-build" strategy.

Differentiate product offerings based on features and price

         We believe that we can differentiate ourselves from competitors by
offering a variety of product features that meet the specific needs of our
customers. In the process, we seek to develop customer loyalty and brand
awareness by informing consumers about the telecommunications services that we
offer and by helping them to differentiate between the various
telecommunications services available in the market. We also seek to offer our
services at prices that are between 5% and 15% lower than the prevailing market
price in order to build our customer base.

OUR MARKETS

Concession areas

         In February 1997, we were awarded the first concession for competitive
local wireline telephony services in the Federal District of Mexico and in 110
cities and towns in the Gulf region. In September 1999, we received the approval
of the SCT and COFETEL to provide local telephony services in several
municipalities contiguous to the Federal District, which are part of Mexico
City, as well as in selected additional cities in the Gulf region.

         Our area of coverage includes Mexico City, which has the greatest
concentration of service and manufacturing industries and is also the center of
Mexico's public and financial services sectors. According to the Mexican
National Institute of Statistics, Geography and Information (Instituto Nacional
de Estadistica, Geografia e Informatica), in 2000, Mexico City had a population
of approximately 17.9 million people. Although Mexico City has the highest
teledensity rate in Mexico, at approximately 19.2 telephone lines per 100
inhabitants at December 31, 2000, we believe that significant unmet demand for
high-quality, local telephony services in Mexico City remains. We commenced
commercial operations in Mexico City on May 1, 1999.

         We commenced commercial operations in the City of Puebla also in May
1999. Puebla is the fourth largest city in Mexico, with a population of
approximately 1.9 million people in 2000.

         As of December 31, 2000, we had 16,920 installed lines and an order
backlog of 4,605 lines in Mexico City and 9,900 installed lines and an order
backlog of 1,840 lines in the City of Puebla. During the second half of 2000 we
conducted a line-by-line profitability analysis that resulted in the termination
of 18,506 lines which were either unused or slow revenue generators. As of April
30, 2001, we had 27,720 installed lines and an order backlog of 10,035 lines.

         The Gulf region includes, in addition to the City of Puebla, among
others, the cities of Veracruz, Tampico, Reynosa, Merida, Cancun, Chetumal,
Campeche, Ciudad del Carmen, Coatzacoalcos and Tuxtla Gutierrez, and has an
aggregate population of approximately 13.8 million people. The Gulf region has
the greatest concentration of oil, natural gas and maritime industries in
Mexico. The Gulf region is a significantly underserved market, with a
teledensity rate of approximately 8.6 telephone lines per 100 inhabitants. We
believe that this region has not been an area of initial focus of potential
competitors. As a result, we believe we will operate in a limited competitive
environment.

         We have recently approached the SCT and COFETEL to explore the
possibility of amending our concession to allow for national coverage.

Clusters

         We have developed a comprehensive marketing strategy that starts by
identifying city areas with the largest potential for new lines, which areas we
refer to as "clusters." We use a variety of techniques to identify potential


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<PAGE>   17

clusters, including canvassing, plotting of potential clusters and database
marketing. Once a cluster is identified, a map of the geographic area is
produced and the cluster is defined. A cluster becomes the basis for network
design and deployment and for the launching of focused field sales efforts.

         Our cluster strategy is divided into three stages:

            -  IDENTIFY CLUSTERS through market research. Our market research is
               designed to identify small- and medium-sized businesses and
               medium- and high-usage residential consumers. Once we identify
               potential customers and the clusters or single sites (such as
               apartment buildings) within which these potential customers are
               located, we design the deployment of the access network to cover
               these clusters.

            -  DEVELOP CLUSTERS through the implementation of a sales plan for
               each cluster based on our network deployment schedule. We promote
               our services at the same time that we are building the network.

            -  FILL OUT CLUSTERS by offering our services to all customers
               within the cluster.

OUR NETWORK

Buildout strategy

         We build out our network on a modular basis. Once a cluster has been
identified, we build our network in tandem with our sales efforts within the
cluster. This approach provides greater flexibility and minimizes the time lag
between the incurrence of capital expenditures and the generation of service
revenues. Through December 31, 2000 we had invested Ps.1,531.9 million to build
our network, excluding cumulative preoperating expenses.

Network backbone

         At December 31, 2000, our network backbone consisted of one owned
170-kilometer fiber optic link between Mexico City and the City of Puebla with a
Lucent Technologies 5ESS digital switch in each city and an optical regenerator
at the halfway point. Our switch in Mexico City is connected to two different
nodes in the city's public switched network by leased fiber capacity. Our switch
in Puebla is connected to the City of Puebla public switched network by leased
fiber capacity. We also lease facilities to connect to long distance networks.

         In June 2000, we finished constructing a fiber optic ring in the City
of Puebla. We also acquired six strands of dark fiber for approximately 175
kilometers in metropolitan rings in Mexico City and obtained an option for
additional capacity in fiber optic rings also in Mexico City. In addition, the
infrastructure is in place to provide local telephony service to five towns
located along our Mexico City-City of Puebla fiber optic link.

Last-mile connectivity

         The last-mile connectivity portion of our network is comprised of a mix
of wireline and wireless access technologies. We use point-to-point microwave
transmission technology for fast deployment to single site locations and to
provide backbone to clusters. We have point-to-point frequencies in the 15 and
23 GHz band. We also have a point-to-multipoint concession for the 10.5 GHz band
covering a portion of the Gulf region. We do not currently use this concession
but may use it in the future to provide last-mile connectivity to our customers.

         We also use wireline access to provide service to clusters. Clusters
generally have an area ranging between one and six square kilometers. An average
of 50 kilometers of cable plant is required to provide facilities within the
clusters. We use the following two types of outside plant facilities:

            -  COPPER FACILITIES. Copper wire feeder and distribution facilities
               are placed from the host or remote site along rights of way,
               either aerial or underground. Aerial is the preferred method
               based on cost of construction. Underground cable is placed using
               either the open trench or directional boring methods of
               construction. The size of the cable laid is based on the
               anticipated number of customers in the cluster forecasted by our
               marketing research. We also integrate fiber optic facilities in
               the distribution plant to allow us to provide broadband services.

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<PAGE>   18

            -  PAIR GAIN FACILITIES. Fiber optic cable is used in some instances
               to serve pair gain units and copper distribution facilities
               depending on the economics and governmental restrictions relating
               to underground placement. The size of the copper distribution
               cable is described above.

Switching

         We have a Lucent Technologies 5ESS digital switch in each of Mexico
City and the City of Puebla. Our switch in Mexico City is currently engineered
for 95,000 trunks and equipped for 87,000 trunks, while our switch in the City
of Puebla is engineered for 60,000 trunks and equipped for 27,000 trunks. Each
trunk can generally carry between 1 and 3 lines. Equipped capacity is expanded
modularly and at incremental costs according to customer demand.

         The switches are capable of providing analog lines, E1 digital lines,
digital high-speed data services, centrex services and operator-assisted
services. In addition, they can provide private analog lines, private
clear-channel digital lines, data transmission and value-added services such as
abbreviated dialing, conference, call back, calling number display, call
waiting, hot line, hunt group and voice mail, among others.

Operational support systems

         We have a network operations and control center in Mexico City which
oversees, administers and provides technical support to all service areas. Our
center, which uses Hewlett Packard hardware and Lucent Technologies software,
allows us to manage a multi-vendor network, and has the ability to monitor
switching, transmission and microwave elements simultaneously and provide
automatic trouble identification.

         Our operational support systems are designed to allow us to
differentiate ourselves in the marketplace by being able to:

            -  offer a flexible, large selection of services;

            -  provide tailored service packages;

            -  quickly introduce products and services;

            -  deliver near real-time activation and disconnection;

            -  deliver a high quality of service;

            -  minimize activation errors; and

            -  provide accurate and timely billing services.

         Our information technology strategy is to implement operational support
systems possessing a high level of functionality and flexibility from the
service order to the delivery of customer invoices. The systems include the
following functional features:

            -  Spanish language support for invoices and documentation;

            -  a high degree of integration between a small number of
               operational support systems components;

            -  flow-through of information, provisioning and service activation;

            -  capabilities to monitor, manage and resolve network problems; and

            -  allowance for growth on a modular scalable basis.

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<PAGE>   19

OUR SERVICES

General

         Our primary focus of service is local telephony, particularly the
provision of high-quality, flexible last-mile connectivity to small and
medium-sized businesses and middle and high-usage residential customers. We
offer long distance service as an integrated value-added service for our local
telephony customers. We do not offer our long distance service separately from
our local telephony service. In addition, although not required by Mexican
regulation, we give our local telephony customers the option to choose either
our long distance services or those of other carriers.

         We currently provide value-added services such as: voice mail, speed
dialing, call waiting, call forwarding, three-way calling, call barring, caller
identification and multi-line hunting. We also provide digital high-speed
connectivity and dial-up Internet access.

Service products

         We seek to offer high-quality telephony service products combining (1)
prices that are between 5% and 15% below current market levels, (2) a wide range
of value-added solutions, and (3) superior customer service. The following are
the service products we currently offer to our customers:

            -  RESIDENCIAL LINEAMAX. This is a service for residential customers
               that provides a high-quality telephone line. The features offered
               under this product include voice mail, call waiting, call
               forwarding, three-way calling, call blocking, speed dialing and
               unlisted numbers.

            -  COMERCIAL LINEAMAX. This service, which is offered to business
               customers, is identical to Residential LineaMax except that it
               also includes multi-line hunting.

            -  CENTRALMAX. This service provides business customers with all the
               functions of a private branch exchange using centrex technology,
               without having to acquire and maintain the equipment. The
               features offered under this product include call waiting, call
               forwarding, three-way calling, direct inward dialing, direct
               outward dialing, intercom dialing, call transfer, speed dialing,
               call hold, call pick up, outgoing call barring, single digit
               access to attendant and distinctive ringing. Optional solutions
               include voice mail, multi-line hunting and attendant services.

            -  LARGA DISTANCIA LINEAMAX. This service provides domestic and
               international long distance.

            -  TRONCALMAX DIGITAL. This service provides digital trunks for
               business customers that need highly reliable access to and from
               the public telephone network through their existing private
               branch exchange. This service is sold in groups of 10, 20 or 30
               trunks. The groups can be configured with direct inward dial
               (DID), direct outward dial (DOD), caller identification or main
               telephone number assignments.

            -  TRONCALMAX ANALOGICA. This service, which is offered to business
               customers, provides connectivity to analog PBX or key systems.
               The features available with this product are multi-line hunting,
               caller identification and call barring.

            -  XDSL. Digital subscriber line is a transmission service that
               turns ordinary telephone lines into high speed data connections.
               It is a digital data service that provides telecommuting
               capabilities at speeds much faster than standard modems. With
               xDSL it is possible to have secure, dedicated links to the
               Internet or a company's LAN at a high speed transmission.

         We plan to offer the following service products to our customers in the
future in order to capitalize on the significant data applications growth
expected in Mexico.

            -  DIGITAL PRIVATE LINES. We expect that our private lines will be
               highly reliable dedicated circuits between two or more physical
               locations. They are designed to integrate voice, data and video


                                       16
<PAGE>   20

               private networks over a single physical link. Digital private
               lines are in effect leased lines for exclusive/private use with
               no limitations in usage, available 365 days a year, with no
               restrictions in amount of traffic.

            -  INTELLIGENT NETWORKS PLATFORM.

               [X]  Virtual private networks provide customers with several
                    telecommunications service such as simplified dialing,
                    privacy and security of communications, control calls, over
                    national and international private networks.

               [X]  Free call services. This service allows subscribers to
                    advertise a toll-free telephone number (the service number)
                    for their customers or potential customers.

               [X]  Calling cards. Calling cards provide the capability to offer
                    subscribers the option of automatically billing their calls
                    to an alternate account number. This service is typically
                    provided as a convenience to subscribers that have a need to
                    place calls when they are away from their homes or offices.

            -  WEB SERVICES. Hosting of web applications, domain name
               administration, applications on demand, unified messaging
               services and small and medium business enablement content.

PRICING

         We generally seek to maintain our prices between 5% and 15% below our
principal competition. We offer pricing plans that are simple in order to assure
customers of the integrity of the billing process. Our pricing structure rewards
long-term commitments by increasing discounts in relation to the length of the
commitment. We also provide discounts to high-volume users that are likely to
generate a significant flow of calls that will terminate in our network.

         We pay interconnection charges to other carriers on a per minute basis.
However, the common practice in the Mexican market is to charge customers on a
per call basis for local service. We seek to minimize the risk associated with
this mismatch in terms of revenues and costs by targeting customers, such as
radio stations and Internet service providers, who are likely to generate a
significant flow of calls that will terminate in our network. Moreover, for long
holding time customers, we have, in some cases, implemented a per minute charge
plan to be consistent with our interconnection fees that are on a per minute
basis.

MARKETING AND SALES

General

         We seek to develop brand name recognition by using our corporate name,
logo and product names consistently to portray a unified image. We conduct
publicity drives within target clusters and to high-volume business and
residential users. We seek to differentiate ourselves from our competitors by
our pricing, consistent quality of service and speed of line activation.

Sales and distribution channels

         We focus our sales efforts within clusters using general promotion and
direct sales. We promote our services primarily through advertisements on
billboards and in-building promotions. As we commence the deployment of our
network within a cluster, we intensify our promotion efforts through our direct
sales force in such cluster.

         Our direct sales approach is to assign sales representatives or teams
to locations within a cluster that have significant potential for customer
growth. There are two types of locations within a cluster:

            -  SINGLE-SITE LOCATIONS that have significant potential for our
               services; and

                                       17
<PAGE>   21

            -  FIBER OPTIC/COPPER CABLE DISTRIBUTION ROUTES that will extend
               bi-directionally from host buildings along main routes with
               significant potential.

         As of December 31, 2000, we employed 38 salespeople. We assign our
sales force based on territory, product or market segment, depending on their
background and experience. The compensation structure for our sales force is
tailored to attract and retain high achievers by providing a base and a bonus
component.

         Our sales force is recruited from other telecommunications providers
and systems integrators. In addition, we recruit master's degree holders from
Mexican universities. We believe that current labor market conditions in Mexico
allow us to recruit high-quality individuals. Our sales force undergoes
extensive training covering the industry of telecommunications, our products,
our internal procedures and markets, sales, proposal preparation and
presentation skills. In its sales effort, our sales force uses, among other
things, multimedia presentation, corporate videos and corporate and product
brochures.

         In addition to our sales force, we are developing other distribution
channels, including store fronts, agents, distributors, outsourcing and
telemarketing.

Customer service

         We seek to differentiate ourselves by providing superior and consistent
customer service. Our customer service group is divided into three areas:

            -  CENTRALIZED ANSWERING POINT. This area responds to calls to our
               main number in Mexico City and the City of Puebla. Many
               prospective and existing customers use our centralized answering
               point for all types of queries, including regarding area codes,
               rates, billing and line installation and changes. Our hours of
               operation are 8:00 a.m. to 8:00 p.m. Monday through Friday, and
               from 9:00 a.m. to 6:00 p.m. on Saturdays.

            -  WALK-IN CENTER. We have one walk-in center in Mexico City and two
               in the City of Puebla for prospective and existing customers who
               wish to make inquires regarding our services in person. Our hours
               of operation are 8:00 a.m. to 8:00 p.m. Monday through Friday,
               and from 9:00 a.m. to 6:00 p.m. on Saturdays.

            -  CENTRALIZED TROUBLE-SHOOTING CENTER. This area responds to calls
               to our main number in Mexico City and the City of Puebla. This
               center is available 24 hours a day, seven days a week and handles
               customer service problems.

         For the convenience of our customers, we have arranged for customers to
pay their bills at the branches of major Mexican banks. We also have customer
walk-in centers, one in Mexico City and two in Puebla, to assist our customers
with new service requests, bill payments and product information.

CREDIT, BILLING AND COLLECTION

         We carry out credit checks on all our potential business customers
using a leading Mexican credit bureau. Based on the result of the credit check,
we assign a credit risk rating to the business customer and, depending on the
credit risk assignment, request a deposit, bond or standby letter of credit.
Normally, for business customers with an imperfect credit history we require a
one- to three-month deposit, which is calculated based on the number of lines
contracted. For high-volume customers we may require higher deposits, and may
collect on a prepaid or weekly basis and undertake a closer monitoring of call
activity.

         For our billing process, we use an Ericsson/Hewlett-Packard billing
mediation platform and a Kenan Systems/Arbor billing platform interfaced with
our customer service system. We collect our billing data from our switches using
an X.25 data network, with magnetic tape as backup. We monitor collections and
abnormal activity and develop statistics using our Kenan Systems/Arbor billing
platform. Also, we installed a state-of-the-art fraud management system in the
last quarter of 1999.

                                       18
<PAGE>   22

         We perform four billing cycles per month for business customers and two
for residential customers. We invoice monthly on a staggered basis, except in
some cases of greater credit risk where we invoice weekly. We prepare and mail
bills within five days after the close of each cycle. If a bill is past-due for
more than five days in the case of a business customer or two days in the case
of a residential customer, we call the customer to request payment. If the bill
remains unpaid for three additional days, we leave a reminder message on our
customer's phone. If the bill remains unpaid for seven additional days, we will
then restrict service to incoming calls only and eventually suspend service and
forward our unpaid receivables to a collection agency or, if necessary, to a
legal agency.

COMPETITION

         We compete primarily in the local telephony market on the basis of
features, customer service and value. Our direct competitors are wireline and
fixed wireless local telephony operators, although we also face competition
indirectly from mobile wireless operators.

         We do not compete directly in the long distance market. Although we
provide long distance service, we position such service as an integrated
value-added service for our local telephony customers. As a result, we do not
offer our long distance service separately from our local telephony service. In
addition, we give our local telephony customers the option to choose either our
long distance services or those of other carriers.

Telmex

         Our main local telephony competitor is Telmex, the former
government-owned telecommunications monopoly. Telmex has significantly greater
financial and other resources than those available to us. In addition, Telmex
has an established customer base which represents substantially all of the
wireline local telephony lines in Mexico. We depend on Telmex for local
interconnection.

         Our core strategy is to service underserved markets by targeting new
customers that do not currently receive the type of products and services we
offer.

New entrants

         We expect to face competition in local telephony from new entrants that
have been awarded concessions and which have just begun, or are expected to
begin, commercial operations. The more significant of these entrants are Axtel,
S.A. de C.V. ("Axtel"), Megacable Telecomunicaciones de Mexico, S.A. de C.V.
("Megacable"), Pegaso Comunicaciones y Sistemas, S.A. de C.V. ("Pegaso") and
Operadora Unefon, S.A. de C.V. ("Unefon").

         Axtel was awarded a nationwide local telephony and long distance
concession in June 1996, as well as fixed wireless local loop frequencies in the
3.4-3.7 GHz band, in May 1998. Axtel commenced commercial services in the
northern city of Monterrey in July 1999 and in Guadalajara, Puebla, Toluca, Leon
and Mexico City during 2000. We believe that Axtel seeks to target both business
and residential customers.

         Megacable was awarded a wireline local telephony concession in July
1997. In addition, it has a point-to-point microwave frequency concession in the
23 GHz band range. Megacable operates currently in Mexico City and plans to
commence operations in Guadalajara and Monterrey sometime in 2001. We believe
that Megacable will focus on providing service to large corporate customers.

         Pegaso was awarded a mix of 30 and 10 MHz bandwidth concessions in the
1.9 GHz band, and PCS band concessions covering all of Mexico in June 1998.
Pegaso offers services in Mexico City, Monterrey, Guadalajara, Tijuana, Toluca
and several other cities in northern Mexico. We believe that Pegaso plans to
cover the thirty-four most important cities in Mexico.

         Unefon won nationwide concessions for fixed wireless local loop
frequencies in the 3.4-3.7 GHz band and in the PCS 1.9 GHz band in May 1998.
Unefon began commercial operations in Toluca in early 2000 and has initiated
operations in Mexico City and Puebla, among other cities.

         We expect to face significant competition from some of these new
entrants in Mexico City and Puebla. We believe that having already commenced
operations in Mexico City gives us a significant advantage over these

                                       19
<PAGE>   23

competitors in terms of brand name recognition, operations and line growth. We
are not aware of any current plans by any of these competitors to provide local
telephony services in the Gulf region in the near future.

OVERVIEW OF THE MEXICAN TELECOMMUNICATIONS INDUSTRY

General

         The telecommunications industry involves the transmission of voice,
data and video communications from point of origination to point of termination.
The Mexican telecommunications industry has been undergoing rapid change in the
last decade due to the introduction of new technologies and the construction of
additional infrastructure, as well as market liberalization, which together have
resulted in increased competition and demand for telecommunications services.

         The modernization of the Mexican telecommunications infrastructure
began in 1990 with the privatization of Telmex, the government-controlled
telecommunications monopoly. Since privatization, Telmex and several
concessionaires have begun deploying modern fiber and wireless networks
throughout Mexico. To meet the demand for higher volume and higher quality
wireline services, copper cables are being replaced largely by fiber optic
transmission systems that provide greater capacity at lower cost with higher
quality and reliability.

Market liberalization

         Historically, the Mexican telecommunications industry was dominated by
Telmex, the government-controlled telecommunications monopoly. In December 1990,
the Mexican government initiated the privatization and deregulation of Telmex by
selling a controlling portion of Telmex's equity to a private consortium led by
Grupo Carso, S.A. de C.V., a Mexican conglomerate, as well as to subsidiaries of
Southwestern Bell Corporation and France Telecom S.A. Subsequently, the Mexican
government opened the wireless market by granting nine regional cellular
concessions in Band "A" in order to allow concessionaires to compete with
Telmex.

         LOCAL TELEPHONY MARKET. In connection with the privatization of Telmex
in 1990, the Mexican government amended Telmex's nationwide concession, which
expires in March 2026 and granted Telmex a six-year implied monopoly over local
telephony services. The amended Telmex concession obligated Telmex to expand and
increase local telephony service at a rate of 12% per year beginning in 1992 and
to provide basic telephone service to all population centers of 500 or more
inhabitants by 1995. The implied local service monopoly was eliminated in
mid-1996 when the Mexican Communications and Transportation Ministry (Secretaria
de Comunicaciones y Transportes), which we refer to as the "SCT," published
regulations governing the licensing of local services on a competitive basis.

         In order to promote competition in the local telephony market, the
Mexican government granted several concessions beginning in 1997, including the
concession awarded to us for wireline local telephony service. Each wireline
local telephony concession granted by the Mexican government generally has a
30-year term, and authorizes, among other things, the provision of local
telephony services and value-added services in a specified region of the
country.

         The Mexican government has also been conducting auctions of spectrum
frequencies in the:

            -  450 MHz, 1.9 GHz (PCS) and 3.4-3.7 GHz (fixed wireless local
               loop) frequency bands;

            -  7, 15 and 23 GHz frequency band for nationwide point-to-point
               microwave transmission links; and

            -  10.5 GHz frequency band for regional point-to-multipoint
               microwave transmission service.

         Four companies won nationwide concessions for fixed wireless local loop
frequencies, although one later forfeited its right for failure to pay
concession fees. In addition, five companies won concessions in the 1.9 GHz
(PCS) frequencies on either a nationwide or regional basis, although one also
forfeited its right for failure to pay concession fees. See "--Competition."

                                       20
<PAGE>   24

         LONG DISTANCE TELEPHONY MARKET. In connection with the privatization of
Telmex in 1990, the Mexican government granted Telmex an exclusivity period for
long distance telephony services of six years. In August 1996, the exclusivity
period granted to Telmex to provide domestic and international long distance
telephone service expired and competition commenced in January 1997. In order to
promote competition among domestic and international long distance providers,
the Mexican government granted several concessions, including the concession
awarded to us, for domestic and international long distance services, as well as
value-added services. Each concession generally has a nationwide scope and a
30-year term, and authorizes the provision of domestic and international long
distance services and value-added services.

         The long distance concessionaires include among others:

            -  Alestra, S. de R.L. de C.V., in which AT&T Corp. is a
               shareholder;

            -  Avantel, S.A. de C.V., in which MCI WorldCom Inc. is a
               shareholder;

            -  Axtel, S.A. de C.V., in which Bell Canada International is a
               shareholder; and

            -  Iusatel, S.A. de C.V., in which Verizon and Vodafone are indirect
               shareholders.

         International liberalization trends will likely impact the flow of long
distance telephone traffic to and from Mexico. In particular, demand for long
distance services may be stimulated by reforms of domestic
access/interconnection charges and international settlement rates and recent
international trade negotiations. As such charges decline, overall demand for
international and local services may increase.

Mexican market characteristics

         POPULATION AND ECONOMIC GROWTH. Mexico is the second largest country in
Latin America in terms of population. In 2000, Mexico had an estimated
population of 97.3 million and a population growth rate of approximately 1.3%
for the period from 1995 to 2000. In 2000, 33.1% of the population was under the
age of 15, 61.6% between the ages of 15 and 65 and only 5.3% was over 65. After
a decline in 1995, Mexico's real gross domestic product has grown in the past
four years, rising by 6.8% in 1997, 4.8% in 1998, 3.7% in 1999 and 6.9% in 2000.

         UNDERSERVED TELEPHONY MARKET. Mexico has a relatively low level of
wireline penetration with substantial unmet demand for fixed telephony service.
The following table presents telephone wirelines in service per 100 inhabitants
for the United States and selected Latin American countries as of December 31,
2000.

<TABLE>
<CAPTION>
                                             SELECTED TELEDENSITY RATES
                                                                                      LINES IN SERVICE PER
        COUNTRY                                                                        100 INHABITANTS(1)
        -------                                                                      -----------------------
<S>                                                                                          <C>
        United States............................................................              68
        Uruguay..................................................................              29
        Argentina................................................................              22
        Chile....................................................................              22
        Brazil...................................................................              19
        Colombia.................................................................              18
        Mexico...................................................................              13
        Venezuela................................................................              11
        Peru.....................................................................               7
</TABLE>

        ------------------
        (1)    Source:  Pyramid Research.

         According to Pyramid Research, the wireline local telephony market
represents approximately 33% of Mexico's total telecommunications market, when
measured by revenues, and generated approximately U.S.$4.5 billion of revenue in
2000. The business segment represents approximately 25% of the local telephone
market, with the balance accounted for by the residential segment.

                                       21
<PAGE>   25


         PROJECTED GROWTH TRENDS. With the introduction of competition in the
Mexican telecommunications market, teledensity rates and line usage are expected
to increase substantially. According to Pyramid Research, between 2000 and 2004,
lines in service in Mexico are expected to increase by 6.2 million, a compound
annual growth rate of approximately 10.8%. During the same period, teledensity
rates are expected to increase from 12.7 lines per one hundred inhabitants in
2000 to 18.0 lines per one hundred inhabitants in 2004.

         According to Pyramid Research, local, domestic long distance and
international long distance services revenues are expected to experience 13%, 5%
and 4% compound annual growth rates, respectively, between 2000 and 2004. Total
local wireline telephony revenues in Mexico are expected to increase from
U.S.$4.5 billion in 2000 to U.S.$7.4 billion in 2004. This growth is expected to
result from a marked increase in the number of lines in service and a slight
increase in local service rates.

SUPERVISION AND REGULATION OF THE MEXICAN TELECOMMUNICATIONS INDUSTRY

Current regulatory environment

         GENERAL. The telecommunications industry in Mexico is subject to the
New Telecommunications Law (Ley Federal de Telecomunicaciones) which was enacted
in 1995. However, certain rules set forth under the General Means of
Communications Law (Ley de Vias Generales de Comunicacion), the
Telecommunications Regulation (Reglamento de Telecomunicaciones) and the rules
promulgated thereunder, generally remain effective and are referred to as the
Old Telecommunications Law.

         Under the New Telecommunications Law, the Mexican telecommunications
industry is regulated for administrative and operational matters by COFETEL
(Comision Federal de Telecomunicaciones). COFETEL was created in 1996 as an
autonomous entity from the SCT to regulate and promote the efficient development
of the telecommunications industry in Mexico. COFETEL is responsible for, among
other things:

            -  enacting regulations and technical standards for the
               telecommunications industry;

            -  ensuring that holders fulfill the terms of their concessions and
               permits;

            -  suspending operators without concessions;

            -  resolving interconnection controversies between competitors; and

            -  maintaining a registry of applicable rates.

         The SCT retains the authority to grant all concessions and permits.
COFETEL makes recommendations to the SCT on major issues, such as amending
existing telecommunications laws, allocating spectrum frequencies, granting,
transferring, renewing or revoking concessions and applying penalties for
concession violations. The SCT has final decision making power on these issues.
Once a final decision is made, COFETEL implements the related regulations.

         CONCESSIONS AND PERMITS.

         General. To provide public telephony services in Mexico through a
public network, a service provider must first obtain a concession from the SCT.
Pursuant to the New Telecommunications Law, concessions for public networks may
not exceed a term of 30 years, and concessions for spectrum frequencies may not
exceed a term of 20 years. Generally, concessions for public networks may be
extended for a term equivalent to the term for which the concession was
originally granted. Concessions for spectrum frequencies will be re-auctioned at
least three years prior to their expiration date. Concessions specify, among
other things:

            -  the type and technical specifications of the network, system or
               services that may be provided;

            -  the allocated spectrum frequencies, if applicable;

            -  the geographical region in which the holder of the concession may
               provide the service;

                                       22
<PAGE>   26

            -  the required capital expenditure program;

            -  the term during which such service may be provided;

            -  the payment, where applicable, required to be made to acquire the
               concession, including, where applicable, the participation of the
               Mexican government in the revenues of the holder of the
               concession; and

            -  any other rights and obligations affecting the concession holder.

         In addition to concessions, the SCT may also grant permits for the
following:

            -  installing, operating or exploiting transmission-ground stations;
               and

            -  providing telecommunications services as a reseller.

         There is no legally mandated maximum term for these permits, unless
specifically stated in the permit. Under the New Telecommunications Law, a
company needs to register the rates for the telecommunications services that it
wishes to provide with COFETEL in order to be able to provide them to the
public.

         Ownership restrictions. Under the New Telecommunications Law and the
Mexican Foreign Investment Law (Ley de Inversion Extranjera), concessions may be
granted only to:

            -  Mexican individuals; and

            -  Mexican corporations (1) in which non-Mexicans own 49% or less of
               the full voting stock and (2) which are not otherwise controlled
               by non-Mexicans.

         However, in the case of concessions for cellular communications
services, foreign investment participation may exceed 49% of the voting stock
with the prior approval of the Mexican Foreign Investment Commission of the
Mexican Ministry of Economy (Secretaria de Economia).

         Pursuant to the Foreign Investment Law, the Mexican Ministry of Economy
may also authorize the issuance of non-voting or limited-voting stock (also
known as "neutral shares") that are not counted for purposes of determining the
foreign investment percentage of a Mexican corporation under the Mexican Foreign
Investment Law. Any share transfers in violation of these foreign ownership
requirements are invalid under Mexican law.

         Transfer. Concessions are transferable, after the first three-year
period of the concession, if the SCT approves the transfer of the concession
title, the assignee agrees to comply with the terms of such concession, and such
a transfer does not violate the foreign ownership requirements of the New
Telecommunications Law and the Mexican Foreign Investment Law.

         Termination. A concession or a permit may be terminated pursuant to the
New Telecommunications Law upon the following events:

            -  EXPIRATION OF ITS TERM.

            -  RESIGNATION BY THE CONCESSION HOLDER OR THE PERMIT HOLDER.

            -  REVOCATION. A concession or a permit may be revoked prior to the
               end of its term under certain circumstances, such as:

               [X]  failure to exercise the rights of the concession within 180
                    days;

               [X]  failure to provide interconnection services with other
                    holders of telecommunications concessions and permits
                    without just cause;

               [X]  loss of the concession or permit holder's Mexican
                    nationality;

                                       23
<PAGE>   27

               [X]  unauthorized assignment, transfer or encumbrance of the
                    concession or permit;

               [X]  unauthorized interruption of service;

               [X]  taking any action that impairs the rights of other
                    concessionaires or permit holders;

               [X]  failure to comply with the obligations or conditions
                    specified in the concession or permit; and

               [X]  failure to pay to the Mexican government its fee for the
                    concession or, where applicable, its participation in the
                    revenues of the holder of the concession.

         The SCT may revoke a concession for violations of any of the
circumstances referred to in the first four instances above. Under the last four
instances above, the SCT would have to fine the concessionaire at least three
times for the same failure before moving to revoke a concession.

            -  EXPROPRIATION. The Mexican government has the statutory right to
               permanently expropriate any telecommunications concession and
               claim any related assets for reasons of public interest. Under
               Mexican law, the Mexican government is obligated to compensate
               the owner of such assets in the case of a statutory
               expropriation. The amount of the compensation is to be determined
               by appraisers. If the party affected by the expropriation
               disagrees with the amount appraised, such party may initiate
               judicial action against the government. In such a case, the
               relevant judicial authority will determine the appropriate amount
               of compensation to be paid. We are not aware of any instance in
               which the SCT has exercised its expropriation rights in
               connection with a telecommunications company.

            -  DISSOLUTION OR BANKRUPTCY OF THE CONCESSION HOLDER OR THE PERMIT
               HOLDER.

         Temporary seizure. The Mexican government, through the SCT, may also
temporarily seize all assets related to a telecommunications concession or
permit in the event of a natural disaster, war, significant public disturbance,
threats to internal peace or for economic reasons or for other reasons related
to national security. If the Mexican government temporarily seizes such assets,
except in the event of war, it must indemnify the concession holder for all
losses and damages, including lost revenues. We are not aware of any instance in
which the SCT has exercised its temporary seizure powers in connection with a
telecommunications company.

         RATES FOR TELECOMMUNICATIONS SERVICES. Under the Old Telecommunications
Law, the SCT's approval was required for setting the rates charged for all basic
local, long distance and certain value-added local and long distance
telecommunications services. Historically, the SCT permitted rate increases
based on the cost of service, the level of competition, the financial situation
of the carrier and certain macroeconomic factors. Carriers were not allowed to
discount the rates authorized by the SCT, although operators occasionally waived
activation fees on a promotional basis. Interconnection rates also required SCT
approval. Rates for private dedicated circuit services through microwave
networks and private networks through satellites were not regulated under the
Old Telecommunications Law.

         Under the New Telecommunications Law, rates for telecommunications
services (including local, cellular and long distance services) are now freely
determined by the providers of such services, except that such rates may not be
set below a service provider's long-term incremental cost.

         In addition, COFETEL is authorized to impose specific rate, quality and
service requirements on those companies determined by the Federal Antitrust
Commission (Comision Federal de Competencia) to have substantial market power
pursuant to the provisions of Mexico's antitrust statute. All rates for
telecommunications services (other than value-added services) must be registered
with COFETEL prior to becoming effective. The New Telecommunications Law
prohibits telecommunications providers from cross-subsidizing among their
services and requires that they keep separate accounting for each of their
services.

         The Mexican Antitrust Commission has found that Telmex has substantial
market power as defined under Mexico's antitrust statute. Based on this finding,
COFETEL issued a resolution in September 2000 regulating Telmex as a dominant
carrier, imposing special obligations regarding, among other things, quality of
services, tariffs and disclosure of information. Telmex has obtained a
provisional injunction against potential COFETEL actions to


                                       24
<PAGE>   28

regulate Telmex as a dominant carrier, imposing special obligations regarding,
among other things, quality of services, tariffs and disclosure information.

Our concessions

         LOCAL TELEPHONY. We obtained our wireline local telephony concession in
February 1997, which was amended in September 1999 to, among other things,
expand the areas of coverage. The concession, which is not exclusive, grants us
the right to provide business, residential and public wireline local telephony
services in Mexico City and 115 cities and towns in the Gulf region, which
include, among others, the cities of Puebla, Veracruz, Tampico, Coatzacoalcos,
Reynosa, Merida, Cancun, Campeche, Chetumal, Ciudad del Carmen and Tuxtla
Gutierrez. Our wireline local telephony concession has a term of 30 years and
may be renewable for up to an equivalent period provided we have complied with
all its terms.

         The concession expressly permits us to provide the following services:

            -  basic local telephony;

            -  the sale or lease of network capacity for the generation,
               transmission or reception of signs, signals, writings, images,
               voice, sounds or other information of any nature;

            -  the purchase and lease of network capacity from other carriers,
               including the lease of digital circuits;

            -  value-added services;

            -  operator services;

            -  data, video, audio and video conference services, except for
               cable or other restricted television, continuous music or digital
               audio;

            -  credit or debit telephone cards; and

            -  public telephony.

         The concession does not impose any limitations on the setting of our
rates other than the requirement that we file with COFETEL a notification of any
rate change prior to having it take effect.

         The concession requires us to comply with service quality
specifications and to install infrastructure on the basis of a predetermined
schedule. According to this schedule, we must install at least an aggregate of
464 kilometers of wired infrastructure in at least 115 cities and towns in the
Gulf region and in Mexico City by the end of 2003. We are currently in
compliance with all the material terms of the concession.

         The failure to comply with the terms of the concession could result in
a revocation of the concession.

         See "--Concessions and permits -- Termination." As of December 31,
2000, the level of fines, which are based on a multiple of the Mexican minimum
daily salary, ranged from Ps.80,700 to Ps.4 million, depending on the nature of
the infraction. In the case of multiple recurring infractions, these fines may
be doubled.

         LONG DISTANCE. We obtained our nationwide long distance concession in
February 1997, concurrently with our local telephony concession. Our nationwide
long distance concession also has a term of 30 years and may be renewable for up
to an equivalent period provided we have complied with all its terms.

         The concession expressly permits us to provide the following services:

            -  the carrying of switched traffic between two different local
               calling areas that requires the use of a dialing prefix for its
               routing;

                                       25
<PAGE>   29

            -  the sale or lease of network capacity for the generation,
               transmission or reception of signs, signals, writings, images,
               voice, sounds or other information of any nature;

            -  the purchase and lease of network capacity from other carriers;
               and

            -  nationwide and international long distance telephony.

         The concession expressly prohibits the following services:

            -  those which require a concession for frequency bands of the radio
               electric spectrum for specific uses;

            -  those which require a concession to occupy and exploit
               geostationary orbital positions and satellite orbits assigned to
               Mexico;

            -  those which require a concession to operate radio or television
               broadcasting systems; and

            -  cable or other restricted television.

         The concession does not impose any limitations on the setting of our
rates other than the requirement that we file with COFETEL a notification of any
rate change prior to having it take effect.

         The concession requires us to comply with service quality
specifications and to install infrastructure on the basis of a predetermined
schedule. According to this schedule, we must provide nationwide long distance
service in at least 115 cities and towns in the Gulf region and in Mexico City
by the end of 2003. Of these, we must:

            -  install our own fiber optic infrastructure to link eight cities;
               and

            -  provide service in 117 towns and cities using our own or leased
               infrastructure.

We are currently in compliance with all the material terms of the concession.

         The failure to comply with the terms of the concession could result in
the revocation of the concession and the loss the Ps.6.9 million performance
bond previously issued to the SCT. As of December 31, 2000, the level of fines,
which are based on a multiple of the Mexican minimum daily salary, ranged from
Ps.80,700 to Ps.4 million, depending on the nature of the infraction. In the
case of multiple recurring infractions, these fines may be doubled.

         MICROWAVE TRANSMISSIONS.

         Point-to-point. In October 1997, we were awarded seven nationwide
point-to-point microwave concessions. These concessions cover:

            -  two consecutive frequency segments in the 15 GHz band, with a 56
               MHz bandwidth;

            -  three consecutive frequency segments in the 23 GHz band, with a
               56 MHz bandwidth; and

            -  two consecutive frequency segments in the 23 GHz band, with a 100
               MHz bandwidth.

         These concessions, which were issued in June 1998, have a term of 20
years. COFETEL will re-auction the frequencies covered by the concessions at
least three years before the expiration date of the concessions. The concessions
require us to provide available capacity to the general public.

         These concessions do not impose any limitations on the setting of our
rates other than the requirement that we file with COFETEL a notification of any
rate change prior to having it take effect.

         Point-to-multipoint. In October 1997, we were awarded three regional
point-to-multipoint microwave concessions covering Regions 3, 5 and 8, which
include states in the north and southeast of Mexico, and covering the 60 MHz
band in the Gulf region.

                                       26
<PAGE>   30

         These concessions, which were issued in April 1998, have a term of 20
years. COFETEL will re-auction the frequencies covered by the concessions at
least three years before the expiration date of the concessions. These
concessions require us to install a network and offer service to at least 30% of
the population in each region by the end of the second year after the issuance
of the concession. We, together with 14 other concessionaires, have been unable
to start operations because of lack of commercially viable technological
solutions and equipment for those frequencies. COFETEL has granted extensions
initially to April 2000 and later to October 2001.

         These concessions do not impose any limitations on the setting of our
rates other than the requirement that we file with COFETEL a notification of any
rate change prior to having it take effect.

INTERCONNECTION

         In accordance with the Mexican telecommunications laws, all local
telecommunications carriers are required to provide interconnection to each
local, long distance and cellular carrier operating in Mexico.

         All terms of interconnection (such as point of interconnection) are
negotiated between telecommunications carriers under COFETEL's supervision.
Should telecommunications carriers be unable to agree on the terms of
interconnection (including rates) after a certain period of negotiation, either
carrier may request COFETEL to resolve any interconnection term at issue.
Telecommunications carriers are prohibited from adopting discriminatory
practices in the application of rates or any other terms of interconnection.

Local interconnection

         In November 1998, we entered into an interconnection agreement with
Telmex. This agreement calls for reciprocal interconnection rates for
local-to-local services. The interconnection rate, which is adjusted for
inflation, was Ps.0.3220 per minute for the month of December 2000.

         This agreement was amended in February 1999 to incorporate a "bill and
keep" feature through September 15, 2002, provided we maintain a significant
percentage of residential users, and again in November 2000, retroactive to
March 2000, to exempt internet service provider traffic from interconnection
fees.

         Under the "bill and keep" arrangement, if the imbalance between calls
originated by Telmex and terminated by Maxcom and calls originated by Maxcom and
terminated by Telmex during a month does not exceed 70%, then no interconnection
fee amounts are payable by the net user of interconnection services. If the
imbalance exceeds 70% in any given month, the "bill and keep" feature will not
apply for that month.

         If we fail to maintain a significant percentage of residential users,
then the "bill and keep" arrangement will be terminated and asymmetrical
interconnection rates may apply. COFETEL has not yet defined what constitutes a
"significant percentage of residential users" in this case, although in local
concessions granted to Alestra and Avantel it defines it to mean that at least
50% of the customers are residential.

         Through December 31, 2000, no material interconnection fees have been
paid.

Mobile interconnection

         We have also signed reciprocal interconnection agreements with
Radiomovil Dipsa, S.A. de C.V., commonly known as Telcel, a wholly-owned
subsidiary of America Movil, which is a spin-off of Telmex, several subsidiaries
of Grupo Iusacell, S.A. de C.V. , and with Unefon and Pegaso. Telcel and Grupo
Iusacell are the first and second largest mobile telephony service providers in
Mexico, respectively. Telcel is a nationwide cellular operator, while Grupo
Iusacell provides cellular mobile services in central Mexico. Pegaso and Unefon
are nationwide PCS mobile operators.

         For the month of December 2000, the interconnection fees with these
carriers were Ps.0.3220 per minute for mobile to wireline interconnection and
Ps.1.90 per minute for wireline to mobile interconnection under the "calling
party pays" mode. There is no interconnection fee for wireline to mobile
interconnection outside of the "calling party pays" mode. The interconnection
agreements, provide that transit from Telmex may be used at a rate per minute
which was Ps.0.0626 for the month of December 2000.

                                       27
<PAGE>   31

Long distance interconnection

         Long distance carriers are required to ensure call termination by
providing transit and direct/or indirect interconnection. Since we view long
distance services as a complement to our core local telephony business, we give
our customers the option to use our long distance services or those of other
providers. As a result, we grant long distance carriers the option to pick up
calls at our facilities.

         We have requested interconnection from all long distance carriers. To
date, only Telmex, Alestra S. de R.L. de C.V., Bestel, S.A. de C.V., Operadora
Protel, S.A. de C.V. and Iusatel, S.A. de C.V., the long distance subsidiary of
Grupo Iusacell, have agreed to provide interconnection. We have filed a
complaint with COFETEL against four other long distance carriers who have
refused to provide interconnection. It is unclear when COFETEL will rule in this
issue.

         We currently provide our long distance service to our local telephony
customers through our own network and leased facilities.

C.       ORGANIZATIONAL STRUCTURE

         Maxcom has only two subsidiaries, Corporativo en Telecomunicaciones,
S.A. de C.V. and Maxcom Servicios Administrativos, S. A. de C.V., each a Mexican
limited liability company (sociedad anonima de capital variable) that provides
corporate services to Maxcom. Maxcom owns all of the capital stock of each
subsidiary, except for one share which is owned by Marco Antonio Donjuan, the
controller of Maxcom. Mexican law requires that limited liability companies have
a minimum of two stockholders.

D.       PROPERTY, PLANT AND EQUIPMENT

         We currently lease the buildings and/or the land where our operations
are carried out and our microwave transmission equipment and switching centers
are located.

         We lease space for administrative offices in Mexico City and the City
of Puebla. Our principal executive offices and headquarters are located in
Mexico City in a modern building leased for a 15-year term expiring on September
30, 2013. This building is comprised of 70,500 square feet plus parking space
and holds one of our Lucent Technologies 5ESS switches. Our offices in Puebla
are leased for a 10-year renewable term expiring on March 25, 2008. Our offices
in Puebla are comprised of 14,100 square feet and hold our other Lucent
Technologies 5ESS switches.

         Our switch in Mexico City is currently engineered for 80,000 lines and
equipped for 9,200 lines, while our switch in the City of Puebla is engineered
for 16,000 lines and equipped for 2,500 lines.

         We also have a 10,700 square foot industrial warehouse in Mexico City
leased for a 5-year term expiring on March 30, 2004. In addition, we lease more
than forty other sites which are used as hosts or single site buildings and are
located throughout Mexico City and the City of Puebla. We believe that our
facilities are adequate for our present needs and are suitable for their
intended purposes.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

         You should read the following discussion and analysis in conjunction
with the Consolidated Financial Statements included elsewhere in this annual
report. Unless otherwise indicated, all financial information in this annual
report is presented in constant pesos as of December 31, 2000. The U.S. dollar
translations provided in this annual report are, unless otherwise indicated,
calculated at the noon buying rate at December 29, 2000, which was Ps.9.62 per
U.S.$1.00. Sums may not add due to rounding.

         The following discussion and analysis is intended to facilitate an
understanding and assessment of significant changes and trends in our historical
consolidated results of operations and financial condition and factors affecting
our financial resources. It should be read in conjunction with the audited
consolidated financial statements as of December 31, 1999 and 2000 and for the
years ended December 31, 1998, 1999 and 2000 and related notes.

                                       28
<PAGE>   32

         These consolidated financial statements, which appear elsewhere in this
annual report, have been prepared in accordance with Mexican GAAP, which differs
in significant respects from U.S. GAAP, including in the treatment of the
capitalization of preoperating expenses, the amortization of frequency rights,
the capitalization of interest, the accrual of vacation expenses and the
deferral of income taxes and employees' profit sharing, and in the presentation
of cash flow information. Note 17 to the consolidated financial statements
provides a description of the principal differences between Mexican GAAP and
U.S. GAAP as they relate to us, and a reconciliation to U.S. GAAP of our net
loss and total shareholders' equity as of and for the years ended December 31,
1998, 1999 and 2000.

         Pursuant to Bulletin B-10, "Recognition of the Effects of Inflation on
Financial Information," and Bulletin B-12, "Statement of Changes in Financial
Position," issued by the Mexican Institute of Public Accountants, our
consolidated financial statements are reported in period-end pesos to adjust for
the inter-period effects of inflation. The presentation of financial information
in period-end, or constant, currency units is intended to eliminate the
distorting effect of inflation on the financial statements and to permit
comparisons across comparable periods in comparable monetary units. Bulletin
B-10 requires us to restate nonmonetary assets (other than inventory),
nonmonetary liabilities and the components of shareholders' equity using the
Mexican national consumer price index. The effects of these inflation accounting
principles have not been eliminated in the reconciliation to U.S. GAAP.

         Except where otherwise indicated, financial data for all periods in the
consolidated financial statements and throughout this annual report have been
restated in constant pesos as of December 31, 2000, in accordance with the fifth
amendment to Bulletin B-10. References in this annual report to "real" amounts
are to inflation-adjusted pesos and references to "nominal" amounts are to
unadjusted historical pesos. In calendar years 1998, 1999 and 2000, the rates of
inflation in Mexico, as measured by changes in the Mexican national consumer
price index, were 18.6%, 12.3% and 9.0%, respectively. The inflation index used
for 1998 figures is 1.2238 and for 1999 figures is 1.0896.

A.       RESULTS OF OPERATIONS

Overview of Maxcom

         We are a growing facilities-based telecommunications company operating
in the competitive local exchange carrier market in Mexico. We are focused on
developing our network and support infrastructure required to provide local as
well as long distance and other value-added services to targeted businesses and
residential customers within our concession areas. We position ourselves as a
single-source provider of telecommunications services to our customers.

         We commenced commercial operations on May 1, 1999 and currently provide
last-mile connectivity to small and medium-sized businesses and middle and
high-usage residential customers in Mexico City and the City of Puebla. In
addition to our existing local and long distance services, we offer value-added
products such as digital high-speed data connectivity and dial-up Internet
access. We are currently expanding the functionality of our network to offer
other broadband services.

         We were incorporated in February 1996 to take advantage of business
opportunities arising out of the liberalization of Mexico's telecommunications
industry. In February 1997, we were awarded Mexico's first competitive wireline
local/long distance telephony concession, which covers the Federal District of
Mexico and over 100 cities and towns in the Gulf region, and has a term of 30
years. Our concession was expanded in September 1999 to cover over 80% of the
greater Mexico City area, and a total of 115 cities and towns in the Gulf
region. Mexico City, with a population of approximately 17.9 million people, is
one of the world's most heavily populated metropolitan areas. The Gulf region
has the greatest concentration of oil, natural gas and maritime industries in
Mexico. We were also awarded a nationwide point-to-point and three regional
point-to-multipoint microwave concessions in October 1997, each for 20 years.

Recent development

         Maxcom has recently detected an inaccuracy in its accounting policy
regarding the capitalization of installation expenses for line disconnections.
Capitalized installation expenses for customers that were disconnected were not
properly written off from the balance sheet and charged in the income statement.

                                       29
<PAGE>   33

         Maxcom estimates that this inaccuracy should not be superior to an
aggregate of U.S.$1.6 million for years 1999 and 2000, with the majority of this
amount related to the 2000 financial statements.

         Once the exact effect of this inaccuracy is confirmed, Maxcom will
adjust its financial statements accordingly as a charge to the 2001 statements.

Capitalization of preoperating expenses

         We commenced commercial operations on May 1, 1999. As permitted under
Mexican GAAP, during our preoperating stage we were able to capitalize all of
our general and administrative expenses and our net comprehensive cost of
financing. Accordingly, our financial statements do not include a consolidated
statement of operations for the period from February 28, 1996 (our date of
incorporation) to April 30, 1999.

         Beginning on May 1, 1999, we are required to amortize all previously
capitalized general and administrative expenses and to depreciate all previously
capitalized net comprehensive cost of financing. These capitalized preoperating
expenses, which amounted to Ps.270.4 million at December 31, 1999 and Ps.241.4
million at December 31, 2000, are amortized on a straight-line basis for a
period not exceeding ten years.

Devaluation and inflation

         On December 20, 1994, the Mexican government responded to exchange rate
pressures by increasing the upper limit of the then existing free market
peso/U.S. dollar exchange rate band by 15% and, two days later, by eliminating
the band to allow the peso to fluctuate freely against the U.S. dollar. This
resulted in a major devaluation of the peso relative to the U.S. dollar. Where
the noon buying rate had been Ps.3.47 per U.S.$1.00 on December 19, 1994, by
December 31, 1994 the noon buying rate had fallen to Ps.5.00 per U.S.$1.00,
representing a 44.3% devaluation. The peso continued to decline against the U.S.
dollar during 1995, closing at a noon buying rate of Ps.7.74 per U.S.$1.00 on
December 31, 1995, which represented a 54.8% devaluation relative to the U.S.
dollar for the year.

         The Mexican economy began to recover in 1996 and 1997, as exchange
rates stabilized, inflation decreased and real gross domestic product grew by
5.3% and 6.8%, respectively. However, the financial crises in Asia and Russia,
together with the weakness in the price of oil in 1998, which is a significant
source of revenue for the Mexican government, contributed to renewed weakness in
the peso, which devalued 22.7% relative to the U.S. dollar. In 1999 and 2000,
the peso-to-dollar exchange rate remained relatively stable.

         Peso devaluations have contributed to sharp increases in inflation.
Inflation, which had been 7.1% in 1994, increased to 52.0% and 27.7% in 1995 and
1996, respectively. After a reduction to 15.7% in 1997, inflation was 18.6% in
1998. In 1999 and 2000, the inflation rate decreased to 12.3% and 9.0%,
respectively.

         The general economic conditions in Mexico resulting from a devaluation
of the peso and the resulting inflation may have a negative impact on our
results of operations, primarily as a result of:

            -  the ensuing decrease in the purchasing power of Mexican
               consumers, which results in a decrease in the demand for
               telephony services; and

            -  our inability, due to competitive pressures, to increase our
               prices in line with inflation.

Year ended December 31, 2000

         Since Maxcom commenced commercial operations on May 1, 1999, a
comparison of 2000 with 1999 is not meaningful.

         TELECOMMUNICATIONS REVENUES. Our telecommunications revenues were
Ps.266.1 million. Our telecommunications revenues include primarily monthly
fees, usage fees, installation charges, interconnection fees and the sale of
telephone sets. We recognize revenues on an accrual basis, except for
interconnection fees, which are recognized upon invoicing.

         Telecommunications revenues for the year 2000 evolved as shown below.

                                       30
<PAGE>   34


<TABLE>
<CAPTION>

             FIRST QUARTER        SECOND QUARTER       THIRD QUARTER       FOURTH QUARTER
             -------------        --------------       -------------       --------------
                                       (IN MILLIONS OF PESOS)
<S>            <C>                   <C>                 <C>                 <C>
                Ps.50.5               Ps.62.7             Ps.81.4             Ps.71.5
</TABLE>

         Our telecommunications revenues increased steadily through the first
three quarters of 2000 primarily because of a significant increase in outbound
traffic, from 74.3 million minutes of use in the first quarter to 123.5 million
minutes of use in the third quarter. The increase in the outbound traffic was
partially offset by a change in the mix of local and long distance outbound
traffic, whereby long distance outbound traffic, which generates more revenues
relative to local outbound traffic, decreased from 24% of total outbound traffic
in the first quarter to 17% in the third quarter.

         The decrease in telecommunications revenues in the fourth quarter was
primarily due to an approximately 50% decrease in outbound long distance traffic
resulting from our implementation of a traffic and tariff management policy that
sought to eliminate long distance traffic with a negative gross margin.

         The following table presents a breakdown of our lines by geography and
type of customer at December 31, 2000:

<TABLE>
<CAPTION>
                                      MEXICO CITY                CITY OF PUEBLA                TOTAL LINES
                                      -----------                --------------                -----------
<S>                                      <C>                          <C>                         <C>
BUSINESS LINES                             14,170                       3,412                       17,582
RESIDENTIAL LINES                           2,750                       6,578                        9,328
TOTAL LINES                                16,920                       9,990                       26,910
</TABLE>

         For the last quarter of 2000, our average revenue per user (ARPU) for
business lines was U.S.$143 and for residential lines was U.S.$31.

         OPERATING COSTS AND EXPENSES. Our operating costs and expenses were
Ps.640.0 million. Our operating costs and expenses include network operating
cost, selling, general and administrative expenses and depreciation and
amortization.

         Network operating cost includes long distance reselling costs, circuit
leasing costs and interconnection costs to carriers other than Telmex. Our
network operating cost remained stable between the first and third quarters,
ranging between Ps.30.4 million in the first quarter and Ps.32.0 million in the
third quarter. Our network operating cost decreased significantly in the fourth
quarter to Ps.14.8 million due to:

            -  a Ps.8.6 million reduction in long distance reselling costs in
               the fourth quarter as compared to the third quarter because of a
               50% decrease in outbound long distance traffic resulting from the
               implementation of the traffic and tariff management policy; and

            -  a Ps.9.8 million reduction in circuit leasing costs in the fourth
               quarter as compared to the third quarter resulting from the
               migration of traffic from leased circuits to our newly acquired
               fiber optic rings in Mexico City.

         Our selling, general and administrative expenses were Ps.331.2 million
in 2000. Our selling, general and administrative expenses include primarily
salaries, wages and benefits, consulting fees, leasing costs, marketing expenses
and provisioning for bad debt.

         Salaries, wages and benefits were Ps.180.4 million in 2000. As of
December 31, 2000, our employee headcount was 457 compared to 293 employees as
of a year earlier. Consulting fees were Ps.53.7 million in 2000. These fees were
primarily related to temporary management and consulting services, executive
recruiting consultants and general legal and accounting fees. Leasing costs were
Ps.26.4 million in 2000. These costs were primarily related to leases of our
headquarters, warehouses, sites and other facilities. Marketing expenses were
Ps.16.9 million in 2000. These expenses were mainly related to the
implementation of our branding campaign,

                                       31
<PAGE>   35

general advertising and promotions. Provision for bad debt was Ps.9.9 million in
2000. Bad debt reserve accounted for 3.7% of telecommunications revenues in
2000.

         Depreciation and amortization costs, which relate mainly to
telecommunications assets, were Ps.201.0 million in 2000.

         GROSS MARGIN. We define gross margin as the quotient of dividing (i)
the difference between telecommunications revenues and network operating costs,
by (ii) telecommunications revenues, expressed as a percentage. Our gross margin
has increased steadily from 40% for the first quarter to 79% for the fourth
quarter. This increase is primarily due to improved long distance tariff and
traffic management, the gradual elimination of low-revenue generating and unused
lines and the migration of traffic from leased circuits to our newly acquired
fiber optic rings in Mexico City.

         COMPREHENSIVE (INCOME) FINANCING COST. In reporting under Mexican GAAP
and in accordance with Bulletin B-10, Maxcom is required to quantify all
financial effects of operating and financing the business under inflationary
conditions. For presentation purposes, "comprehensive (income) cost of
financing" refers to the combined financial effects of:

            -  net interest expense or interest income;

            -  net foreign exchange gains or losses; and

            -  net gains or losses on monetary position.

         Net foreign exchange gains or losses reflect the impact of changes in
foreign exchange rates on assets and liabilities denominated in currencies other
than pesos. A foreign exchange loss arises if a liability is denominated in a
foreign currency which appreciates relative to the peso between the time the
liability is incurred and the date it is repaid, as the appreciation of the
foreign currency results in an increase in the amount of pesos which must be
exchanged to repay the specified amount of the foreign currency liability.

         The gain or loss on monetary position refers to the gains and losses
realized from holding net monetary assets or liabilities and reflects the impact
of inflation on monetary assets and liabilities. For example, a gain on monetary
position results from holding net monetary liabilities in pesos during periods
of inflation, as the purchasing power of the peso declines over time.

         Our comprehensive financing cost was Ps.222.6 million in 2000. The
comprehensive financing cost was due to a net interest expense of Ps.302.0
million and a foreign exchange loss of Ps.10.7 million, offset in part by a
Ps.90.1 million gain on net monetary position.

Year ended December 31, 1999

         Our consolidated statement of operations for the year ended December
31, 1999 covers only our first eight months of operations, which commenced on
May 1, 1999. As a result, a comparison of our results of operations for 1999 and
2000 is not meaningful.

         Our telecommunications revenues were Ps.96.1 million.

         Our operating costs and expenses were Ps.304.7 million. Selling,
general and administrative expenses and network operating costs represented
57.8% and 15.7% of our operating costs and expenses, respectively. The remaining
26.5%, or Ps.80.9 million, related to depreciation and amortization of
preoperating expenses, frequency rights and telephone network systems and
equipment.

         Our comprehensive cost of financing was Ps.28.1 million. Net interest
expense was Ps.39.5 million, mainly resulting from our increased level of
indebtedness under the Nissho Iwai and the Hewlett Packard vendor facilities
described below in "--B. Liquidity and capital resources--Financing sources and
liquidity." In addition, we experienced a Ps.10.4 million exchange loss
resulting from the effect of the monthly fluctuation of the peso exchange rate
relative to the U.S. dollar on our net liability U.S. dollar position.

                                       32
<PAGE>   36

         These two factors were offset in part by a Ps.21.7 million monetary
gain resulting from the effect of inflation on our net liability peso position.

         We also recorded other income, net of Ps.0.1 million representing
interest earned on value-added tax receivables.

         As a result of the above, we recorded a net loss for the period of
Ps.236.6 million.

U.S. GAAP reconciliation

         We describe below the principal differences between Mexican GAAP and
U.S. GAAP. See Note 17 to the consolidated financial statements for a
reconciliation to U.S. GAAP of stockholders' equity and net loss for the
respective periods presented.

         RECOGNITION OF THE EFFECTS OF INFLATION ON FINANCIAL INFORMATION. Under
Mexican GAAP, the recognition of the effects of inflation in financial
statements has no counterparts under U.S. GAAP. However, since Mexican GAAP
includes the effects of inflation in primary financial statements, the SEC does
not require the restatement of financial statements to recognize the effects of
inflation.

         PREOPERATING EXPENSES. Under Mexican GAAP, all expenses incurred while
a company or a project is in the preoperating or development stages are deferred
and considered as a component of a company's assets. Such capitalized expenses
are amortized on a straight-line basis for a period not exceeding 10 years after
the corresponding asset commences operations. According to U.S. GAAP, such
preoperating expenses are expensed and reported as deficit accumulated during
the development stage in the shareholders' equity.

         DEFERRED INCOME TAXES. Under Mexican GAAP, deferred income taxes and
employees' profit sharing are provided for on the liability method, but only for
non-recurring and identifiable book and tax differences that are expected to
reverse themselves over a definite period of time. Under U.S. GAAP, deferred
taxes are recognized for the tax consequences of all temporary differences, both
recurring and non-recurring, between the financial statements carrying amounts
and the tax basis of existing assets and liabilities.

         REALIZATION OF TAX-LOSS CARRY-FORWARDS. In accordance with Mexican
GAAP, the tax benefit of a tax-loss carry-forward should only be recorded when
realized and should be reported as an extraordinary item in the statement of
income. Generally, under U.S. GAAP, the tax benefit of an operating-loss
carry-forward must be reported in the same manner as the source of the income or
the loss in the current year. Because the realization of our tax losses is not
considered to be likely, a valuation allowance has been established for the full
amount of the potential deferred tax assets.

         STATEMENT OF CHANGES IN FINANCIAL POSITION. In accordance with Mexican
GAAP, we present statements of changes in financial position in constant Mexican
pesos. This presentation identifies the generation and application of resources
representing differences between beginning and ending financial statement
balances in constant pesos.

         The changes in the consolidated financial statement balances included
in our audited consolidated financial statements constitute cash flow activity
stated in constant pesos (including monetary losses which are considered as cash
losses in the financial statements presented in constant pesos). SFAS No. 95,
does not provide guidance with respect to inflation-adjusted financial
statements. However, U.S. GAAP requires that non-cash financing and investing
transactions should be excluded from the statement of cash flows and reported in
related disclosures.

         LOSSES PER SHARE. In accordance with Mexican GAAP, basic earnings per
ordinary share are calculated based on the weighted-average number of ordinary
shares outstanding during the period. The same procedure is applied to preferred
or limited-voting shares. For diluted earnings per share, net income or loss
attributable to ordinary shares and weighted average number of ordinary shares
should be adjusted by the dilutive effects of the convertible shares, options,
warrants and other potentially dilutive securities, within certain limits.
Dilution of ordinary shares by the potentially dilutive shares included in
options and warrants is determined by modifying only the number of shares in the
calculation of the earnings or losses per share.

                                       33
<PAGE>   37

         Under U.S. GAAP, basic net loss per share includes no dilution and is
computed by dividing losses available to common shareholders' by the weighted
average number of common shares outstanding for the period. Dilutive net loss
per share reflects the potential dilution of securities that could share in the
losses of an entity, similar to existing diluted losses per share. The basic and
diluted number of shares under U.S. GAAP would not be materially different from
what will be presented for Mexican GAAP purposes.

         PERSONNEL COMPENSATION AND SENIORITY PREMIUMS. Under Mexican GAAP,
vacation expenses are recognized when taken, rather than in the period when they
are earned by an employee, as is required under U.S. GAAP.

         We have no pension plan and have no significant contingent labor
liabilities, due to the fact that the seniority of the vast majority of our
employees is less than three years.

         FREQUENCY RIGHTS. Under Mexican GAAP, frequency rights are amortized by
the straight-line method over the term of the concession from the start of
operations. Under U.S. GAAP, this item should be amortized from the date the
cost was incurred and through the term of the concession.

         CAPITALIZATION OF INTEREST. In accordance with Mexican GAAP,
capitalization of interest or, during inflationary periods, comprehensive cost
of financing or income incurred in the period of construction and installation
of an asset is permitted. The interest to be capitalized is that of the specific
financing obtained for the construction of the related asset. Under U.S. GAAP,
capitalization of interest is required for certain qualifying assets that
require a period of time to get them ready for their intended use. The amount of
interest to be capitalized is that portion of the interest cost incurred during
the assets' acquisition period that theoretically could have been avoided if
expenditures for the assets had not been made, and is not limited to
indebtedness attributable to the asset.

         STOCK OPTION AND WARRANTS PLANS. This item is not specifically
addressed by Mexican GAAP. Under U.S. GAAP, an entity is encouraged to use a
fair value method of accounting to measure compensation cost for its stock
options and similar equity instruments awarded to employees. If the fair value
based method is not used, the intrinsic value method of accounting is required.
Under the fair value based method, compensation costs are generally measured at
the grant date based on the value of the award and are recognized over the
service period, which is usually the vesting period. Under the intrinsic value
based method, compensation cost is the excess, if any, of the quoted market
price of the stock on the grant date or other measurement date over which the
employee pays to acquire the stock.

         We have adopted U.S. GAAP guidelines for our stock option and warrants
plans.

B.       LIQUIDITY AND CAPITAL RESOURCES

Financing sources and liquidity

         We financed our start-up costs through capital contributions and vendor
financing, as described below:

            -  U.S.$100.0 million vendor financing facility from Nissho Iwai
               American Corporation, bearing an annual interest rate of
               three-month LIBOR plus 4.15% due August 12, 2005, of which
               U.S.$53.8 million was outstanding at December 31, 1999. We drew
               down an additional U.S.$17.8 million in January and February
               2000. Funds from this facility were used to purchase Lucent
               Technologies equipment. We used proceeds from the sale of the
               notes on March 17, 2000 to repay all amounts outstanding in full
               and have terminated this facility.

            -  U.S.$20.0 million vendor financing facility from Nissho Iwai
               American Corporation, bearing an annual interest rate of
               three-month LIBOR plus 4.15% due August 12, 2005, of which
               U.S.$13.9 million was outstanding at December 31, 1999. Funds
               from this facility were used to purchase NEC equipment. We used
               proceeds from the sale of the notes on March 17, 2000 to repay
               all amounts outstanding in full and have terminated this
               facility.

            -  U.S.$18.7 million vendor financing from Hewlett Packard de Mexico
               bearing an annual interest rate of three-month LIBOR plus 4.15%
               due November 25, 2005, of which U.S.$16.3 million was

                                       34
<PAGE>   38

               outstanding at December 31, 1999. We used proceeds from the sale
               of the notes on March 17, 2000 to repay all amounts outstanding
               in full and have terminated this facility.

            -  U.S.$70.0 million raised from private equity investors.

         On March 17, 2000, we sold notes bearing an annual interest rate of 13
3/4% due April 1, 2007 in an aggregate amount of U.S.$300 million. Our debt
service relating to the notes for the first two years will be paid with
U.S.$77.9 million of the proceeds of the offering of the notes that was
deposited in the interest escrow account.

         In September 2000, our principal shareholders contributed an aggregate
of U.S.$35 million of new capital. This capital contribution is being used
primarily to fund capital expenditures and working capital related to the
buildout of our network infrastructure.

         We estimate that funds from operating activities, the net proceeds of
the sale of the notes, the interest escrow account, the U.S.$35 million capital
contribution and financing available through our cash reserves and future lines
of credit with vendors and financial institutions will be adequate to meet our
debt service, our working capital requirements and our capital expenditure needs
through 2002.

         However, this estimate may be affected if we enter into joint ventures
or acquisitions which are currently not foreseeable. Our future operating
performance and ability to service and repay the notes will be subject to future
economic and competitive conditions and to financial, business and other
factors, many of which are beyond our control.

Indebtedness

         Our consolidated debt at December 31, 2000 was Ps.2,801.8 million, of
which nearly all was long-term debt. All of our consolidated debt outstanding at
December 31, 2000 was denominated in U.S. dollars. The notes represent
substantially all of our indebtedness.

         The indenture governing the terms of the notes restricts our ability to
incur indebtedness. In particular, in order to be able to incur additional
indebtedness, we must comply with a minimum consolidated leverage ratio of less
than 5.0 to 1 and a minimum fixed charge coverage ratio of 1.5 to 1 through
December 31, 2001 and 1.7 to 1, in each case after giving effect to the proposed
incurrence of indebtedness.

Capital expenditures

         Through December 31, 2000, we have invested Ps.1,531.9 million in the
buildout of our network, excluding cumulative preoperating expenses. This amount
includes Ps.114.6 million paid to obtain all of our frequency rights.

         For 2001, we plan to make capital expenditures of approximately U.S.$58
million, mainly to continue to build out our network.

Dividend policy

         Our current policy is to reinvest profits into our operations. In
addition, the indenture that governs the terms of the notes allows us to pay
cash dividends only if we meet the following conditions:

            -  a minimum consolidated leverage ratio of less than 5.0 to 1;

            -  a minimum fixed charge coverage ratio of 1.5 to 1 through
               December 31, 2001 and 1.7 to 1 after; and

            -  no default (as defined in the indenture) must have occurred and
               be continuing or result from the payment of the cash dividend.

                                       35
<PAGE>   39

         If we meet the conditions described above, we may make cash dividend
payments provided they do not exceed an amount determined in the indenture based
on, among other things, cash flow generated from operations or equity offerings
and consolidated interest expense.

Repurchase of notes

         Maxcom has been investing a portion of its liquidity in its own notes.
Our management believes that, given that our current cash and cash flow is
sufficient to cover our needs for the rest of 2001, the relatively low interest
rates on short-term investments and the relatively low market price of our notes
as compared to what our management estimates the price should be, the repurchase
of notes is a sound short-term investment of our cash. Our Board of Directors
authorized the use of up to U.S.$10 million for the purchase of notes at current
market value. At June 19, 2001, Maxcom had spent U.S.$10 million to repurchase
a nominal U.S.$25 million of notes.

C.       RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

         Maxcom does not undertake research and development activities.

D.       TREND INFORMATION

         The growth of competition has been substantial and we expect it to
continue. We are in the process of improving our competitive position by
strengthening our voice products and developing our data products and services.
The increase in competition negatively affects our profit margins.

         By May 2001, we had reached the 30,000-line mark, and had been
installing an average of 1,000 lines per week. We are developing the necessary
infrastructure to be able to install 10,000 lines per month by December 2001.

         Based on current trends, we expect that the total number of customers
should grow beyond 35,000 by December 2001 from the current level of 13,000. Our
lines per customer ratio should continue declining from the 13 lines recorded in
the first quarter of 2000 to approximately 2 lines by December 2001. Recurring
ARPUs should also decrease from historical highs of U.S.$100 to approximately
U.S.$60.

Recent accounting pronouncements

         RECENT MEXICAN ACCOUNTING PRONOUNCEMENTS. In April 1999, the Mexican
Institute of Public Accountants issued a new Bulletin D-4, Accounting Treatment
for Income Tax, Tax on Assets and Statutory Employees' Profit Sharing,
applicable to all Mexican companies for the year beginning on January 1, 2000.
This standard provides a different method of calculating deferred income taxes
than is currently in force. Under the new rules, deferred taxes will be
recognized for the tax consequences of all temporary differences, both recurring
and non-recurring, between the financial statements' carrying amounts and the
tax basis of existing assets, liabilities and tax losses. Due to the recent
issuance of this standard, our management has not been able to fully evaluate
the impact it may have on our future financial position and results of
operations.

         RECENT UNITED STATES ACCOUNTING PRONOUNCEMENTS. In June 1999, the
Financial Accounting Standard Board issued SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133, as amended by SFAS
137, requires companies to recognize all derivatives contracts as either assets
or liabilities in the balance sheet and to measure them at fair value. If
certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged assets or liability that are attributable to the hedged risk
or (ii) the earnings effects of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000.

         Historically the Company has not entered into derivative contracts
either to hedge existing risks or for speculative purposes. Accordingly, the
adoption of SFAS 133 on January 1, 2001 will not have a material impact on the
Company's earnings or financial position.

                                       36
<PAGE>   40

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB
101"). SAB 101 provides guidance on the recognition, presentation and disclosure
of revenues in financial statements and requires adoption no later than the
fourth fiscal quarter of fiscal years after December 15, 1999. The company
implemented SAB 101 effective January 1, 2000 and its adoption did not have a
material impact on the Company's earnings of financial position.

         In September 2000, the FASB issued SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. "
SFAS140 provides accounting and reporting standards for transfers and servicing
of financial assets and extinguishments of liabilities. SFAS 140 replaces SFAS
No. 125 and is effective for transfers and servicing of financial assets and
recognition and reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000. The adoption of SFAS 140 effective January 1, 2001, will not
materially impact the Company's earnings or financial position.

         In March 2000, the FASB issued FASB Interpretation No. 44, Accounting
for Certain Transactions Involving Stock Compensation. Interpretation 44
provides criteria for the recognition of compensation expense in certain
stock-based compensation arrangements that are accounted for under Accounting
Principles Board Opinion No. 25, Accounting for Stock-Based Compensation.
Interpretation 44 was effective July 1, 2000, with certain provisions that were
effective retroactively to December 15, 1998 and January 15, 2000. The adoption
of Interpretation 44 did not have an impact on the Company's consolidated
financial statements.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.       DIRECTORS AND SENIOR MANAGEMENT

DIRECTORS

         Our Board of Directors is responsible for the management of our
business. Our Board of Directors currently consists of seven series A directors,
two series B directors and four series N directors. Our series A shareholders
have the ability to elect the majority of the Board of Directors. Pursuant to
our By-laws, our series A shares represent 51.0% of our voting stock and may
only be held by Mexican nationals.

         The following table presents information concerning our current
directors (ages as of December 31, 2000):

<TABLE>
<CAPTION>
NAME                                                                  POSITION                             AGE
----                                                                  --------                             ---
<S>                                            <C>                                                        <C>
Adrian Aguirre Gomez.......................     Series A Director and Chairman of the Board                 50
Maria Guadalupe Aguirre Gomez..............     Series A Director                                           52
Maria Trinidad Aguirre Gomez...............     Series A Director                                           40
Maria Elena Aguirre Gomez..................     Series A Director                                           48
Miguel Sepulveda Martinez..................     Series A Director                                           57
Gilberto Solis Silva.......................     Series A Director                                           54
Raul Guijarro de Pablo.....................     Series A Director                                           44
Michael R. Coltrane........................     Series B Director                                           54
Barry R. Rubens............................     Series B Director                                           42
Jacques Gliksberg..........................     Series N Director                                           42
Graeme Mills...............................     Series N Director                                           41
Salvatore A. Grasso........................     Series N Director                                           43
Hurdle H. Lea, III.........................     Series N Director                                           41
</TABLE>

         Rosa Maria Palme Sierra, Raul Sanchez Rucobo, Gilberto Solis Aguirre,
Adrian Aguirre Palme, Miguel Sepulveda Aguirre, Lourdes Suayfeta Saenz and
Alberto Saavedra Olavarrieta are our Alternate series A directors. Thomas A.
Norman and Richard L. Garner are our Alternate series B directors. Adrienne
Kaga, Iain Whitfield, Paul S. Bachow and Christopher D. Meyn are our Alternate
series N directors. Lourdes Suayfeta Saenz is the Secretary of the Board and
Sergio Hernandez Gonzalez is our statutory auditor.

         Adrian, Maria Guadalupe, Maria Trinidad and Maria Elena Aguirre Gomez
are siblings. Gilberto Solis Silva is the spouse of Maria Elena Aguirre Gomez.
Raul Guijarro de Pablo is the spouse of Maria Trinidad Aguirre Gomez. Rosa Maria
Palme Sierra is the spouse of Adrian Aguirre Gomez. Miguel Sepulveda Martinez is
the spouse of Maria Guadalupe Aguirre Gomez. Adrian Aguirre Palme is the son of
Adrian Aguirre Gomez and Rosa

                                       37
<PAGE>   41

Maria Palme Sierra, Gilberto Solis Aguirre is the son of Gilberto Solis Silva
and Maria Elena Aguirre Gomez and Miguel Sepulveda Aguirre is the son of Miguel
Sepulveda Martinez and Maria Guadalupe Aguirre Gomez.

         Set forth below is a brief biographical description of our directors:

         Adrian Aguirre Gomez has been a series A director and Chairman of the
Board of Maxcom since Maxcom's incorporation in February 1996. Mr. Aguirre also
sits on the Board of Directors of Corporativo en Telecomunicaciones, S.A. de
C.V., a subsidiary of Maxcom, Grupo Empresarial de Telecomunicaciones, S.A. de
C.V., Recover, S.A. de C.V. and Laguna Real, S.A. de C.V. Previously, Mr.
Aguirre was CEO of Grupo Radio Centro, S.A. de C.V. from November 1968 to May
24, 1999 and a Director until May 1999. Mr. Aguirre is a certified public
accountant and holds an undergraduate degree in accounting from the Instituto
Tecnologico Autonomo de Mexico (ITAM).

         Maria Guadalupe Aguirre Gomez has been a series A director of Maxcom
since May 1998. She also sits on the Board of Directors of Sport and Therapy
Center, S.A. de C.V. Previously, Ms. Aguirre sat on the Board of Directors of
Majurame, S.A. de C.V. and Cable Centro, S.A. de C.V. from February 1997 to
April 1999 and was an Alternate Director of Grupo Radio Centro, S.A. de C.V.,
from July 1998 to May 1999. In her capacity as Alternate Director, Ms. Aguirre
had both director and management responsibilities. Ms. Aguirre holds an
undergraduate degree in communications from the Universidad Iberoamericana.

         Maria Trinidad Aguirre Gomez has been a series A director of Maxcom
since May 1998. She also sits on the Board of Directors of Talento Arte Visual,
S.A. de C.V., Promotora de Radiodifusion del Sureste, S.A. de C.V., Promotora de
Publicidad del Sureste, S.A. de C.V. and Publicidad y Promocion del Sureste,
S.A. de C.V. Previously, Ms. Aguirre was an Alternate Director of Grupo Radio
Centro, S.A. de C.V. from March 10, 1997 to May 7, 1999. Ms. Aguirre holds an
undergraduate degree in communications from the Universidad Iberoamericana.

         Maria Elena Aguirre Gomez has been a series A director of Maxcom since
June 1999. She also sits on the Board of Directors of Radiocomunicacion
Profesional, S.A. de C.V., Radiocomunicacion Enfocada, S.A. de C.V. and
Radiocomunicacion Saltillo, S.A. de C.V. Previously, Ms. Aguirre was an
Alternate Director of Grupo Radio Centro, S.A. de C.V. and its subsidiaries and
operating companies from July 1998 to May 1999.

         Miguel Sepulveda Martinez has been a series A director of Maxcom since
June 2000. He is an active member of the Orthopedic Research Society. He was the
Chairman of the Sociedad de Rodilla y Artoscopia de Mexico, Medical Association
during 1993 and 1994 and served as Medical Director and member of the Board of
Directors of the Red Cross of Chihuahua from 1996 to 1998. Mr. Sepulveda holds a
Ph.D. from the Instituto Politecnico Nacional and several post-graduate studies
in several universities, such as Tufts University (1988) and Harvard University
(1989).

         Gilberto Solis Silva has been a series A director of Maxcom since
August 1997. He also sits on the Board of Directors of Grupo Empresarial de
Telecomunicaciones, S.A. de C.V. and is CEO of Radiocomunicacion Profesional,
S.A. de C.V., Radiocomunicacion Enfocada, S.A. de C.V. and Radiocomunicacion
Saltillo, S.A. de C.V. Previously, Mr. Solis sat on the Board of Directors of
Grupo Radio Centro, S.A. de C.V. from 1990 to 1998. Mr. Solis holds an
undergraduate degree in geological engineering from the UNAM.

         Raul Guijarro de Pablo has been a series A director of Maxcom since
June 1999. He also serves as Treasurer for and sits on the Board of Directors of
Talento Arte Visual, S.A. de C.V. Mr. Guijarro holds an undergraduate degree in
architecture from the Universidad Anahuac.

         Michael R. Coltrane has been a series B director of Maxcom since August
1997. Mr. Coltrane is President and Chief Executive Officer of Concord Telephone
Company and CT Communications, Inc. He also sits on the Board of Directors of
Concord Telephone Company, CT Communications, Inc., First Charter Corporation,
U.S. Telecom Holdings Inc., Access/ON Multimedia PMN, Inc., Palmetto MobileNet,
the United States Telephone Industry Association, the North Carolina Telephone
Industry Association and the Alliance of North Carolina Independent Telephone
Companies. Previously, Mr. Coltrane sat on the Board of Directors of, ITC
Holding Company from 1993 to 1995, U.S. Intelco Holdings from 1994 to 1996 and
the Society of International Business Fellows from 1997 to 1999. Mr. Coltrane
holds an undergraduate degree from Davidson College and a masters degree in
business administration from the Wharton School of Business of the University of
Pennsylvania.

                                       38
<PAGE>   42

         Barry R. Rubens has been a series B director of Maxcom since June 2000.
He has been a Senior Vice-President, Chief Financial Officer, Secretary and
Treasurer of CT Communications, Inc. (the parent company of CT Global
Telecommunications, Inc.) since 1995. He also served as Vice-President-External
Affairs of CT Communications, Inc. from 1992 to 1995. Prior to this, Mr. Rubens
was a senior manager in Ernst & Young's telecommunications practice in
Washington, D.C. Mr. Rubens serves on the executive committee of BellSouth
Carolinas PCS LLC, as a director of Carolinas FiberNet and is an officer and
board member of WirelessOne of North Carolina, LLC.

         Jacques Gliksberg has been a series N director of Maxcom since May
1998. He also sits on the Board of Directors of Acme Paging, L.P., Bank American
International Investment Corporation, Banco Noroco (Venezuela), Structured
Intelligence LLP and Organizacion Rescarven, C.A. (Venezuela). Mr. Gliksberg has
been a managing partner of Bank of America Equity Partners since 1994. Mr.
Gliksberg holds a Bachelor of Arts degree in Economics and Political Science
from the University of Rochester, and a masters degree in business
administration from the J.L. Kellogg Graduate School of Management of
Northwestern University, Chicago Illinois.

         Graeme Mills has been a series N director of Maxcom since May 1998. He
also sits on the Board of Directors of BancBoston Capital, Shield Pack, Inc.,
Johnston Industries, Inc., Zelenka Nursey, Inc. and Kinco, Ltd. and is
Vice-President of BancBoston Investments Inc., BancBoston Capital Inc. and
BancBoston Ventures Inc. Previously, Mr. Mills was Director of Emerging Market
Investment Banking at BancBoston, N.A. from July 1991 to November 1996. In his
capacity as Director of Emerging Market Investment Banking, Mr. Mills was
responsible for cross border debt raising in Latin America. Mr. Mills holds an
undergraduate degree and a masters degree in commerce from the University of New
South Wales.

         Salvatore A. Grasso has been a series N director of Maxcom since May
1998. He also sits on the Board of Directors of Acme Paging, L.P., Bachow and
Associates, Inc., Bachow/Coastel Operations, Inc. and Discovery Schools, L.P.
Mr. Grasso is currently Managing Director and Chief Financial Officer of Bachow
and Associates, Inc., Vice-President of Bachow/Coastel Operations, Inc., Bala
Equity, Inc., Bachow Co-Investment, Inc, PBS/ Bachtel, Inc. and Cottonwood
Holdings, Inc., Partner in Bala Equity Partners, L.P., Bachow Co-Investment,
L.P. and Bachtel Development, L.P. Mr. Grasso holds a bachelor of science degree
in accounting from St. Joseph's University and is a certified public accountant
in the State of Pennsylvania.

         Hurdle H. Lea, III has been a series N director of Maxcom since May
1998. Prior to becoming a director, Mr. Lea was an alternate director of Maxcom.
He is currently Vice-President of Globalvest Management Company, L.P. and sits
on the Board of Directors of Globalvest Diversified Fund, LDC, Globalvest
Emerging Income Fund, Ltd., Globalvest Management Company, Inc., Globalvest
Opportunity Latin Fund I, Ltd., Globalvest Russia Fund, LDC, Globalvest Russia
Fund, LLC, Globalvest Russia Fund, Ltd., Latinvest Cable Holdings, LLC,
Latinvest Holding, LDC, Latinvest Online Holding, LDC, Latinvest Opportunity
Holdings, LLC, Utilivest II, LLC and Utilivest III, LLC. Previously, Mr. Lea was
Chief Financial Officer and Managing Director of Pointer Management Company from
1990-1997. Mr. Lea holds a bachelor of science degree in management from the
University of North Carolina at Asheville.

EXECUTIVE OFFICERS

         In June and July 2000, Gian Carlo Pecchioni, our former Chief Executive
Officer, Michael Tatum, our former Chief Operating Officer and Rodrigo Sandoval,
our former Chief Marketing Officer, resigned. The Board of Directors of Maxcom
assumed the duties of such offices on a temporary basis pending the appointment
of new officers. In February 2001, Mr. Eduardo Patron was appointed as the new
Chief Marketing Officer; in April 2001, Mr. Fulvio del Valle was appointed as
the new Chief Executive Officer; and in May 2001, Mr. Rene Sagastuy was
appointed as the new Chief Operating Officer.

         In April 2001, Mr. Alejandro Martinez, our former Chief Financial
Officer, resigned. In May 2001, Ms. Eloisa Martinez was appointed as the new
Chief Financial Officer.

                                       39
<PAGE>   43

         The following table sets forth our current executive officers (ages as
of December 31, 2000):

<TABLE>
<CAPTION>
NAME                                                                     POSITION                          AGE
----                                                                     --------                          ---
<S>                                                   <C>                                                 <C>
Fulvio del Valle...............................        President and Chief Executive Officer                51
Rene Sagastuy..................................        Chief Operating Officer                              40
Eloisa Martinez................................        Chief Financial Officer                              41
Eduardo Patron.................................        Chief Marketing Officer                              43
Ricardo Arevalo Ruiz...........................        Chief Information Systems Officer                    36
Fernando Galvan................................        Vice-President, Sales                                34
Carlos Castro Paniagua.........................        Vice-President, Human Resources                      50

</TABLE>

         Set forth below is a brief biographical description of each of our
executive officers not otherwise provided above:

         Fulvio V. del Valle has been the President and Chief Executive Officer
of Maxcom since April 2001. Prior to joining Maxcom, Mr. del Valle was President
of Grupo Iusacell, S.A. since June 1997 and a member of its Board of Directors
since June 1998. From August 1996 until June 1997, Mr. del Valle served as
managing director of the non-wireline cellular companies in Regions 3 (Norcel)
and 4 (CedeTel). For more than 20 years prior, Mr. del Valle served in senior
Latin America region executive positions for several multinational positions for
several multinational corporations. Mr. del Valle was employed by AMP Inc. as
regional director, Latin America, from January 1996 through July 1996 and as
managing director, Mexico from August 1992 until December 1995. From September
1986 until July 1992, Mr. del Valle served as Regional Director for South
America, Electronic Division for DuPont Latin America Corp. and from March 1980
through August 1986, he served as general manager, Latin American North Region
for National Semiconductor Corp. Mr. del Valle holds an undergraduate degree in
electrical engineering from the Instituto Politecnico Nacional of Mexico and a
masters degree in physics from Virginia Polytechnic Institute.

         Rene Sagastuy has been Chief Operating Officer to Maxcom since May
2001. Prior to joining Maxcom, Mr. Sagastuy served for one year as Director of
Operations for Johnson Controls in Mexico, a U.S. public company with 19
manufacturing sites in Mexico. Mr. Sagastuy also served as operations, strategic
planning, manufacturing and project manager and director of several companies in
Mexico, including Avex Electronics, AMP de Mexico, S.A. de C.V. and the
Jefferson Smurfit Group in Mexico. Mr. Sagastuy holds a bachelor's degree in
civil engineering from the Universidad Iberoamericana in Mexico and a masters
degree in Business Administration form the Instituto Technologico Autonomo de
Mexico.

         Eloisa Martinez has been Chief Financial Officer since May 2001. Prior
to joining Maxcom, Ms. Martinez served for four years as Financial Planning and
Control Director at Grupo Iusacell, S.A. de C.V. Previously, Ms. Martinez worked
for 12 years at IBM Corporation in Mexico and in the United States, where she
held the positions of Controller, Internal Audit Manager, Corporate Internal
Auditor and Business Control and Planning Analyst. Ms. Martinez holds a
bachelor's degree in Business Administration from the Instituto Politecnico
Nacional in Mexico City, and a masters degree in Business Administration from
the Instituto Tecnologico de Estudios Superiores de Monterrey.

         Eduardo Patron has been Chief Marketing Officer of Maxcom since
February 2001. Prior to joining Maxcom, Mr. Patron served as Marketing Director
and Assistant General Manager, as well as in several other positions for 14
years, for Kraft Foods in Mexico, a subsidiary of Phillip Morris. Previously,
Mr. Patron worked as Promotion and Merchandising Manager for Alfa Alimentos,
S.A. de C.V., a food company, and as an account executive for A. C. Nielsen. Mr.
Patron holds an Industrial Engineering degree from the Universidad
Iberoamericana in Mexico.

         Ricardo Arevalo Ruiz has been Chief Information Systems Officer since
May 2001. Prior to joining Maxcom, Mr. Arevalo served as Vice-President,
Information Systems and Chief Information Officer of Grupo Iusacell, S.A. de
C.V. from August 1997 to May 2001. Mr. Arevalo also served as Vice-President,
Information Systems, as Chief Information Officer and as Director, Systems
Development of Grupo Iusacell Celular during the previous two years. Before, Mr.
Arevalo served as Director of Informations Systems, Materials, Logistics and
Customer Service of AMP de Mexico, S.A. de C.V. from May 1993 until August 1997.
Mr. Arevalo was also the

                                       40
<PAGE>   44

Information Systems Manager for Tequila Cuervo, S.A. de C.V. from October 1990
until May 1993. Mr. Arevalo has an undergraduate degree in computer sciences and
a diploma in marketing from the Instituto Technologico y de Estudios Superiores
de Monterrey.

         Fernando Galvan has been Vice-President, Sales since May 2001. Before
that, Mr. Galvan had been Director of Sales since June 2000. Prior to joining
Maxcom, Mr. Galvan was Latin American Director of Sales, Business Planning and
Strategy Consumer Products for Motorola de Mexico, where he also served as Sales
Business Planning and Strategy Director for Mexico, Central America and the
Caribbean. Mr. Galvan holds a law degree from the Universidad del Nuevo Mundo.

         Carlos Castro Paniagua has been Vice-President of Human Resources since
March 2001. Prior to joining Maxcom, Mr. Castro served as Director of Human
Resources at Gillette de Mexico for ten years. Mr. Castro also served at
Gillette de Mexico as engineering manager and production manager. Mr. Castro
holds an industrial degree from the Centro Nacional de Ensenanza Tecnico
Industrial.

B.       COMPENSATION

         For the year ended December 31, 2000, our executive officers received
an aggregate compensation (including bonuses and severance payments) of
approximately Ps.13.3 million (U.S.$1.4 million). These amounts represent 4% of
Maxcom's total selling, general and administrative expenses for 2000. Members of
our Board of Directors are entitled to receive an option to purchase 250 CPOs at
an exercise price of U.S.$0.02 per CPO, each time the member attends a Board of
Directors meeting. The Chairman of the Board is entitled to receive 500 CPOs
each time.

         As of December 31, 2000, we had 7 expatriates rendering services to
Maxcom under an operating agreement with CT Global Telecommunications, Inc.
Under the operating agreement, which expired on December 31, 2000, Maxcom was
required to reimburse CT Global for expenses related to salaries and other
expenses of the expatriates assigned to us. For the year ended December 31,
2000, we paid CT Global U.S.$3.7 million for reimbursement of expenses.

         In addition, we have implemented an executive compensation plan that
includes bonuses and stock options on our series N shares (which are
automatically convertible into CPOs at a two-to-one exchange ratio, as explained
in "Item 7. Major Shareholders and Related Party Transactions--A. Major
shareholders--Capital restructuring"). This plan covers the years 1998, 1999 and
2000. Options granted under the plan for 1998 have exercise prices for 1998 of
U.S.$8.70 (estimated fair market value). Options granted for 1999 have exercise
prices for 1999 of U.S.$10.45 (estimated fair market value), while options to be
granted under the plan for 2000 will have exercise prices of U.S.$12.55
(estimated fair market value). We granted 142,250, 538,000 and 206,820 options
for 1998, 1999 and 2000, respectively. Of these options, 356,108 had vested and
12,424 had been forfeited at April 1, 2001.

         Our executive stock option plan is divided into two programs based on
whether the beneficiary is considered to be part of senior or junior management.
The executive stock option plan for the senior management is based on company
performance, while the executive stock option plan for the junior management is
based on individual performance. The maximum aggregate amount of series N shares
that were originally distributable was 1,690,000 series N shares, equivalent to
approximately 10% of our current capital stock on a diluted basis. After
discounting options that did not vest or were forfeited, the maximum aggregate
amount of series N shares that can currently be distributed is 932,070 series N
shares, equivalent to approximately 5% of our current capital stock on a fully
diluted basis.

         Our Board of Directors has decided to establish a new stock option plan
where up to 2,444,580 CPOs may be issued. Once the specific guidelines of the
new plan are defined, the new plan will have to be submitted for approval at a
shareholders' meeting.

C.       BOARD PRACTICES

         The members of our Board of Directors are elected annually at our
ordinary general meeting of shareholders. The current members of the Board of
Directors described in "--A. Directors and Senior

                                       41
<PAGE>   45

Management" above were elected at the shareholders' meeting held on May 22,
2001. All board members hold the positions for one year and may be reelected.

         Under the Mexican Companies Law (Ley General de Sociedades
Mercantiles), we are required to have at least one statutory auditor
(comisario), who is elected by our shareholders at the annual ordinary general
shareholders' meeting. The primary role of the statutory auditor is to report to
our shareholders at the annual ordinary general shareholders' meeting regarding
the accuracy, sufficiency and reasonable basis of the financial information
presented to such shareholders by the Board of Directors.

         Our executive officers are appointed by the Board of Directors for an
indefinite term and may be removed by the Board at will, provided the
corresponding severance payments are made in accordance with Mexican labor law
and the applicable labor contract.

         Members of the Board of Directors are not entitled to any benefits upon
termination.

D.       EMPLOYEES

         As of December 31, 2000, through our wholly-owned employment
subsidiary, Corporativo en Telecomunicaciones, S.A. de C.V., we had 449
employees. Of these, 62 employees were unionized and covered by the terms of a
collective bargaining agreement we entered into with the National Union of
Telecommunications, Communications, Cybernetics, Electric, Electronic and
Similar Products Workers of the Mexican Republic (Sindicato Nacional de
Trabajadores de Telecomunicaciones, Telefonia, Comunicaciones, Cibernetica,
Productos Electricos, Electronicos, Similares y Conexos de la Republica
Mexicana). This agreement is renewable every year and next expires on April 1,
2002. We have not experienced any strikes or work stoppages and believe that our
relations with our employees are satisfactory.

E.       SHARE OWNERSHIP

         None of our directors and officers owns more than 1% of our shares,
excluding the shares held by the Aguirre Gomez family, which are described below
in "Item 7. Major Shareholders and Related Party Transactions."

         The only arrangement that we have for involving employees in the
capital stock of Maxcom is the executive compensation plan described above under
"--B. Compensation."

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.       MAJOR SHAREHOLDERS

         At December 31, 2000, our issued and outstanding share capital
consisted of 1,276,428 series A shares of common stock, 1,226,373 series B
shares of common stock, 5,622,822 series C shares of common stock and 5,622,822
series N shares of capital stock with limited voting rights, each without stated
par value.

         Our series C and series N shares are in deposit in a trust which issues
ordinary participation certificates (certificados de participacion ordinarios)
commonly known as "CPOs." Each CPO represents one series C share and one series
N share. Although the series C shares have full voting rights, the trustee votes
those shares according to the vote of the majority of the series A shares, which
are owned by the Aguirre Gomez family. At December 31, 2000 there were 5,622,822
CPOs issued and outstanding.

         Our series A shareholders have the ability to elect the majority of the
Board of Directors. All series A shares are beneficially owned, directly and
indirectly, by several members of the Aguirre Gomez family, including Adrian
Aguirre Gomez, Maria Guadalupe Aguirre Gomez, Maria Elena Aguirre Gomez, Maria
Esther Gomez de Aguirre, and Maria Trinidad Aguirre Gomez. Pursuant to our
By-laws, our series A shares represent 51.0% of our voting stock and may only be
held by Mexican nationals.

         Although the Aguirre Gomez family holds 51.0% of the voting stock
through the series A shares, has effective control over the voting rights of the
C shares (which represent an additional 40.89% of the voting rights)

                                       42
<PAGE>   46

and has the power to elect the majority of the Board of Directors, its ability
to control Maxcom is substantially limited by the terms of the shareholders
agreement described below under "-- Shareholders agreement."

OUTSTANDING SHARES

         The following table presents information concerning the beneficial
ownership of our issued and outstanding shares of capital stock at December 31,
2000:


<TABLE>
<CAPTION>
                                SERIES A SHARES    SERIES B SHARES     SERIES C SHARES     SERIES N SHARES          TOTAL
                              ------------------ ------------------- ------------------- ------------------- -------------------
                               NUMBER OF    %     NUMBER OF     %     NUMBER OF    %      NUMBER OF     %     NUMBER OF     %
NAME OF STOCKHOLDER             SHARES    OWNED     SHARES    OWNED    SHARES    OWNED     SHARES     OWNED    SHARES     OWNED
-------------------           ---------- ------- ----------- ------- ---------- -------- ----------- ------- ----------- -------
<S>                           <C>        <C>      <C>        <C>     <C>         <C>    <C>          <C>     <C>         <C>
Aguirre Gomez Family(1)......  1,276,428  100.0%                        405,064    7.2%     405,064    7.2%   2,086,556   15.2%
CT Global
  Telecommunications, Inc....                      1,226,373  100.0%    515,953   10.9%     515,953   10.9%   2,258,279   16.4%
BankAmerica International
  Investment Corporation.....                                         1,577,582   28.1%   1,577,582   28.1%   3,155,164   22.9%
Bachow Investment
  Partners III, LP...........                                         1,166,568   20.8%   1,166,568   20.8%   2,333,136   17.0%
Latinvest Strategic
  Investment Fund, L.P.......                                           671,964   12.0%     671,964   12.0%   1,343,928    9.8%
BancBoston Investments, Inc..                                           658,702   11.7%     658,702   11.7%   1,317,404    9.6%
LA Strategic Capital Partners
  II.........................                                           175,287    1.3%     175,287    1.3%     350,573    2.5%
Other Investors..............                                           451,702    8.0%     451,702    8.0%     903,405    6.6%
                              ---------- ------- ----------- ------- ---------- -------- ----------- ------- ----------- -------
                               1,276,428  100.0%   1,226,373  100.0%  5,622,822    100%   5,622,822  100.0%  13,748,445  100.0%
</TABLE>

---------------------
(1)  The shares of Maxcom controlled by the Aguirre Gomez family are held either
     individually or through trusts or corporations.

CAPITAL RESTRUCTURING

         On February 21, 2000, our shareholders resolved to modify our capital
structure in order to give us more flexibility to raise equity capital, without
affecting corporate governance. The capital restructuring, which was implemented
on August 28, 2000, was designed to create additional room for investment by
foreign persons.

         Prior to the capital restructuring, we were unable to raise additional
equity capital from foreign investors because they accounted for 79.96% of our
capital stock on a fully diluted basis, which is the maximum limit set
specifically for us by the Mexican foreign investment authorities. With the
capital restructuring, the effective foreign investment permitted as a
percentage of our capital stock on a fully diluted basis increased to 89%.

         Under the capital restructuring, 50% of the then existing series N
shares were converted into a new series of common stock, the series C shares, at
an exchange ratio of one-to-one.

         The series C and series N shares were deposited into a trust which
issued ordinary participation certificates (certificados de participacion
ordinarios) commonly known as "CPOs." Each CPO represents one series C share and
one series N share. The term of the trust is the longest between 30 years and
the maximum term permitted by law. Currently, the maximum permitted is 30 years.
The trust may also be terminated by recommendation of the technical committee of
the trust.

         Although the series C shares have full voting rights, the trustee votes
those shares according to the vote of the majority of the series A shares, which
are owned by the Aguirre Gomez family.

         Any options or warrants for series N shares that are exercised after
the implementation of the capital restructuring will be subject to conversion
and deposit into the trust.

         Separate from the proposed capital restructuring, 255,000 series A
shares and 245,000 series B shares were converted into CPOs on a two-to-one
basis.

                                       43
<PAGE>   47

OUTSTANDING OPTIONS AND WARRANTS

         We have issued options and warrants to purchase up to 3,358,388 series
N shares which, as a result of the capital restructuring, if purchased, will be
subject to conversion into CPOs on a two-to-one basis. The following table
presents information concerning the ownership of these stock options and
warrants currently outstanding:


<TABLE>
<CAPTION>
                                                                                                NUMBER OF
                                             NUMBER OF     EXERCISE PRICE    PERCENTAGE OF   OPTIONS ALREADY
           NAME OF OPTION HOLDER             OPTIONS(1)       PER SHARE     OPTIONS VESTED      EXERCISED
------------------------------------------ -------------- ---------------- ---------------- -----------------
<S>                                        <C>           <C>                <C>                 <C>
Nissho Iwai American Corporation..........    337,471      U.S.$  10.90          100%              none
CT Global Telecommunications, Inc.(2).....    250,000              8.70           40               none
Bachow & Associates, Inc.(2)..............    100,000              8.70          100               none
Amsterdam Pacific LLC(2)..................     24,425              8.70          100               none
1998-2000 Executive Stock Option Plan.....    950,000      8.70 to 12.55          38               none
2001-2003 Executive Stock Option Plan(3)..  4,489,160     15.06 to 21.68          16               none
UBS Warburg LLC (4).......................     89,243              0.01          100               none
Donaldson, Lufkin & Jenrette
    Securities Corporation(4).............     22,311              0.01          100               none
Old notes investors (5)...................    764,938              0.01          100               none
Gian Carlo Pecchioni(6)...................     10,000              0.01          100               none
Signing bonus for current officers........    100,000              0.01           55               none
Bachow & Associates, Inc. and Bank of
    America International Investment
    Corporation management services (7)...     94,000              0.01          100               none
Directors compensation....................     70,000              0.01         none               none
</TABLE>

----------------
(1)  Each option entitles the holder to purchase either one series N or one
     series C share in the form of CPOs.
(2)  Maximum realization capped at U.S.$40.0 per share.
(3)  Maximum number of options to be issued is subject to our attainment of
     certain performance targets. This plan is still subject to formal approval.
(4)  These warrants were granted as partial compensation for services rendered
     in connection with the sale of the notes.
(5)  These warrants were issued in connection with the sale of the notes.
(6)  Signing bonus for former Chief Executive Officer.
(7)  These options relate to compensation for management services provided
     during 2000.

Options to creditors and business partners

         In order to better align our interests with those of our creditors and
other business partners, we have granted stock options to some of these parties.

            -  In March 1998, together with a vendor financing facility we
               obtained from Nissho Iwai American Corporation, we granted Nissho
               Iwai options to purchase up to 337,471 of our series N shares at
               U.S.$10.90 per share.

            -  In May 1998, as part of an operating agreement that we signed
               with CT Global Telecommunications, Inc. under which CT Global
               agreed to manage the construction of our telephone network,
               provide engineering services and run our day-to-day operations,
               we granted CT Global options to purchase up to 250,000 of our
               series N shares at U.S.$8.70 per share.

            -  In May 1998, as part of a strategic assistance agreement that we
               signed with Bachow & Associates, Inc. under which Bachow agreed
               to provide us with consulting and advisory services, we granted
               Bachow options to purchase up to 100,000 of our series N shares
               at U.S.$8.70 per share.

            -  In April 1998, under an engagement letter that we signed with
               Amsterdam Pacific LLC pursuant to which Amsterdam Pacific agreed
               to provide us with investment banking services, we granted
               Amsterdam Pacific options to purchase up to 24,425 of our series
               N shares at U.S.$8.70 per share.

                                       44
<PAGE>   48

Executive stock option plan

         In May 1998, we adopted an executive stock option plan in order to
retain key executive officers and better align their interest with ours. The
executive stock option plan is administered under a management trust with the
assistance of the trust division of Banco Nacional de Mexico, S.A. (Banamex).
Under the executive stock option plan, a technical committee determines the
executive officers to whom options to purchase series N shares will be granted,
as well as the terms of those options. In 1998, we issued options to purchase
142,250 series N shares at U.S.$8.70 (estimated fair market value); in 1999 we
issued options to purchase 583,000 series N shares at U.S.$10.45 (estimated fair
market value); and in 2000 we issued options to purchase 206,820 series N shares
at U.S.$12.55 (estimated fair market value). As a result of the capital
restructuring, these series N shares, if purchased, will be automatically
converted into CPOs on a two-to-one basis.

         Our Board of Directors has decided to establish a new stock option plan
where up to 2,244,580 CPOs may be issued. Once the specific guidelines of the
new plan are defined, the new plan will have to be submitted for approval at a
shareholders' meeting.

Warrants in connection with the offering of the old notes

         As part of the sale of notes completed on March 17, 2000, we offered to
investors an aggregate of 300,000 warrants to purchase 764,938 shares of our
series N capital stock with limited voting rights, at an exercise price of $0.01
per share. As partial compensation to the initial purchasers for their services
in connection with the offering of the old notes, we gave the initial purchasers
warrants to purchase an aggregate of 111,554 shares of our series N shares.

         As a result of the adoption of the capital restructuring the warrants
now exercised, the warrants will entitle holders to receive instead an aggregate
of 406,374 CPOs, each representing one new series C share of common stock and
one series N share, at an exercise price of $0.02 per CPO.

CAPITAL CONTRIBUTIONS

         As a condition to the offering of the notes, some of our shareholders
agreed to make or cause to be made capital contributions in an aggregate
principal amount of U.S.$35 million by September 30, 2000. This capital
contribution was effected in August 2000.

         As a result of this capital contribution, we issued an aggregate of
3,352,504 series N shares which constitute 1,676,252 CPOs. The purchase price
was U.S.$10.44 per share (or U.S.$20.88 per CPO).

         As compensation to those shareholders who committed to make or cause to
be made the U.S.$35 million capital contribution, we agreed to grant those
shareholders warrants to purchase an aggregate of 70,000 series N shares in the
form of 35,000 CPOs, at an exercise price of U.S.$0.01 per share.

SHAREHOLDERS AGREEMENT

         In May 1998, we and our principal shareholders, BankAmerica
International Investment Corporation, LA Strategic Capital Partners II,
BancBoston Investments, Inc., Bachow Investment Partners III, L.P., Latinvest
Strategic Investment Fund, L.P., Grupo Empresarial de Telecomunicaciones, S.A.
de C.V., the Aguirre Gomez Trust, CT Global Telecommunications, Inc. Adrian
Aguirre Gomez, Jose Manuel Aguirre Gomez, L.D. Coltrane, III, Michael Coltrane,
Samuel E. Leftwich, Thomas A. Norman and Amsterdam Pacific LLC, entered into a
shareholders agreement relating to our governance.

         We and our principal shareholders agreed to take all necessary actions
so that:

            -  the Board of Directors of Maxcom consists of 13 members and 13
               alternate members;

            -  seven directors and seven alternate directors designated by the
               series A shareholders are elected to the Board of Directors;

                                       45
<PAGE>   49

            -  two directors and two alternate directors designated by the
               series B shareholders are elected to the Board of Directors;

            -  four directors and four alternates directors designated by the
               series N shareholders are elected to the Board of Directors, with
               each of BankAmerica International Investment Corporation, Bachow
               Investment Partners III, L.P., BancBoston Investments Inc., and
               Latinvest Strategic Investment Fund having the right to designate
               one director and one alternate director; and

            -  actions with respect to certain "key matters" be:

               [X]  submitted to the Board of Directors prior to the taking of
                    any such action; and

               [X]  approved by at least two of the directors appointed by the
                    series N shareholders, or if the series N shareholders only
                    have a right to elect one director, then approved by at
                    least that director.

         See "Item 10. Additional Information--B. Memorandum and Articles of
Association--Voting rights" for a description of "key matters."

         The shareholders agreement provides that if we register any equity
securities for a primary or secondary public offering prior to May 21, 2002, we
must permit parties to the shareholders agreement to include their shares in
such an offering. We have agreed to bear all expenses of any primary or
secondary public offerings, other than the fees of counsel to the holders of the
registration rights and any underwriting commissions or discounts. If we do not
register our equity securities in a primary or secondary public offering prior
to May 21, 2005, some of our series N shareholders will have the right to retain
an investment banker to:

            -  sell substantially all of our assets;

            -  merge or consolidate us into another company; or

            -  require parties to the shareholders agreement to sell their
               shares, and distribute the proceeds to some series N
               shareholders.

         In addition, in the event of a breach by us or any of our shareholders
of certain provisions of the shareholders agreement, the non-breaching
shareholders will have the right to redeem their shares at a per share price
equal to the greater of (1) nine times EBITDA or (2) fair market value. If for
any reason any of the shareholders wishing to redeem their shares are unable to
consummate their redemption within a specified period of time, such shareholders
will have the right to buy the shares of the breaching shareholder at a fair
market value.

B.       RELATED PARTY TRANSACTIONS

GENERAL POLICY

         Our general policy is that we will not, and will not permit our
subsidiary to, enter into any contract or transaction with or for the benefit of
any affiliate (other than transactions between us and our subsidiary), which is
not at a price and on other terms at least as favorable to Maxcom or our
subsidiary as those which could be obtained on an arm's-length basis from an
unaffiliated third party.

OPERATION SERVICES

         On October 17, 1997, we entered into an operating agreement with CT
Global Telecommunications, Inc., one of our principal shareholders. This
agreement was amended and restated as of May 21, 1998 and October 1, 1999. Under
this agreement, CT Global was responsible for:

            -  the planning, supervision, implementation and management of our
               network construction and operations, and for the transfer or
               responsibility to us following the start-up phase;

                                       46
<PAGE>   50
                -       the management, advice and assistance for the overall
                        direction, planning, coordination and supervision of our
                        day-to-day telephone operations;

                -       the provision of our Chief Operating Officer, other
                        management and other CT Global employees with
                        appropriate experience and training;

                -       the design and supervision of the implementation of
                        focused marketing and sales services;

                -       the planning, coordination and supervision of our
                        operational financial affairs, including the preparation
                        of an annual operating budget; and

                -       the training of personnel to enable us to assume direct
                        responsibility for all operations.

        Beginning on October 1, 1999 through December 31, 2000, CT Global will
be responsible for:

                -       continuing to provide us with advisory, consulting and
                        support services; and

                -       the administrative responsibilities for all employees
                        seconded to us.

        We pay CT Global a management fee of U.S.$450,000 per year. In addition,
we granted CT Global options to purchase up to 250,000 of our series N shares
and cash incentives provided that we meet start-up and operational targets. CT
Global has already earned options to purchase 100,000 shares. The exercise price
is U.S.$8.70 per share, provided that the maximum value that CT Global may
realize upon the exercise of the options may not exceed U.S.$40.00 per share.
For 1998, 1999 and 2000, we paid incentive fees to CT Global of U.S.$450,000
each year.

        We are also required to reimburse CT Global for expenses related to
salaries and other expenses of CT Global personnel assigned to us. For 1998,
1999 and 2000, we paid CT Global U.S.$3.5 million, U.S.$4.6 million and U.S.$3.7
million, respectively, for reimbursement of expenses.

The amended and restated operating agreement terminated on December 31, 2000.

STRATEGIC ASSISTANCE SERVICES

        On May 21, 1998, we entered into a strategic assistance agreement with
Bachow & Associates, Inc., an affiliate of one of our principal shareholders.
The agreement provided that Bachow would help us to:

                -       develop and implement a budget model template for our
                        annual operating and capital budgets;

                -       evaluate and assist in the choice and implementation of
                        a financial accounting system;

                -       develop a template for the monthly Board of Directors
                        operational reporting package;

                -       evaluate and assist in the choice and implementation of
                        a customer billing system;

                -       design a sales and marketing plan; and

                -       provide training and guidance to our Chief Financial
                        Officer.

        This agreement expired on April 1, 1999. For 1998 and 1999, we paid
Bachow U.S.$0.4 million and U.S.$0.2 million, respectively, for its services. In
addition, Bachow received a right to earn options to purchase 100,000 of our
series N shares at a strike price of U.S.$8.70 per share, upon a successful
completion of the above-mentioned projects. In accordance with the terms of the
strategic assistance agreement, Bachow may elect to have the Company finance up
to 95% of the exercise price with a seven-year term recourse loan that will be
secured by the shares. The maximum value that Bachow may realize upon the
exercise of the options may not exceed U.S.$40.00 per share.







                                       47
<PAGE>   51

OFFICE LEASE

        In 1997 and 1998 we entered into lease agreements which have expired,
with Inmobiliaria Grupo Radio Centro, S.A. de C.V., a corporation controlled by
some members of the Aguirre Gomez family, for the use of three floors of office
space in the Grupo Radio Centro building, our former headquarters. For 1998 and
1999, we paid Inmobiliaria Grupo Radio Centro approximately Ps.6.1 million and
Ps.7.7 million, respectively, for use of the floors.

ADMINISTRATIVE SERVICES

        During 1998 and 1999, we paid Promotora Tecnica de Servicios
Profesionales, S.A. de C.V., a corporation controlled by some members of the
Aguirre Gomez family, approximately Ps.1.9 million and Ps.1.2 million,
respectively, for general administrative and accounting services.

INCENTIVE FOR CAPITAL CONTRIBUTIONS

        Our Board of Directors resolved on February 15, 2000, that those
shareholders who commit to make or cause to be made a U.S.$35 million capital
contribution by September 30, 2000 be compensated for providing such commitment.
This capital contribution, which occurred in August 2000, was a condition to the
offering of the notes. The committing shareholders, which include the Aguirre
Gomez family, CT Global Telecommunications, Inc., BankAmerica International
Investment Corporation, Bachow Investment Partners III, L.P. and BancBoston
Investments, Inc., received warrants to purchase an aggregate of 70,000 series N
shares, at an exercise price of U.S.$0.01 per share. As a result of the capital
restructuring described in "--A. Major shareholders--Capital restructuring"
above, the series N shares, if purchased, will be automatically converted into
CPOs on a two-to-one basis.

        On June 20, 2000, our Board of Directors acknowledged receipt of the
option holders' notice of exercise of such options.

C.      INTERESTS OF EXPERTS AND COUNSEL

        Not applicable.

ITEM 8.    FINANCIAL INFORMATION

A.      CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

FINANCIAL STATEMENTS

        See Item 19(a) for a list of financial statements filed under Item 18.

LEGAL PROCEEDINGS

        We are not currently party to any material legal proceedings.

DIVIDEND POLICY

        Our current policy is to reinvest profits into our operations. In
addition, the indenture that governs the terms of the notes limits our liability
to pay cash dividends. The indenture permits us to pay cash dividends only if we
meet certain conditions, including:

                -       a minimum consolidated leverage ratio of less than 5.0
                        to 1;

                -       a minimum fixed charge coverage ratio of 1.5 to 1
                        through December 31, 2001 and 1.7 to 1 after; and

                -       no default (as defined in the indenture) must have
                        occurred and be continuing or result from the payment of
                        the cash dividend.






                                       48
<PAGE>   52

        If we meet the conditions described above, we may make cash dividend
payments provided they do not exceed an amount determined in the indenture based
on, among other things, cash flow generated from operations or equity offerings
and the level of consolidated interest expense.

B.      SIGNIFICANT CHANGES

        No significant change has occurred affecting our results or financial
conditions since December 31, 2000.

ITEM 9.    THE OFFER AND LISTING

A.      OFFER AND LISTING DETAILS

        Maxcom's stock is not traded on any stock exchange nor has it ever been
publicly offered in the United States or anywhere.

B.      PLAN OF DISTRIBUTION

        Not applicable.

C.      MARKETS

        Maxcom has registered U.S.$300 million 13 3/4% Series B Senior Notes Due
2007 with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended. The notes are not traded on any stock exchange. The notes
are eligible for trading in The PortalSM Market, a subsidiary of the Nasdaq
Stock Market, Inc.

D.      SELLING SHAREHOLDERS

        Not applicable.

E.      DILUTION

        Not applicable.

F.      EXPENSES OF THE ISSUE

        Not applicable.

ITEM 10.    ADDITIONAL INFORMATION

A.      SHARE CAPITAL

        Not applicable.

B.      MEMORANDUM AND ARTICLES OF ASSOCIATION

GENERAL

        Maxcom was incorporated on February 28, 1996, under the name "Amaritel,
S.A. de C.V." as a variable capital corporation (sociedad anonima de capital
variable) established under the laws of Mexico. Maxcom was registered in the
Public Registry of Commerce of the Federal District of Mexico under folio no.
210585 on June 11, 1996. Amaritel changed its name to "Maxcom
Telecomunicaciones, S.A. de C.V." on February 9, 1999.

        We were formed for the purpose of installing, operating and exploiting a
public telecommunications network granted by the Mexican federal government for
the provision of local and long distance telephone services.

        Maxcom's corporate purposes are found under Article Two of its by-laws.
The duration of our existence under our by-laws is indefinite.







                                       49
<PAGE>   53

CAPITAL STRUCTURE

        Our authorized capital stock is 21,049,987 shares. Our issued and
outstanding capital stock consists of 1,276,428 series A shares of common stock,
1,226,373 series B shares of common stock, 5,622,822 series C shares of common
stock and 5,622,822 series N shares of capital stock with limited voting rights.

        Our capital stock comprises fixed capital and variable capital. The
fixed portion of the capital stock of Maxcom is represented by 765,714 series A
shares and 736,113 series B shares. The remaining series A and series B shares
and the series C shares and the series N shares represent the variable portion
of Maxcom's capital stock.

        Our series C and series N shares are in deposit in a trust which issues
ordinary participation certificates (certificados de participacion ordinarios)
commonly known as "CPOs." Each CPO represents one series C share and one series
N share. Although the series C shares have full voting rights, the trustee votes
those shares according to the vote of the majority of the series A shares, which
are owned by the Aguirre Gomez family. At December 31, 2000 there were 5,622,822
CPOs issued and outstanding.

        Under the New Telecommunications Law and the Foreign Investment Law, no
more than 49% of the full voting stock of Mexican corporations holding a
concession to provide telecommunications services, other than cellular, may be
held by non-Mexicans.

        Our series A shares, which represent 51% of our voting stock, may only
be subscribed, paid for and held by Mexican investors. All of our series A
shares are held directly or indirectly by members of the Aguirre Gomez family."
The series B shares, the series C shares and the series N shares may be
subscribed, paid for and held by Mexicans and non-Mexican investors. Series N
shares are limited voting shares that are not computed for purposes of
determining the foreign investment percentage under the Mexican Foreign
Investment Law.

VOTING RIGHTS

        Under our By-laws, the holders of series A shares, series B shares and
series C shares are entitled to vote on all matters submitted to a vote of the
shareholders, with each series A share, series B share and series C share being
entitled to one vote. However, series C shareholders are deemed to vote in the
same manner as the majority of the series A shareholders. Holders of series N
shares have limited voting rights and may only:

                -       vote in special meetings of their series in accordance
                        with the Mexican Companies Law (Ley General de
                        Sociedades Mercantiles);

                -       vote in general extraordinary shareholders' meetings;

                -       vote on the key matters referred to below; and

                -       subscribe to any issuance of shares of Maxcom on a pro
                        rata basis.

        Shareholders' meetings may be ordinary, extraordinary or special.
Extraordinary general meetings are called to consider the matters specified in
Article 182 of the Mexican Companies Law, and principally include increases or
reductions of capital stock, amendments to the By-laws, dissolution, issuance of
bonds or preferred stock, merger, spin-off, transformation from one type of
company to another, change in nationality and change of corporate purpose.

        General meetings called to consider all matters other than those
mentioned above are ordinary meetings. An ordinary general meeting of the
shareholders of Maxcom must be held at least annually during the four months
following the end of each fiscal year to consider matters specified in Article
181 of the Mexican Companies Law, principally including the election of
directors, the report of the Board of Directors regarding the performance of
Maxcom, containing the financial statements of Maxcom for the preceding fiscal
year and the declaration of dividends, if any.






                                       50
<PAGE>   54

        Special meetings of the series A, series B, series C and series N
shareholders may be held to elect the members of the Board of Directors
representing those shareholders and to address other matters relating to the
relevant series.

        Series A shareholders have the right to designate seven members of the
Board of Directors and their alternates, Series B shareholders have the right to
designate two members of the Board of Directors and their alternates and Series
N shareholders have the right to designate four members of the Board of
Directors and their alternates. Series C shareholders do not have a right to
designate members of the Board of Directors.

        Under our By-laws, the quorum on a first call for an ordinary general
shareholders' meeting is at least 60% of the voting shares. If quorum is not
available on the first call, subsequent meetings may be called, at which the
quorum will be at least 51% of the voting shares. Except for purposes of key
matters, series N shares are not considered voting shares for purposes of
determining the quorum at ordinary general shareholders' meetings.

        The quorum on a first call for extraordinary shareholders' meetings is
at least 75% of the shares having a right to vote at such meetings. If quorum is
not available on the first call, subsequent meetings may be called, at which the
quorum will be at least 60% of the voting shares.

        The quorum for special shareholders' meetings is at least 75% of the
shares of the respective series for which the special meeting is being held.

        Resolutions of ordinary general and special shareholders' meetings may
be adopted by the affirmative vote of the majority of shares present at the
meeting, except as to key matters. Resolutions of general extraordinary
shareholders' meetings held on a first call may be adopted by the affirmative
vote of at least 75% of the shares having a right to vote at such meetings. In
the case of a second or subsequent call, resolutions may be adopted by the
affirmative vote of at least 60% of the voting shares.

        Resolutions at any shareholders' meeting regarding key matters are
subject to special voting requirements. Key matters may be submitted to the
Board of Directors or to a general shareholders' meeting for authorization. If
submitted to the Board of Directors for authorization, key matters require the
approval of the majority of the Directors present at the meeting, including the
vote of at least two members of the Board of Directors designated by series N
shareholders. Resolutions regarding key matters, if submitted to a general
shareholders' meeting, may only be adopted by the affirmative vote of at least
75% of the total issued and outstanding shares. Holders of series N shares have
the right to vote on any key matter at shareholders' meetings.

        Key matters include the following:

                -       the sale, transfer, or disposition of all or
                        substantially all of our assets;

                -       the sale, transfer, or disposition of any of our assets
                        to our creditors;

                -       the filing of a petition under the bankruptcy laws of
                        any jurisdiction;

                -       the incurrence or assumption of indebtedness or the
                        granting of guarantees in an aggregate amount exceeding
                        U.S.$10.0 million;

                -       the issuance of equity or debt securities with equity
                        features or securities exercisable or convertible into
                        equity securities, or the issuance of warrants or
                        options other than under existing contracts with
                        shareholders;

                -       the redemption, purchase or acquisition of our
                        outstanding shares of capital stock;

                -       entering, directly or indirectly, into any transaction
                        with any of our executive officers or Directors or their
                        immediate family members, in which the amount involved
                        exceeds U.S.$1.0 million;

                -       electing, appointing or removing of any of our executive
                        officers;







                                       51
<PAGE>   55

                -       approving our annual business plan and annual budget for
                        each fiscal year;

                -       entering into any additional line of business other than
                        the provision of telecommunications services in Mexico;

                -       entering into, amending or terminating existing
                        contracts with shareholders;

                -       establishing, participating in or investing in
                        non-consolidated subsidiaries;

                -       mergers, spin-offs, consolidations; and

                -       terminating or modifying of any of our concessions or
                        licenses relating to telecommunications operations.

        Shareholders' meetings may be called by the Board of Directors, the
President, Vice-President or Secretary of Maxcom, any statutory auditor or, in
certain cases by a Mexican court of competent jurisdiction. The holders of at
least 10% of the series N shares of Maxcom can also call a shareholders'
meeting. In addition, the Board of Directors or the statutory auditor must call
a shareholders' meeting at the written request of any shareholder if no ordinary
general shareholders' meeting has been held for two consecutive years or if the
shareholders' meetings held during that period have not considered the items
mentioned in Article 181 of the Mexican Companies Law. Notice of meetings must
be published in the Official Gazette of the Federation or in a newspaper of
general circulation in Mexico City or by written notice given to each
shareholder of record at least 15 days prior to the meeting. In order to attend
a shareholders' meeting, a shareholder must request and obtain an admission card
by depositing, at least 24 hours before the time set for holding the
shareholders' meeting, such shares with Maxcom's corporate secretary or with a
Mexican bank or other qualified institution. If entitled to attend the meeting,
a shareholder may be represented by proxy or a power-of-attorney.

        Under Mexican law, holders of 33% of Maxcom's outstanding capital stock
may have any shareholder action set aside by filing a complaint with a Mexican
court of competent jurisdiction within 15 days after the close of the meeting at
which such action was taken, by showing that the challenged action violates
Mexican law or Maxcom's By-laws.

        Under Mexican law, an action for civil liabilities against a member or
members of the Board of Directors may be initiated by a shareholders'
resolution. In the event shareholders decide to bring an action, the person or
persons against whom the action is brought will immediately cease to be members
of the Board of Directors. Additionally, shareholders representing not less than
33% of the outstanding shares of Maxcom may directly take such action against
members of the Board of Directors, provided that:

                -       such shareholders have not voted in favor of a
                        resolution approved at the relevant shareholders'
                        meeting pursuant to which it was resolved not to take
                        any action against the directors who are to be sued, and

                -       the claim in question covers the total amount of damages
                        alleged to have been caused to Maxcom as well as to the
                        individual plaintiffs' interests.

        Any recovery of damages will be for the benefit of Maxcom and not the
shareholders bringing the action.

        Under Mexican law, any shareholder or director who has a conflict of
interests in connection with any matter must abstain from voting at the relevant
shareholders' or board of directors' meeting. Any shareholder or director who
votes on a business transaction where its interests conflict with those of
Maxcom may be liable for damages if the transaction would not have been approved
without such shareholder's or director's vote.

        The terms of compensation of the members of the Board of Directors must
be approved at a shareholders' meeting.

        According to our By-laws, to change the rights of holders of a
particular class of stock, the affirmative vote of at least 85%








                                       52
<PAGE>   56


of the total issued and outstanding shares is required, at a meeting with the
presence of at least 85% of the total issued and outstanding shares. This
condition is stricter than what is provided by Mexican corporate law, which
requires a quorum of at least 75% of the total issued and outstanding shares and
the affirmative vote of more than 50% of the total issued and outstanding
shares.

DIVIDENDS

        At the annual ordinary general meeting of shareholders of Maxcom, the
Board of Directors will typically submit the financial statements of Maxcom for
the previous fiscal year, together with a report by the Board of Directors, to
the general ordinary shareholders' meeting for their approval. The series A and
series B shareholders will determine the allocation of Maxcom's net profits for
such fiscal year. The series C shareholders are deemed to vote in the same
manner as the majority of series A shareholders. At least 5% of such net profits
must be allocated to a legal reserve, which is not available for distribution
except as a stock dividend, until the amount of the legal reserve equals 20% of
Maxcom's paid-in capital stock. Additional amounts may be allocated to other
reserve funds as the shareholders determine. The remaining balance of net
profits, if any, is available for distribution as dividends.

        All fully paid and outstanding shares will be entitled to share ratably
in such dividends or other distributions. Partially paid shares will be entitled
to participate in a dividend or distribution in the same proportion that such
shares have been paid at the time of the dividend or distribution.

LIQUIDATION RIGHTS

        In the event that we are dissolved or liquidated, one or more
liquidators must be appointed at an extraordinary general shareholders' meeting
to wind up our affairs. Except as provided below, all fully paid and outstanding
shares of capital stock will be entitled to share ratably in all assets
remaining after payment of liabilities. Partially paid shares will be entitled
to participate in a liquidation, dissolution or winding up in the same manner as
they would in a dividend or distribution.

        However, under our By-laws, upon any liquidation, dissolution or winding
up of Maxcom, each holder of series N shares will be entitled to be paid, before
any distribution or payment is made upon any other shares of Maxcom, an amount
in cash equal to the aggregate subscription price paid (or deemed paid) for the
series N shares held by such holder (plus all accrued and unpaid dividends), in
each case on a pro rata basis based on such shareholders subscription price paid
(or deemed paid).

CHANGES IN SHARE CAPITAL

        An increase of our capital stock may be effected through the issuance of
new shares for payment in cash or in kind, by capitalization of indebtedness or
by capitalization of certain items of shareholders' equity. No increase of our
capital stock may be effected until all previously-issued shares of capital
stock have been fully paid. A reduction of our capital stock may be effected to
absorb losses, to redeem shares, or to release shareholders from payments not
made.

        Our By-laws require that any capital increase effected pursuant to a
capital contribution be represented, to the extent permitted by law, by new
series A, series B, series C or series N shares, as the case may be, in
proportion to the number of shares of each such series outstanding. Increases in
capital may not result in either the series N shares or the series C shares
representing more than 44.5% of the outstanding capital stock of Maxcom.
Currently, we have 5,622,822 series N shares and 5,622,822 series C shares
outstanding which each represent 48.89% of our outstanding capital stock.

        The fixed portion of our capital stock may only be increased or
decreased by resolution of an extraordinary general meeting of shareholders and
an amendment to our By-laws. The variable portion of our capital stock may be
increased or decreased by resolution of an extraordinary general meeting of
shareholders.

PREEMPTIVE RIGHTS

        In the event of a capital increase through the issuance of new shares
for payment in cash or in kind, a holder of shares has a preferential right to
subscribe for a sufficient number of new shares to maintain the holder's
existing proportion of shares held.







                                       53
<PAGE>   57

        Shareholders have a preemptive right to subscribe for shares, except:

                -       in connection with mergers or spin-offs;

                -       on the conversion of convertible debentures; or

                -       issuances of shares pursuant to a public offering, if a
                        general extraordinary shareholders' meeting called for
                        such purpose so approves and other requirements
                        specified in Article 81 of the Mexican Securities Law
                        are satisfied, including obtaining the approval of the
                        Mexican National Banking and Securities Commission
                        (CNBV).

        Under Mexican law, preemptive rights may not be waived in advance by a
shareholder, and cannot be represented by an instrument that is negotiable
separately from the corresponding share but may be waived at the moment of
issuance of such shares. The shareholders have waived their preemptive rights in
connection with the warrant shares.

TRANSFER RESTRICTIONS

        Our By-laws provide that transfers of our shares are subject to the
following restrictions:

                -       FIRST REFUSAL: Each shareholder has a right of first
                        refusal in the event of a transfer of shares; such right
                        is exercised by electing to purchase the shares to be
                        transferred on the same terms and conditions of the
                        offer notice;

                -       PARTICIPATION RIGHTS: Each shareholder has the right to
                        participate in the sale of shares to a prospective
                        transferee at the same price and on the same terms as in
                        the prospective transferee's offer to purchase shares;
                        and

                -       PERMITTED TRANSFERS: Such restrictions shall not apply
                        to, except in the case of Adrian Aguirre Gomez, any
                        transfer (1) pursuant to applicable laws of descent
                        among a shareholder's family group, or (2) among a
                        shareholder and/or its affiliates.

        Under our telecommunications concessions and By-laws, the SCT has 90
days to object to any transfer, subscription or conveyance of 10% or more of our
capital stock with the exception of:

                -       transfers related to series N shares; and

                -       subscriptions made pursuant to the exercise of a
                        shareholder's preemptive rights, as long as the
                        percentage participation of the shareholders in the
                        capital stock of Maxcom does not vary.

OTHER PROVISIONS

Duration

        The duration of our existence is indefinite.

Forfeiture of shares

        Under our By-laws, the current or future foreign shareholders of Maxcom
firmly undertake with the Ministry of Foreign Relations (Secretaria de
Relaciones Exteriores) to consider themselves as Mexican nationals with respect
to the shares of Maxcom that they may acquire or own, as well as with respect to
the properties, rights, concessions, securities or interests owned by Maxcom, or
the rights and obligations derived from the agreements entered with the Mexican
authorities to which Maxcom is a party. The current or future foreign
shareholders of Maxcom firmly undertake not to invoke the protection of their
government, under penalty of forfeiting such shares to the benefit of the
Mexican nation.







                                       54
<PAGE>   58

Dissolution

        Pursuant to the Mexican Companies Law and our By-laws, we may be
dissolved upon the occurrence, among other things, of any of the following
events:

                -       the impossibility of continuing with our current line of
                        business;

                -       the resolution of our shareholders at an general
                        extraordinary shareholders' meeting;

                -       the reduction of the number of our shareholders to fewer
                        than two; and

                -       the loss of two thirds of our capital stock.

Shareholder conflicts of interest

        Under Mexican law, any shareholder that has a conflict of interest in
connection with any transaction must abstain from voting at the relevant
shareholders' meeting. A shareholder that votes on a business transaction in
which its interest conflicts with that of Maxcom may be liable for damages if
the transaction would not have been approved without such shareholder's vote.

Director conflicts of interest

        Under Mexican law, any member of the Board of Directors who has a
conflict of interest with Maxcom in any transaction must disclose such a fact to
the other members of the Board of Directors and abstain from voting on such
matter at the relevant meeting of the Board of Directors. Any member of the
Board of Directors who violates such a provision may be liable for damages
caused to Maxcom. Additionally, members of the Board of Directors may not
represent any shareholders at any shareholders' meeting.

C.      MATERIAL CONTRACTS

Concessions

        In February 1997, we obtained a concession to provide local telephony
services covering Mexico City and the Gulf region and long distance services
nationwide from the Mexican government. We also obtained a nationwide
point-to-point and three regional point-to-multipoint microwave concessions in
October 1997. For a description of our concessions, see "Item 4. Information on
the Company -- Supervision and regulation of the Mexican telecommunications
industry -- Our concessions."

Interconnection agreements

        In November 1998, we entered into a local interconnection agreement with
Telmex. We have also signed reciprocal interconnection agreements with mobile
telephony providers Telcel, Grupo Iusacell and Pegaso. Finally, we have signed
long distance interconnection agreements with Telmex, Alestra, Bestel, Protel
and Iusatel. For a description of these interconnection agreements, see "Item 4.
Information on the Company -- Interconnection."

Lucent supply agreement

        On September 5, 1997, Maxcom executed a purchase and sales agreement
with subsidiaries of Lucent Technologies, Inc. pursuant to which Maxcom may
purchase from Lucent products, services and software. Through December 31, 2000,
Maxcom has purchased approximately U.S.$62.6 million.

Nec supply agreement

        On October 15, 1998, Maxcorn executed a master agreement for the
purchase and sale of equipment and services with Nec de Mexico, S.A. de C.V.
pursuant to which Maxcom may purchase from Nec de Mexico certain services and
equipment for the installation, operation and exploitation of its
telecommunications network. Through December 31, 2000, Maxcom has purchased
approximately U.S.$5.5 million.







                                       55
<PAGE>   59

Hewlett-Packard supply agreement

        On November 3, 1998, Maxcom executed a supply and services agreement
with Hewlett-Packard de Mexico, S.A. de C.V. pursuant to which Hewlett-Packard
agreed to provide to Maxcom telecommunications solutions and services. The
obligations under this agreement have been substantially fulfilled. Maxcom paid
U.S.$18 million for these solutions and services.

Metro Net capacity sales agreement

        On April 28, 2000, Maxcom executed a metropolitan network capacity sale
agreement with Metro Net, S.A. de C.V. (which was amended on December 21, 2000)
for an aggregate amount of U.S.$7.2 million pursuant to which Maxcom purchased
from Metro Net (i) the exclusive and unlimited right to use certain backbone
fiber optic capacity of 6 (six) fiber optic strands of Metro Net's metropolitan
rings in Mexico City, and (ii) an option to acquire the exclusive and unlimited
right to use additional backbone fiber optic capacity of 6 (six) fiber optic
strands.

CPO trust agreement

        On August 18, 2000, Maxcom and its shareholders executed a neutral
investment trust agreement with Banamex, S.A. Institucion de Banca Multiple,
Grupo Financiero Banamex Accival, Division Fiduciaria acting as trustee for the
issuance of ordinary participation certificates, also known as "CPOs," each
representing one series C share and one series N share of the capital stock of
Maxcom. For a description of the effect of this agreement, see "Item 7. Major
Shareholders and Related Party Transactions -- A. Major shareholders -- Capital
restructuring."

Shareholders' agreement

        On August 18, 2000, Maxcom executed an amended and restated
shareholders' agreement with the shareholders of the Company to, among other
things, reflect the restructuring of the capital stock of Maxcom and to provide
that the exchange of series C shares and series N shares for CPOs may not
adversely affect in any manner the rights granted to the holders of the series N
shares under the original shareholders' agreement. For a description of the
shareholders' agreement, see "Item 7. Major Shareholders and Related Party
Transactions--A. Major shareholders--Shareholders' agreement."

Indenture

        On March 17, 2000, Maxcom and its subsidiary, Corporativo en
Telecomunicaciones, S.A. de C.V., entered into an Indenture with The Bank of New
York, acting as trustee, which governs the terms and conditions of the issuance
by Maxcom of U.S.$300 13 3/4% senior notes due April 1, 2007. The Indenture
restricts Maxcom's ability to incur indebtedness by requiring that Maxcorn meet
minimum consolidated leverage and fixed charge coverage ratios. In addition, the
Indenture limits Maxcom's ability to pay dividends, repurchase subordinated
debt, redeem its capital stock, dispose of assets and make investments, among
other things.

Warrant agreement

        On March 17, 2000, Maxcom entered into a warrant agreement with The Bank
of New York, acting as warrant agent, pursuant to which Maxcom agreed to issue
warrants to purchasers of 13 3/4% senior notes due April 1, 2007 for the
purchase of up to 764,938 series N shares, convertible into 382,469 CPOs. The
exercise price for each warrant, which entitled the purchaser to receive 2.54979
series N shares, was U.S.$0.01. These warrants were offered as an incentive to
the purchasers of the notes.

D.      EXCHANGE CONTROLS

        Mexico abolished its exchange control system on November 11, 1991. Under
the previous Mexican exchange control system established in 1982, Mexican
residents and companies were entitled to purchase, and required to sell, foreign
currencies for certain purposes at a controlled rate of exchange that was
established daily by the Mexican Central Bank (Banco de Mexico). Transactions to
which the controlled rate applied included payments for virtually all
merchandise imports, revenues from virtually all merchandise exports, royalty
payments and payments of principal, interest and related expenses with respect
to indebtedness to foreign creditors registered with








                                       56
<PAGE>   60

the Mexican government. For all transactions to which the controlled rate did
not apply, foreign currencies could also be purchased, if they were available,
at the then prevailing domestic free market rate for the type of transaction.

        From November 11, 1991 to October 20, 1992, the Mexican Central Bank
permitted the Free Market Rate to fluctuate according to supply and demand
within a moving band. In late December 1994, the Mexican government responded to
exchange rate pressures first by increasing by 15% the upper limit of the
peso/U.S. dollar exchange rate band and then, two days later, allowing the peso
to fluctuate freely against the U.S. dollar. By December 31, 1994, the peso/U.S.
dollar exchange rate, which had been Ps.3.47 to U.S.$1.00 on December 19, 1994
was Ps.5.00 to U.S.$1.00.

        Except for the period from September through December 1982 during the
Mexican liquidity crisis, the Mexican Central Bank consistently has made foreign
currency available to Mexican private sector entities to meet their foreign
currency obligations. Nevertheless, in the event of a renewed shortage of
foreign currency, we cannot assure you that the Mexican Central Bank would
continue to make foreign currency available to private sector companies or that
foreign currency we need to service foreign currency obligations could be
purchased in the open market without substantial additional cost.

        Pursuant to the provisions of NAFTA, Mexico remains free to impose
foreign exchange controls on investments made in Mexico, including those made by
U.S. and Canadian investors.

E.      TAXATION

        This is a summary of the principal U.S. and Mexican federal income tax
consequences resulting from the beneficial ownership of the 13 3/4% Series B
Senior Notes Due 2007, which are the only securities that Maxcom has offered
publicly in the United States.

UNITED STATES TAXATION

        This summary does not purport to consider all the possible U.S. federal
tax consequences of the exchange, purchase, ownership and disposition of the
notes and is not intended to reflect the individual tax position of any
beneficial owner. The summary is based upon the Internal Revenue Code of 1986,
as amended (the "Code"), its legislative history, existing and proposed
regulations thereunder, published rulings and court decisions, all as currently
in effect and all subject to change at any time, perhaps with retroactive
effect.

        This summary deals only with notes held as capital assets within the
meaning of Section 1221 of the Code by initial and subsequent purchasers. This
summary does not purport to deal with purchasers in special tax situations, such
as financial institutions, tax-exempt organizations, insurance companies,
regulated investment companies, dealers in securities or currencies, persons
holding notes as a hedge against currency risks or as part of a straddle with
other investments or as part of a "synthetic security" or other integrated
investment (including a "conversion transaction") composed of a note and one or
more other investments, holders who own or will own directly, indirectly or by
attribution (including stock attribution resulting from ownership of the
warrants) 10% or more (by voting power) of Maxcom's voting stock or 10% or more
(by value) of Maxcom's outstanding capital stock, or persons whose functional
currency (as defined in section 985 of the Code) is not the U.S. dollar.

        The summary does not include any description of the tax laws of any
state, locality or foreign government that may be applicable to the notes or to
the holders of any of the foregoing. You should note that no rulings have been
or will be sought from the Internal Revenue Service ("IRS") with respect to any
of the U.S. federal income tax consequences discussed below, and we cannot
assure you that the IRS will not take contrary positions. You should consult
your own tax advisors concerning the application of U.S. federal income tax laws
to your particular situation as well as any consequences of the exchange,
purchase, ownership and disposition of the notes arising under the laws of any
other taxing jurisdiction.

        As used herein, "U.S. Holder" means a beneficial owner of a note, unit,
warrant or warrant shares who or which is

                -       a citizen or resident of the United States,







                                       57
<PAGE>   61

                -       a corporation created or organized in or under the laws
                        of the United States or of any state thereof (including
                        the District of Columbia) or

                -       any other person or entity who or which is subject to
                        U.S. federal income taxation on a net income basis with
                        respect to its worldwide income.

        As used in this annual report, the term "Non-U.S. Holder" means a
beneficial owner of a note that is not a U.S. Holder. In the case of a holder of
notes that is a partnership for U.S. federal income tax purposes, each partner
generally will take into account its allocable share of income or loss from the
notes and will take such income or loss into account under the rules of taxation
applicable to such partner, taking into account the activities of the
partnership and the partner.

U.S. tax consequences to U.S. Holders of notes

        PAYMENTS OF INTEREST AND ADDITIONAL AMOUNTS. Generally, payments of
"qualified stated interest" (including Mexican withholding tax imposed on such
interest) and Additional Amounts (if any) are taxable to a U.S. Holder as
ordinary income. Payments of "qualified stated interest" and Additional Amounts
(if any) on a note generally are includible in the income of a U.S. Holder as it
accrues or is received, in accordance with such holder's regular method of
accounting for tax purposes. Qualified stated interest is stated interest that
is unconditionally payable at least annually at a single fixed rate over the
entire term of the note.

        ORIGINAL ISSUE DISCOUNT. The notes were issued with original issue
discount ("OID") for U.S. federal income tax purposes. OID on the notes is equal
to the amount by which the "stated redemption price at maturity" of a note
exceeds its "issue price." The original purchasers of the notes also acquired
warrants, thus each note was treated for U.S. federal income tax purposes as
issued as part of an "investment unit" consisting of the note and the associated
warrant. Maxcom allocated the issue price of a unit between the note and the
associated warrant in accordance with Maxcom's determination of their relative
fair market values on the issue date. Maxcom determined that the issue price of
each note should be U.S.$975.06. Although Maxcom's allocation is not binding on
the IRS, an initial purchaser of a unit must use Maxcom's determination of the
note issue price for purposes of calculating OID unless the holder discloses on
its U.S. federal income tax return for the year in which the unit was acquired
that it plans to use an allocation that is inconsistent with Maxcom's
allocation. The stated redemption price at maturity of a note equals the total
amount of all principal and interest payments to be made on the note, other than
qualified stated interest. However, if the amount of OID determined under this
formula is "de minimis OID," then the notes will be treated as if there is no
OID. The notes will have de minimis OID if the total amount thereof is less than
the product of (a) 0.25% ( 1/4 of 1%), (b) the number of full years from the
issue date to the maturity date of the note and (c) the stated redemption price
at maturity.

        A U.S. Holder must include OID on the notes, if any, in income as
ordinary interest income as it accrues on the basis of a constant yield to
maturity. OID must be included in income regardless of whether cash is received
in respect of such income. The amount of OID includible in income by the U.S.
Holder of a note is the sum of the "daily portions" of OID with respect to the
note for each day during the taxable year or portion of the taxable year on
which such U.S. Holder held such note ("accrued OID"). The daily portion is
determined by allocating to each day in any accrual period other than the
initial short accrual period and the final accrual period an amount equal to the
excess of

                -       the product of a note's adjusted issue price at the
                        beginning of such accrual period and its yield to
                        maturity (determined on the basis of compounding at the
                        close of each accrual period and properly adjusted for
                        the length of the accrual period) over

                -       the amount of any qualified stated interest payments
                        allocable to such accrual period.

        The "yield to maturity" is the discount rate that, when applied to all
payments under a note, results in a present value equal to the issue price. The
amount of OID allocable to the final accrual period is the difference between
the amount payable at maturity and the adjusted issue price of the note at the
beginning of the final accrual period. The amount of OID allocable to the
initial short period may be computed under any reasonable method. The adjusted
issue price of the note at the start of any accrual period is equal to its issue
price increased by the







                                       58
<PAGE>   62

aggregate amount of accrued OID for each prior accrual period and reduced by the
amount of any cash payments previously made on the note (other than payments of
qualified stated interest).

        A U.S. Holder may generally, upon election, use the constant yield to
maturity method applicable to OID to determine the timing of inclusion of all
qualified stated interest and OID on a note, subject to certain limitations.
Such an election will apply to all debt instruments held or acquired by the U.S.
Holder on or after the beginning of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.

        The above treatment assumes that the "stated redemption price at
maturity" for a note does not include any Additional Amounts payable on the
notes. It is possible that the IRS might disagree with this treatment and
contend that the "stated redemption price at maturity" should include the
reasonably expected amount of Additional Amounts payable on the notes. In such
case, the amount of OID on the notes would be increased by such amount.

        MARKET DISCOUNT AND BOND PREMIUM. If a U.S. Holder purchases a note at a
price that is less than its principal amount, the excess of the principal amount
over the U.S. Holder's purchase price will be treated as "market discount".
However, such market discount will be considered to be zero if it is less than
1/4 of 1% of the note's principal amount multiplied by the number of complete
years to maturity from the date the U.S. Holder purchased such note.

        Under the market discount rules, a U.S. Holder generally will be
required to treat any partial principal payment on, and any gain realized on the
sale, exchange, retirement or other disposition of, a note as ordinary income
(generally treated as interest income) to the extent of the market discount
which accrued but was not previously included in income during the period the
U.S. Holder held such note. In addition, the U.S. Holder may be required to
defer, until the maturity of the note or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry such note.

        In general, market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of the note, unless
the U.S. Holder makes an irrevocable election (on an instrument-by-instrument
basis) to accrue market discount under a constant yield method. A U.S. Holder of
a note may elect to include market discount in income currently as it accrues
(under either a ratable or constant yield method), in which case the rules
described above regarding the treatment as ordinary income of gain upon the
disposition of the note and upon the receipt of certain payments and the
deferral of interest deductions will not apply. The election to include market
discount in income currently, once made, applies to all market discount
obligations acquired on or after the first day of the first taxable year to
which the election applies, and may not be revoked without the consent of the
IRS. Such currently included market discount will increase the U.S. Holder's tax
basis in the note and generally is treated as ordinary interest income for U.S.
federal income tax purposes.

        A U.S. Holder who purchases notes for an amount in excess of its stated
redemption price at maturity will be considered to have purchased the notes at a
premium. A U.S. Holder generally may elect to amortize the premium on the
constant yield method. The amount amortized in any year will be treated as a
reduction of the U.S. Holder's interest income from the notes. The premium on a
note held by a U.S. Holder that does not make such an election will decrease the
gain or increase the loss otherwise recognized on disposition or retirement of
the notes. The election to amortize the premium on a constant yield method once
made applies to all debt obligations held or subsequently acquired by the
electing holder on or after the first day of the first taxable year to which the
election applies and may not be revoked without the consent of the IRS.

        SALE, EXCHANGE OR RETIREMENT OF A NOTE. Upon the sale, exchange or
retirement of a note, a U.S. Holder generally will recognize capital gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest which
are taxable as ordinary income) and such U.S. Holder's adjusted tax basis in the
note. A U.S. Holder's adjusted tax basis in a note generally will equal the
issue price of the note increased by the amount of OID on such note that is
includible in such U.S. Holder's gross income and decreased by the amount of any
cash payments received on the note (other than payments of qualified stated
interest). Capital gain recognized by an individual U.S. Holder generally will
be long term capital gain and subject to a maximum U.S. federal income tax rate
of 20% if the U.S. Holder held the note for more than one year before sale. U.S.
Holders that are corporations are taxed on their net capital gains at the
regular corporate income tax rates. The source of gain or loss realized by a
U.S. Holder in connection with the disposition of notes is U.S. source.






                                       59
<PAGE>   63

        FOREIGN TAX CREDIT.

        Interest, OID and Additional Amounts. Qualified stated interest, OID and
Additional Amounts (if any) paid on notes will constitute income from sources
outside the United States, and, with certain exceptions, will be grouped
together with other items of "passive" income, for purposes of computing the
foreign tax credit allowable to a U.S. Holder. If the payments of qualified
stated interest, OID and Additional Amounts (if any) were to become subject to a
withholding tax imposed by a foreign country at a rate of 5 percent or more, the
qualified stated interest, OID and Additional Amounts (if any) may be considered
"high withholding tax interest" for purposes of computing the foreign tax
credit. If a U.S. Holder is predominantly engaged in the active conduct of a
banking, insurance, financing or similar business, the payments of qualified
stated interest, OID and Additional Amounts (if any) may be considered
"financial services income" for purposes of computing the foreign tax credit,
provided that such amounts do not constitute "high withholding tax interest," as
described above.

        Effect of Mexican withholding taxes. A U.S. Holder will be required to
include the amount of Mexican withholding taxes, if any, imposed on payments on
a note (including any Additional Amounts payable by Maxcom) in gross income as
interest income. Such treatment will be required regardless of whether, as will
generally be true, Maxcom is required to pay Additional Amounts so that the
amount of Mexican withholding taxes does not reduce the net amount actually
received by the holder of the note.

        Subject to certain limitations, a U.S. Holder may be entitled to a
credit against its U.S. federal income tax liability, or a deduction in
computing its U.S. federal taxable income, for the amount of Mexican income
taxes withheld by Maxcom (which, as described above, would include amounts
withheld on Additional Amounts paid by Maxcom with respect to Mexican taxes).
However, Mexican taxes may be deducted from a U.S. Holder's taxable income only
if such U.S. Holder does not claim a credit for any Mexican or other foreign
taxes paid or accrued in that taxable year. A U.S. Holder may be required to
provide the IRS with a certified copy of the receipt evidencing payment of such
withholding tax imposed in respect of payments on the notes in order to claim a
Mexican tax credit in respect of such Mexican withholding tax.

        Since a U.S. Holder may be required to include in its gross income OID
on the notes in advance of any withholding of Mexican income taxes from payments
relating to the discount (which would generally occur when such discount is paid
in cash), a U.S. Holder may not be entitled to a credit or deduction for these
Mexican withholding taxes in the year the OID is included in the U.S. Holder's
gross income for U.S. federal income tax purposes, and may be limited in its
ability to credit or deduct in full the foreign taxes in the year those taxes
are actually withheld by Maxcom. Prospective purchasers of the notes should
consult their tax advisors concerning the availability and timing of a foreign
tax credit or deduction relating to the payment of Mexican withholding taxes.

U.S. tax consequences to Non-U.S. Holders of notes

        A Non-U.S. Holder generally will not be subject to U.S. federal income
or withholding tax on distributions in respect of the notes, unless such income
is effectively connected with the conduct by the non-U.S. Holder of a trade or
business in the United States.

        A Non-U.S. Holder will generally not be subject to U.S. federal income
or withholding tax on gain realized on the sale or the other disposition of
notes unless (i) such gain is effectively connected with the conduct of a United
States trade or business by such Non-U.S. Holder, or (ii) such Non-U.S. Holder
is present in the United States for 183 days or more during the taxable year of
sale or disposition and certain other conditions are met.

Information reporting and backup withholding

        Recently finalized Treasury Regulations relating to withholding,
information reporting and backup withholding unify current certification
procedures and forms and clarify reliance standards (the "Final Regulations").
The Final Regulations generally are effective with respect to payments made
after December 31, 2000. Except as provided below, this section describes rules
applicable to payments made after December 31, 2000.

        A U.S. Holder of the notes may be subject to information reporting
requirements with respect to distributions made in respect of the notes and
proceeds from the sale or other disposition of notes payable to a U.S. Holder by
a U.S. paying agent or other U.S. intermediary. If information reporting
requirements apply, distributions








                                       60
<PAGE>   64

made to the U.S. Holder will be reported to the IRS and to the U.S. Holder as
may be required under applicable Treasury regulations. Backup withholding at a
rate of 31% will also apply with respect to any payments made on the notes and
proceeds from the sale, exchange, redemption or retirement of the notes unless
such U.S. Holder:

                -       is a corporation or comes within certain other exempt
                        categories and, when required, demonstrates that fact,
                        or

                -       provides a correct taxpayer identification number
                        (social security number or employer identification
                        number), certifies as to its exemption from backup
                        withholding and otherwise complies with applicable
                        requirements of the backup withholding rules. Generally,
                        a U.S. Holder will provide such certification on IRS
                        Form W-9 "Request for Taxpayer Identification Number and
                        Certification."

        Certain penalties may be imposed by the IRS on a U.S. Holder that is
required to supply information but does not do so in the proper manner.

        A Non-U.S. Holder generally will be exempt from backup withholding and
information reporting requirements, but may be required to comply with
certification and identification procedures in order to obtain an exemption from
backup withholding and information reporting (generally, filing a timely and
properly completed IRS Form W-8BEN).

        Any amount withheld under the backup withholding rules from a payment to
a holder is allowable as a credit against such holder's U.S. federal income tax
liability (which might entitle such holder to a refund), provided that such
holder furnishes the required information to the IRS.

        You are advised to consult your own tax advisers as to the consequences
of a purchase and sale of notes, including, without limitation,

                -       the applicability and effect of any state, local or
                        non-U.S. tax laws to which they may be subject, and of
                        any legislative or administrative changes in law,

                -       the U.S. federal income tax consequences of foreign
                        withholding taxes by Maxcom (and of the payment by
                        Maxcom of Additional Amounts with respect to such
                        withholding taxes),

                -       the availability of a credit or deduction for foreign
                        withholding taxes, and

                -       the effect, if any, of the Final Regulations on their
                        purchase, ownership and disposition of the notes.

MEXICAN TAXATION

        The following is a general discussion of the material consequences of an
investment in the notes under the Mexican Income Tax Law (Ley del Impuesto sobre
la Renta) and rules and regulations thereunder, as currently in effect. This
summary of certain Mexican tax considerations deals only with holders of notes
or of a beneficial interest therein that are not residents of Mexico for Mexican
tax purposes and that do not conduct a trade or business through a permanent
establishment or fixed base in Mexico (a "Foreign Holder").

        For purposes of Mexican taxation, an individual is a resident of Mexico
if he has a permanent home in Mexico, unless he has been in another country for
more than 183 calendar days, whether consecutive or not, in any one calendar
year and can demonstrate that he has become a resident of that country for tax
purposes. A legal entity is a resident of Mexico for tax purposes if it has been
incorporated under the laws of Mexico, or has established the principal
management of its business or the base of its effective direction in Mexico. A
Mexican citizen is presumed to be a resident of Mexico for tax purposes unless
such person can demonstrate otherwise.







                                       61
<PAGE>   65

United States/Mexico and other tax treaties

        A Convention for the Avoidance of Double Taxation and Prevention of
Fiscal Evasion, together with a related Protocol thereto (collectively, the "Tax
Treaty"), between the United States and Mexico entered into force on January 1,
1994. Provisions of the Tax Treaty that may affect the taxation of certain U.S.
holders of notes are summarized below. The United States and Mexico have also
entered into an agreement that covers the exchange of information with respect
to tax matters. Mexico has also entered into and is negotiating several other
tax treaties that may reduce the amount of Mexican withholding tax to which the
notes may be subject. Holders of the notes should consult their own tax advisors
as to the tax consequences, if any, of such treaties.

Mexican tax consequences to foreign holders of the notes

        TAXATION OF INTEREST AND PRINCIPAL. Under the Mexican Income Tax Law,
payments of interest made by Maxcom in respect of the notes (including payments
of principal in excess of the issue price of such notes, which, under Mexican
law, are deemed to be interest) to a Foreign Holder will generally be subject to
a Mexican withholding tax assessed at a rate of 4.9% (the "Reduced Rate"),
provided that:

                -       the notes are offered through banks or brokerage houses
                        in a country with which Mexico has a tax treaty in
                        force;

                -       the notes are registered in the Special Section of the
                        National Registry for Securities and Intermediaries
                        (Registro Nacional de Valores e Intermediarios); and

                -       certain periodic information requirements by the Mexican
                        Ministry of Finance (Secretaria de Hacienda y Credito
                        Publico) are complied with.

        If these conditions are not met, the applicable withholding tax rate
will be 10%.

        Foreign Holders should consult their tax advisors regarding whether they
reside in a country that has entered into such a treaty with Mexico which is
effective, and if so, the conditions and requirements for obtaining benefits
under such treaty.

        However, if the beneficial owner, either directly or indirectly,
individually or jointly with related parties, of more than 5% of the interest
derived from the related securities, is any of the following:

                -       a shareholder of the issuer who owns, directly or
                        indirectly, individually or jointly with related
                        parties, more than 10% of the voting stock of the
                        issuer, or

                -       a legal entity 20% of whose stock is owned, directly or
                        indirectly, individually or jointly with related
                        parties, by the issuer,

then, the withholding tax rate will be 40%.

        Pursuant to Rule 3.31.9 (the "Reduced Rate Rule") issued by the Mexican
Ministry of Finance (Secretaria de Hacienda y Credito Publico) on March 6, 2000
and expected to be effective through March 6, 2002, payments of interest with
respect to the notes made by Maxcom to Foreign Holders, regardless of the place
of residence or the tax regime applicable to the Foreign Holder recipient of the
interest, will be subject to withholding taxes imposed at the Reduced Rate if:

                -       the notes are registered with the Special Section of the
                        National Registry of Securities and Intermediaries and
                        copies of approval of such registration are provided to
                        the Ministry of Finance;

                -       Maxcom timely files with the Ministry of Finance certain
                        information relating to the issuance of the notes;

                -       Maxcom timely files with the Ministry of Finance on a
                        quarterly basis information on the amount and dates of
                        interest payments made during each quarter and
                        information representing that no





                                       62
<PAGE>   66
                        party related to Maxcom, directly or indirectly, is the
                        effective beneficiary of more than five percent (5%) of
                        the aggregate amount of each such interest payment; and

                -       Maxcom maintains records that evidence compliance with
                        the conditions set forth above.

        Maxcom has complied with the first two conditions set forth above and
expects that the last two conditions will be met and, accordingly, expects to
withhold Mexican tax from interest payments on the notes at the Reduced Rate
during the effectiveness of such rule. Although it is expected that a rule
equivalent to the Reduced Rate Rule will be in effect from March 7, 2002 and
beyond, there can be no assurance that any such rule will be issued and become
effective. In such event, higher rates may apply.

        Apart from the Reduced Rate, other special rates of Mexican withholding
tax may apply. In particular, under the Tax Treaty, the Mexican withholding tax
rate is reduced to 4.9% provided the notes are regularly and substantially
traded on a recognized securities market such as Nasdaq or any stock exchange
registered with the appropriate Mexican or United States regulatory authority.

        Otherwise the Tax Treaty provides for a maximum withholding tax rate of
15% for certain holders that are residents of the United States (within the
meaning of the Tax Treaty) and under certain circumstances contemplated therein.

        However, during the fiscal year 2001, the Tax Treaty is not expected,
generally, to have any material effect on the Mexican tax consequences described
herein, because, as described above, under Mexican Income Tax Law and
regulations as currently in effect, with respect to a U.S. Holder that meets the
Reduced Rate Rule requirements described above, Maxcom will be entitled to
withhold taxes in connection with interest payments under the notes at the
Reduced Rate. From 2001 and beyond, holders of the notes should consult their
own tax advisors as to the possible application of the Tax Treaty.

        Payments of interest Maxcom makes on the notes to non-Mexican pension or
retirement funds will be exempt from Mexican withholding taxes, if any such fund
is:

                -       the effective beneficiary of the interest;

                -       duly incorporated under the laws of its country of
                        origin;

                -       exempt in its country of origin from income tax on
                        interest income; and

                -       registered with the Ministry of Finance for that
                        purpose.

        Under existing Mexican law and regulations, a Foreign Holder will not be
subject to any Mexican taxes in respect of payments of principal made by Maxcom
with respect to the notes.

        TAXATION OF ADDITIONAL AMOUNTS. Maxcom has agreed, subject to specified
exceptions and limitations, to pay Additional Amounts to the holders of the
notes in respect of the Mexican withholding taxes mentioned above. Payments of
Additional Amounts with respect to the notes will be subject to Mexican
withholding tax at the same rate applicable to interest paid on the notes.

        Holders or beneficial owners of notes may be requested to provide
certain information or documentation necessary to enable Maxcom to establish the
appropriate Mexican withholding tax rate applicable to such holders or
beneficial owners. In the event that the specified information or documentation
concerning the holder or beneficial owner is requested and is not provided on a
timely basis, the obligation of Maxcom to pay Additional Amounts will be
limited.

        TAXATION OF PROCEEDS FROM THE SALE OR OTHER DISPOSITION OF NOTES.
Capital gains resulting from the sale or other disposition of the notes by
Foreign Holders will not be subject to Mexican income tax.







                                       63
<PAGE>   67

        TRANSFER AND OTHER TAXES. There are no Mexican stamp, registration, or
similar taxes payable by a Foreign Holder in connection with the purchase,
ownership or disposition of the notes. A Foreign Holder of notes will not be
liable for Mexican estate, gift, inheritance or similar tax with respect to the
notes.

F.      DIVIDENDS AND PAYING AGENTS

        Not applicable.

G.      STATEMENT BY EXPERTS

        Not applicable.

H.      DOCUMENTS ON DISPLAY

        We file annual reports with and furnish other information to the SEC as
may be applicable from time to time. You may read and copy any documents filed
or furnished by Maxcom at the SEC's public reference rooms in Washington, D.C.,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.

I.      SUBSIDIARY INFORMATION

        Not applicable.







                                       64
<PAGE>   68

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

        The notes, which are payable at a fixed annual rate of 13 3/4%,
constituted substantially all of our outstanding indebtedness at December 31,
2000. As a result, we do not have any significant interest rate risk.

FOREIGN EXCHANGE RISK

        Our primary foreign currency exposure relates to our U.S.
dollar-denominated debt. Substantially all of our debt obligations at December
31, 2000 were denominated in U.S. dollars. Therefore, we are exposed to currency
exchange rate risks that could significantly affect our ability to meet our
obligations. We currently do not enter into hedging transactions with respect to
these foreign currency risks, but continue to consider the appropriateness of
this option.

        The exchange rate of the peso to the U.S. dollar is a freely-floating
rate and the peso has experienced significant devaluations in recent years. Any
significant decrease in the value of the peso relative to the U.S. dollar in the
near term may have a material adverse effect on our results of operations and
financial condition, including our ability to repay or repurchase the notes. At
December 31, 2000, an immediate 10% devaluation of the peso relative to the U.S.
dollar would have increased our interest expense by approximately Ps.41.7
million over a one-year period.

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

        Not applicable.







                                       65
<PAGE>   69

                                    PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

        Maxcom is not in default under any of its obligations nor is any payment
of dividends in arrears.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
        OF PROCEEDS

        Not applicable.

ITEM 15.    RESERVED

        Not applicable.

ITEM 16.   RESERVED

        Not applicable.







                                       66
<PAGE>   70

                                    PART III

ITEM 17.   FINANCIAL STATEMENTS

        We have responded to Item 18 in lieu of responding to this Item.







                                       67
<PAGE>   71


ITEM 18.        FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                        PAGE
                                                                                                                        ----
<S>                                                                                                                     <C>
Maxcom Telecomunicaciones, S.A. de C.V. and Subsidiary

Report of Independent Accountants........................................................................................F-2
Consolidated Balance Sheets--December 31, 2000 and 1999..................................................................F-3
Consolidated Statements of Operations--From May 1, 1999 (Commencement of Operations), Through
        December 31, 1999, and the Year Ended December 31, 2000..........................................................F-4
Consolidated Statements of Changes in Shareholder's Equity--Years Ended December 31, 2000, 1999
        and 1998.........................................................................................................F-5
Consolidated Statements of Changes in Financial Position--Years Ended December 31, 2000, 1999
        and 1998.........................................................................................................F-6
Notes to the Consolidated Financial Statements...........................................................................F-7

Financial Statement Schedules

Report of Independent Accountants on Financial Statement Schedules.......................................................S-I
Valuation and Qualifying Accounts.......................................................................................S-II
</TABLE>







                                      F-1

<PAGE>   72

REPORT OF INDEPENDENT AUDITORS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY


We have audited the accompanying Consolidated Balance Sheets of Maxcom
Telecomunicaciones, S.A. de C.V. and Subsidiary, as of December 31, 1999 and
2000, and the related Consolidated Statements of Operations for the period from
May 1, 1999 (commencement of operations) through December 31, 1999 and for the
year ended December 31 2000, Consolidated Changes in Shareholders' Equity and
Changes in Financial Position for the years ended December 31, 1998, 1999 and
2000. These Financial Statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these Consolidated
Financial Statements based on our audits.

We conducted our audits in accordance with Mexican Generally Accepted Auditing
Standards. These standards require that we plan and perform the audit to obtain
reasonable assurance as to whether the Financial Statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made by
Management, as well as evaluating the overall Financial Statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the Consolidated Financial Statements referred to above present
fairly, in all material respects, the Consolidated Financial Position of Maxcom
Telecomunicaciones, S.A. de C.V. and Subsidiary, as of December 31, 1999 and
2000, the Consolidated Result of its Operations for the period from May 1, 1999
(commencement of operations) through December 31, 1999 and for the year ended
December 31 2000, the Consolidated Changes in Shareholders' Equity and the
Changes in its Financial Position for the years ended December 31, 1998, 1999
and 2000, in conformity with Mexican Generally Accepted Accounting Principles.


BDO INTERNATIONAL






MEXICO CITY,
FEBRUARY 12, 2001




                                      F-2
<PAGE>   73



             MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

 (THOUSANDS OF MEXICAN PESOS "PS." WITH PURCHASING POWER AS OF DECEMBER 31, 2000
                       AND THOUSANDS OF U.S. DOLLARS "$")


<TABLE>
<CAPTION>
DECEMBER 31,                                                                   1999                   2000               2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        (Note 2)
<S>                                                                        <C>                   <C>                  <C>
                                ASSETS
CURRENT ASSETS:
    Cash and cash equivalents (Note 4)                                     Ps.    167,430        Ps.  1,072,261       $    111,462
------------------------------------------------------------------------------------------------------------------------------------
    Restricted cash (Note 9)                                                       20,362               384,399             39,958
------------------------------------------------------------------------------------------------------------------------------------
    Accounts receivable:
         Customers, net of allowance of Ps.3,373 and Ps.8,305                      31,220                38,656              4,018
         Value added tax refundable (Note 5)                                       44,333                16,924              1,759
         Other                                                                        346                   502                 52
------------------------------------------------------------------------------------------------------------------------------------
                                                                                   75,899                56,082              5,829
------------------------------------------------------------------------------------------------------------------------------------
    Equipment for resale                                                            7,322                 9,011                937
------------------------------------------------------------------------------------------------------------------------------------
    Prepaid expenses                                                                4,574                 9,651              1,003
------------------------------------------------------------------------------------------------------------------------------------
                  Total current assets                                            275,587             1,531,404            159,189
RESTRICTED CASH (Note 9)                                                          -                     184,479             19,177
FREQUENCY RIGHTS, Net (Note 6)                                                    112,002               106,208             11,040
TELEPHONE NETWORK SYSTEMS AND EQUIPMENT, Net (Note 8)                             859,532             1,197,136            124,442
PREOPERATING EXPENSES, Net                                                        270,369               241,424             25,096
OTHER ASSETS                                                                       47,154               222,545             23,134
------------------------------------------------------------------------------------------------------------------------------------
        Total assets                                                       PS.  1,564,644        PS.  3,483,196       $    362,078
====================================================================================================================================

                             LIABILITIES
CURRENT LIABILITIES:
    Current maturities of long-term debt (Note 9)                          Ps.      4,081        Ps.      2,917       $        303
    CT Global Telecommunications, Inc. (Note 7)                                    26,121                   479                 50
    Accrued expenses and other accounts payable                                    43,025               225,567             23,448
    Deposits refundable to customers                                                7,964                 5,525                574
    Taxes payable                                                                   5,533                 8,107                843
------------------------------------------------------------------------------------------------------------------------------------
                  Total current liabilities                                        86,724               242,595             25,218
LONG-TERM LIABILITIES:
    Long-term debt, less current maturities (Note 9)                              872,338             2,798,866            290,942
------------------------------------------------------------------------------------------------------------------------------------
                  Total liabilities                                               959,062             3,041,461            316,160
====================================================================================================================================
Commitments (Notes 1, 9, 12 and 15)

                SHAREHOLDERS' EQUITY (NOTES 11 AND 12)
Capital Stock                                                                     810,318             1,152,553            119,808
Additional paid-in capital                                                         31,902               122,830             12,768
Deficit                                                                          (236,638)             (833,648)           (86,658)
------------------------------------------------------------------------------------------------------------------------------------
                  Total shareholders' equity                                      605,582               441,735             45,918
------------------------------------------------------------------------------------------------------------------------------------
                                                                           PS.  1,564,644        PS.  3,483,196       $    362,078
====================================================================================================================================
</TABLE>


  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.



                                      F-3
<PAGE>   74



             MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

 (THOUSANDS OF MEXICAN PESOS "PS." WITH PURCHASING POWER AS OF DECEMBER 31, 2000
                       AND THOUSANDS OF U.S. DOLLARS "$")



<TABLE>
<CAPTION>
FOR THE PERIOD AND YEAR ENDED DECEMBER 31,                                     1999                  2000               2000
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      (Note 2)
<S>                                                                       <C>                  <C>                  <C>

TELECOMMUNICATION REVENUES                                                PS.    96,099        PS.    266,064       $     27,657
---------------------------------------------------------------------------------------------------------------------------------

OPERATING COSTS AND EXPENSES:
    Network operating cost                                                       47,751               107,765             11,202
    Selling general and administrative expenses                                 176,037               331,166             34,425
    Depreciation and amortization                                                80,919               201,040             20,898
---------------------------------------------------------------------------------------------------------------------------------

                  Total operating costs and expenses                            304,707               639,971             66,525
---------------------------------------------------------------------------------------------------------------------------------

                  OPERATING LOSS                                               (208,608)             (373,907)           (38,868)
---------------------------------------------------------------------------------------------------------------------------------

COMPREHENSIVE (INCOME) COST OF FINANCING:
    Interest expense                                                             50,450               399,979             41,578
    Interest income                                                             (10,946)              (97,951)           (10,182)
    Exchange loss, net                                                           10,401                10,705              1,113
    Gain on net monetary position                                               (21,756)              (90,101)            (9,366)
---------------------------------------------------------------------------------------------------------------------------------

                                                                                 28,149               222,632             23,143
---------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE), Net                                                         119                  (471)               (49)
---------------------------------------------------------------------------------------------------------------------------------

                  NET LOSS                                                PS.  (236,638)       PS.   (597,010)      $    (62,060)
=================================================================================================================================

Weighted average common shares outstanding                                   10,264,827            11,463,667         11,463,667

                  NET LOSS PER SHARE                                      Ps.    (23.05)       Ps.     (52.08)      $      (5.41)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.



                                      F-4
<PAGE>   75



             MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000

 (THOUSANDS OF MEXICAN PESOS "PS." WITH PURCHASING POWER AS OF DECEMBER 31, 2000
                       AND THOUSANDS OF U.S. DOLLARS "$")


<TABLE>
<CAPTION>
                                                                              ADDITIONAL
                                                                               PAID-IN
                                                           CAPITAL STOCK       CAPITAL         DEFICIT              TOTAL
---------------------------------------------------------------------------------------------------------------------------------

<S>                                                       <C>               <C>              <C>                <C>
BALANCE AS OF DECEMBER 31, 1997 (NOTE 11)                 PS.    252,717    PS.    -         PS.   -            PS.     252,717

    Increase in capital stock, net of expenses
         (Ps.24,800) incurred in connection with
         a private placement (NotE 11)                           547,421           -               -                    547,421

    Stock options (Note 12)                                       -                 29,478         -                     29,478
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 1998 (NOTE 11)                        800,138            29,478         -                    829,616

    Increase in capital stock                                     10,180           -               -                     10,180

    Contributions for future increases of capital                 -                    361         -                        361

    Stock options (Note 12)                                       -                  2,063         -                      2,063

    Net loss                                                      -                -               (236,638)           (236,638)
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 1999 (NOTE 11)                        810,318            31,902         (236,638)            605,582

    Increase in capital stock                                    335,304           -                -                   335,304

    Contributions for future increases of capital                 -                     96          -                        96

    Stock options and warrants (Note 12)                          -                 97,763          -                    97,763

    Exercise of warrants (Note 11)                                 6,931            (6,931)         -                    -

    Net loss                                                      -                -               (597,010)           (597,010)
---------------------------------------------------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 2000 (NOTE 11)                 PS.  1,152,553    PS.    122,830   PS.   (833,648)    PS.     441,735
---------------------------------------------------------------------------------------------------------------------------------

U.S. DOLLARS (NOTE 2)                                     $      119,808    $       12,768   $      (86,658)    $        45,918
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.



                                      F-5
<PAGE>   76



             MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY

            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

 (THOUSANDS OF MEXICAN PESOS "PS." WITH PURCHASING POWER AS OF DECEMBER 31, 2000
                       AND THOUSANDS OF U.S. DOLLARS "$")


<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,                                          1998             1999          2000              2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         (Note 2)
<S>                                                                 <C>                <C>           <C>               <C>
OPERATING ACTIVITIES:
    Net loss                                                        Ps.     -          Ps. (236,638) Ps.  (597,010)    $   (62,060)
    Depreciation and amortization charged to operations not
         requiring use of resources                                         -                80,919        201,040          20,898
------------------------------------------------------------------------------------------------------------------------------------
                                                                            -              (155,719)      (395,970)        (41,162)
    Net change in restricted cash, accounts receivable,
         inventories, prepaid expenses and accounts payable
         and accrued expenses                                               -                16,033       (378,430)        (39,338)
------------------------------------------------------------------------------------------------------------------------------------
                  Resources used in operating activities                    -              (139,686)      (774,400)        (80,499)
------------------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES:
    Issuance of capital stock                                              547,521           10,180        342,235          35,575
    Additional paid-in capital                                              29,478            2,424         90,928           9,452
    Proceeds from loans and notes payable, net                             228,895          647,518      1,925,364         200,142
-----------------------------------------------------------------------------------------------------------------------------------
                  Resources provided by financing activities               805,894          660,122      2,358,527         245,169
-----------------------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES:
    Preoperating expenses                                                 (113,037)         (84,690)       -               -
    Net changes in monetary assets and liabilities                         (26,778)         -              -               -
-----------------------------------------------------------------------------------------------------------------------------------
                                                                          (139,815)         (84,690)       -               -
    Telephone network systems and equipment                               (270,106)        (670,517)      (476,642)        (49,547)
    Other assets                                                           (27,491)         (19,663)      (202,654)        (21,066)
-----------------------------------------------------------------------------------------------------------------------------------
                  Resources used in investing activities                  (437,412)        (774,870)      (679,296)        (70,613)
-----------------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS:
    Increase (decrease) during the period                                   368,482        (254,434)       904,831          94,057
    Beginning balance                                                        53,382         421,864        167,430          17,404
------------------------------------------------------------------------------------------------------------------------------------

    Ending balance                                                  Ps.     421,864    Ps.  167,430  Ps. 1,072,261    $    111,462
------------------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES:
    Cash paid for interest                                          Ps.      17,502    Ps.   42,972  Ps.   250,983    $     26,090
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.





                                      F-6
<PAGE>   77


MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


             MAXCOM TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED, DECEMBER 31, 1998, 1999 AND 2000

 (THOUSANDS OF MEXICAN PESOS "PS." WITH PURCHASING POWER AS OF DECEMBER 31, 2000
                       AND THOUSANDS OF U.S. DOLLARS "$")


NOTE 1. INCORPORATION AND BUSINESS

        Maxcom Telecomunicaciones, S.A. de C.V. ("Maxcom" or "the Company"), is
a Mexican company incorporated on February 28, 1996 (inception). Its main line
of business is the construction and operation of a telephone network, with the
purpose of providing local, national and international long-distance, data and
other value-added services, and private network services, within the Mexican
Republic.

        The Company started its commercial operations in May 1999. Therefore,
from its incorporation through April 30, 1999, the Company was in the
preoperating and development stage. From the beginning of its commercial
operations, the Company has had negative cash flow from operations and loss from
operations, due to its recent establishment and that it is building up its base
of customers. Therefore, the Company, and the recoverability of its investment
in telephone network systems and equipment, preoperating expenses and frequency
rights will depend on the ability of the Company to obtain financing to complete
development, and on the future profitable commercial exploitation of the
telephone network.

        Effective February 3, 1997 (supplemented December 7, 1999), Mexico's
Ministry of Communications and Transport (the "SCT") awarded the Company a
concession to install and operate a public telecommunication network in Mexico.
This concession is non-exclusive; its initial term is of 30 years, and it
contains certain renewal rights. The concession grants the Company the right to
provide local telephone services in the Federal District of Mexico and in 124
other cities located in the states of Chiapas, Hidalgo, Mexico, Oaxaca, Puebla,
San Luis Potosi, Tabasco, Tamaulipas, Tlaxcala, Veracruz, Campeche, Quintana Roo
and Yucatan. It also grants the Company the right to provide long-distance, data
and other value-added services. There are conditions for the concession to
remain effective, such as building certain networks and providing certain
services by predetermined dates.

        In October 1997, the Company was awarded a nationwide point-to-point and
three regional point-to-multipoint microwave concessions, each for 20 years. See
Note 6.

        On November 24, 1998, the Company entered into an agreement with
Telefonos de Mexico, S.A. de C.V. ("Telmex"), through which both parties agreed
to provide each other with interconnection services to each other's local
telecommunications network. This agreement calls for reciprocal interconnection
rates for local-to-local services through January 1, 2001. On March 23, 1999,
this agreement was renewed and the term was extended to September 15, 2002.

        On January 22, 1999, the Company entered into an agreement with Telmex
through which Maxcom agreed to provide Telmex with interconnection services for
Telmex's long-distance traffic. This agreement is valid through September 15,
2002, with the possibility of extension after such date.

        During 1999 and 2000, the Company has entered into interconnection and
reselling agreements with several local and long distance carriers and mobile
phone companies.



                                      F-7
<PAGE>   78

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2. BASIS OF PRESENTATION

        For of the years ended December 31, 1998, 1999 and 2000, the
accompanying consolidated financial statements include the accounts of Maxcom
and Corporativo en Telecomunicaciones, S.A. de C.V. ("Corporativo" or the
"Subsidiary"), a wholly-owned Mexican subsidiary incorporated on January 19,
1998, whose main line of business is the rendering of administrative and
technical services, mainly to Maxcom. All intercompany balances and transactions
have been eliminated in the consolidation.

        U.S. Dollar amounts ("$") shown in the consolidated financial statements
have been included solely for the convenience of the reader and were translated
from Mexican Pesos, as a matter of arithmetic computation only, at the December
29, 2000, noon-buying rate of Ps. 9.62 per U.S.$1.00, published by The Federal
Reserve Bank of New York. Such translation should not be construed as a
representation that the Mexican Peso amounts have been or could be converted
into U.S. Dollars at this or any other rate.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The accompanying consolidated financial statements are expressed in
Mexican Pesos, denoted by the symbol "Ps.", and have been prepared by applying
Mexican generally accepted accounting principles ("Mexican GAAP"). The
significant accounting policies used by the Company in the preparation of its
financial statements, including the concepts, methods and criteria related to
the recognition of the effects of inflation on the financial information, are
summarized below:

        a)      RECOGNITION OF THE EFFECTS OF INFLATION:

                i)      Following the methodology set out in Mexican GAAP, the
                        Company restates its financial statements to reflect the
                        purchasing power of the Mexican Peso as of the most
                        recent reporting date (December 31, 2000), thereby
                        comprehensively recognizing the effects of inflation.
                        The financial statements of previous years have also
                        been restated in terms of the purchasing power of the
                        Mexican Peso as of the most recent reporting date, thus
                        making them comparable. Therefore, these amounts differ
                        from those previously reported.

                ii)     Shareholders' equity accounts include their restatement
                        to express them in terms of constant Pesos. The
                        restatement amounts are determined by applying factors
                        derived from the National Consumer Price Index ("INPC")
                        to the historical balances.

                iii)    The result on net monetary position represents the
                        inflationary gain or loss, as determined by applying
                        factors derived from the INPC, on the Company's monthly
                        net monetary assets or liabilities during the period.

                iv)     Comprehensive income and cost of financing consists of
                        interest income and expense, exchange gains or losses
                        and the gain or loss on the net monetary position.
                        Comprehensive income and cost of financing during the
                        development stage period, was capitalized to
                        preoperating expenses. Once the Company commenced
                        operations, this costs are applied to the results of
                        operations.

        b)      CASH AND CASH EQUIVALENTS:

                Cash equivalents include highly liquid short-term investments
                and bank deposits with original due dates of three months or
                less, which are valued at market cost plus accrued interest.



                                      F-8
<PAGE>   79

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


        c)      TELEPHONE NETWORK SYSTEMS AND EQUIPMENT:

                Telephone network systems and equipment are recorded at
                acquisition cost and restated by applying factors derived from
                the INPC. Depreciation is calculated by the straight-line method
                on restated cost based on the estimated useful lives of the
                assets. Depreciation is charged to results of operations. During
                the development stage, depreciation was applied to preoperating
                expenses.

        d)      FREQUENCY RIGHTS:

                Frequency rights are recorded at acquisition cost and restated
                by applying factors derived from the INPC. Amortization is
                calculated by the straight-line method over the term of the
                concession (see Note 6), from the start of the Company's
                operations.

        e)      PREOPERATING EXPENSES:

                All expenses incurred during the development stage or in
                specific projects in progress are capitalized. The amortization
                of such expenses is determined by the straight-line method over
                ten years, once the corresponding asset commences operations.

        f)      TRANSACTIONS AND BALANCES IN FOREIGN CURRENCIES:

                Transactions in foreign currencies are recorded at the rates of
                exchange prevailing on the dates they are entered into or
                settled. Assets and liabilities denominated in those currencies
                are stated in Mexican Pesos at the year-end closing rate
                published in Mexico's Official Gazette. Exchange gains or losses
                are applied to comprehensive (income from) cost of financing.

        g)      INCOME TAX AND STATUTORY EMPLOYEES' PROFIT SHARING:

                The Company has had no net income since inception and
                accordingly has not provided for income taxes and statutory
                employees' profit sharing.

                Starting in the year 2000, the Company recognizes the deferred
                tax for the tax consequences of all temporary differences, both
                recurring and non-recurring, between the financial statements'
                carrying amounts and the tax basis of existing assets,
                liabilities and tax losses. An analysis of the corresponding
                effects is shown in Note 14.

        h)      MANAGEMENT ESTIMATES

                Generally accepted accounting principles require that, in
                preparing a company's financial statements, management make
                estimates and assumptions that affect the reported amounts of
                assets and liabilities and disclose contingent assets and
                liabilities at the date of the financial statements. Actual
                results could differ from those estimates.

        i)      FINANCIAL INSTRUMENTS

                The Company's financial instruments consist principally of cash,
                cash equivalents and restricted cash, accounts receivable and
                payable, and loans and notes payable. The carrying amounts of
                such financial instruments, as reflected in the balance sheet,
                approximate their fair value as of December 31, 1999 and 2000.

        j)      REVENUE RECOGNITION

                The Company recognizes revenues from telephone services provided
                to customers, from the sale of customer-premise equipment and
                from services provided to other telephone-service companies
                (such as interconnection services).



                                      F-9
<PAGE>   80

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


                Revenues from services provided to customers are recognized on
                accrual basis.

                Revenues from the sale of customer-premise equipment are
                recognized at the time of the sale and delivery of such
                equipment.

                Advances from customers are classified as current liabilities
                until they are refunded. When the contract is rescinded, these
                deposits are applied to operations as services rendered.

        k)      STOCK-BASED COMPENSATION

                At December 31, 1999 and 2000, the Company had several stock
                option transactions, which are described below. Since Mexican
                GAAP does not have standards to value and record these kinds of
                transactions, the Company adopted the US GAAP guidelines of APB
                Opinion 14, "Accounting for Convertible Debt and Debt Issued
                with Stock Purchase Warrants"; APB Opinion 25, "Accounting for
                Stock Issued to Employees"; and FASB Statement 123, "Accounting
                for Stock-Based Compensation."

                The Company recognizes compensation expense for its stock option
                plan using the intrinsic-value method of accounting. Under the
                terms of the intrinsic-value method, compensation cost is the
                excess, if any, of the market price of the stock at the grant
                date, or other measurement date, over the amount an employee
                must pay to acquire the stock.

        l)      NEW ACCOUNTING STANDARDS

                During 2000, the Mexican Institute of Certified Public
                Accountants issued a revised Bulletin C-1 "Valuation of Cash and
                temporary investments", applicable to all Mexican companies for
                the year beginning January 1, 2001. This statement provides
                guidance for the valuation of foreign currencies and precious
                metals as currency. As the Company follows the practices
                mentioned in the Bulletin, the adoption of this standard will
                not have a material effect on the Company's financial statements
                and disclosures.

                During 2000, the Mexican Institute of Certified Public
                Accountants issued the Bulletin C-2 "Financial instruments",
                which requires companies to recognize all derivatives contracts
                as either assets or liabilities in the balance sheet and to
                measure them at fair value. The Company has not entered into
                derivative contracts either to hedge existing risk or for
                speculative purposes, and do not expect to enter in to them.
                Accordingly, the Company does not expect the adoption of this
                new standard to have a material effect in its financial
                statements.

                In April 1999, the Mexican Institute of Certified Public
                Accountants issued a revised Bulletin D-4, "Accounting Treatment
                for Income Tax, Tax on Assets and Statutory Employees' Profit
                Sharing", applicable to all Mexican companies for the year
                beginning on January 1, 2000. The Company has adopted this
                standard and its effects are shown in Note 14.




                                      F-10
<PAGE>   81
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4. CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
DECEMBER 31,                                                                       1999            2000
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>
Republic National Bank of New York: $6,625 in a certificate of deposit, due
   January 12, 2000. Annual interest rate of 5.94%.                           Ps.  69,400   Ps.      -
BancBoston: $5,010 in a certificate of deposit, due January 5, 2000. Annual
   interest rate of 5.7%.                                                          52,206            -
Bank of America: $3,430 in a certificate of deposit, due January 3, 2000.
   Annual interest rate of 3.5%.                                                   35,604            -
Bank of America: $22,710 in two certificates of deposit, due January 3,
   2001 Annual interest rate of 6.58% and 6.32%.                                      -           218,009
HSBC Republic: $72,375 in a certificate of deposit, due January 3, 2001
   Annual interest rate of 6.70%.                                                     -           694,778
Paine Webber Incorporated: $15,192 in money market instruments, bearing
    interest at 6.71% per annum.                                                      -           145,843
Other                                                                              10,220          13,631
-------------------------------------------------------------------------------------------------------------
                                                                              PS. 167,430   PS. 1,072,261
-------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE 5. VALUE-ADDED TAX REFUNDABLE

                Value-Added Tax ("VAT") is levied on goods and services
acquired, at a standard rate of 15%. VAT does not usually represent an
additional cost to business enterprises because the amounts paid will be offset
against the VAT liability of the Company on the billing to customers. Because
the Company has paid VAT on investments, costs and expenses incurred, the VAT
paid has resulted in a tax overpayment subject to refund. This tax is being
refunded on a regular basis.

NOTE 6. FREQUENCY RIGHTS

                On October 3, 1997, the Federal Telecommunications Commission
("COFETEL") granted the Company a concession to use and exploit different bands
of the radio-electric spectrum and to establish point-to-point and
point-to-multi-point microwave links. The concession became effective February
28, 1998, and will run to the year 2018.

                The Company paid the SCT the sum of Ps. 114,624, which will be
amortized over the life of the concession from the start of the Company's
operations. As of December 31, 1999 and 2000, the Company has recorded
amortization expenses of Ps.2,581 and Ps.5,835 respectively.

NOTE 7. TRANSACTIONS WITH RELATED PARTIES

<TABLE>
<CAPTION>
                                                                                   1999            2000
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>             <C>
TRANSACTIONS:
   Office and site lease                                                      Ps.    2,603    Ps.      188
   Compensation in connection with the operation agreement and other
       expenses with CT Global Telecommunications, Inc.                             72,825          35,710
   Strategic assistance agreement and other expenses to Bachow Associates            2,004           1,698
   Advisory fee and other expenses to Bank of America                                  901           1,066
   Expenses to BancBoston                                                              173              90
-------------------------------------------------------------------------------------------------------------
                                                                              PS.   78,506    PS.   38,752
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-11
<PAGE>   82

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8. TELEPHONE NETWORK SYSTEMS AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                                USEFUL LIFE
DECEMBER 31                                                          1999            2000         (YEARS)
-------------------------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>             <C>
Office furniture                                                Ps.    3,604    Ps.     5,933           10
Transportation equipment                                               8,342           15,212            4
Software                                                               5,570           16,920         3.33
Engineering equipment                                                  7,681            8,930           10
Computer equipment                                                    17,079           27,885         3.33
Telecommunication equipment and network                              487,494          731,893           10
Electronic equipment                                                 153,244          186,587         3.33
Radio equipment                                                       76,727          116,090           10
Leasehold improvements                                                47,955           52,105        20(1)
Other                                                                  4,010            5,789           10
-------------------------------------------------------------------------------------------------------------
                                                                     811,706        1,167,344
Less - Accumulated depreciation                                      (61,437)        (201,428)
Construction in process:
   Telecommunications                                                109,263          231,220
-------------------------------------------------------------------------------------------------------------
                                                                PS.  859,532    PS. 1,197,136
-------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Or life of the lease.

NOTE 9. LONG-TERM DEBT

                The balances as of December 31, 1999 and 2000, were:

<TABLE>
<CAPTION>
                                                                  CURRENT
                                                                 MATURITIES      LONG-TERM        TOTAL
-------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>             <C>
DECEMBER 31, 1999:
   Nissho Iwai American Corp. (Lucent) (2)                     Ps.    -       Ps.   556,023   Ps.  556,023
   Nissho Iwai American Corp. (NEC) (3)                               -             143,232        143,232
   Hewlett Packard de Mexico, S.A. de C.V. (4)                        -             168,094        168,094
   Other                                                             4,081            4,989          9,070
-------------------------------------------------------------------------------------------------------------
                                                               PS.   4,081    PS.   872,338   PS.  876,419
-------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                  CURRENT
DECEMBER 31, 2000:                                               MATURITIES      LONG-TERM        TOTAL
-------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>             <C>
   $ 300,000 Senior Notes Due April 1, 2007. These Notes
       accrue interest at the rate of 13.75 % per annum. (1)   Ps.     -      Ps. 2,879,910   Ps. 2,879,910
   Less- Cost of warrants granted to the initial purchasers
       of the senior notes (net of accumulated amortization)           -            (82,227)        (82,227)
-------------------------------------------------------------------------------------------------------------
   Senior Notes, Net                                                   -          2,797,683       2,797,683
   Other                                                             2,917            1,183           4,100
-------------------------------------------------------------------------------------------------------------
                                                               PS.   2,917    PS. 2,798,866   PS. 2,801,783
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-12
<PAGE>   83
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


                Maturities of the long-term debt are as follows:

<TABLE>
<CAPTION>
YEAR ENDED                                              2000
------------------------------------------------------------------
<S>                                               <C>
   2001                                           Ps.     2,917
   2002                                                   1,183
   2003                                                    -
   2004                                                    -
   2005                                                    -
   2006                                                    -
   2007 and thereafter                                2,879,910
------------------------------------------------------------------
                                                  PS. 2,884,010
------------------------------------------------------------------
</TABLE>

        (1)     On March 17, 2000, Maxcom issued a private offering of Senior
                Notes with a maximum aggregate principal amount of $300 million.
                The Notes will mature on April 1, 2007. The main characteristics
                of these Notes are as follows: (a) unsecured senior obligations
                of the Company; (b) pari passu in right of payment to all
                existing and future Senior Indebtedness of the Company; (c)
                senior in right of payment to any future Subordinated
                Obligations of the Company; (d) subject to registration with SEC
                (Securities and Exchange Commission), pursuant to a Registration
                Rights Agreement; and (e) unconditionally guaranteed by
                Corporativo en Telecomunicaciones, S.A de C.V. These notes
                accrue interest at the rate of 13.75% per annum (14.46%
                including the withholding tax effect according to prevailing tax
                regulations in year 2000) and are payable semiannually in
                arrears on April 1 and October 1, commencing on October 1, 2000.

                RESTRICTED CASH:

                Additionally, the first four semiannual scheduled interest
                payments are secured pursuant to a Pledge and Escrow Agreement
                between the Company and the Trustee, as Escrow Agent, through a
                deposit of $77.9 million of the net proceeds from the sale of
                the notes which were used to purchase and pledge to the Trustee
                a portfolio of US government securities. Said portfolio is in an
                amount intended to be sufficient to fulfill the payment of the
                mentioned payments. As of December 31, 2000, this fund amounted
                to approximately $59 million, which was presented as restricted
                cash. After the mentioned payments, the remaining balance of the
                fund, if any, will be released from the pledge.

                On August 22, 2000, the Notes were registered with the SEC, and
                beginning on that date and ending on September 21, 2000, the
                Notes were exchanged into Series B Senior Notes, with
                substantially identical terms to those of the old notes, except
                that the Series B can be freely traded in the open market.

                The indenture contains certain covenants among others:
                limitations on indebtedness and derived payments, restrictions
                on distributions from restricted subsidiaries, limitations on
                sales of assets and subsidiary stock, limitation on affiliate
                transactions, limitations of sale or issuance of capital stock
                of restricted subsidiaries, limitations on liens, limitation on
                sale/leaseback transactions and restrictions in mergers and
                consolidations. If an event of default occurs and is continuing,
                the trustee or the holders of 25% in principal amount of the
                outstanding notes may declare the principal and accrued but
                unpaid interest on all the notes to be due and payable. As of
                December 31, 2000, the Company has complied with all the
                covenants.

        (2)     $100 million vendor facility, bearing an annual interest rate of
                three-month LIBOR plus 4.15% plus withholding tax (11.47% at
                December 31, 1999). The outstanding balance was paid in March
                2000.

        (3)     $20 million vendor facility, bearing an annual interest rate of
                three-month LIBOR plus 4.15% plus withholding tax (11.47% at
                December 31, 1999). The outstanding balance was paid in March
                2000.


                                      F-13
<PAGE>   84
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


        (4)     $18.7 million from Hewlett-Packard, bearing an annual interest
                rate of three-month LIBOR plus 4.15% (10.28% at December 31,
                1999). The outstanding balance was paid in March 2000.

NOTE 10. EMPLOYEES BENEFITS

                As of December 31, 1999 and 2000, the Company had the following
                labor liabilities:

        a)      INDEMNITIES TO EMPLOYEES

                Employees who are dismissed without justification are entitled
                to severance compensation determined in accordance with the
                provisions of Mexico's Federal Labor Law.

        b)      SENIORITY PREMIUMS

                In the event of dismissal without justification, retirement
                after 15 years of service, or death, employees are entitled to a
                seniority premium determined in accordance with the provisions
                of Mexico's Federal Labor Law.

                As of December 31, 1999 and 2000, these items were not
significant because the seniority of the vast majority of the Company's
employees was less than three years.

NOTE 11. CAPITAL STOCK

                Under Mexico's Federal Telecommunications Law and Foreign
Investment Law, no more than 49% of the full voting capital stock of a Mexican
corporation holding a concession to provide local and long-distance
telecommunication services may be held by foreigners.

                The Extraordinary Shareholders' Meeting held on February 21,
2000, resolved to modify the equity structure of the Company by converting 50%
of Series N shares into new shares, of Series C shares, at a rate of 1:1. The
new Series C shares have full voting and economic rights. They can only be
subscribed by the agent acting as trustee of a Neutral Investment Trust
incorporated in accordance with the Mexico's Foreign Investment Law. The trust
shall in turn issue Certificados de Participacion Ordinarios (CPO's).
Statutorily, the Trustee shall vote Series C shares in the same manner as the
majority of the Series A shares are voted. The corporate governance of the
Company remains unaffected.

                Additionally from the capital restructuring, the Shareholders
Meeting held on February 21, 2000, resolved the conversion of 255,000 Series A
shares into 127,500 Series C shares and 127,500 Series N shares and the
conversion of 245,000 Series B shares into 122,500 Series C shares and 122,500
Series N shares.

                The capital stock is represented by registered shares with no
par value, which are divided in Series A, B and C common shares and Series N
limited-voting shares. Series A shares may only be subscribed to, acquired or
owned by Mexicans, Series B shares may be freely subscribed to and Series C
shares can only be subscribed to, acquired or owned by the agent acting as
trustee of a Neutral Investment Trust. Series N shares, which may also be freely
subscribed to, are limited-voting shares. Series C and N shares are deposited in
the Neutral Investment Trust, which in turn issue CPO's. Series C and N shares
may not be computed for purposes of determining the foreign-investment
percentage under the terms of the Foreign Investment Law. In compliance with a
ruling of the Mexican Foreign Investment Authorities, in accordance with the
Foreign Investment Law and the Company Bylaws, Series B shares may not represent
more than 49% of the voting right shares, Series C shares may not represent more
than 44.5% of the Company's total outstanding capital stock and Series N shares
may not represent more than 44.5% of the Company's total outstanding capital
stock.


                                      F-14
<PAGE>   85
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


                The Extraordinary Shareholders' Meetings held on June 5 and
September 29, 2000, resolved the following:

                (1)     To increase the Capital stock in an amount of $35
                        million issuing 3,355,446 shares, of which 1,677,723 are
                        Series C shares, and 1,677,723 are Series N Shares, the
                        shareholders paid $10.44 for each share or its
                        equivalent in Mexican Pesos at the exchange rate
                        published on the official gazette on the day of the
                        payment.

                (2)     To cancel 4,660,000 Series N shares which were held in
                        the treasury of the Company to fulfill commitments of
                        the Company, in accordance with several stock options
                        and warrants agreements (See Note 12).

                (3)     To issue 1,679,866 nominative Series C shares and
                        1,679,866 Series N shares to be held in the treasury of
                        the Company to fulfill the commitments derived from the
                        stock options and warrants agreements, mentioned in Note
                        12.

                The Bylaws and a Shareholders' Agreement require a supermajority
of votes to approve certain transactions; they also stipulate that the transfers
of shares may be subject to certain restrictions and rights of first refusal.

                As of December 31, 1999 and 2000, the Company's outstanding
shares were:

<TABLE>
<CAPTION>
DECEMBER 31,                                                  1999          2000
------------------------------------------------------------------------------------
<S>                                                        <C>           <C>
Capital stock:
   Series A                                                 1,531,428     1,276,428
   Series B                                                 1,471,373     1,226,373
   Series C                                                       -       5,622,822
   Series N                                                 7,320,190     5,622,822
------------------------------------------------------------------------------------
TOTAL OUTSTANDING SHARES                                   10,322,991    13,748,445
Treasury Shares:
   Series C                                                 -             1,679,866
   Series N                                                 4,660,000     1,679,866
------------------------------------------------------------------------------------
TOTAL ISSUED SHARES                                        14,982,991    17,108,177
------------------------------------------------------------------------------------
</TABLE>

                Of the total outstanding shares, 765,714 Series A shares and
763,113 Series B shares represent the minimum fixed portion, with no withdrawal
rights, of Maxcom's capital stock, while the remaining A, B, C and N Series
shares represent the variable portion of the capital stock.

                Under the May 1998 Shareholders' Agreement as amended and
restated on August 18, 2000, if the Company registers any equity securities for
a primary or secondary public offering prior to May 21, 2002, it must permit
parties to the Shareholders Agreement to include their shares in such an
offering. The Company will bear all expenses of any primary or secondary public
offering, other than the fees of counsel to the holders of the registration
rights and any underwriting commission or discounts. If the Company does not
register the equity securities in a primary or secondary public offering prior
to May 21, 2005, the Series N shareholders will have the right to retain an
investment banker to: sell substantially all of the assets of the Company; merge
or consolidate into another company; or require parties to the Shareholders
Agreement to sell their shares, and distribute the proceeds to the shareholders.


                                      F-15
<PAGE>   86
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


                As of December 31, 1999 and 2000, the Company's capital stock
was:

<TABLE>
<CAPTION>
DECEMBER 31                                                                          1999           2000
---------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>             <C>
Capital stock                                                                   Ps.   595,841   Ps.   925,958
Restatement for effects of inflation                                                  239,277         251,395
---------------------------------------------------------------------------------------------------------------
Total capital stock                                                                   835,118       1,177,353
---------------------------------------------------------------------------------------------------------------
Expenses connected with private placement                                             (18,280)        (18,280)
Restatement for effects of inflation                                                   (6,520)         (6,520)
---------------------------------------------------------------------------------------------------------------
                                                                                      (24,800)        (24,800)
---------------------------------------------------------------------------------------------------------------
                                                                                PS.   810,318   PS. 1,152,553
---------------------------------------------------------------------------------------------------------------
</TABLE>

                During May 1998, Maxcom had a private placement and issued
6,085,977 Series N shares, which resulted in a capital stock increase of
Ps.572,221 (Ps.421,914 nominal Pesos). The expenses incurred (Ps.24,800) in
connection with the placement were directly applied to shareholders' equity.

NOTE 12. STOCK OPTIONS

                At December 31, 1999 and 2000, the Company had several stock
option transactions, which are described below. Since Mexican GAAP does not have
standards to value and record these kinds of transactions, the Company adopted
the US GAAP guidelines of APB Opinion 14, "Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants"; APB Opinion 25, "Accounting for Stock
Issued to Employees"; and FASB Statement 123, "Accounting for Stock-Based
Compensation".

                FASB 123 requires the Company to calculate the fair value of
each stock option at the grant date by using the Black-Scholes option-pricing
model. The following weighted average assumptions were used for grants in 1998:
no dividend yield for all years; expected volatility of 46.10%; risk-free
interest rate of 5.15%; and expected lives of 4 to 7 years.

        a)      EXECUTIVE STOCK OPTION PLAN:

                At a Board of Directors' Meeting held in May 1998, an executive
                stock option plan was approved. This plan provides that the
                Company grant options, on every April 1, commencing in 1999 and
                until December 2000, to several of its officers. Under this
                plan, a technical committee will determine the executive
                officers to whom options to purchase Series N shares will be
                granted, as well as the terms of those options.

                The Company has created two option plans for its executive
                officers, as follows:

                The first award (option "A") consists of a total of 425,000
                options to be awarded as follows: 170,000 on April 1, 1999, at
                an exercise price of $8.70; 145,000, on April 1, 2000, at an
                exercise price of $10.40 and 110,000 on April 1, 2001, at an
                exercise price of $12.55. The options vest equally over a
                five-year period beginning on the date of the grant.

                These options were awarded to executive officers who continued
                to provide professional services to the Company on April 1, 1999
                and 2000. The only requirement to receive the option is that the
                executive officers must be rendering services to the Company at
                the time of the grant, in his capacity of officer.

                The second award (option "B") is granted based on a set formula
                as defined in the options plan agreement. Options will be
                granted to executive officers at an exercise price of $10.45 at
                April 1, 2000, and at an exercise price of $12.55 at April 1,
                2001.


                                      F-16
<PAGE>   87
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


                Based on APB Opinion No. 25, compensation expense is determined
                based on the market or fair-value price of the stock at the
                measurement date, less the amount, if any, that the executive
                officers are required to pay for the stock.

                Since the option price equals the market value on the date of
                the grant, there is no intrinsic value for the options and thus
                there is no expense associated with these options to record in
                the financial statements.

                Should a company elect to account for options to employees under
                APB 25, FASB 123 requires it to provide pro forma information
                regarding net income and earnings per share as if compensation
                cost for the company's executive stock option plan had been
                determined in accordance with the fair-value based method
                prescribed in that statement.

                As of December 31, 1999 and 2000, under the accounting
                provisions of FASB 123, the Company's net loss and net loss per
                share would have been as follows:

<TABLE>
<CAPTION>
                                                                                AS REPORTED      PRO-FORMA
-------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>             <C>
       DECEMBER 31,  1999
          Net loss                                                             Ps. (236,638)   Ps. (237,920)
          Net loss per share -- basic and diluted                                    (23.05)         (23.18)
       DECEMBER 31,  2000
          Net loss                                                                 (597,010)       (599,237)
          Net loss per share -- basic and diluted                                    (52.08)         (50.87)
</TABLE>

        b)      NISSHO IWAI AMERICAN CORP. STOCK OPTIONS:

                In March 24, 1998, the Company granted options to Nissho Iwai
                for 337,471 Series N shares at fixed exercise prices per share
                of $10.87, expiring through March 2005. No options have been
                exercised as of December 31, 2000. These options were issued in
                connection with a financing agreement and their cost was valued
                at approximately $2.2 million, which was amortized during the
                life of the financing.

        c)      CT GLOBAL TELECOMMUNICATIONS, INC. (CTGT) STOCK OPTIONS:

                On May 21, 1998, the Company granted options to CT Global
                Telecommunications for up to 250,000 Series N shares at an
                exercise price of $8.70. These options will expire two years
                after CTGT disposes of its equity participation in Maxcom.
                CTGT's rights to these options is subject to certain performance
                objectives. On these basis, as of December 31, 2000, CTGT had
                acquired the right to exercise up to 150,000 series N shares.
                The cost of these options was valued at approximately $567,
                which was expensed as granted. No options have been exercised as
                of December 31, 2000. The shares subject to these options
                agreement are limited to a maximum gain of $40.00 per share.

        d)      BACHOW AND ASSOCIATES STOCK OPTIONS:

                On May 21, 1998, the Company granted options to Bachow and
                Associates for up to 100,000 Series N shares at an exercise
                price of $8.70 expiring two years after Bachow Investment
                Partners III L.P. disposes of its current equity participation
                in Maxcom. Bachow and Associates' right to exercise the options
                are subject to performance objectives. As of December 31, 2000,
                Bachow and Associates had accomplished all objectives, which
                gave it the right to exercise the total of the options. The cost
                of these options was valued at approximately $397, which was
                expensed as granted. No options have been exercised as of
                December 31, 2000. The shares subject to these options agreement
                are limited to a maximum gain of $40.00 per share. During 1999
                and 2000, Bachow and Associates advanced $43 towards the
                exercise of its options and such amount is reflected in
                additional paid-in capital.


                                      F-17
<PAGE>   88
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


        e)      AMSTERDAM PACIFIC LLC STOCK OPTIONS:

                On May 21, 1998, the Company granted options to Amsterdam
                Pacific, in connection with an equity financing transaction, for
                up to 24,425 Series N shares at an exercise price of $8.70
                expiring May 21, 2003. As of December 31, 2000, Amsterdam
                Pacific had the right to exercise its options.

        f)      WARRANTS IN CONNECTION WITH THE OFFERING OF THE NOTES

                The Company granted the bondholders and initial purchasers of
                the Senior Notes up to 876,492 warrants to purchase Series N
                shares at an exercise price of $0.01 (or $0.02 CPO's). The cost
                of these warrants was valued at approximately $8.6 millions, and
                was recorded as a discount of the senior notes and as an
                additional paid-in capital. This cost will be amortized as
                additional interest expense over the life of the senior notes.

NOTE 13. POSITION IN FOREIGN CURRENCY

                The Company currently does not hedge any of its
foreign-denominated assets or liabilities.

                As of December 31, 1999 and 2000, the Company's foreign-currency
position was:

<TABLE>
<CAPTION>
DECEMBER 31,                                                                       1999            2000
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>             <C>
U.S. DOLLARS:
   Assets                                                                     $     18,953    $    170,799
   Liabilities                                                                      88,552         320,945
-------------------------------------------------------------------------------------------------------------
NET LIABILITY IN U.S. DOLLARS                                                 $   (69,599)    $  (150,146)
-------------------------------------------------------------------------------------------------------------
Exchange rate at end of the year (Ps. per U.S.$1.00)                          Ps.     9.52    Ps.     9.60
-------------------------------------------------------------------------------------------------------------

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

NOTE 14. INCOME TAX AND TAX-LOSS CARRY-FORWARDS

                The Company has had tax losses since inception and accordingly
has not provided for income taxes. The following is a summary of the
reconciliation between book and tax results:

<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31,                                                          1999           2000
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>             <C>
Net loss for the period                                                       Ps.   236,638   Ps.   597,010
Preoperating expenses and expenses incurred in connection with a placement,
   which were considered as tax deductions when incurred                             90,661          26,503
Difference between inflationary effects for accounting and tax purposes              41,289        (143,969)
Nondeductible items                                                                  (3,017)         (1,834)
-------------------------------------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD                                                       PS.   365,571   PS.   477,710
-------------------------------------------------------------------------------------------------------------
</TABLE>

                In accordance with Mexico's Income Tax Law, tax losses are
subject to restatement by inflation and may be carried forward against future
taxable profits of subsequent years. As of December 31, 2000, the Company's
restated cumulative tax losses were:

<TABLE>
<CAPTION>
                        FISCAL                       EXPIRATION
                         YEAR           AMOUNT          YEAR
------------------------------------------------------------------
<S>                                  <C>             <C>
                         1996        Ps.     6,306      2006
                         1997               22,500      2007
                         1998              144,649      2008
                         1999              365,571      2009
                         2000              477,710      2010
------------------------------------------------------------------
</TABLE>



                                      F-18
<PAGE>   89
MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
                                                           PS.  1,016,736
--------------------------------------------------------------------------------

                In accordance with Bulletin D-4 issued by the Mexican Institute
of Public Accountants, starting 2000, the Company recognizes the deferred income
tax using the assets and liabilities method. This method requires to recognize
the tax consequences of all temporary differences, both recurring and
non-recurring, between the financial statements' carrying amounts and the tax
basis of existing assets, liabilities and tax losses. At year end this caption
is analyzed as follows:

<TABLE>
<CAPTION>
DECEMBER 31,                                                                     2000
------------------------------------------------------------------------------------------
<S>                                                                         <C>
Accounts receivable                                                          Ps.   2,907
Equipment for resale                                                              (3,154)
Frequency rights                                                                  (4,148)
Telephone network systems and equipment, net                                     (76,293)
Preoperating expenses                                                            (77,560)
Other assets                                                                      (3,501)
------------------------------------------------------------------------------------------
       Total assets and liabilities                                             (161,749)
Tax-loss carry-forward                                                           355,858
------------------------------------------------------------------------------------------
Deferred-tax asset                                                               194,109
Deferred-tax asset-valuation allowance                                          (194,109)
------------------------------------------------------------------------------------------
       NET DEFERRED TAX                                                      PS.   -
------------------------------------------------------------------------------------------
</TABLE>

NOTE 15.        COMMITMENTS

                At December 31, 2000, the Company had the following commitments:

                1.      The Company was committed under purchase orders and
                        other commitments in the amount of Ps.22,849.

                2.      The Company maintains operating leases on buildings,
                        sites and transportation equipment, having recorded
                        leasing costs of Ps.26,278 in 1999 and Ps.27,553 in
                        2000. The schedule of future minimum lease payments is
                        as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 2000                                                     1999          2000
--------------------------------------------------------------------------------------------
<S>                                                                <C>         <C>
2001                                                               Ps.  21,037  Ps.  23,214
2002                                                                    23,393       22,566
2003                                                                    19,716       19,543
2004                                                                   107,579       16,882
2005 and thereafter                                                      -          128,510
--------------------------------------------------------------------------------------------
                                                                   PS. 171,725  PS. 210,715
--------------------------------------------------------------------------------------------
</TABLE>

NOTE 16.        SUBSEQUENT EVENT

                As of the date of issue of these financial statements, the
Company is negotiating with several carriers the interconnection tariffs. The
new agreement will have retroactive effects to January 1, 2001.

NOTE 17.        SIGNIFICANT DIFFERENCES BETWEEN MEXICAN AND US GAAP

                The consolidated financial statements of the Company have been
prepared in accordance with Mexican GAAP.


                                      F-19
<PAGE>   90

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                Except for the inflation accounting, Mexican GAAP are, in
general terms, similar to US generally accepted accounting principles ("US
GAAP"). However, there are certain areas in which Mexican accounting standards
and practices differ from the requirements of US GAAP. The major differences
between Mexican and US GAAP are as follows:

        a)      RECOGNITION OF THE EFFECTS OF INFLATION ON FINANCIAL INFORMATION

                The provisions of Bulletin B-10, as amended, on the recognition
                of the effects of inflation in the financial statements, have no
                counterparts under US GAAP. However, as Mexican GAAP include the
                effects of inflation in the primary financial statements, the US
                Securities and Exchange Commission ("SEC") does not require the
                reversal of the restatement of the financial statements to
                recognize the effects of inflation.

        b)      PREOPERATING EXPENSES

                Under Mexican GAAP, all expenses incurred while a company or a
                project is in the preoperating or development stages are
                deferred and considered as a component of the company's assets.
                Such capitalized expenses are amortized on a straight-line basis
                for a period not exceeding 10 years after the corresponding
                asset commences operations. According to US GAAP, such
                preoperating expenses are expensed and reported as accumulated
                deficit during the development stage in shareholders' equity.

        c)      DEFERRED INCOME TAXES

                Under Mexican accounting practices, deferred income taxes and
                employees' profit sharing were provided for on the liability
                method, but only for non-recurring and identifiable book and tax
                differences that are expected to reverse over a definite period
                of time. Under US GAAP, deferred taxes are recognized for the
                tax consequences of all temporary differences, both recurring
                and non-recurring, between the financial statements' carrying
                amounts and the tax basis of existing assets and liabilities.

                As mentioned in Note 14, during 2000 the company adopted
                guidelines of the revised Bulletin D-4 requiring the recognition
                of deferred tax of all temporary differences, therefore such
                statement is not a difference to US GAAP.

                Deferred income taxes determined in accordance with SFAS 109
would be as follows:

<TABLE>
<CAPTION>
DECEMBER 31,                                                        1998         1999
------------------------------------------------------------------------------------------
<S>                                                             <C>          <C>
Non-current deferred tax liability on:
   Difference in valuation of assets for accounting and tax
      purposes                                                  Ps. (44,862) Ps. (117,696)
   Stock options cost                                                (7,471)          -
   Expenses incurred in connection with a private placement
      and deducted for tax purposes                                  (7,743)          -
------------------------------------------------------------------------------------------
                                                                    (60,076)     (117,696)
Non-current deferred tax asset on tax-loss carry-forwards            54,176       188,659
------------------------------------------------------------------------------------------
Deferred tax (liability) asset, net                                  (5,900)       70,963
Deferred tax asset-valuation allowance                                 -          (70,963)
------------------------------------------------------------------------------------------
NET DEFERRED TAX LIABILITY                                      PS.   5,900  PS.   -
------------------------------------------------------------------------------------------
</TABLE>

                                      F-20
<PAGE>   91

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

        d)      REALIZATION OF TAX-LOSS CARRY-FORWARDS

                In accordance with Mexican GAAP, the tax benefit of a tax-loss
                carry-forward should only be recorded when realized and should
                be reported as an extraordinary item in the statement of
                operations. Generally, under US GAAP, the tax benefit of an
                operating-loss carry-forward must be reported in the same manner
                as the source of the income or the loss in the current year.
                Because the realization of the Company's tax losses is
                considered to be uncertain, a valuation allowance has been
                established for the net amount of the potential deferred tax
                asset.

        e)      STATEMENT OF CHANGES IN FINANCIAL POSITION

                In accordance with Mexican GAAP, the Company presents statements
                of changes in financial position in constant Mexican Pesos. This
                presentation identifies the generation and application of
                resources representing differences between beginning and ending
                financial statement balances in constant Mexican Pesos.

                The changes in the consolidated financial statement balances
                included in this statement constitute cash flow activity stated
                in constant Mexican Pesos (including monetary losses, which are
                considered as cash losses in the financial statements presented
                in constant Mexican Pesos). SFAS No. 95, "Statement of Cash
                Flow", however, does not provide guidance with respect to
                inflation-adjusted financial statements. In addition, US GAAP
                require that non-cash financing and investing transactions
                should be excluded from the statement of cash flows and reported
                in related disclosures. If the inflation accounting effects were
                eliminated, cash flows provided by or used in investing and
                financing activities would be as follows:

<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31,                                                        1998               1999              2000
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                <C>               <C>
Operations:
Resources used in operations under Mexican GAAP                            Ps.       -         Ps.   (139,686)     Ps.  (774,400)
    Adjustments to the net loss for the period under US GAAP                         -                (57,806)             44,252
    Net loss for the period under US GAAP                                           (97,519)          -                  -
    Net change in monetary assets and liabilities                                   (24,577)          -                  -
    Deferred taxes                                                                     5,900           (5,900)           -
    Depreciation and amortization                                                      6,510             3,546           -
    Inflationary effects                                                              56,005           108,395             32,960
----------------------------------------------------------------------------------------------------------------------------------
Resources used in operation under US GAAP                                           (53,681)          (91,451)          (697,188)
----------------------------------------------------------------------------------------------------------------------------------
Financing:
Resources provided by financing activities under Mexican GAAP                        805,894           660,122          2,358,527
    Less:
    Debt applied to fixed assets acquisition                                       (195,930)          (594,265)          -
    Inflationary effects                                                           (184,971)          (138,573)         (108,818)
----------------------------------------------------------------------------------------------------------------------------------
Resources provided by financing activities as per US GAAP                            424,993          (72,716)          2,249,709
----------------------------------------------------------------------------------------------------------------------------------
Investing:
Resources used in investing activities as per Mexican GAAP                         (437,412)         (774,870)          (679,296)
    (Less) Plus:
        Net resources used in preoperating activities for Mexican GAAP and net
            change in monetary assets and liabilities, which are
            considered as operating activities for US GAAP                           128,318            77,126           -
        Capitalization of interest for US GAAP purposes                             (18,638)          (18,163)           (15,407)
        Fixed assets acquisition financed with debt                                  196,030           594,265           -
        Inflationary effects                                                          68,325            94,760             60,781
----------------------------------------------------------------------------------------------------------------------------------
Resources used in investing activities as per US GAAP                               (63,377)          (26,882)          (633,922)
----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash as per US GAAP                                           307,935         (191,049)            918,599
Cash at beginning of period under US GAAP                                             36,776           344,711            153,662
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-21
<PAGE>   92

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S>                                                                        <C>                <C>                  <C>
----------------------------------------------------------------------------------------------------------------------------------
CASH AT END OF PERIOD UNDER US GAAP (1)                                    PS.       344,711   PS.     153,662     PS.  1,072,261
----------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures:
    Cash paid for interest                                                 Ps.        16,063   Ps.      39,438     Ps.    250,983
    Non-cash transactions:
        Fixed assets acquisitions                                                    187,044           561,059           -
        Stock options cost                                                            27,044             1,904           -
        Warrants cost                                                               -                  -                   97,763
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Cash at the end of the period under US GAAP is based on historical Pesos and
is not adjusted for inflation.

                f)      LOSSES PER SHARE

                        In accordance with Mexican GAAP, basic earnings per
                        ordinary share are calculated based on the
                        weighted-average number of ordinary shares outstanding
                        during the period. The same procedure is applied to
                        preferred or limited-voting shares. For diluted earnings
                        per share, net income or loss attributable to ordinary
                        shares and weighted-average number of ordinary shares
                        should be adjusted by the dilutive effects of the
                        convertible shares, options, warrants and other
                        potentially dilutive securities, within certain limits.
                        Dilution of ordinary shares by the potentially dilutive
                        shares included in options and warrants is determined by
                        modifying only the number of shares in the calculation
                        of the earnings or losses per share.

                        Under US GAAP, basic net loss per share includes no
                        dilution and is computed by dividing losses available to
                        common shareholders by the weighted average number of
                        common shares outstanding for the period. Dilutive net
                        loss per share reflects the potential dilution of
                        securities that could share in the losses of an entity,
                        similar to existing diluted losses per share. The basic
                        and diluted number of shares under US GAAP would not be
                        materially different from what will be presented for
                        Mexican GAAP purposes.

                g)      PERSONNEL COMPENSATION AND SENIORITY PREMIUMS

                        The Company had no significant contingent labor
                        liabilities, as of December 31, 1999 and 2000, because
                        seniority of the vast majority of the Company's
                        employees was less than three years.

                h)      FREQUENCY RIGHTS

                        Frequency rights are being amortized by the
                        straight-line method over the term of the concession,
                        since the Company commenced operations. Under US GAAP,
                        this item should be amortized during the term of the
                        concession.

                i)      CAPITALIZATION OF INTEREST

                        In accordance with Mexican GAAP, capitalization of
                        interest or, during inflationary periods, comprehensive
                        (income from) cost of financing incurred in the period
                        of construction and installation of an asset is
                        permitted. The interest to be capitalized is that of
                        specific financing obtained for the construction of the
                        related asset. Under US GAAP, capitalization of interest
                        is required for certain qualifying assets that require a
                        period of time to get them ready for their intended use.
                        The amount of interest to be capitalized is that portion
                        of the interest cost incurred during the assets'
                        acquisition period that theoretically could have been
                        avoided if expenditures for the assets had not been
                        made, and is not limited to indebtedness attributable to
                        the assets.

                j)      STOCK OPTION PLAN

                        This item is not specifically addressed by Mexican GAAP.
                        Under US GAAP, an entity is encouraged to use a
                        fair-value method of accounting to measure compensation
                        cost for its stock options and similar equity
                        instruments awarded to employees. If the fair-value
                        method is not used,


                                      F-22
<PAGE>   93

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                        the intrinsic-value method of accounting is required.
                        Under the fair-value method, compensation cost is
                        generally measured at the grant date based on the fair
                        value of the award and is recognized over the service
                        period, which is usually the vesting period. Under the
                        intrinsic-value method, compensation cost is the excess,
                        if any, of the market price of the stock at grant date
                        or other measurement date over the amount an employee
                        must pay to acquire the stock. Options issued to
                        non-employees are valued using the fair-value concept.

                        As is mentioned in Note 12, since the Company adopted US
                        GAAP for these transactions, there are no differences
                        between Mexican and US GAAP.

                k)      RECONCILIATION BETWEEN MEXICAN AND US GAAP

                        The following is a summary of the estimated adjustments
                        to net loss and shareholders' equity as of and for the
                        periods ended December 31, 1998, 1999 and 2000, that
                        would have been required if the Company had applied US
                        GAAP instead of Mexican GAAP:

<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,                                                       1998               1999              2000
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                  <C>                 <C>
Net loss as per Mexican GAAP                                               Ps.   -              Ps.   (236,638)     Ps.  (597,010)
----------------------------------------------------------------------------------------------------------------------------------
Adjustments:
    Preoperating expenses applied to operations for US GAAP purposes                (105,053)          (97,599)      -
    Capitalization of interest                                                        18,638            18,163             15,407
    Amortization of preoperating expenses                                           -                   17,505             28,845
    Amortization of frequency rights for US GAAP purposes, considering 20
        years life of the concession (2)                                             (5,317)            (1,773)          -
    Deferred income tax                                                              (5,900)             5,900           -
----------------------------------------------------------------------------------------------------------------------------------
                                                                                    (97,632)           (57,804)            44,252
----------------------------------------------------------------------------------------------------------------------------------
NET LOSS AS PER US GAAP                                                    PS.      (97,632)    PS.   (294,442)     PS.  (552,758)
==================================================================================================================================
Weighted-average common shares outstanding                                        8,134,883         10,264,827         11,463,667
==================================================================================================================================
Net loss per share                                                         Ps.       (12.00)    Ps.     (28.68)     Ps.    (48.22)
===================================================================================================== ============================

BALANCES AS OF DECEMBER 31,                                                         1998               1999              2000
----------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity as per Mexican GAAP                                   Ps.      829,616     Ps.    605,582      Ps.   441,735
Adjustment from Mexican GAAP to US GAAP (1)                                        (161,504)          (219,308)          (175,056)
----------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AS PER US GAAP                                        PS.      668,112     PS.    386,274      PS.   266,679
==================================================================================================================================
</TABLE>

(1) Includes 1996 net loss amounting to Ps.5,628, and the adjustment for 1997
amounting $58,357.

(2) For Mexican GAAP purposes, the amortization is calculated from the date the
company entered into operation (May 1999).

                l)      RECENT US ACCOUNTING STANDARDS

                        In June 1999, the Financial Accounting Standard Board
                        issued SFAS No. 133, Accounting for Derivative
                        Instruments and Hedging Activities. SFAS No. 133, as
                        amended by SFAS 137, requires companies to recognize all
                        derivatives contracts as either assets or liabilities in
                        the balance sheet and to measure them at fair value. If
                        certain conditions are met, a derivative may be
                        specifically designated as a hedge, the objective of
                        which is to match the timing of gain or loss recognition
                        on the hedging derivative with the recognition of (i)
                        the changes in the fair value of the hedged assets or
                        liability that are attributable to the hedged risk or
                        (ii) the earnings effects of the hedged forecasted
                        transaction. For a derivative not designated as a
                        hedging instrument, the gain or loss is recognized in
                        income in the period of change. SFAS No. 133 is
                        effective for all fiscal quarters of fiscal years
                        beginning after June 15, 2000.


                                      F-23
<PAGE>   94

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                        Historically the Company has not entered into derivative
                        contracts either to hedge existing risks or for
                        speculative purposes. Accordingly, the adoption of SFAS
                        133 on January 1, 2001 will not have a material impact
                        on the Company's earnings or financial position.

                        In December 1999, the Securities and Exchange Commission
                        issued Staff Accounting Bulletin 101, "Revenue
                        Recognition in Financial Statements" ("SAB 101"). SAB
                        101 provides guidance on the recognition, presentation
                        and disclosure of revenues in financial statements and
                        requires adoption no later than the fourth fiscal
                        quarter of fiscal years after December 15, 1999. The
                        company implemented SAB 101 effective January 1, 2000
                        and its adoption did not have a material impact on the
                        Company's earnings of financial position.

                        In September 2000, the FASB issued SFAS No. 140,
                        "Accounting for Transfers and Servicing of Financial
                        Assets and Extinguishment of Liabilities. " SFAS140
                        provides accounting and reporting standards for
                        transfers and servicing of financial assets and
                        extinguishments of liabilities. SFAS 140 replaces SFAS
                        No. 125 and is effective for transfers and servicing of
                        financial assets and recognition and reclassification of
                        collateral and for disclosures relating to
                        securitization transactions and collateral for fiscal
                        years ending after December 15, 2000. The adoption of
                        SFAS 140 effective January 1, 2001, will not materially
                        impact the Company's earnings or financial position.

                        In March 2000, the FASB issued FASB Interpretation No.
                        44, Accounting for Certain Transactions Involving Stock
                        Compensation. Interpretation 44 provides criteria for
                        the recognition of compensation expense in certain
                        stock-based compensation arrangements that are accounted
                        for under Accounting Principles Board Opinion No. 25,
                        Accounting for Stock-Based Compensation. Interpretation
                        44 was effective July 1, 2000, with certain provisions
                        that were effective retroactively to December 15, 1998
                        and January 15, 2000. The adoption of Interpretation 44
                        did not have an impact on the company's consolidated
                        financial statements.

NOTE 18.        REVENUE BY GEOGRAPHICAL LOCATION

                The Company's revenue information by geographical location is as
follows:

<TABLE>
<CAPTION>
                                                  MEXICAN PESOS                                        U.S. DOLLARS
-----------------------------------------------------------------------------------------------------------------------------------
                                                     CENTER-                                             CENTER-
SERVICES                         METROPOLITAN         SOUTH            TOTAL         METROPOLITAN         SOUTH             TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED DECEMBER 31, 1999
<S>                              <C>               <C>            <C>                <C>            <C>                <C>
Local                             Ps.   28,695     Ps.    2,270   Ps.    30,965      $      2,983   $            236   $     3,219
Long distance                           53,199              634          53,833             5,530                 66         5,596
Rent of dedicated links                    486          -                   486                51              -                51
Sale of  customer premise
    equipment                            1,412              516           1,928               147                 54           201
Lease of capacity                          645          -                   645                67              -                67
Other                                    8,049              193           8,242               837                 20           857
-----------------------------------------------------------------------------------------------------------------------------------
                                  Ps.   92,486     Ps.    3,613   Ps.    96,099      $      9,615   $            376   $     9,991
YEAR ENDED DECEMBER 31, 2000
Local                             Ps.  149,210     Ps.   29,060   Ps.   178,270      $     15,510   $          3,021   $    18,531
Long distance                           75,334            4,759          80,093             7,831                495         8,326
Rent of dedicated links                  2,460          -                 2,460               256              -               256
Sale of customer premise
    equipment                              689              689           1,378                72                 72           144
Lease of capacity                          473          -                   473                49              -                49
Other                                    1,830            1,560           3,390               190                161           351
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-24
<PAGE>   95

MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>               <C>            <C>                <C>            <C>                <C>
                                  Ps.   229,996    Ps.   36,068   Ps.   266,064      $     23,908   $          3,749   $    27,657
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-25
<PAGE>   96


                                   ON SCHEDULE


TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF MAXCOM TELECOMUNICACIONES, S.A. DE
C.V.

The audits referred to in our report to MAXCOM Telecomunicaciones, S.A. de C.V.
dated February 12, 2001, which is contained in the document constituting part of
this Annual Report included the audit of the schedule listed under Item 21 for
each of the years ended December 31, 1998, 1999 and 2000. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audits.

In our opinion, such schedule presents fairly, in all material respects, the
information set forth therein.







MEXICO CITY
FEBRUARY 12, 2001                                             BDO INTERNATIONAL






                                      S-1
<PAGE>   97

                    MAXCOM TELECOMUNICACIONES, S.A. De C.V.

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                     YEARS ENDED 1997, 1998, 1999 AND 2000

             (Amounts expressed in Millions of Mexican Pesos (Ps.)
                 with Purchasing Power as of December 31, 2000)





<TABLE>
<CAPTION>
                                              Balance at          Charged to          Charged to                    Balance at
                                              beginning           costs and             other                         end of
                                              of period            expenses            accounts        Deductions     period
                                            --------------       -------------       -------------    ------------  ------------
<S>                                <C>       <C>                 <C>                 <C>              <C>           <C>
Allowance for doubtful accounts
                                   1997          --                   --                  --               --           --
                                   1998          --                   --                  --               --           --
                                   1999          --              Ps. 3,095.0              --               --        Ps. 3,095.0
                                   2000      Ps. 3,095.0         Ps. 5,210.0              --               --        Ps. 8,305.0


Allowance for obsolete and
slow-moving inventories
                                   1997          --                   --                  --               --           --
                                   1998          --                   --                  --               --           --
                                   1999          --                   --                  --               --           --
                                   2000          --                   --                  --               --           --

</TABLE>






                                      S-II
<PAGE>   98
                      GLOSSARY OF TELECOMMUNICATIONS TERMS


ATM...........................    Asynchronous Transfer Mode. An information
                                  transfer standard that is one of a general
                                  class of packet technologies that relay
                                  traffic by way of an address contained within
                                  the first five bytes of a standard
                                  fifty-three-byte-long packet or cell. The ATM
                                  format can be used by many different
                                  information systems, including local area
                                  networks, to deliver traffic at varying rates,
                                  permitting a mix of voice, data and video
                                  (multimedia).

band..........................    A range of frequencies between two defined
                                  limits.

bandwidth.....................    the relative range of analog frequencies or
                                  digital signals that can be passed through a
                                  transmission medium, such as glass fibers,
                                  without distortion.  The greater the
                                  bandwidth, the greater the information
                                  carrying capacity.  Bandwidth is measured in
                                  Hertz (analog) or Bits Per Second (digital).

capacity......................    Refers to ability to transmit voice or data
                                  over telecommunications equipment.

carrier.......................    A provider of telecommunications transmission
                                  services by fiber, wire or radio.

centrex service...............    A business telephone service developed
                                  originally by Lucent Technologies which
                                  offers private branch exchange type features
                                  directly from the local telephone company
                                  central office, such as voicemail, call
                                  pick-up group, abbreviated dialing and
                                  multi-line hunting.

COFETEL.......................    Comision Federal de Telecomunicaciones, the
                                  Mexican Federal Telecommunications
                                  Commission.

digital.......................    Describes a method of storing, processing
                                  and transmitting information through the use
                                  of distinct electronic or optical pulses
                                  that represent the binary digits 0 and 1.
                                  Digital transmission/switching technologies
                                  employ a sequence of discrete, distinct
                                  pulses to represent information, as opposed
                                  to the continuously variable analog signal.

E1............................    A digital telephony format that carries data
                                  at the rate of 2.048 Mbps (DS-1 level). E-1
                                  is the European and Latin American version
                                  of North American T-1, though T-1 is 1.544
                                  Mbps.

fiber optic technology..........  Fiber optic systems use laser-generated
                                  light to transmit voice, data and video in
                                  digital format through ultra-thin strands of
                                  glass. Fiber optic systems are characterized
                                  by large circuit capacity, good sound
                                  quality, resistance to external signal
                                  interference and direct interface to digital
                                  switching equipment and digital microwave
                                  systems. A pair of fiber optic strands using
                                  advanced transmission technologies is
                                  capable of carrying over 258,000
                                  simultaneous telephone calls. Because
                                  optical signals disperse over distance, they
                                  must be regenerated/amplified at sites
                                  located along the fiber optic cable. Fiber
                                  optic systems using earlier generation fiber
                                  require frequent intervals between
                                  regeneration/amplifier sites. Greater
                                  distances between regeneration/amplifier
                                  sites afforded by the use of advanced fiber
                                  generally translate into substantially lower
                                  installation and operating costs and fewer
                                  potential points of failure.

fixed wireless local loop.......  A wireless local telephony service using the
                                  3.4-3.7 GHz frequency band.









                                     G-1

<PAGE>   99


Gulf region.....................  115 cities and towns in eleven states in
                                  eastern Mexico, which includes the cities of
                                  Puebla, Tampico, Veracruz, Reynosa, Cancun,
                                  Chetumal, Merida, Ciudad del Carmen,
                                  Campeche, Coatzacoalcos and Tuxtla
                                  Gutierrez, among others.

Hertz...........................  The unit measuring the frequency with which
                                  an alternating electromagnetic signal cycles
                                  through the zero-value state between lowest
                                  and highest states. One hertz (abbreviated
                                  Hz) equals one cycle per second. KHz
                                  (kilohertz) stands for thousands of hertz;
                                  MHz (megahertz) stands for millions of hertz
                                  and GHz (gigahertz) stands for billions of
                                  hertz.

LAN.............................  Local area network, a private data
                                  communications network linking a variety of
                                  data devices, such as computer terminals,
                                  personal computer terminals, personal
                                  computers and microcomputers, all housed in
                                  a defined building, plant or geographic
                                  area.

microwave technology............  Although limited in capacity compared with
                                  fiber optic systems, digital microwave
                                  systems offer an effective and reliable
                                  means of transmitting lower volume and
                                  narrower bandwidths of voice, data and video
                                  signals over intermediate and longer
                                  distances. Microwaves are very high
                                  frequency radio waves that can be reflected,
                                  focused and beamed in a line-of-sight
                                  transmission path. As a result of their
                                  electro-physical properties, microwaves can
                                  be used to transmit signals through the air,
                                  with relatively little power. To create a
                                  communications circuit, microwave signals
                                  are transmitted through a focusing antenna,
                                  received by an antenna at the next station
                                  in the network, then amplified and
                                  retransmitted. Because microwaves disperse
                                  as they travel through the air, this
                                  transmission process must be repeated at
                                  repeater stations, which consist of radio
                                  equipment, antennae and back-up power
                                  sources, located on average every 30
                                  kilometers along the transmission route.

Mbps............................  MegaBits per second.  A measurement of speed
                                  for digital signal transmission expressed in
                                  millions of bits per second (Mbps).

Multi-line hunting..............  A value-added service that allows for
                                  multiple calls to be received with a single
                                  telephone number.

PCS.............................  Personal Communications Services. PCS has
                                  come to represent two things: first, a
                                  digital wireless communications service
                                  operating over the 1.9 GHz band; and second,
                                  more generically, a wireless communications
                                  service utilizing a digital network that
                                  offers typical features such as voice, video
                                  and data applications, short messaging,
                                  voicemail, caller identification, call
                                  conferencing and call forwarding. Generic
                                  PCS suppliers promote this service on the
                                  ability of its features to be customized, or
                                  "bundled," to the needs of the individual
                                  customers.

point-to-multipoint microwave
transmission....................  A transmission using microwave technology by
                                  which a single signal goes from one
                                  origination point to many destination points.

point-to-point microwave
transmission....................  A transmission using microwave technology by
                                  which a signal goes from one point to another,
                                  usually connected by some dedicated
                                  transmission line.







                                     G-2
<PAGE>   100

SCT.............................  Secretaria de Comunicaciones y Transportes,
                                  the Mexican Communications and Transportation
                                  Ministry.

switch..........................  A device that opens or closes circuits or
                                  selects the paths or circuits to be used
                                  for transmission of information.  Switching
                                  is the process of interconnecting circuits
                                  to form a transmission path between users.

teledensity.....................  Teledensity is a measure of telephony
                                  service in a population. It is calculated by
                                  dividing the total subscriber base (number
                                  of lines in service) by the inhabitants and
                                  multiplying by 100. It is generally used as
                                  a comparative measure of network
                                  development.  All teledensity figures are
                                  reported in subscribers per 100 inhabitants.

WAN.............................  Wide area network, a large-scale, high speed
                                  communications network used primarily for
                                  interconnecting local area and metro area
                                  networks located in different cities, states
                                  or countries.






                                     G-3
<PAGE>   101



                                   SIGNATURES

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

                                MAXCOM TELECOMUNICACIONES, S.A. DE C.V.




                                   By:  /s/ ELOISA MARTINEZ
                                       -----------------------------------
                                        Eloisa Martinez
                                        Chief Financial Officer


DATE:  June 29, 2001

<PAGE>   102



ITEM 19.        EXHIBITS


<TABLE>
<CAPTION>
                                                                                                                        PAGE
                                                                                                                        ----
<S>                                                                                                                    <C>
1.           By-laws (estatutos) of Maxcom Telecomunicaciones, S.A. de C.V...........................................    E-3
2(a).        Not applicable.
2(b).        Indenture dated as of March 17, 2000 among Maxcom Telecomunicaciones, S.A. de C.V.,
             Corporativo en Telecomunicaciones, S.A. de C.V. and The Bank of New York, as Trustee....................     *
2(c).        Not applicable.
3.           CPOs Trust Agreement effective August 18, 2000 among Maxcom Telecomunicaciones,
             S.A. de C.V., its shareholders and Banamex, S.A., Institucion de Banca Multiple, Grupo
             Financiero Banamex Accival, acting as trustee...........................................................    E-22
4(a).        Agreement for the use of infrastructure and installation of fiber optic cable on the
             highways between Puebla and Mexico, dated August 18, 1998, between Amaritel, S.A. de
             C.V. (the predecessor of Maxcom Telecomunicaciones, S.A. de C.V.) and Iusatel, S.A. de
             C.V.....................................................................................................     *
4(b).        Interconnection Agreement for long distance services, dated January 22, 1999, between
             Amaritel and Telefonos de Mexico (Telmex) valid for a period of two years between
             February 1, 1999 and January 1, 2001.  The agreement establishes that it would remain in
             effect after the expiration date if no further agreement for its termination or renewal has
             been entered into, in accordance with article 42 of the Mexican Telecommunications law..................     *
4(c).        Local Interconnection Service Agreement, dated November 24, 1998, between Amaritel,
             S.A. de C.V. and Telefonos de Mexico, S.A. de C.V.......................................................     *
4(d).        Amendment to Local Interconnection Service Agreement, dated February 25, 1999,
             between Amaritel, S.A. de C.V. and Telefonos de Mexico, S.A. de C.V., originally entered
             into on November 24, 1998...............................................................................     *
4(e).        Metropolitan Network Capacity Sale Agreement, dated April 28, 2000, between Maxcom
             Telecomunicaciones, S.A. de C.V. and Metro Net, S.A. de C.V. (including amendment
             dated December 21, 2000)................................................................................    E-40
4(f).        Telecommunications Service Agreement dated November 15, 1999, between Maxcom and
             Telefonos de Mexico, S.A. de C.V.......................................................................      *
4(g).        Telecommunications Service Agreement dated March 9, 1999, between Maxcom and
             Bestel S.A. de C.V., according to which Bestel will provide long distance and private calls
             services to Maxcom......................................................................................     *
4(h).        Concession for the installation and operation of telecommunications services granted to
             Amaritel, S.A. de C.V. by the Secretary of Telecommunications and Transport on
             December 20, 1996.......................................................................................     *
4(i).        Amendment to Concession for the installation and operation of telecommunications
             services granted to Amaritel by the Secretary of Telecommunications and Transport on
             December 20, 1996, dated September 8, 1999, extending the coverage of such concession
             to include various additional municipalities of the State of Mexico.....................................     *
4(j).        Amendment to Concession for the installation and operation of telecommunications
             services granted to Amaritel by the Secretary of Telecommunications and Transport on
             December 20, 1996, dated December 7, 1999, authorizing Maxcom to employ whatever
             technologies it deems appropriate in providing telecommunications services to various
             municipalities..........................................................................................     *
4(k).        Concession for a public telecommunications network in Regions 3, 5 and 8 granted to
             Amaritel, S.A. de C.V. by the Secretary of Telecommunications and Transport on April 29, 1998...........     *
4(l).        Concession for the operation of point-to-multipoint microwave telecommunications
             services in Region 5 granted to Amaritel, S.A. de C.V. by the Secretary of
             Telecommunications and Transport on April 23, 1998......................................................     *
4(m)         Concession for the operation of point-to-multipoint microwave telecommunications
             services in Region 3 granted to Amaritel, S.A. de C.V. by the Secretary of
             Telecommunications and Transport on April 23, 1998......................................................     *
</TABLE>






                                      E-1
<PAGE>   103


<TABLE>
<S>                                                                                                                    <C>
4(n).        Concession for the operation of point-to multipoint microwave telecommunications
             services in Region 8 granted to Amaritel, S.A. de C.V. by the Secretary of
             Telecommunications and Transport on April 29, 1998......................................................     *
4(o).        Concessions for the nationwide operation of point-to-point microwave
             telecommunications services using five frequency bands in the 56 MHz bandwidth, each
             granted to Amaritel, S.A. de C.V. by the Secretary of Telecommunications and Transport
             on June 4, 1998.........................................................................................     *
4(p).        Concessions for the nationwide operation of point-to-point microwave
             telecommunications services using two frequency bands in the 100 MHz bandwidth, each
             granted to Amaritel, S.A. de C.V. by the Secretary of Telecommunications and Transport
             on June 4, 1998.........................................................................................     *
4(q).        Amendment to Concession for the operation of point-to-multipoint telecommunications
             services in Regions 3, 5, 8 granted to Amaritel, S.A. de C.V. by the Secretary of
             Telecommunications and Transport on April 1, 1998, dated October 12, 1999, regarding
             the start date for the initiation of services...........................................................     *
4(r).        Amendment to Concession for the installation and operation of telecommunications
             services granted to Amaritel, S.A. de C.V. by the Secretary of Telecommunications and
             Transport on December 20, 1996, dated September 24, 1999 eliminating financial
             restrictions............................................................................................     *
4(s).        Warrant Agreement dated as of March 17, 2000 between Maxcom Telecomunicaciones,
             S.A. de C.V. and The Bank of New York, acting as warrant agent..........................................    E-70
4(t).        Amended and Restated Securityholders' Agreement dated August 18, 2000 among
             Maxcom Telecomunicaciones, S.A. de C.V., its shareholders and the common
             representative..........................................................................................    E-122
5.           Not applicable.
6.           Computation of earnings per share.......................................................................    E-154
7.           Computation of ratio of earnings to fixed charges.......................................................    E-155
8.           None.
9.           Not applicable.
10.          None.
</TABLE>

------------
*       Previously filed with Registration Statement on Form F-4 No. 333-11910
        submitted on May 5, 2000.





                                      E-2