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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1999

Commission file number: 0-21213

LCC INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                              |  |                                                  
|----------------------------------------------------------------------------- |  | -------------------------------------------------
|Delaware
	(State or Other Jurisdiction
	of Incorporation or Organization)     |  | 54-1807038
	(I.R.S. Employer
	Identification No.)
|7925 Jones Branch Drive
	McLean, VA
	(Address of Principal Executive offices) |  | 22102
	(Zip Code)                                

Registrants telephone number, including area code:
(703) 873-2000

Securities registered pursuant to Section 12(b) of the
Act: Not Applicable

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

Class A Common Stock, par value $.01 per share

(Title of Class)


Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and
(2) has been subject to such filing requirements for the
past 90 days.  Yes 
[X]     No

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

Based upon the closing price of the registrants common
stock as of March 23, 2000, the aggregate market value of the
common stock held by non-affiliates of the registrant is
$252,193,874.*

As of March 23, 2000, the registrant had outstanding
11,841,331 shares of Class A Common Stock, par value $.01
per share, (the Class A Common Stock) and
8,449,984 shares of Class B Common Stock, par value $.01 per
 share (the Class B Common Stock).

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference
and the Part of the Form 10-K into which the document is
incorporated:

(1)  Portions of the definitive Proxy Statement for the
Annual Meeting of the Stockholders to be held on May 16,
2000 (the Proxy Statement) to be filed within
120 days after the end of the registrants fiscal year
are incorporated by reference into Part III, Items 10  13
of this Form 10-K.














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TABLE OF CONTENTS



|                                                                                              |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I                                                                                       
|Item 2. Properties                                                                           
|Item 3. Legal Proceedings                                                                    
|Item 4. Submission of Matters to a Vote of Security Holders                                  
|Item 5. Market for Registrants Common Stock and Related Stockholder Matters                 
|Item 6. Selected Financial Data                                                              
|Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|Item 8. Financial Statements and Supplementary Data                                          
|Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  
|Item 10.Directors and Executive Officers of the Registrant                                   
|Item 11.Executive Compensation                                                               
|Item 12.Security Ownership of Certain Beneficial Owners and Management                       
|Item 13.Certain Relationships and Related Transactions                                       
|Item 14.Exhibits, Financial Statement Schedules, and Reports on Form 8-K                     
|SIGNATURES                                                                                   



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This Annual Report on Form 10-K
(Form 10-K) contains certain forward-looking
statements within the meaning of Section 27A of the
Securities and Exchange Act of 1934, which statements can be
identified by the use of forward looking terminology, such as
may, will, expect,
anticipate, estimate, or
continue or the negative thereof or other variations
thereon or comparable terminology. The Companys actual
results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors,
including those set forth elsewhere in this Form 10-K. See
the Risk Factors section of Item 1
Business for cautionary statements identifying
important factors with respect to such forward-looking
statements, including certain risks and uncertainties, that could
 cause actual results to differ materially from results referred
to in forward-looking statements. Unless the context indicates or
 requires otherwise, references in this Form 10-K to the
Company are to (1) the combined operations of
the Companys predecessor, LCC, L.L.C., a Delaware limited
liability company, and its subsidiaries (the Limited
Liability Company) prior to the date of the merger of the
Limited Liability Company into LCC International, Inc., a
Delaware corporation formed in June 1996 (LCC
International), as described below (the Merger)
 and (2) LCC International and its subsidiaries, after the
Merger. Definitions of technical and other terms are set forth in
 the Glossary appearing elsewhere herein. References herein to
wireless telecommunications or similar terms are not intended to
include satellite transmission, which some consider to be a
wireless technology.




PART I

Item 1.  Business

General

The Company is one of the worlds largest independent
providers of RF engineering and program management services to
the wireless telecommunications industry. The Company provides
end-to-end services solutions to operators of a wide range of
wireless networks, incorporating all major wireless technologies
available today, including W-CDMA, LMDS, MMDS, TDMA (which
includes IS-54 and IS-136), GSM, CDMA, and iDEN. The Company
provides services for operators involved in all four phases of
wireless system development: (i) Phase 1
strategic planning and bidding for the licenses necessary to
build and operate the system; (ii) Phase 2
 design and build-out of the system; (iii) Phase 3 optimization and enhancement of the
system to meet the requirements of an increasing subscriber base
and to provide increased quality and coverage; and (iv) Phase 4 achievement of greater efficiencies in
providing service in order to compete in areas where there are
multiple system operators. In Phase 1, the Company will assist in
 the development of an operators business case planning,
licensing strategy, technical requirements (both short term and
long range), and vendor selection. In Phase 2, the Company offers
 a full range of integrated network deployment services including
 radio frequency engineering, site acquisition, construction
management and related services designed to take the operator
from concept to commercial launch. To address Phases 3 and 4, the
 Company offers benchmarking, optimization, technical evaluation
and operations and maintenance services.

The Company has provided services and products to seven of the
ten largest U.S. cellular system operators; large international
operators, including British Telecom, France Telecom, Misrfone (a
 Vodafone Airtouch affiliate) and Mannesmann; companies building
PCS systems, including Sprint PCS, AT&T Wireless Services,
Bell South Cellular Corporation, Lucent Technologies and Pacific
Bell Mobile Services; operators of iDEN systems, including Nextel
 Communications; and operators of two-way messaging systems, such
 as SkyTel. The customers listed above each contributed
approximately 5% or more of the Companys consolidated
revenues during one or more of fiscal years 1992 through 1999. In
 August 1999, the Company secured a contract from XM
Satellite Radio, Inc. (XM Satellite) to complete, on
a turn-key basis, the design and deployment of XM
Satellites nationwide terrestrial repeater network. The
Company also has established working relationships with two major
 telecommunications equipment vendors, pursuant to which the
Company provides services and products on a subcontract basis.
The Company derives a significant portion of its revenues from
its international customers (approximately 47.0% in 1999).

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In October 1999, the Company completed the sale of its
software tools and field test measurement equipment business
(Products Business) to Ericsson Radio Systems AB. In
March 2000, the Company announced, and completed the initial
 closing with respect to, the sale of up to 197 telecommunication
 towers to Pinnacle Towers Inc., which towers were owned or being
 constructed by the Companys subsidiary, Microcell
Management, Inc. In connection with the sale of its towers, the
Company was awarded a contract by Pinnacle to site audit, perform
 capital improvements (when necessary), and maintain a portion of
 Pinnacles telecommunication towers. The sale of the
Companys products business, and the conversion of the
Companys tower business from asset ownership to an
operations and maintenance business, have allowed the Company to
focus on its core strengths and on expanding its end-to-end
services offerings.

A substantial number of new wireless network licenses have been
awarded worldwide over the last several years, and the Company
expects a significant number of additional wireless licenses to
be awarded in the next few years. Many of the new systems are
being designed to deploy 3G data capabilities, which
the Company believes it is uniquely positioned to address given
its experience in designing and deploying wireless systems. The
Company has already performed work with respect to the design and
 deployment of fixed and mobile wireless data networks for more
than eight customers in the United States and Europe. In
addition, many existing systems are continuing to grow.
Furthermore, competition among operators of wireless networks is
generating greater requirements for operational quality and
efficiency. Construction of new networks, and expansion and
optimization of existing networks, require substantial amounts of
 RF engineering, system development, and ongoing maintenance
services.

Company Background

The Companys business commenced in 1983 in a corporation
named LCC Incorporated formed by Dr. Rajendra and Neera
Singh. In 1994, entities formed by The Carlyle Group, a
Washington, D.C.-based investment group (the Carlyle
Investors) acquired a 25% indirect interest in LCC
Incorporated. LCC International was formed in June 1996 in
connection with the Companys initial public offering.

The Company issued 3,162,500 shares of Class A Common Stock
in the Offering at an initial public offering price of $16.00 per
 share. The total proceeds of the Offering, net of underwriting
discounts and offering expenses, were approximately
$44.8 million.

In June 1994, the Companys predecessor entered into a Note
Purchase Agreement with a then unrelated third party, MCI
Telecommunications Corporation (now MCI/Worldcom, Inc.;
MCI/Worldcom). These notes were convertible, under
certain circumstances, into 2,841,099 shares of Class A
Common Stock (see note 12 to the Consolidated Financial
Statements). In July 1999, MCI/Worldcom converted these notes in
their entirety into 2,841,099 shares of Class A Common
Stock, and both notes were cancelled.

Recent Developments

In October 1999, the Company completed the sale of its
Products Business to Ericsson Radio Systems AB in consideration
for an aggregate cash purchase price of $22.3 million,
subject to a holdback of $1.9 million payable upon the
collection of certain accounts receivable (see note 3 to the
Consolidated Financial Statements).

In March 2000, the Company announced, and completed an
initial closing on 134 towers with respect to, the sale of up to
197 telecommunication towers owned or to be constructed be the
Companys subsidiary, Microcell Management, Inc., for an
aggregate purchase price of $80 million, assuming all 197
towers are conveyed. At the initial closing, the Company conveyed
 134 towers in consideration for cash proceeds of approximately
$56.3 million. In connection with the sale of its towers,
the Company entered into a five year Tower Service Agreement with
 Pinnacle Towers Inc., whereby the Company was engaged to provide
 site audit, program management and site maintenance services
with respect to an initial 204 towers owned or managed by
Pinnacle.

Concurrent with the initial closing of its sale of 134 towers to
Pinnacle, the Company prepaid, in full, its outstanding revolving
 credit facility with The Chase Manhattan Bank. The Company paid
approximately

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In July 1999, MCI/ Worldcom elected to convert its
convertible subordinated notes, in the aggregate principal amount
 of $50 million, into 2,841,099 shares of Class A
Common Stock.

In August 1999, Telcom Ventures elected to convert its
convertible subordinated note, in the principal amount of
$5 million into 845,087 shares of Class A Common Stock
(see note 5 to the Consolidated Financial Statements).

In August 1999, the Company entered into a turn-key network
deployment contract of approximately $124 million with XM
Satellite pursuant to which the Company was engaged to design and
 deploy XM Satellites nationwide terrestrial repeater
network.

In October 1999, the Company (through its wholly-owned
subsidiary, LCC Egypt, Ltd.) was awarded a contract of
approximately $16.5 million by Misrfone Telecommunications
Company S.A.E (Misrfone) with respect to the
deployment of a minimum of 180 telecommunications cell sites in
Egypt.

In November 1999, the Company was awarded a master
professional services contract by Cisco Systems, Inc. whereby the
 Company may be engaged to provide services with respect to the
development and support of broadband fixed wireless internet
services. In particular, the Company will assist in the design
and deployment of wireless internet networks based on
Ciscos Orthogonal Frequency Division Multiplexing
(OFDM) technology and equipment. On March 8,
2000, the Company entered into an agreement with Nucentrix
Broadband Networks, Inc. to provide technical engineering and
design support in connection with its efforts to deploy a Cisco
powered network using Ciscos OFDM based WT2700 wireless
technology suite, and with its efforts to obtain permanent
licenses from the Federal Communication Commission
(FCC).

Industry Background

Overview

Wireless telecommunications networks use a variety of radio
frequencies to transmit voice and data. Wireless
telecommunications networks include two-way voice and data
applications, such as cellular, wide band and narrow band PCS and
 iDEN networks, and various high speed data applications. Each
application operates within a distinct radio frequency block.
These technologies all require radio frequency engineering and
system deployment services for system design, build-out and
optimization. Once operational, they require ongoing
technological evaluation, auditing, competitive benchmarking,
operations and maintenance services.

Types of Wireless Communications

The wireless communications industry encompasses a broad range of
 technologies and applications from traditional voice to high
speed data applications. These radio signals operate within
portions of the spectrum designated by the government
specifically for each technology. The key technologies in the
communications industry today are as follows:

Cellular.A cellular network is a telephone system based
on a grid of cells deployed primarily at 800 and 900
MHz. Each cell contains transmitters, receivers and antennas, and
 is connected to switching gear and control equipment. As the
cellular market migrates from an analog based transmission
technology to a digital based transmission technology, demand has
 increased as prices decline. Demand for design and deployment
services continues to increase both in the US and the rest of the
 world as carriers role out services in new areas and improve
coverage in existing areas. Analog network demand is stagnating
or declining as subscribers are switching to digital service.
Over the next 5 to 10 years, it is anticipated that digital
service will replace analog service.

PCS.In 1993, the FCC allocated a portion of the radio
spectrum for the provision of a new wireless communications
service, commonly known as PCS. The principal difference between
PCS and traditional cellular service is that PCS systems operate
at a higher frequency range and have a more limited transmission

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iDEN.iDEN is a mobile communication service that relies
on specialized mobile radio frequencies that have been
historically limited to two-way voice communications in small
local networks (such as for taxi or messenger dispatch). As a
result of advances in digital technology, iDEN operators have
begun to design and deploy digital mobile networks that increase
the frequency capacity of iDEN systems to a level that is
competitive with that of cellular and PCS systems. Companies such
 as Nextel Communications (in the U.S.) have acquired licenses
for iDEN two-way radio channels in their respective operating
areas and are offering wireless voice services over their
networks. A derivative SMR technology known as TETRA
or Terrestrial Trucking Radio is becoming an
increasingly popular technology in Europe.

Third Generation (3G). 3G is the general term for the next
 generation of wireless services offering enhanced voice and data
 services, improved spectrum efficiency, high speed data, and
superior voice quality as well as lower operating costs for the
wireless service providers. 3G licenses are being auctioned in
Europe, with Finland and Spain leading the auction calendar
followed by the United Kingdom and Germany. Within the next three
 years, the Company expects that more than 80 new 3G licenses
will be auctioned in Europe alone. In Europe, usually one of the
new licenses in each country is reserved for a new carrier while
the remaining licenses are awarded to the existing wireless
carriers.

Fixed Wireless High-speed Data and other Services.Local
Multipoint Distribution System (LMDS) and
Multichannel Multipoint Distribution System (MMDS)
are fixed broadband point-to-multipoint systems which provide an
alternative for offering local exchange service, wireless
telephony, data, internet access, video and other broadband
services. LMDS services and MMDS services can provide a wireless
local loop (a system that eliminates need for a wire loop
connecting users to the public switched telephone network)
bridging the last mile gap enabling competitive local
 exchange carriers (CLECs) to offer a full array for
telecommunications services to business and residential customers
 in a fast, timely, and cost-effective manner. Digital audio
radio satellite systems (DARS), direct satellite
broadcasting, and other wireless high-speed data services
represent segments of the wireless communications industry being
developed by operators in the U.S. and abroad. XM Satellite
currently is in the process of deploying a terrestrial repeater
network to improve its coverage in densely populated metropolitan
 areas. In the United States, Teligent, Winstar and ARTS are
operating the first stages of their LMDS networks. Nucentrix
Broadband Networks is among a group of other providers that are
beginning to deploy MMDS networks, and who plans to construct
fixed wireless networks in the near future. Similar opportunities
 exist throughout the world, especially in Europe, where new
spectrum for fixed wireless is being auctioned.

Wireless Technologies

Most traditional cellular systems historically transmitted voice
and data signals over analog-based systems, which use one
continuous electronic signal that varies in amplitude or
frequency over a single radio channel. Digital systems, on the
other hand, convert voice or data signals into a stream of digits
 that is compressed before transmission, enabling a single radio
channel to carry multiple simultaneous signal transmissions. This
 enhanced capacity, along with enhancements in digital protocols
(discussed below), allows digital-based wireless technologies to
offer new and enhanced services, such as greater call privacy and
 single number (or find me) service, and more data
transmission features, such as mobile office
applications (including facsimile, electronic mail and connecting
 notebook computers with computer/data networks).

Digital signal transmission is accomplished through the use of
frequency management technologies, or protocols. Two
common protocols used in cellular and other networks
manage the radio channel either by dividing it into
distinct time slots (a method known as Time Division Multiple
Access, or TDMA) or by assigning specific coding
instructions to each packet of digitized data that comprises a
signal (a method known as Code Division Multiple Access, or
CDMA). In the U.S., the FCC has intentionally avoided
 mandating a universal digital signaling protocol, and three
principal digital signal protocols (which are incompatible with
each other) are currently being used in the U.S. for PCS
networks: GSM, CDMA and TDMA. European

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With the convergence of wireless and internet technologies,
wireless carriers are beginning to deploy high speed data
capabilities. As an interim measure, carriers are rolling out
intermediary solutions generally referred to as 2.5G,
 in particular GPRS and EDGE, which provide high speed data
capabilities in conjunction with current digital networks. GPRS
is being implemented as a software upgrade to existing GSM and
TDMA networks enabling them to provide data services with speeds
up to 128 kbps. The next step of 2.5G solutions, such as EDGE,
allows for speeds up to 384 kbps, requiring hardware upgrades and
 engineering services. The Company also has experience in these
technologies.

The International Telecommunications Union (ITU) has
agreed on an umbrella 3G standard combining WCDMA, cdma2000 and
UWC-136 into a set of interoperable standards. This allows all
existing carriers to choose a 3G standard that will allow them to
 reuse their existing infrastructure while making global roaming
possible. 3G capabilities will include wireline quality voice
service, collaborative working between multimedia and high speed
data, user customization allowing the subscriber better control
over features such as voicemail routing, announcements and call
screening, mobility-enabled services such as vehicular navigation
 and emergency services, wireless local loop capabilities,
seamless global roaming, zone identification and billing and
satellite interworking. The Company also has experience in these
technologies.

Operation of Two-Way Wireless Systems

Two-way mobile wireless service areas are divided into multiple
regions called cells, each of which contains a base
station consisting of a transmitter, a receiver and signaling
equipment, located on a telecommunications tower. The cells are
typically configured on a grid pattern, although terrain factors
(including natural and man-made obstructions) and signal coverage
 patterns may result in irregularly shaped cells and overlaps or
gaps in coverage. Cellular system cells generally have a radius
ranging from two miles to 25 miles. PCS system cells have a
radius ranging from approximately one-quarter mile to
approximately 12 miles, depending on the PCS technology being
used and the terrain. The base station in each cell is connected
by microwave, fiber optic cable or telephone wires to a switch,
which uses computers and specially developed software to control
the operation of the wireless telephone system for its entire
service area. The switch controls the transfer of calls from
cells within the system and connects calls to the local landline
telephone system or to a long distance telephone carrier. Since
each cell site requires engineering and site acquisition
services, growth in the number of cell sites is one of the key
drivers of demand for the Companys telecommunications
services and telecommunications towers.

Unlike cellular and PCS systems, which are designed principally
to serve voice calls, 3G systems have been conceived to serve
integrated voice, data, and multimedia applications. The typical
range of coverage from a 3G cell is less than 1 mile depending on
 the environment and the applications being served. Due to the
increased need for high speed mobile data and multimedia
services, the range of coverage is expected to be within less
than  1/2 mile in dense urban core areas, which renders a 3
to 4 fold increase in the number of base stations required to
deploy 3G systems compared to PCS.

Wireless transmission requires a certain signal strength for the
parties to hear each other or for data to be received. The signal
 strength of a transmission between a handset and a base station
declines as the handset moves away from the base station, so the
switch and the base stations monitor the signal strength of calls
 in progress. When the signal strength of a call declines to a
predetermined level, the switch may hand off the call
 to another base station that can establish a stronger signal
with the handset. Hand-off to an adjacent system must be effected
 through an appropriate technical interface when a handset leaves
 the service area of the wireless service provider. The quality
of wireless transmission depends in part on signal strength,
limitations imposed by the terrain and interference from other
uses of radio signals. Transmission quality is measured in the
field at various locations so that adjustments can be made to
enhance quality.

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Each wireless network is designed to meet a certain level of
subscriber density and traffic demand and to provide a certain
geographic coverage. Each transmission over the wireless network
requires a certain amount of radio frequency, so a systems
capacity is limited by the amount of frequency that is available.
 The same frequency can be reused by each separate transmitter,
subject to certain interference limitations. The design of each
wireless system involves placement of transmission equipment in
locations that will make optimal use of available frequency based
 upon projected subscriber usage patterns, subject to
availability of such locations and ability to use them for
wireless transmissions under applicable zoning requirements.

After a wireless system has been installed, the systems
capacity can be increased in various ways, by (i) adding
available frequency capacity to cells as required, if such
capacity is available, (ii) using directional antennae to
divide a cell into discrete multiple sectors or coverage areas,
thereby reducing the required distance between cells using the
same frequency, or (iii) cell splitting (i.e.,
 dividing a single cell into a number of smaller cells served by
lower-power transmitters, thereby increasing the ability to reuse
 radio frequencies and increasing the number of calls that can be
 handled in a given area). Additional solutions are being
designed to increase network capacity and coverage, including
(i) the introduction of microcells, which can be placed very
 close together to increase frequency reuse and the total
capacity of the wireless network and which can be placed within
buildings, train stations and other structures to provide
coverage where none was available before and (ii) the
introduction of digital technologies, which increase the number
of conversations which can be transported on a single radio
carrier from two to potentially more than ten times, depending on
 the type of digital technology deployed.

Wireless System Life Cycle

Set forth below is a description of the life cycle of a typical
wireless system.

Phase 1.In Phase 1, the operator is developing its
 business strategy and pursuing the licenses necessary to build
and operate the system. Technical planning and a rough
engineering designs are often required to decide on a deployment
strategy and determine construction costs and the revenue
generating ability of the system.

Phase 2. Phase 2involves the actual design and build-out
of the wireless system. Detailed site location designs are
prepared, interference to or from co-located antennae is checked,
 site performance is measured after completing construction and,
finally, the site is optimized to work with neighboring sites.
Wireless network operators (even the few which have sizable
internal engineering staffs) typically rely on outside RF
engineering companies, such as the Company, for Phase 2
engineering services and often rely on outside parties to oversee
 the site acquisition and construction process. Depending on the
size of the system, this phase can involve from four RF engineers
 for a typical small system, to 15 RF engineers for a typical
medium-sized system and up to 100 RF engineers for a nationwide
deployment over a period of 12 to 24 months. The Company
believes that globally the number of RF engineers available on an
 outsourcing basis is limited.

Phase 3.As the number of subscribers handled by the
wireless system increases, the system enters Phase 3, the
expansion of the system by adding cell sites or using other
techniques to increase system coverage and capacity. The system
must also be optimized to meet the increased subscriber usage
from the new cell cites and to provide increased quality and
coverage. In network expansions, the operator typically continues
 to rely on the RF engineering company and the external site
acquisition team, such as the Company, to design and implement
the expansion and make optimization adjustments to the existing
system.

Phase 4.Eventually the system will enter Phase 4,
in which the operator must achieve greater efficiencies in
service provision in order to compete in areas where there are
multiple system operators. In most European countries and
Australia, certain systems have entered Phase 4. In the
U.S., with the construction of new PCS systems in areas that
already have two cellular systems and with the rollout of a
national iDEN system by Nextel Communications, wireless networks
are reaching Phase 4. Competing systems in Phase 4
generally have the same network coverage; thus, competition is
focused primarily on price and call quality.

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Services for the Wireless Industry

The planning, geographic layout, build out and operation of a
wireless network requires significant RF engineering work. The RF
 engineers must design the wireless network to meet the
operators requirements for transmission over the wireless
network, which requirements are based upon a projected level of
subscriber density and traffic demand and the coverage area
specified by the operators license or cost-benefit
decisions. In addition to meeting basic transmission
requirements, the RF network design must make optimal use of
available radio frequency and result in the highest possible
signal quality for the greatest portion of projected subscriber
usage within existing constraints. These constraints may be
imposed by cost parameters, terrain, limitations in the license,
interference with other operators, availability of cells,
applicable zoning requirements and other factors. Based on these
initial technical guidelines, desired cell site locations are
identified. This process is known as identifying search
rings.

The RF engineering work performed in connection with both initial
 system design and buildout and subsequent system redesign and
expansion must be coordinated with cell site acquisition
activities. A site acquisition team identifies those potential
sites within a given search ring (i) which most closely
match the RF engineering specifications; (ii) can be leased;
 (iii) are suitable for construction; and (iv) are
amenable to obtaining zoning and other required permits. The most
 desirable sites fitting these criteria are further analyzed by
the RF engineers in the context of demographics, traffic patterns
 and signal characteristics. If necessary, the RF engineers may
re-design their initial search rings to identify other suitable
target locations.

After a suitable site has been identified, the site acquisition
team obtains either (i) a long-term lease for a rooftop or
tower site, or (ii) in the case of a tower site, an option
to purchase the property. In the case of a tower site, the site
acquisition team will also obtain a title report on the site,
conduct a survey of the site, obtain an environmental survey of
the site and conduct a soil analysis of the site. The site
acquisition team will also prepare all necessary zoning
applications, attend any necessary zoning hearings and obtain
necessary land use permits to begin construction or install
equipment.

Following the site acquisition process, cell site construction
commences. This involves securing the necessary permits,
installing the necessary equipment, antenna and shelters, and
competing the initial cell site acceptance testing procedures.
During this phase of development, construction budgets and
schedules are prepared, sub-contractors are hired where necessary
 and construction begins. Construction involves, in the case of a
 tower site, clearing the site, laying foundations, bringing in
utility lines (including interconnection with a local telephone
provider) and constructing the multi-tenant tower, and, in some
cases, shelters or buildings to house electronic equipment and,
in the case of a rooftop site, assembling the necessary
equipment.

End-to-End Telecommunications Services

RF Engineering and System Deployment Services.The Company
 provides a variety of RF engineering and system deployment
services over the four phases of the life cycle of a wireless
telecommunications system, as follows:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Phase 1 Services.The Companys engineers help in the
	 preparation of strategic plans, business plans and applications
	for network system operators seeking licenses in formal
	government license grant processes. The Company also has assisted
	 foreign governments in preparing Requests for Proposals
	(RFPs) and analyzing responses thereto. The Company
	has assisted in preparing winning applications in several
	(approximately nine) license tender processes worldwide,
	including the second nationwide cellular license in Germany, the
	first cellular license in Bombay, India and a license in Belgium.
	 The Companys involvement in successful tenders has
	generally led to follow-on contracts with winning applicants as
	they implement new systems. The introduction of wireless data
	necessitates additional planning for wireless operators. The
	Company assists operators in 2G to 3G migration planning,
	technology and service evaluation, and end to end dimensioning of
	 wireless networks to carry voice and data traffic.
|
| | Phase 2 Services.The Company offers a full range of
	deployment services including analysis of customer expectations
	for network coverage, capacity and other requirements, analysis
	of interference                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

8



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | and other technical factors affecting coverage, capacity and
	performance, identification and rank of desirable cell sites,
	preparation of regulatory filings (FCC, FAA, zoning, land use and
	 others) required for system deployment and attendance at
	regulatory hearings, turn-key systems deployment, including
	identification and site acquisition and construction management
	services, measurement of network performance and optimization of
	systems.                                                                                               
|
| | Phase 3 Services.The Companys services are used by
	existing system operators to plan system expansions to
	accommodate subscriber growth, incorporate improvements in
	technology, improve system performance and achieve efficient use
	of available radio spectrum. The Company also assists in capacity
	 expansion planning and technology changeovers, such as
	conversion from analog to digital technology and the
	implementation of 2.5G solutions.                                                                                                    
|
| | Phase 4 Services.As multiple service providers offer
	competing services in the same service area, network operators
	will require additional engineering services focusing on the
	achievement of cost savings and quality enhancements within the
	existing coverage area. These services include system analysis
	and network management, including redistribution or elimination
	of cell sites, cost management, measurement of network
	performance, including benchmarking performance
	against that of competitors, and technology and network upgrades.

The Company is one of the worlds largest independent
providers of RF engineering and wireless network design services.
 (The Company maintains regional headquarters in Mission Viejo,
California, London (UK), Cairo (Egypt), Sao Paulo (Brazil), and
Singapore, in addition to its worldwide headquarters in McLean,
Virginia.) The Company believes that its large number of RF
engineers enables it to respond quickly to customers who may
require the Company to staff a major project on a timely basis.
In addition, the Company believes that the wide-ranging
experience of its RF engineers, including exposure to and
participation in the standards-setting process for new digital
and wireless internet technologies, helps the Company understand
the changing marketplace for wireless communications and for
end-to-end services to support the wireless industry. Since a
large number of its professionals work on customer sites, the
Company is able to develop an understanding of many of the issues
 of importance to its customers and uses this information in
planning. The Company also believes that the various
nationalities of its professionals provides the Company with an
understanding of different practices in business and wireless
telephony in many countries around the world that will assist the
 Company in continuing to pursue international opportunities.

The Company provides engineering services on a contract basis,
usually in a customized plan for each client. The Company
generally charges for engineering services on a time and
materials basis, although Phase 1 services or other projects of
short duration may involve a fixed price or success fee. The
Companys revenues also include reimbursement for expenses,
including the living expenses of engineers on customer sites.

The Company offers its customers a one stop shopping
approach to Phase 2system build-outs and Phase 3 network
expansions by packaging system deployment services in a
customized plan for each client. The Company provides these
services on a contract basis, on a time and materials basis or
for a fixed price per cell site.

Cellular Institute

The Company provides training services, for its employees and
clients, through the Cellular Institute. The Cellular Institute
started in 1991 as the Companys corporate university and
has become one of the premier training schools for the wireless
industry. The Cellular Institute has taught more than 2,000
employee and client classes worldwide in a variety of languages.

Tower Service and Tower Management

The Company recently launched a tower service and tower
management business pursuant to which it will offer site audit,
maintenance and project management services to telecommunications
 tower owners.

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Customers and Backlog

Customers

The Company has provided services and products to seven of the
ten largest U.S. cellular system operators; large international
cellular operators, including British Telecom, France Telecom,
Misrfone (a Vodafone Airtouch affiliate) Mannesmann and Korea
Mobile Telecom; companies building or proposing to build PCS
systems, including Sprint PCS, AT&T Wireless Services and
Pacific Bell Mobile Services; operators of iDEN systems,
including Nextel Communications; operators of two-way messaging
systems; and operators of emerging technologies such as XM
Satellite. The Company also has established working relationships
 with two major telecommunications equipment vendors, pursuant to
 which the Company provides services and products on a
subcontract basis.

In 1999, XM Satellite and Sprint PCS accounted for approximately
13.6% and 11.2% respectively, of the Companys revenues and
were the only customers accounting for 10% or more of the
Companys revenues.

The Companys existing and targeted customer base includes
operators and vendors of all forms of wireless communications
services, operating a variety of different network platforms and
access technologies in diverse geographic markets. The
Companys experience includes the following projects:



| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In the U.S., the Company is assisting its cellular customers in
	implementing the North American digital cellular standards (i.e., TDMA, CDMA and others).                                
|
| |  | The Company has designed, or is currently designing, GSM digital
	cellular networks in the U.S., Germany, The Netherlands, Belgium,
	 France, Italy, Portugal, Malaysia and other nations.
|
| |  | In Asia, the Company has designed and developed GSM and CDMA
	networks in Korea, Malaysia, and Australia.                                                                                 
|
| |  | The Company has designed, or is currently designing, iDEN systems
	 throughout the U.S. and in Brazil, Canada, Mexico and China.                                                          
|
| |  | In the U.S., the Company has supported narrowband PCS clients
	with INFLEXION and REFLEX standards.                                                                                     
|
| |  | In the US, the Company is supporting design and deployment of
	wireless broadband networks including LMDS and MMDS.                                                                       
|
| |  | Currently, the Company is assisting in one of the first UMTS
	designs in the UK.                                                                                                          

In March, 2000, the Company entered into a Tower Services
Agreement with Pinnacle Towers, Inc. to launch its new tower
services and tower management business. The Company will provide
the following services to Pinnacle: (i) site audit services,
 including field inspections, preparation of due diligence
reports, provide deficiency summaries of the owners
existing towers and new towers, complete site upgrade work,
(ii) maintenance services, including routine inspections and
 maintenance and preparation of tower management reports, and
(iii) project management services, including program
management and implementation of new tower construction, zoning
and land use services, lease re-negotiation and site evaluations.
 The agreement with Pinnacle provides for a monthly maintenance
fee for maintenance services. The site audit and project
management services are provided on a time and materials basis.
The Company intends to market and provide similar services to
other telecommunications owners.

Backlog

The Company has entered into long-term contracts with customers
for the provision of the Companys services. As of
December 31, 1999, the Company had a total backlog of
$135 million relating to professional services. In March
2000, the Company secured an additional $50 million in
backlog relating to its newly-launched tower services and tower
management business. The Company includes in its backlog only
committed fees or purchase prices specified in contracts which
have been executed by the Company to the extent that the Company
contemplates recognition of the related revenue.

10



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The principal portion of the Companys present backlog
arises from XM Satellite, which represents approximately
$114 million (or 62.0%) of the overall backlog. Since the
Companys backlog is subject to significant timing
uncertainties, the Company cannot accurately predict the portion
of the backlog that will be filled within the current year, but
expects that it will not fill at least $85.0 million of its
overall backlog in 2000. There can be no assurance that the
contracts included in the backlog will actually generate the
specified revenues or that actual revenues will be generated
within any particular period. Our contracts typically have
provisions that permit customers to terminate their contracts
under various circumstances, which include our nonperformance for
 customer convenience. With respect to the Companys Tower
Services Agreement with Pinnacle Tower Inc., the contract
provides that on an annual basis, either party may request a
renegotiation of the pricing and scope of services. Therefore,
there are no guarantees the current contract will generate the
specified revenues or the minimum payments of $10.0 million
per year over the next five years.

Sales and Marketing

The Company markets its telecommunications services to operators
of wireless telecommunications networks in North America, Europe,
 the Middle East, Africa, Asia-Pacific and Latin America. The
Company markets primarily through its executives, project
managers and RF engineers and other technical professional staff.
 Customers generally have engineers involved in their procurement
 decisions, and the Companys engineers work closely with
the customers engineers to help them understand the
Companys services and their advantages compared to those of
 the competition. The Company also utilizes independent
distributors and sales agents to supplement its sales force
outside the U.S. where business practices or customs make it most
 effective to proceed through local companies. The Company
utilizes the offices of its British subsidiary to lead its
European sales efforts and the offices of its Brazilian
subsidiary to lead its Latin American sales efforts and has
established a regional sales office in the Asia-Pacific region.

Additional business from existing customers is pursued through
the joint efforts of both the project manager, the RF engineers
and other technical staff who have developed a service
relationship and worked closely with the customers
engineers. This combination gives the Company an advantage in
pursuing follow-on business.

The Company generates sales leads for new customers through
referrals from existing customers (including referrals to
international wireless operators with which such customers have
entered into partnership arrangements) and other industry
suppliers, its reputation in the industry, contacts with bidders
for new wireless licenses and others in the industry and other
sources, which include advertising, use of explanatory literature
 and publications and participation in conferences and trade
shows. The Company utilizes various strategies to attract
business from new customers, particularly various arrangements in
 which Phase 1 services are provided for a reduced fee or with a
success-based contingent arrangement, coupled with a commitment
from, or understanding with, the customer to retain the Company
in connection with Phase 2 services and products should the
customer be awarded the applicable licenses.

In addition to obtaining business directly from wireless network
operators, the Company has also established working relationships
 with major telecommunications equipment vendors, pursuant to
which the Company provides RF engineering services and related
products, on a subcontract basis.

Purchases of the Companys services by customers often
entails an extended decision-making process for the customer
because of the substantial costs and strategic implications
associated with selecting the Companys services. Senior
management of the customer is often involved in this process,
given the importance of the decision as well as the risks faced
by the customer if the Companys services do not meet the
customers particular needs. Therefore, large procurements
of the Companys services involve lengthy selling cycles,
often as long as nine months.

Competition

The current market for wireless network design and network
deployment, and network optimization & maintenance services
is highly competitive. Many companies offer such services and the
 Company believes

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Engineering Services.The Companys competition in
the provision of RF engineering services consists of
(i) companies such as Wireless Facilities, Inc., Metapath
Software International, Inc., DETECON, Teleworx, Inc. and SAFCO,
Inc., which provide a full range of RF engineering services,
(ii) companies that provide only a portion of the
engineering services, which generally act as a supplement to a
wireless operators in-house engineering staff, (iii)
telecommunications equipment vendors, which provide RF
engineering services through subcontractors as part of larger
turnkey projects, and (iv) the internal staffs of wireless
network operators. The Company believes that it is able to
compete effectively against competitors in RF engineering
services procurements based upon its leadership position,
pricing, reputation, experience, ability to provide its customers
 one-stop-shopping, ability to deploy quickly a large
 number of RF engineers to a project and its relationships with
major wireless operators. In particular, the Company believes
that its existing customer and industry relationships give it a
significant advantage in obtaining additional business for its
existing and new services. The Company has been less successful
in competing where the customer has a strong internal staff of
wireless network operators or where RF engineering services are
packaged with large equipment procurements supported by vendor
financing.

Program Management Services.Competition for the provision
 of program management services is highly fragmented consisting
of (i) equipment vendors that provide program management
services as part of larger turnkey projects, (ii) companies
with experience in project management in other industries, (iii)
the internal staffs of wireless network operators and
(iv) small firms that focus on a limited number of the
entire range of activities involved in wireless network
deployment and expansion.

Regulatory Matters Affecting the Telecommunications System
Deployment Business

Federal Regulation

Both the FCC and the FAA regulate towers used for wireless
communication transmitters and receivers. Such regulations
control the siting, marking and lighting of towers and may,
depending on the characteristics of particular multi-tenant
towers, require licensing of tower facilities. Wireless
communication devices operating on towers are separately
regulated and independently licensed based upon the particular
frequency used.

The Telecommunication Act of 1996 (the Telecom Act)
amended the Communications Act of 1934 by giving state and local
zoning authorities jurisdiction over the construction,
modification and placement of towers. The new law preserves local
 zoning authority but clarifies preemption of such authority by
the FCC. The Telecom Act prohibits any action that would (i)
discriminate between different providers of personal wireless
services or (ii) ban altogether the construction, modification or
 placement of radio communication towers. Finally, the Telecom
Act requires the federal government to help licensees for
wireless communication services gain access to preferred sites
for their facilities. This may require that federal agencies and
departments work directly with licensees to make federal property
 available for tower facilities.

All telecommunication sites must comply with the National
Environmental Policy Act of 1969 as well as OSHA and other
federal environmental statutes. The FCCs environmental
rules place responsibility on each applicant to investigate any
potential environmental effects of operations and to disclose any
 significant effects on the environment in an environmental
assessment prior to constructing a tower. In the event the FCC
determines the proposed tower would have a significant
environmental impact based on the standards the FCC has
developed, the FCC would be required to prepare an environmental
impact statement. This process could significantly delay the
licensing of a particular tower site.

Local Regulation

Local zoning boards govern the approval of new tower
construction. Currently, there are hundreds of moratoria on tower
 construction in local communities nationwide. Industry experts
estimate there have been

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International Operations

The development of the Companys international operations
will require the Company to obtain the necessary approvals and
remain compliant with the applicable local regulations.

Research and Development

The Companys R&D group keeps pace with the rapidly
changing technology developments in the wireless industry.
Ongoing development of expertise in emerging technologies allows
the Company to modify service offerings as well as create new
services to meet client needs. Such services include 3G network
design and dimensioning, engineering packet switched backbones,
and design and testing of location based services (E911). The
R&D group also provides strategic consulting to assist
wireless data clients in issues such as business case planning,
technology and vendor evaluation, CAPEX and OPEX evaluation and
due diligence.

Risk Factors

We depend on our professional staff

The success of our business depends on our ability to attract,
train and retain professional staff. Moreover, to achieve our
present plans, we need to attract additional RF engineers and
other system deployment professionals. There are a limited number
 of RF engineers, and many RF engineering companies and wireless
network operators want to hire them. Intense competition for such
 personnel has at times made it difficult to recruit and retain
qualified technical personnel to properly staff customer
projects. In addition to recruitment difficulties, when staffing
customer projects, the Company must (i) fully and properly
train its employees to insure they are trained with respect to
the customers technology requirements, (ii) deploy the
 employee to the customers project site which may require
relocation and relocation expenses, and (iii) fully
integrate the employee into the project. This training and
deployment process requires time and resources. We may experience
 difficulties in, attracting, training, retaining and increasing
our professional staff.

We depend on key personnel

Our success depends to a significant degree upon the contribution
 of our executive officers and other key personnel. With the
exception of our Chief Executive Officer, none of our executive
officers has an employment agreement with us, other than
agreements terminable at will or that provide modest severance
benefits. We may not be able to retain our key managerial and
other key personnel or to attract suitable replacements or
additional personnel if required.

We experience significant fluctuations in our
quarterly results and uncertainties relating to backlog

Our quarterly revenues and operating results have varied
considerably in the past and are likely to vary considerably from
 quarter to quarter in the future. Fluctuations in our revenues
depend on a number of factors, some of which are beyond our
control. These factors include, among others:



| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | the timing of receipt of new licenses or financing by potential
	customers;
|
| |  | the length of sales cycles;                                                
|
| |  | changes in pricing policy by us or our competitors;                        
|
| |  | the timing of contracts; and                                               
|
| |  | customer budget changes.                                                   

Even after contracts are entered into, the timing of delivery of
services depends in part on our customers readiness to
receive the services and the pace of the build-out of our
customers network. The timing of build-

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An increasing percentage of our revenue is
contracted on a fixed price basis which could cause our quarterly
 results to fluctuate

We use the percentage-of-completion method to recognize revenue
on our fixed priced contracts. With the percentage-of-completion
method, in each period we recognize expenses as they are incurred
 and we recognize revenue based on a comparison of the current
costs incurred for the project to the then estimated total costs
of the project. Accordingly, the revenue we recognize in a given
quarter depends on the costs we have incurred for individual
projects and our then current estimate of the total remaining
costs to complete individual projects. If in any period we
significantly increase our estimate of the total costs to
complete a project, we may recognize very little or no additional
 revenue with respect to that project. As a result, our gross
margin in such period and in future periods may be significantly
reduced and in some cases we may recognize a loss on individual
projects prior to their completion. The portion of our revenue
from fixed price contracts has grown significantly as a
percentage of revenues. We are relatively inexperienced at
estimating total project costs, particularly on a quarterly
basis. To the extent that our estimates fluctuate over time or
differ from actual requirements, gross margins in subsequent
quarters may vary significantly from our estimates and could harm
 our business.

Demand for telecommunications services may
decrease

The wireless telecommunications industry is undergoing
significant changes that has reduced, and may continue to reduce,
 the demand for our services. Those changes include:



| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | operators of mature wireless networks may use their own engineers
	 instead of hiring us; and
|
| |  | equipment vendors may offer design services and financing bundled
	 with their equipment.    

Operators of mature wireless networks may use their own
engineers instead of hiring us.Over the last few years,
operators of several mature wireless networks have reduced the
amount of engineering services they buy from us and have been
using their own engineers. We expect this trend to continue and
to affect other types of wireless networks in the U.S. and
internationally.

Equipment vendors may offer design services and financing
bundled with their equipment.Wireless network operators,
particularly new operators and new licensees, depend increasingly
 on wireless telecommunications equipment vendors to supply and
to finance entire wireless networks. Frequently, those vendors
only make financing available for services or products that the
vendors do not provide directly if they have the right to select
the providers of those services and products, including RF
engineering and network design.

Fluctuations from our international operations may
 have an adverse result on our business

Approximately 47% of our revenues for 1999 were generated outside
 of the United States, and we expect this segment of our business
 to increase as a percentage of our revenues. Selling services in
 foreign countries are subject to various risks inherent in
international business activities. Risks include:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | the general economic and political conditions in each country;            
|
| |  | the effect of applicable foreign tax structures;                          
|
| |  | tariff and trade regulations;                                             
|
| |  | difficulties in obtaining local business licenses;                        
|
| |  | management of a geographically diverse organization; and                  
|
| |  | difficulties in complying with a variety of foreign laws and
	regulations.

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In addition, changes in the regulatory environments in foreign
countries, including delays in deregulation or privatization
affecting the pace at which licenses are awarded to wireless
network system operators, affect the level and timing of the
demand for our services and products.

Providing services outside the United States carries the
additional risk of currency fluctuations and foreign exchange
controls imposed by certain countries. We try to address these
issues at the onset of an agreement and establish proper
reserves. In addition, when entering into agreements with foreign
 customers, many of those customers will not agree to US style
payment terms or payment in US dollars.

We face intense competition

We face intense competition in the market for wireless network
design and system deployment services. Many other companies offer
 these services, and we believe that the number of other
independent firms providing these services to wireless network
operators throughout the world is increasing. Wireless operators
themselves and system equipment vendors are also developing
capabilities competitive with those we provide.

Some of our competitors have greater resources than ours. Also,
some of our competitors have been founded by or have recruited
senior engineering executives from our current or potential
customers and may have better relationships with those customers
than we may be able to develop. The intense competition may
continue to adversely affect our business.

We depend on significant customers and large
contracts

We derived approximately 66% of our revenues from our ten largest
 customers in the year ended December 31, 1999. Although our
 major customers generally have differed from year to year as we
complete work under existing contracts and begin providing
services under new contracts, we depend on having large contracts
 from some customers each year to meet our expected revenues. We
may not continue to receive large contracts from customers. In
addition, our contracts typically have provisions that permit
customers to terminate their contracts under various
circumstances, which include our nonperformance or unsatisfactory
 performance. Customers under long-term contracts may attempt to
cancel or renegotiate those contracts.

Our lengthy sales cycles result in high costs for
new business generation

Purchases of our services by customers often entail a lengthy
decision-making process for the customer. Selecting wireless
network deployment services involves substantial costs and has
strategic implications. Senior management of the customer is
often involved in this process, given the importance of the
decision as well as the risks faced by the customer if the
services do not meet the customers particular needs.
Therefore, large procurements of our services involve lengthy
selling cycles, resulting in a relatively high cost of new
business generation.

We will depend on proprietary technology of others

Following the sale of our Products Businesses, we do not own
proprietary software and field test measurement equipment
products used to perform RF engineering services. Instead, we
will license these technologies from third parties pursuant to
agreements which may not be perpetual in duration. While these
products are available from multiple sources, the termination of
one or more of these licenses, their renewal on terms materially
less favorable to us or any other loss of the right to use such
technologies (including loss of intellectual property rights by a
 licensor) could adversely affect our business.

In addition, effective copyright, trademark or trade secret
protection may be unavailable to our licensors or limited in
certain circumstances. Third parties may assert infringement
claims against us in the future that may require us to enter into
 royalty arrangements or result in costly litigation, damages or
injunctive relief against us for which we may not be compensated
by our licensors.

RF Investors voting control may result in
the taking of certain unilateral actions

RF Investors owns all of the outstanding shares of our
Class B Common Stock, which represents 87% of the combined
voting power of both classes of common stock. These shares may be
 sold without your

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RF Investors may also, by converting its shares of Class B
Common Stock into shares of Class A Common Stock, obtain a
sufficient number of shares of Class A Common Stock (41% of
the total outstanding shares of Class A Common Stock on
March 23, 2000) to influence the outcome of any vote on
which the holders of Class A Common Stock are entitled to
vote together as a class.

Dr. Rajendra and Neera Singh, who with certain Singh family
trusts indirectly own 75% of Telcom Ventures, are directors or
executive officers. Gregory Ledford, a designee of the Carlyle
Investors, 25% owners of Telcom Ventures, is also one of our
directors.

The Telcom Ventures and RF Investors limited liability company
agreements provide that, for as long as the Carlyle Investors
collectively owns at least 5% of the total membership interests
of Telcom Ventures, Telcom Ventures and RF Investors must vote
their stock in us:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | to elect as our directors up to two persons recommended by the
	Carlyle Investors, upon the request of the Carlyle Investors; and
|
| |  | not to take any of the following actions without the consent of
	the Carlyle Investors:                                          



| |     |                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | approve any amendment to our certificate of incorporation or
	bylaws;                                                                                                                                                                                                                                                                                                             
|
| | (b) | approve our incurrence of any debt (or the granting of security
	relating to the incurrence of debt) if as a result of the debt
	incurrence, our debt to equity ratio exceeds 6:1 or, if as a
	result of the debt incurrence, our total outstanding debt exceeds
	 $50 million plus or minus, as the case may be, our
	cumulative net income or our net losses after January 1994;
|
| | (c) | approve any new affiliated party transactions between us and RF
	Investors, Telcom Ventures or the Singh family in excess of
	$150,000 or modifications to existing transactions, subject to
	certain limited exceptions;                                                                                                                                                         
|
| | (d) | approve the appointment as our independent accountants of a firm
	other than one of the big five accounting firms; or                                                                                                                                                                                                                                                           
|
| | (e) | approve certain events relating to our bankruptcy or insolvency.                                                                                                                                                                                                                                                                                                                  

The RF Investors and Telcom Ventures limited liability company
agreements provide for certain rights of the Carlyle Investors to
 cause the distribution to the Carlyle Investors, beginning
September 30, 1999, of up to 25% of the common stock held by
 RF Investors. Such a distribution would still leave RF Investors
 with voting control over us.

Our relationship with Telcom Ventures may result
in potential conflicts of interest

Telcom Ventures, RF Investors parent company, is
principally engaged in making investments in wireless system
operators and emerging wireless and internet technologies.
Directors of Telcom Ventures and its subsidiaries who are also
our directors or officers have certain fiduciary obligations to
each organization. Telcom Ventures and directors of Telcom
Ventures and its subsidiaries who are also our directors and
officers may be subject to conflicts of interest in transactions
concerning us.

We have entered, and will enter, into arrangements with Telcom
Ventures and certain of Telcom Ventures subsidiaries which
provide for transactions and relationships between the parties or
 which otherwise affect us. Our company, RF Investors, Telcom
Ventures, and the Telcom Ventures owners (the Singh family
(including companies they own) and the Carlyle Investors) have
entered into an intercompany agreement, by which, among other
things, (i) the Singh Family group is limited in its ability
 to compete with us in our traditional lines of business and
(ii) Telcom Ventures is limited in its ability to invest in
entities whose primary business is to compete with us in our
traditional lines of business, in each case until the earlier of

16



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Each of the Carlyle Investors (but not its affiliates) is limited
 in its ability to invest in entities whose primary business is
to compete with us in our traditional line of business (excluding
 the program management and tower businesses) until the earlier
of (i) the date on which the Carlyle Investor no longer
owns, directly or indirectly, an interest in us or (ii) the
occurrence of certain termination events specified in the
intercompany agreement.

We are free to pursue investment opportunities on our own, but we
 are obligated to refer to Telcom Ventures investment
opportunities prior to offering the opportunities to any other
third party. If Telcom Ventures does not elect to pursue the
investment opportunity within five days, we will then be free to
offer the opportunity to third parties. The intercompany
agreement may not eliminate or reduce conflicts of interest or
inconsistent fiduciary obligations.

Employees

As of December 31, 1999, the Company employed approximately
570 full-time employees. The Company believes that relations with
 its employees are good. None of its employees is part of any
collective bargaining unit. The Company believes that its future
growth and success will depend upon its ability to attract and
retain skilled and motivated personnel.




Item 2.  Properties

As of December 31, 1999 the Company had leased approximately
 155,000 square feet of office space in McLean, Virginia pursuant
 to a lease entered into in May 1996, with an initial annual
 rent of approximately $2.9 million. The term of this lease
is ten years, with two five-year renewal options. The company
subleases approximately 58% of this space to third parties. The
Company entered into another lease in May 1996, for
approximately 10,000 square feet of office space in McLean,
Virginia, with an initial annual rent of approximately $153,700.
The term of this lease is five years with three five-year renewal
 options. In January 1997 and June 1998 the Company
signed amendments to the lease to expand into additional office
space, bringing the total space leased at this property to
approximately 35,500 square feet, with an annualized rent in 1998
 of approximately $600,900. In February 1999, the Company
agreed to return approximately 6000 square feet of leased space
to the landlord, bringing the total space leased to approximately
 29,500 square feet, with an annualized rent in 1999 of
approximately $504,000. The Company has occupied a portion of the
 overall space at this location since May 1996 and since
October 1997 has subleased additional portions thereof to
other tenants. During December 1998, the Company entered
into a lease for approximately 2,000 square feet in London,
England with an approximate initial annual rent of $100,000. In
July 1999, the Company leased approximately 1,400 square
feet in Pittsburgh, Pennsylvania with an initial annual rent of
approximately $18,000. In August 1999, the Company entered
into a lease of approximately 1,500 square feet with an initial
annual rent of approximately $14,400 in Boston, Massachusetts.
During September 1999, the Company leased approximately
4,600 square feet in Chicago, Illinois with an annual rent of
approximately $84,000. In October 1999, the Company entered
into a lease for approximately 1,400 square feet in Seattle,
Washington with an initial annual rent of approximately $16,800.
The Company entered into another lease in October 1999 in
Los Angeles, California for approximately 12,000 square feet with
 an initial annual rent of approximately $131,000. During
November 1999, the Company entered into a lease in New York,
 New York for approximately 6,700 square feet with an initial
annual rent of approximately $140,400. Also, during
November 1999, the Company entered into another lease in
Philadelphia, Pennsylvania for approximately 1,000 square feet
with an initial annual rent of approximately $17,000. In
December 1999, the Company entered into a lease in Atlanta,
Georgia for approximately 3,500 square feet with an initial
annual rent of approximately $43,000. The Company believes that
its facilities will be adequate for its needs for the foreseeable
 future.

17



---



##### Table of Contents






Item 3.  Legal Proceedings

The Company is party to various non-material legal proceeding and
 claims incidental to its business.

Albert Grimes et al. V LCC International, Inc. et al.,
Civil Action No. 16957-NC, in the Court of Chancery of the State
of Delaware, Castle County. On February 12, 1999, the
minority shareholders of the Companys majority-owned
Microcell subsidiary filed a suit against the Company, the
directors appointed by the Company to the Microcell Board and
Microcell itself, seeking rescission of the shareholders
agreement between the Company and the minority shareholders
(which concerns management of Microcell, funding commitments and
other matters), the appointment of a custodian or receiver, and
unspecified monetary damages. In connection with the sale of the
Company towers to Pinnacle Towers, Inc., the parties settled all
pending litigation, and all claims were dismissed with prejudice
on March 7, 2000.




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

None

PART II




Item 5.  Market for Registrants Common
 Stock and Related Stockholder Matters

Since completion of the Offering in September 1996, the
Class A Common Stock has been quoted on the Nasdaq National
Market under the trading symbol LCCI. As of
March 23, 2000, there were 127 stockholders of record of the
 Class A Common Stock and, in excess of 3,000 beneficial
holders thereof, and two stockholders of record of the
Class B Common Stock. The following table summarizes the
high and low closing sale prices of the Class A Common Stock
 by fiscal quarter for 1998 and 1999 as reported on the Nasdaq
National Market:

|               |  |      |                  | 
|-------------- |  | ---- | ---------------- | 
|Quarter Ended: |  | 1998
|               |  |     
|March 31.      |  | $    | 8.063 to $20.625 | 
|              
|              
|              
|              
|June 30.       |  | $    | 14.625 to $22.50 | 
|              
|              
|              
|              
|September 30.  |  | $    | 4.75 to $17.25   | 
|              
|              
|              
|              
|December 31.   |  | $    | 3.00 to $4.8125  | 

|               |  |      |                 | 
|-------------- |  | ---- | --------------- | 
|Quarter Ended: |  | 1999
|               |  |     
|March 31.      |  | $    | 3.781 to $6.00  | 
|              
|              
|              
|              
|June 30.       |  | $    | 3.50 to $5.969  | 
|              
|              
|              
|              
|September 30.  |  | $    | 4.188 to $7.813 | 
|              
|              
|              
|              
|December 31.   |  | $    | 5.50 to $19.938 | 

The Company has never paid any cash dividends on Common Stock and
 the Company does not anticipate paying dividends on the Common
Stock, cash or otherwise, in the foreseeable future. Future
dividends, if any, will be at the discretion of the Board of
Directors and will depend upon, among other things, the
Companys operations, capital requirements and surplus,
general financial condition, contractual restrictions and such
other factors as the Board of Directors may deem relevant.




Item 6.  Selected Financial Data

Set forth below are (i) selected consolidated financial data
 as of and for each of the years in the five-year period ended
December 31, 1999, which have been derived from the
Companys audited Consolidated Financial Statements and
(ii) unaudited pro forma net income (loss) and net
income (loss) per share data prepared as if the Company was
treated as a Subchapter C Corporation for Federal and state
income tax purposes from January 1, 1995. The selected
consolidated financial data set forth below should be read in
conjunction with Item 7, Managements Discussion
and Analysis of Financial Condition and Results of

18



---



##### Table of Contents





|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |        |        |  
|-------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------- | ------ | ------- | ------ | ------- | ------- | ------- | ------ | ---- | ------ | ------ | ------ | - | ------- | ------ | ------ | - | ------ | ------ | ------ | -
|                                                                           |                                      |                                      
|                                                                           |                                      | Years Ended December 31,             
|                                                                           |                                      |                                      
|                                                                           |                                      | 1995(2)                               |        | 1996(2) |        | 1997(2) |         | 1998(2) |        | 1999
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |     
|                                                                           |                                      |                                      
|                                                                           |                                      | (in thousands, except per share data)
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Revenues:                                                                  |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Service                              |                                       | $      | 64,016  |        |         | $       | 93,156  |        |      | $      | 91,289 |        |   | $       | 86,328 |        |   | $      | 73,289 |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Tower ownership and management       |                                       |        |        |        |         |         |        |        |      |        |       |        |   |         | 860    |        |   |        | 2,504  |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           |                                      | Total revenues                        |        |         | 64,016 |         |         |         | 93,156 |      |        |        | 91,289 |   |         |        | 87,188 |   |        |        | 75,793 |  
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Cost of revenues:                                                          |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Service                              |                                       |        | 45,682  |        |         |         | 61,581  |        |      |        | 62,263 |        |   |         | 66,238 |        |   |        | 53,080 |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Tower ownership and management       |                                       |        |        |        |         |         |        |        |      |        |       |        |   |         | 521    |        |   |        | 1,176  |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           |                                      | Total cost of revenues                |        |         | 45,682 |         |         |         | 61,581 |      |        |        | 62,263 |   |         |        | 66,759 |   |        |        | 54,256 |  
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Gross profit                                                               |                                      |                                       | 18,334 |         |        |         | 31,575  |         |        |      | 29,026 |        |        |   | 20,429  |        |        |   | 21,537 |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Operating expenses:                                                        |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Sales and marketing                  |                                       |        | 446     |        |         |         | 1,200   |        |      |        | 2,466  |        |   |         | 3,843  |        |   |        | 5,464  |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | General and administrative           |                                       |        | 7,139   |        |         |         | 13,030  |        |      |        | 18,314 |        |   |         | 22,063 |        |   |        | 18,128 |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Special charge (credit)              |                                       |        |        |        |         |         | 28,920  |        |      |        | (3,894 | )      |   |         |       |        |   |        |       |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Restructuring charge                 |                                       |        |        |        |         |         |        |        |      |        |       |        |   |         | 1,256  |        |   |        |       |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Non-cash compensation                |                                       |        | 4,362   |        |         |         | 6,831   |        |      |        | 514    |        |   |         | 362    |        |   |        | (12    | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Depreciation and amortization        |                                       |        | 2,003   |        |         |         | 2,330   |        |      |        | 3.410  |        |   |         | 2,409  |        |   |        | 3,628  |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           |                                      | Total operating expenses              |        |         | 13,950 |         |         |         | 52,311 |      |        |        | 20,810 |   |         |        | 29,933 |   |        |        | 27,208 |  
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Operating income (loss)                                                    |                                      |                                       | 4,384  |         |        |         | (20,736 | )       |        |      | 8,216  |        |        |   | (9,504  | )      |        |   | (5,671 | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Other income (expense)                                                     |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Interest, net                        |                                       |        | (2,193  | )      |         |         | (2,125  | )      |      |        | (2,553 | )      |   |         | (1,397 | )      |   |        | (1,827 | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Other                                |                                       |        | 1,027   |        |         |         | 2,385   |        |      |        | 1,275  |        |   |         | (618   | )      |   |        | (1,391 | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           |                                      | Total other income (expense)          |        |         | (1,166 | )       |         |         | 260    |      |        |        | (1,278 | ) |         |        | (2,015 | ) |        |        | (3,218 | )
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Income (loss)from continuing operations before income taxes                |                                      |                                       | 3,218  |         |        |         | (20,476 | )       |        |      | 6,938  |        |        |   | (11,519 | )      |        |   | (8,889 | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Provision (benefit) for income taxes |                                       |        | (1,283  | )      |         |         | (8,745  | )      |      |        | 1,548  |        |   |         | (4,561 | )      |   |        | (2,677 | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Income (loss) from continuing operations                                   |                                      |                                       | 1,935  |         |        |         | (11,731 | )       |        |      | 5,390  |        |        |   | (6,958  | )      |        |   | (6,212 | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Income (loss) from discontinued operations net of tax
	provision (benefit) |                                      |                                       | 2,805  |         |        |         | 447     |         |        |      | 2,185  |        |        |   | (17,785 | )      |        |   |       |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Gain on disposal of discontinued operations net of tax provision           |                                      |                                       |       |         |        |         |        |         |        |      |       |        |        |   |        |        |        |   | 803    |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Net income (loss)                                                          |                                      | $                                     | 4,740  |         |        | $       | (11,284 | )       |        | $    | 7,575  |        |        | $ | (24,743 | )      |        | $ | (5,409 | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Income (loss) per share:                                                   |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Continuing operations:                                                     |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Basic                                |                                       |        |         |        |         |         |         |        |      | $      | 0.37   |        |   | $       | (0.45  | )      |   | $      | (0.36  | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           | Diluted                              |                                       |        |         |        |         |         |         |        |      | $      | 0.34   |        |   | $       | (0.45  | )      |   | $      | (0.36  | )     
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|Discontinued operations:                                                   |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Basic                                |                                       |        |         |        |         |         |         |        |      | $      | 0.15   |        |   | $       | (1.15  | )      |   | $      | 0.05   |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       
|                                                                           | Diluted                              |                                       |        |         |        |         |         |         |        |      | $      | 0.14   |        |   | $       | (1.15  | )      |   | $      | 0.05   |       
|                                                                           |                                      |                                       |        |         |        |         |         |         |        |      |        |        |        |   |         |        |        |   |        |       

19



---



##### Table of Contents



|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |        |        | 
|---------------------------------------------- | ---------------------------------------------------- | ------------------------------------- | - | ------- | ------ | ------- | - | ------- | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                               |                                                      |                                      
|                                               |                                                      | Years Ended December 31,             
|                                               |                                                      |                                      
|                                               |                                                      | 1995(2)                               |   | 1996(2) |        | 1997(2) |   | 1998(2) |        | 1999
|                                               |                                                      |                                       |   |         |        |         |   |         |        |     
|                                               |                                                      |                                      
|                                               |                                                      | (in thousands, except per share data)
|                                              
|                                              
|                                              
|                                              
|Net income (loss) per share:                   |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Basic                                                |                                       |   |         |        |         |   |         |        |      | $ | 0.51   |        |  | $ | (1.60  | )      |  | $ | (0.31  | )     
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                               | Diluted                                              |                                       |   |         |        |         |   |         |        |      | $ | 0.47   |        |  | $ | (1.60  | )      |  | $ | (0.31  | )     
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|Unaudited Pro Forma Data:                      |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Pro forma income (loss) from continuing operations   |                                       | $ | 1,931(1 | )      |         | $ | (18,693 | )(1)   |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                               | Pro forma income (loss) from discontinued operations |                                       | $ | 2,798(1 | )      |         | $ | (2,076  | )(1)   |      |   |        |        |  |   |        |        |  |   |        |       
|                                              
|                                              
|                                              
|                                              
|                                               | Pro forma net income (loss)                          |                                       | $ | 4,729(1 | )      |         | $ | (20,769 | )(1)   |      |   |        |        |  |   |        |        |  |   |        |       
|                                              
|                                              
|                                              
|                                              
|Pro forma income (loss) per share:             |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|Continuing operations:                         |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Basic                                                |                                       | $ | 0.17    |        |         | $ | (1.53   | )      |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                               | Diluted                                              |                                       | $ | 0.19    |        |         | $ | (1.53   | )      |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|Discontinued operations:                       |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Basic                                                |                                       | $ | 0.25    |        |         | $ | (0.17   | )      |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                               | Diluted                                              |                                       | $ | 0.20    |        |         | $ | (0.17   | )      |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|Pro forma net income (loss)                    |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Basic                                                |                                       | $ | 0.42(1  | )      |         | $ | (1.70   | )(1)   |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                               | Diluted                                              |                                       | $ | 0.39(1  | )      |         | $ | (1.70   | )(1)   |      |   |        |        |  |   |        |        |  |   |        |       
|                                               |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|Consolidated Balance Sheet Data (at year-end): |                                                      |                                       |   |         |        |         |   |         |        |      |   |        |        |  |   |        |        |  |   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Working capital                                      |                                       | $ | 22,808  |        |         | $ | 49,840  |        |      | $ | 59,155 |        |  | $ | 14,471 |        |  | $ | (8,039 | )     
|                                              
|                                              
|                                              
|                                              
|                                               | Intangibles, net                                     |                                       |   |        |        |         |   | 354     |        |      |   | 368    |        |  |   | 572    |        |  |   | 430    |       
|                                              
|                                              
|                                              
|                                              
|                                               |                                                      | Total assets                          |   |         | 55,325 |         |   |         | 89,363 |      |   |        | 95,420 |  |   |        | 84,204 |  |   |        | 82,868 | 
|                                              
|                                              
|                                              
|                                              
|                                               | Long term obligations                                |                                       |   | 28,627  |        |         |   | 50,807  |        |      |   | 50,210 |        |  |   | 50,115 |        |  |   | 1,006  |       
|                                              
|                                              
|                                              
|                                              
|                                               | Equity (deficit)                                     |                                       |   | (244    | )      |         |   | 8,477   |        |      |   | 20,202 |        |  |   | 229    |        |  |   | 42,426 |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unaudited pro forma net income (loss) has been adjusted to
	reflect the pro forma effects as if the Company was a Subchapter
	C Corporation in 1995. Unaudited pro forma net income
	(loss) is net of a provision (benefit) for income taxes
	 at an assumed effective income tax rate of 40%. The total amount
	 of the pro forma provision (benefit)  for income taxes was
	$3,153,000 and ($1,886,000) for the years ended December 31,
	 1995 and 1996, respectively. Weighted average shares used in the
	 computation of pro forma net income per share was as follows:

|     |  |       |        |         |  |  |        | 
|---- |  | ----- | ------ | ------- |  |  | ------ | 
|     |  | Basic |        | Diluted
|     |  |       |        |        
|1995 |  |       | 11,364 |         |  |  | 14,205 | 
|     |  |       |        |         |  |  |        | 
|1996 |  |       | 12,211 |         |  |  | 12,211 | 
|     |  |       |        |         |  |  |        | 



|    |                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | In March 1999, the Companys Board of Directors adopted
	 a Plan to dispose of the operations comprising its hardware and
	software segments (see note 3 to the Consolidated Financial
	Statements) which were sold to Ericsson Radio Systems AB in
	October 1999. Prior year balances have been restated to
	reflect these segments as discontinued operations.

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

The following discussion and analysis should be read in
conjunction with the Companys Consolidated Financial
Statements and the notes thereto and the other financial data
appearing elsewhere in this Form 10-K.

Overview

The Company is one of the worlds largest independent
providers of Radio Frequency (RF) engineering and
program management services to the wireless telecommunications
industry. In 1996 the Company entered the tower ownership and
management business which consists of acquiring, developing and
managing telecommunications towers. The telecommunication towers
were sold in March 2000, and the Company repositioned this
operation to provide tower site audit, operations and management
services.

The Companys revenues are generated through contracts for
RF engineering and system deployment services, and lease revenue
from its tower ownership and management business. The Company
provides engineering design services on a contract basis, usually
 in a customized plan for each client and generally charges for
engineering services on a time and materials or fixed price
basis. The Company generally provides system deployment program
management services on a time and materials or fixed price basis.
 The Companys revenues also include reimbursement for
expenses, including the living expenses of engineers on customer
sites.

In March 1999, the Companys Board of Directors adopted
 a plan to dispose of the operations comprising its software and
hardware segments (the Products Businesses). Software
 products develops software and data which support the design and
 operation of wireless communications systems. Hardware products
are used in the implementation, testing and maintenance of
wireless communications systems. The Company engaged an
investment banking firm to assist in the marketing and sale of
these segments. The sale of the product segments was completed in
 October 1999.

Service revenues consist of revenues from engineering design
services and system deployment services. Tower ownership and
management revenues consist of lease revenue from the leasing of
space on telecommunications towers to wireless communication
carriers. The leases generally have initial terms of 5 to
11 years and generally include multiple options to renew
upon similar terms at the option of the lessee. In general, the
lease terms include periodic adjustments to base rent. The
Company derives a significant portion of its total revenues from
its international customers. To date, its tower ownership and
management revenues have come exclusively from the leasing of RF
transmission towers in the United States.

Cost of revenues consists of costs associated with engineering
design and program management services and direct costs related
to the tower ownership and management business. Sales and
marketing expenses consist of salaries, sales commissions,
bonuses, travel and other expenses required to implement the
Companys marketing, sales and customer support plans.
General and administrative expenses consist of the compensation,
benefits, office and occupancy, and other costs required for the
finance, human resources, information systems and executive
office functions. Non-cash compensation consists of awards under
a program for key employees adopted in 1994. Such plan was
accounted for as a variable plan, and therefore, to the extent
that the deemed fair market value of the Company increased,
compensation expense increased accordingly. In connection with
the Companys initial public offering in
September 1996, the Company granted stock options to replace
 the awards granted under this plan.

The key drivers of the Companys growth have historically
been (i) the issuances of new or additional wireless
telecommunications licenses by governmental authorities to
wireless operators, (ii) increases in the number of cell
sites operated and the number of subscribers served by wireless
network operators, (iii) the introduction of new services or
 technologies, (iv) the increasing complexity of the systems
 deployed by wireless network operators, and (v) the
expansion and optimization of existing systems by wireless
network operators.

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To keep pace with the subscriber growth currently anticipated by
most industry analysts, the Company expects that there will
continue to be significant investment by network system operators
 over the next few years in design, system deployment and tower
operations and management services.

Results of Operations

Continuing Operations

The following table sets forth certain items as a percentage of
revenues from the Companys audited consolidated statements
of operations for the years ended December 31, 1997, 1998,
and 1999. The table and discussion which follows provides
information which management believes is relevant to an
assessment and understanding of the Companys consolidated
results of operations and financial condition. The discussion
should be read in conjunction with the consolidated financial
statements and accompanying notes thereto included elsewhere
herein.

|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |      |       |  
|------------------------------------------------------------ | ------------------------------ | ---------------------------- | ---- | ----- | ----- | ---- | ----- | ---- | ----- | - | ----- | ---- | ----- | -
|                                                             |                                |                             
|                                                             |                                | Years Ended December 31,    
|                                                             |                                |                             
|                                                             |                                | 1997                         |      | 1998  |       | 1999
|                                                             |                                |                              |      |       |       |     
|Revenues:                                                    |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Service                        |                              |      | 100.0 | %     |      |       | 99.0 | %     |   |       | 96.7 | %    
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Tower ownership and management |                              |      |      |       |      |       | 1.0  |       |   |       | 3.3  |      
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                             |                                | Total revenues               |      |       | 100.0 |      |       |      | 100.0 |   |       |      | 100.0 |  
|                                                            
|                                                            
|                                                            
|                                                            
|Cost of revenues                                             |                                |                              | 68.2 |       |       |      | 76.6  |      |       |   | 71.6  |     
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|Gross profit                                                 |                                |                              | 31.8 |       |       |      | 23.4  |      |       |   | 28.4  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Operating expenses:                                          |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Sales and marketing            |                              |      | 2.7   |       |      |       | 4.4  |       |   |       | 7.2  |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | General and administrative     |                              |      | 20.1  |       |      |       | 25.3 |       |   |       | 23.9 |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Special credit                 |                              |      | (4.3  | )     |      |       |     |       |   |       |     |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Restructuring charge           |                              |      |      |       |      |       | 1.4  |       |   |       |     |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Non-cash compensation          |                              |      | 0.6   |       |      |       | 0.4  |       |   |       |     |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization  |                              |      | 3.7   |       |      |       | 2.8  |       |   |       | 4.8  |      
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                             |                                | Total operating expenses     |      |       | 22.8  |      |       |      | 34.3  |   |       |      | 35.9  |  
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|Operating income (loss)                                      |                                |                              | 9.0  |       |       |      | (10.9 | )    |       |   | (7.5  | )   
|                                                            
|                                                            
|                                                            
|                                                            
|Other income (expense):                                      |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest income                |                              |      | 0.8   |       |      |       | 1.0  |       |   |       | 0.4  |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest expense               |                              |      | (3.6  | )     |      |       | (2.6 | )     |   |       | (2.8 | )    
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other                          |                              |      | 1.4   |       |      |       | (0.7 | )     |   |       | (1.8 | )    
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|                                                             |                                | Total other income (expense) |      |       | (1.4  | )    |       |      | (2.3  | ) |       |      | (4.2  | )
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|Income (loss) from continuing operations before income taxes |                                |                              | 7.6  |       |       |      | (13.2 | )    |       |   | (11.7 | )   
|                                                            
|                                                            
|                                                            
|                                                            
|Provision (benefit) for income taxes                         |                                |                              | 1.7  |       |       |      | (5.2  | )    |       |   | (3.5  | )   
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     
|Income (loss) from continuing operations                     |                                |                              | 5.9  | %     |       |      | (8.0  | )%   |       |   | (8.2  | )%  
|                                                             |                                |                              |      |       |       |      |       |      |       |   |       |     

Year Ended December 31, 1999 Compared to Year Ended
December 31, 1998

Revenues.Revenues for the twelve months ended
December 31, 1999 were $75.8 million compared to
$87.2 million for the prior year, a decrease of $11.4
million or 13.1%. The 1999 revenue decline reflects the slowdown
in contract awards in late 1998 for new network deployment
contracts. The 1998 revenue remained high as several large
contracts were completed from existing backlog. Engineering and
design services revenue constituted $13.0 million of the
revenue decline, with $10.8 million (83%) of this decline
attributable to the softened market conditions in Asia Pacific
and Brazil. The decline in service revenue was offset by other
revenue growth, included in tower ownership and management
revenues, of $1.6 million.

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Cost of Revenues. Cost of revenues for the twelve months
ended December 31, 1999 was $54.3 million compared to
$66.8 million for the prior year, a decrease of
$12.5 million or 18.7%. As a percentage of total revenues,
cost of revenues was 71.6% and 76.6% for 1999 and 1998,
respectively. The 1998 contract costs contained a large amount of
 non-billable expenditures making cost of revenue as a percent of
 revenue significantly higher in 1998 than 1999.

Gross Profit. Gross profit for the twelve months ended
December 31, 1999 was $21.5 million compared to
$20.4 million for the prior year, an increase of
$1.1 million or 5.4%. As a percentage of total revenues,
gross profit was 28.4% and 23.4% for 1999 and 1998, respectively.
 Gross profit was significantly higher in 1999, due to reductions
 on non-billable expenditures, including an increase in
utilization of professional staff.

Sales and Marketing. Sales and marketing expenses were
$5.5 million for the twelve months ended December 31,
1999 compared to $3.8 million for the prior year, an
increase of $1.7 million. The increase is due primarily to
business development efforts related to the Companys
Europe/ Middle East/ Africa regional office.

General and Administrative. General and administrative
expenses were $18.1 million for the twelve months ended
December 31, 1999 compared to $22.0 million for the prior
year, a decrease of $3.9 million or 17.8%. General and
administrative expenditures in 1998 were unusually high, driven
by a large increase in the allowance for doubtful accounts of
approximately $2.0 million, largely attributed to the
Companys Asia-Pacific customers and costs associated with
the growth of the Companys tower ownership and management
business, which declined approximately $1.0 million in 1999.

Restructure Charge.In October 1998, the
Companys Board of Directors approved a restructuring plan
that resulted in a total fourth quarter charge of approximately
$2.5 million. The restructure charge contained
$1.3 million relative to the Companys discontinued
operations and $1.2 million relative to the continuing
operations. Approximately $0.3 million of these revenues
were not required in 1999 and were recovered.

Depreciation and Amortization. Depreciation and
amortization expense was $3.6 million for the twelve months
ended December 31, 1999 compared to $2.4 million for the
prior year, an increase of $1.2 million or 50.6%. The
increased depreciation is largely related to the Companys
tower ownership and management business, reflecting the increased
 number of towers that are constructed and placed-in-service. The
 company completed construction of 169 microcell towers as of
December 31, 1999 compared to 65 as of December 31,
1998.

Interest Expense. Interest expense was $2.2 million
for the twelve months ended December 31, 1999 compared to
$2.3 million for the prior year, a decrease of $
0.1 million or 6.1%. Interest expense was reduced
$1.0 million attributable to MCI Worldcom converting its
$50.0 million convertible note into equity on July 27,
1999. This savings was offset by increased borrowings under the
Companys credit facility with Chase during the twelve
months as well as interest associated with the $5.0 million
convertible promissory note with Telcom Ventures.

Other Income (Expense).Other expense was
$1.4 million for the twelve months ended December 31,
1999 compared to $0.6 million for the prior year, an
increase of $0.8 million. The increase is due primarily to
foreign currency transaction losses of approximately
$1.4 million relative to the Companys Latin American
operations. The majority of the losses were from the
Companys Brazilian operations as a result of the
devaluation of the Brazilian Real in the first quarter of 1999.

Benefit for Income Taxes.The benefit for income taxes was
 $2.7 million for the twelve months ended December 31,
1999 compared to a benefit of $4.6 million for the prior year, a
reduction of $1.9 million. The benefit for income taxes was
recorded for the twelve months ended December 31, 1999 using
 an effective tax rate of 30.1%, compared to 39.6% in 1998. The
difference in the effective tax rate reflects both a valuation
reserve for tax benefits related to the losses from foreign
operations and a permanent difference arising from the
deductibility of interest expense from the MCI Worldcom
convertible note. The decreased tax benefit in 1999 is
attributable to the decrease in loss from continuing operations
and the difference in the effective tax rates.

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Loss from Continuing Operations.The loss from continuing
operations was $6.2 million for the twelve months ended
December 31, 1999 compared to $7.0 million for the prior
year, a reduction of $0.8 million. The largest reduction in
loss was driven by the decline of operating expenses of
$2.7 million, primarily general and administrative expenses.
 Offsetting the increase in pre-tax earnings was a reduction of
tax benefit of $1.9 million.

Year Ended December 31, 1998 Compared to Year Ended
December 31, 1997

Revenues.Revenues for 1998 were $87.2 million
compared to $91.3 million for 1997, a decrease of
$4.1 million or 4.5%. The decrease is primarily the result
of a $13.8 million or 16.9% decrease in engineering design
services revenue offset by a $8.8 million or 91.3% increase
in program management services revenue and a $0.9 million
increase in tower ownership and management revenue. The decrease
in engineering design services revenue is primarily due to a
decrease in billable hours between years as a result of increased
 competition, a slowdown in network deployment in the United
States and a lack of effective sales and marketing efforts. North
 American and Asian revenue decreased, but were partially offset
by increases in Europe and Latin America. The increase in Latin
America is the result of new system deployment and the increase
in Europe is the result of an increased Company presence in the
region. The decrease in program management services revenues is
primarily a result of ceasing all work from Pocket and NextWave
during the first quarter of 1997 as well as an increased volume
of work in Latin America in 1998.

Cost of Revenues.Cost of revenues was $66.8 million
for 1998, compared to $62.3 million for 1997, an increase of
 $4.5 million or 7.2%. As a percentage of total revenues,
cost of revenues was 76.6% and 68.2% for 1998 and 1997,
respectively. The dollar increase is due primarily to an increase
 in program management services volume. The increase in cost of
revenues as a percentage of total revenues is due to increased
design engineering costs primarily as a result of decreased
chargeability between years.

Gross Profit.Gross profit was $20.4 million,
compared to $29.0 million for the prior year, a decrease of
$8.6 million or 29.6%. As a percentage of total revenues,
gross profit was 23.4% and 31.8% for 1998 and 1997, respectively.
 The decrease in gross profit was due primarily to a decrease in
chargeability related to the engineering design services
business, offset by an increase in program management services
and tower ownership and management volume.

Sales and Marketing.Sales and marketing expenses were
$3.8 million, compared to $2.5 million for the prior
year, an increase of $1.3 million or 55.8%. The increase was
 due primarily to increased business development costs year over
year as a result of the continued regionalization of the
Companys business on a world wide basis.

General and Administrative.General and administrative
expenses were $22.1 million compared to $18.3 million
for the prior year, an increase of $3.8 million or 20.5%. The
increase was primarily due to costs associated with the growth of
 the Companys tower ownership and management business
($2.2 million), unsuccessful merger & acquisition
activities, including the Companys proposed exchange of its
 hardware products business, and costs related to the office of
the former Chief Executive of the Company and related changes
thereto during 1998.

Special (credit).During September 1997, the Company
recognized an approximate $3.9 million recovery of the
special charge recorded in December 1996 related to Pocket
Communications, Inc. and NextWave Telecom, Inc.

Restructuring Charge.In October 1998, the
Companys Board of Directors approved a restructuring plan
that resulted in a total fourth quarter charge of approximately
$2.5 million, including approximately $1.2 million
related to continuing operations. The restructuring charge
included $0.1 million related to the Companys services
 business, $1.1 million related to corporate general and
administrative expenses, and $1.3 million related to the
Companys products businesses. The charge was taken to cover
 the one-time costs associated with the closure of the
Companys office in Dusseldorf, Germany, a reduction of
approximately 70 non-billable full and part-time employees and
the termination of approximately 30 contractors.

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Non-Cash Compensation.Non-cash compensation was
$0.4 million for 1998, compared to $0.5 million for the
 prior year, a decrease of $0.1 million or 29.6%. The
decrease is the result of certain awards becoming fully vested
and related expense recognition completed.

Depreciation and Amortization.Depreciation and
amortization expense was $2.4 million for 1998 compared to
$3.4 million for the prior year, a decrease of
$1.0 million or 29.4%. The decrease is a result of certain
equipment, primarily computer and related equipment, becoming
fully depreciated.

Interest Income.Interest income was $0.9 million for
 1998 compared to $0.7 million for the prior year, an
increase of $0.2 million or 22.0%. The increase is due
primarily to earnings on funds held by the Companys
overseas operations, offset by a decrease in earnings on funds
held domestically.

Interest Expense.Interest expense was $2.3 million
for 1998 compared to $3.3 million for the prior year, a
decrease of $1.0 million or 30.2%. The decrease is due
primarily to a reduction in interest rates on the MCI convertible
 subordinated debt. On October 23, 1997, the Company
announced that it had agreed with MCI to defer the Companys
 option to convert the notes in 1997. As part of the agreement,
interest payable under the notes was reduced from 6.8% to 4.4%
per annum.

Other Income (Expense).Other income (expense) was
$(0.6) million for 1998 compared to other income of
$1.2 million for the prior year. The decrease is due
primarily to foreign currency transaction losses in 1998, the
expiration of the 24-month distribution rights arrangement
granted with the sale of the Companys 50.0% interest in
Telemate S.A. in January 1996 and a reduction in income
recognized from the Companys 33.3% joint venture with KTS.
In July 1998, the Company acquired the remaining 66.7% membership
 interest in KTS, bringing its total membership interest to
100.0%.

Provision (Benefit) for Income Taxes.The
(benefit) for income taxes was $(4.6) million for 1998
compared to a provision of $1.5 million for the prior year.
The benefit for income taxes was recorded in 1998 using a
consolidated effective income tax rate of approximately 39.6%.
The provision for income taxes was recorded in 1997 based on a
consolidated effective income tax rate of approximately 22.3%.
The reduced rate in 1997 is a result of a reduction in valuation
reserves previously established as it was determined that the
reserve was no longer required.

Income (Loss) from Continuing Operations.Income
(loss) from continuing operations was a loss of $(7.0)
million in 1998 compared to income of $5.4 million for the prior
year. Adjusting for the recovery of the special charge in 1997,
non-cash compensation and the restructuring charge in 1998,
income (loss) from continuing operations would have been $(6.0)
million compared to $2.8 million for the prior year.

Discontinued Operations

In March 1999, the Companys Board of Directors adopted
 a plan to discontinue the operations comprising its products
businesses. Included in the assets of discontinued operations was
 a loss of $8.9 million on 1999 discontinued operations
revenue of $19.5 million. On October 22, 1999, the
Company closed on the sale of the products businesses for
$22.3 million. The gain on disposal in 1999 was
$0.8 million, which was net of the loss from discontinued
operations and includes $1.9 million of certain accounts
receivable to be remitted to the Company upon collection. (see
note 3 to the Consolidated Financial Statements).

Product revenues for 1998 were $33.8 million compared to
$64.0 million for 1997, a decrease of $30.2 million or
47.2%. The decrease is primarily a result of customer spending
constraints due to cost cutting measures in the face of increased
 competition, the continued economic downturn in the Asia-Pacific
 region and softness in the U.S. domestic market. In addition,
release of the Companys next generation network propagation
 modeling tool has been delayed resulting in a significant
reduction in software sales. Product gross profit was
$11.4 million compared to $32.4 million for the prior
year, a decrease of $21.0 million or 64.8%. The decrease in
gross profit is due primarily to the decrease in volume between
years. Operating losses were $24.8 million compared to
income of $6.0 million in the prior year, a decrease of
$30.8 million. The decrease was due primarily to the
shortfall in revenue discussed above as well as a write-off of
software development costs. The loss from discontinued operations
 was $17.8 million in 1998 compared to income of
$2.2 million in 1997.

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Liquidity and Capital Resources

Cash and cash equivalents were $2.0 million and
$4.2 million at December 31, 1999 and 1998, respectively.
Net cash used from operations was $4.2 million and
$8.9 million for the twelve months ended December 31,
1999 and 1998. Cash used from operations was primarily attributed
 to the loss from continuing operations of $6.2 million and
$7.0 million in each of the respective years. Net cash used
in investing activities was $10.0 million and
$7.9 million in 1999 and 1998, respectively. The largest use
 of funds from investment activities is increases in property and
 equipment of $17.1 million and $16.7 million, in 1999
and 1998, the largest component of which is construction of
telecommunications towers. Approximately, $15.2 million in
1999 and $14.9 million in 1998 was spent on
telecommunications towers. The investment in property and
equipment was offset by investment proceeds of $8.2 million from
the sale of assets from discontinued operations in 1999 and from
security sales of $8.5 million in 1998. Net cash provided by
 financing activities was $14.6 million and
$4.2 million in 1999 and 1998, respectively. Financing
activity was largely derived from the Companys line of
credit in 1999 of $9.5 million and from the exercise of
stock options and from the issuance of shares under the
Companys Employee Stock Purchase Plan of $4.2 million and
$3.4 million in 1999 and 1998, respectively.

Working capital was $(8.0) million at December 31, 1999,
compared to $14.5 million at December 31, 1998, a decrease
of $22.5 million. The decrease in working capital was
primarily a result of losses from continuing operations
($5.3 million pre-tax and excluding depreciation and
amortization) and funds used to build telecommunications towers.
Capitalized cost resulting from telecommunications tower
development was $15.2 million during 1999. During 1999 the
Companys working capital requirements were provided from
cash proceeds from the sale of its discontinued products business
 as well as borrowings under the Companys credit facility.
During 1999, the Company maintained a credit facility with the
Chase Manhattan Bank, as Administrative Agent
(Chase). This credit facility consisted of a
revolving loan and letter of credit facility in the aggregate not
 to exceed $18.0 million for the Company. Approximately
$4.5 million was outstanding under the Credit Facility at
December 31, 1999. On March 3, 2000 the Company
completed the initial closing of the sale of its
telecommunications tower portfolio to Pinnacle Towers, Inc. (see
note 21 to the Consolidated Financial Statements). The Company
used the proceeds from this transaction to repay all of its
obligations under its credit facility. The credit facility was
terminated and all of the lenders liens and security
interests in the Companys assets were released.

Several events have significantly improved the Companys
liquidity. In July 1999, the Company received notice of
conversion from MCI Worldcom of its convertible subordinated
notes in the principal amount of $50.0 million. In
August 1999, the Company received notice of conversion from
Telcom Ventures of its convertible subordinated note in the
principal amount of $5 million. In October 1999, the
Company sold its discontinued products operations, which reduced
the Companys borrowings and disposed of an unprofitable
operation. Lastly, the proceeds from the sale of the
Companys tower portfolio in March 2000, has eliminated the
Companys debt and has provided sufficient working capital
for the next year.

Foreign Currency

During the two month period ended February 28, 1999, the
Company recognized total foreign currency transaction losses of
approximately $2.1 million related to its Latin American
operations. The majority of the losses were from the
Companys 1998 Brazilian operations as a result of the
devaluation of the Real in 1999. The Company is in the process of
 exploring its options to limit any future exposure from further
exchange rate fluctuations.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board
issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which is effective for
fiscal years beginning after June 15, 2000. This standard
establishes accounting and reporting standards for derivative
instruments and for hedging activities and requires that an
entity recognize all derivatives as either assets or liabilities
in the statement of

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Impact of the Year 2000 Issue

The year 2000 issue results from a programming convention in
which computer programs use two digits rather than four to define
 the applicable year (the Year 2000 Issue). Software,
 hardware or firmware may recognize a date using 00
as the year 1900, rather than the year 2000. Such an inability of
 computer programs to recognize a year that begins with
20 could result in system failures, miscalculations
or errors causing disruptions of operations or other business
problems, including, among others, a temporary inability to
process transactions, send invoices or engage in similar normal
business activities.

The Company undertook a program to address the Year 2000 Issue
with respect to the following: (i) the Companys
information technology and operating systems; (ii) the
Companys non-information technology systems (such as
buildings, plant, equipment and other infrastructure systems that
 may contain embedded microcontroller technology);
(iii) certain systems of the Companys major vendors
and material service providers (insofar as they relate to the
Companys business activities with such parties); and
(iv) the Companys material clients (insofar as the
Year 2000 Issue relates to the Companys ability to provide
services to such clients).

No public infrastructure problems or any problems with respect to
 any of the areas listed in the previous paragraph were
encountered during the rollover to the year 2000. After extensive
 system verification and testing, the Companys systems are
operating normally. The Company is not aware of any significant
issues related to the Year 2000 Issue.

The Company continues to monitor the status of its operations,
major vendors, material service providers and material clients to
 ensure that no significant business interruptions occur.

27



---



##### Table of Contents






Item 8.  Financial Statements and
Supplementary Data

INDEPENDENT AUDITORS REPORT

The Board of Directors



We have audited the accompanying consolidated balance sheets of
LCC International, Inc. and Subsidiaries (the
Company) as of December 31, 1998 and 1999, and
the related consolidated statements of operations,
shareholders equity, and cash flows for each of the years
in the three-year period ended December 31, 1999. In
connection with our audits of the consolidated financial
statements, we have also audited the related financial statement
schedule. These consolidated financial statements and financial
statement schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
 also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
 above present fairly, in all material respects, the financial
position of LCC International, Inc. and Subsidiaries as of
December 31, 1998 and 1999, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity
with generally accepted accounting principles. Also in our
opinion, the related financial statement schedule, when
considered in relation to the consolidated financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.

KPMG LLP

Washington, D.C.





28



---



##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 1997, 1998, 1999

(In thousands, except per share data)


|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |        |        |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ------ | ------ | ------ | ---- | ------- | ------- | ------ | - | ------ | ------ | ------ | -
|                                                             |                                                                                                                                          | 1997                         |        | 1998   |        | 1999
|                                                             |                                                                                                                                          |                              |        |        |        |     
|Revenues (notes 5 and 7):                                    |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Service                                                                                                                                  |                              | $      | 91,289 |        |      | $       | 86,328  |        |   | $      | 73,289 |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Tower ownership and management                                                                                                           |                              |        |       |        |      |         | 860     |        |   |        | 2,504  |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             |                                                                                                                                          | Total revenues               |        |        | 91,289 |      |         |         | 87,188 |   |        |        | 75,793 |  
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Cost of revenues:                                            |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Service                                                                                                                                  |                              |        | 62,263 |        |      |         | 66,238  |        |   |        | 53,080 |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Tower ownership and management                                                                                                           |                              |        |       |        |      |         | 521     |        |   |        | 1,176  |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             |                                                                                                                                          | Total cost of revenues       |        |        | 62,263 |      |         |         | 66,759 |   |        |        | 54,256 |  
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Gross profit                                                 |                                                                                                                                          |                              | 29,026 |        |        |      | 20,429  |         |        |   | 21,537 |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Operating expenses:                                          |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Sales and marketing                                                                                                                      |                              |        | 2,466  |        |      |         | 3,843   |        |   |        | 5,464  |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | General and administrative                                                                                                               |                              |        | 18,314 |        |      |         | 22,063  |        |   |        | 18,128 |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Special credit (note 7)                                                                                                                  |                              |        | (3,894 | )      |      |         |        |        |   |        |       |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Restructuring charge (note 8)                                                                                                            |                              |        |       |        |      |         | 1,256   |        |   |        |       |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Non-cash compensation (note 14)                                                                                                          |                              |        | 514    |        |      |         | 362     |        |   |        | (12    | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization                                                                                                            |                              |        | 3,410  |        |      |         | 2,409   |        |   |        | 3,628  |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             |                                                                                                                                          | Total operating expenses     |        |        | 20,810 |      |         |         | 29,933 |   |        |        | 27,208 |  
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Operating income (loss)                                      |                                                                                                                                          |                              | 8,216  |        |        |      | (9,504  | )       |        |   | (5,671 | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Other income (expense):                                      |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest income                                                                                                                          |                              |        | 736    |        |      |         | 898     |        |   |        | 327    |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Interest expense                                                                                                                         |                              |        | (3,289 | )      |      |         | (2,295  | )      |   |        | (2,154 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other                                                                                                                                    |                              |        | 1,275  |        |      |         | (618    | )      |   |        | (1,391 | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             |                                                                                                                                          | Total other income (expense) |        |        | (1,278 | )    |         |         | (2,015 | ) |        |        | (3,218 | )
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Income (loss) from continuing operations before income taxes |                                                                                                                                          |                              | 6,938  |        |        |      | (11,519 | )       |        |   | (8,889 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|Provision (benefit) for income taxes (note 10)               |                                                                                                                                          |                              | 1,548  |        |        |      | (4,561  | )       |        |   | (2,677 | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Income (loss) from continuing operations                     |                                                                                                                                          |                              | 5,390  |        |        |      | (6,958  | )       |        |   | (6,212 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|Discontinued Operations (note 3):                            |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Income (loss) from discontinued operations net of tax                                                                                    |                              |        | 2,185  |        |      |         | (17,785 | )      |   |        |       |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Gain on disposal of discontinued operations, including operating
	losses during phase out period of $8,866 (net of tax expense of
	$346) |                              |        |       |        |      |         |        |        |   |        | 803    |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Net income (loss)                                            |                                                                                                                                          | $                            | 7,575  |        |        | $    | (24,743 | )       |        | $ | (5,409 | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Net income (loss) per share:                                 |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Continuing Operations                                        |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                    |                              | $      | 0.37   |        |      | $       | (0.45   | )      |   | $      | (0.36  | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             | Diluted                                                                                                                                  |                              | $      | 0.34   |        |      | $       | (0.45   | )      |   | $      | (0.36  | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Discontinued Operations                                      |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                    |                              | $      | 0.15   |        |      | $       | (1.15   | )      |   | $      | 0.05   |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             | Diluted                                                                                                                                  |                              | $      | 0.14   |        |      | $       | (1.15   | )      |   | $      | 0.05   |       
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|Net income (loss) per share:                                 |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic                                                                                                                                    |                              | $      | 0.51   |        |      | $       | (1.60   | )      |   | $      | (0.31  | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       
|                                                             | Diluted                                                                                                                                  |                              | $      | 0.47   |        |      | $       | (1.60   | )      |   | $      | (0.31  | )     
|                                                             |                                                                                                                                          |                              |        |        |        |      |         |         |        |   |        |       

The accompanying notes are an integral part of the Consolidated
Financial Statements.

29



---



##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |         |        |        | 
|-------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------ | ------ | ------ | ------- | ------ | ------ | 
|                                                                                 |                                                                                                                         |                                                                                                                             
|                                                                                 |                                                                                                                         | December 31,                                                                                                                
|                                                                                 |                                                                                                                         |                                                                                                                             
|                                                                                 |                                                                                                                         | 1998                                                                                                                         |                            | 1999   
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |        
|ASSETS:                                                                          |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Current assets:                                                                  |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Cash and cash equivalents (note 4)                                                                                      |                                                                                                                              | $                          | 4,240   |        |        | $      | 1,951   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Short-term investments (note 2)                                                                                         |                                                                                                                              |                            | 113     |        |        |        | 86      |       
|                                                                                 | Receivables, net of allowance for doubtful accounts of $10,453,
	and $7,860 at December 31, 1998 and 1999, respectively |                                                                                                                              |                            |         |        |        |        |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | Trade accounts receivable (note 7)                                                                                           |                            |         | 13,028 |        |        |         | 15,052 |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | Due from related parties and affiliates (note 5)                                                                             |                            |         | 611    |        |        |         | 836    |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | Unbilled receivables (note 7)                                                                                                |                            |         | 6,078  |        |        |         | 5,187  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Deferred income taxes, net (note 10)                                                                                    |                                                                                                                              |                            | 12,050  |        |        |        | 5,083   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Prepaid expenses and other current assets                                                                               |                                                                                                                              |                            | 3,072   |        |        |        | 3,202   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Net assets of discontinued operations (note 3)                                                                          |                                                                                                                              |                            | 9,139   |        |        |        |        |       
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         |                                                                                                                              | Total current assets       |         |        | 48,331 |        |         |        | 31,397 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Property and equipment, net (note 6)                                             |                                                                                                                         |                                                                                                                              | 22,132                     |         |        |        | 37,762 |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Deferred income taxes, net (note 10)                                             |                                                                                                                         |                                                                                                                              | 12,705                     |         |        |        | 11,562 |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other assets (notes 9)                                                           |                                                                                                                         |                                                                                                                              | 1,036                      |         |        |        | 2,147  |        
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         | $                                                                                                                            | 84,204                     |         |        | $      | 82,868 |        
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|LIABILITIES AND SHAREHOLDERS EQUITY:                                            |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Current liabilities:                                                             |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Line of credit                                                                                                          |                                                                                                                              | $                          |        |        |        | $      | 4,535   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accounts payable                                                                                                        |                                                                                                                              |                            | 4,637   |        |        |        | 4,565   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accrued expenses (note 7)                                                                                               |                                                                                                                              |                            | 8,153   |        |        |        | 7,567   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accrued employee compensation and benefits                                                                              |                                                                                                                              |                            | 9,702   |        |        |        | 13,516  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Deferred revenue                                                                                                        |                                                                                                                              |                            | 277     |        |        |        | 780     |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Income taxes payable (note 10)                                                                                          |                                                                                                                              |                            | 7,894   |        |        |        | 5,844   |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Other current liabilities (note 8)                                                                                      |                                                                                                                              |                            | 3,197   |        |        |        | 2,629   |       
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         |                                                                                                                              | Total current liabilities  |         |        | 33,860 |        |         |        | 39,436 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Convertible subordinated debt (note 12)                                          |                                                                                                                         |                                                                                                                              | 50,000                     |         |        |        |       |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other liabilities                                                                |                                                                                                                         |                                                                                                                              | 115                        |         |        |        | 1,006  |        
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         |                                                                                                                              | Total liabilities          |         |        | 83,975 |        |         |        | 40,442 | 
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|Commitments and contingencies (notes 1, 9, 11, 14, 15 and 16)                    |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Shareholders Equity:                                                                                                   |                                                                                                                              |                            |         |        |        |        |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Preferred Stock:                                                                                                        |                                                                                                                              |                            |         |        |        |        |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | 10,000 shares authorized; -0- shares issued and outstanding                                                                  |                            |         |       |        |        |         |       |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Class A common stock; $.01 par value:                                                                                   |                                                                                                                              |                            |         |        |        |        |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | 70,000 shares authorized; 7,180 shares and 11,630 shares issued
	and outstanding at December 31, 1998 and 1999, respectively |                            |         | 72     |        |        |         | 116    |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Class B common stock; $.01 par value:                                                                                   |                                                                                                                              |                            |         |        |        |        |         |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                                                                                         | 20,000 shares authorized; 8,461 shares issued and outstanding at
	December 31, 1998 and 1999.                                |                            |         | 85     |        |        |         | 85     |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Paid-in capital                                                                                                         |                                                                                                                              |                            | 37,130  |        |        |        | 85,846  |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Accumulated deficit                                                                                                     |                                                                                                                              |                            | (33,590 | )      |        |        | (38,999 | )     
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Notes receivable from shareholders (note 5)                                                                             |                                                                                                                              |                            | (2,100  | )      |        |        | (3,025  | )     
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         |                                                                                                                              | Subtotal                   |         |        | 1,597  |        |         |        | 44,023 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Accumulated other comprehensive loss  foreign currency
	translation adjustments |                                                                                                                         |                                                                                                                              | (1,368                     | )       |        |        | (1,597 | )      
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         |                                                                                                                              | Total shareholders equity |         |        | 229    |        |         |        | 42,426 | 
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        
|                                                                                 |                                                                                                                         | $                                                                                                                            | 84,204                     |         |        | $      | 82,868 |        
|                                                                                 |                                                                                                                         |                                                                                                                              |                            |         |        |        |        |        

The accompanying notes are an integral part of the Consolidated
Financial Statements.

30



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##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

Years ended December 31, 1997, 1998 and 1999

(In thousands)


|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|---------------------------------------------------------------------- |  | --------- | - | ------------ |  | ------- | --- | ------------- |  | ----------- | -- | ------------- |  | ----------- | ------ |  |  | - | ------- | - |  | - | ------- | - |  | - | ------ | -
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  | Accumulated
|                                                                       |  |           |   |              |  |         |     |               |  |             |    | Other        
|                                                                       |  |           |   | Common Stock |  |         |     | Comprehensive |  |             |    | Comprehensive
|                                                                       |  | Preferred |   |              |  | Paid-in |     | Income        |  | Accumulated |    | Income       
|                                                                       |  | Stock     |   | Class A      |  | Class B |     | Capital       |  | (Loss)      |    | Deficit       |  | (Loss)     
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |            
|Balances at December 31, 1996.                                         |  |           |  |              |  | $       | 61  |               |  | $           | 85 |               |  | $           | 28,353 |  |  |   |         |   |  | $ | (16,422 | ) |  | $ | (100   | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |               |  |             | 261    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |           |  |              |  |         | 5   |               |  |             |   |               |  |             | 4,148  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         |    |               |  |             |   |               |  |             | 448    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net income                                                             |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | 7,575   |   |  |   | 7,575   |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency translation
	adjustments   |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  |   | (1,412  | ) |  |   |        |   |  |   | (1,412 | )
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive loss                                                     |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | 6,163   |   |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 1997.                                         |  |           |  |              |  |         | 66  |               |  |             | 85 |               |  |             | 33,210 |  |  |   |         |   |  |   | (8,847  | ) |  |   | (1,512 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |               |  |             | 209    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |           |  |              |  |         | 4   |               |  |             |   |               |  |             | 3,012  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         | 2   |               |  |             |   |               |  |             | 699    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net (loss)                                                             |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | (24,743 | ) |  |   | (24,743 | ) |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency translation
	adjustments |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  |   | 144     |   |  |   |        |   |  |   | 144    |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive loss                                                     |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | (24,599 | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 1998.                                         |  |           |  |              |  |         | 72  |               |  |             | 85 |               |  |             | 37,130 |  |  |   |         |   |  |   | (33,590 | ) |  |   | (1,368 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |           |  |              |  |         |    |               |  |             |   |               |  |             | 164    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Loan to shareholder                                                    |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Conversion of debt                                                     |  |           |  |              |  |         | 37  |               |  |             |   |               |  |             | 46,484 |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |           |  |              |  |         | 7   |               |  |             |   |               |  |             | 1,833  |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |           |  |              |  |         |    |               |  |             |   |               |  |             | 235    |  |  |   |         |   |  |   |        |   |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net (loss)                                                             |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | (5,409  | ) |  |   | (5,409  | ) |  |   |       |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency translation
	adjustments |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  |   | (229    | ) |  |   |        |   |  |   | (229   | )
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Comprehensive loss                                                     |  |           |  |              |  |         |    |               |  |             |   |               |  |             |       |  |  | $ | (5,638  | ) |  |   |        |   |  |   |       |  
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  
|Balances at December 31, 1999.                                         |  |           |  |              |  | $       | 116 |               |  | $           | 85 |               |  | $           | 85,846 |  |  |   |         |   |  | $ | (38,999 | ) |  | $ | (1,597 | )
|                                                                       |  |           |   |              |  |         |     |               |  |             |    |               |  |             |        |  |  |   |         |   |  |   |         |   |  |   |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                       |  |              |        |       |  |   |         |  
|---------------------------------------------------------------------- |  | ------------ | ------ | ----- |  | - | ------- | -
|                                                                       |  | Notes        |        |      
|                                                                       |  | Receivable   |        |      
|                                                                       |  | from         |        |      
|                                                                       |  | Shareholders |        |      
|                                                                       |  | (note 5)     |        | Total
|                                                                       |  |              |        |      
|Balances at December 31, 1996.                                         |  | $            | (3,500 | )     |  | $ | 8,477   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |              | 700    |       |  |   | 961     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |              |       |       |  |   | 4,153   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |              |       |       |  |   | 448     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net income                                                             |  |              |       |       |  |   | 7,575   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive loss  foreign currency translation
	adjustments   |  |              |       |       |  |   | (1,412  | )
|                                                                       |  |              |        |       |  |   |         |  
|Comprehensive loss                                                     |  |              |       |       |  |   |        |  
|                                                                       |  |              |        |       |  |   |         |  
|Balances at December 31, 1997.                                         |  |              | (2,800 | )     |  |   | 20,202  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |              | 700    |       |  |   | 909     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |              |       |       |  |   | 3,016   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |              |       |       |  |   | 701     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net (loss)                                                             |  |              |       |       |  |   | (24,743 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency translation
	adjustments |  |              |       |       |  |   | 144     |  
|                                                                       |  |              |        |       |  |   |         |  
|Comprehensive loss                                                     |  |              |       |       |  |   |        |  
|                                                                       |  |              |        |       |  |   |         |  
|Balances at December 31, 1998.                                         |  |              | (2,100 | )     |  |   | 229     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Payment from shareholder                                               |  |              | 700    |       |  |   | 864     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Loan to shareholder                                                    |  |              | (1,625 | )     |  |   | (1,625  | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Conversion of debt                                                     |  |              |       |       |  |   | 46,521  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Exercise/issuance of stock options                                     |  |              |       |       |  |   | 1,840   |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Issuance of common stock                                               |  |              |       |       |  |   | 235     |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net (loss)                                                             |  |              |       |       |  |   | (5,409  | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other comprehensive income  foreign currency translation
	adjustments |  |              |       |       |  |   | (229    | )
|                                                                       |  |              |        |       |  |   |         |  
|Comprehensive loss                                                     |  |              |       |       |  |   |        |  
|                                                                       |  |              |        |       |  |   |         |  
|Balances at December 31, 1999.                                         |  | $            | (3,025 | )     |  | $ | 42,426  |  
|                                                                       |  |              |        |       |  |   |         |  

The accompanying notes are an integral part of the Consolidated
Financial Statements.

31



---



##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 1997, 1998, and 1999

(In thousands)


|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |         |        |  
|--------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | --------------------------------------- | ------ | ------ | ------ | ---- | ------- | ------- | ------- | - | ------- | ------- | ------ | -
|                                                                                                                            |                                              | 1997                                    |        | 1998   |        | 1999
|                                                                                                                            |                                              |                                         |        |        |        |     
|Cash flows from operating activities:                                                                                       |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Income (loss) from continuing operations                                                                                    |                                              | $                                       | 5,390  |        |        | $    | (6,958  | )       |         | $ | (6,212  | )      
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Adjustments to reconcile income (loss) from continuing
	operations to net cash provided by (used in) operating
	activities: |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Depreciation and amortization                |                                         |        | 3,410  |        |      |         | 2,409   |         |   |         | 3,628   |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Provision for doubtful accounts              |                                         |        | 3,206  |        |      |         | 2,047   |         |   |         |        |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Non-cash compensation                        |                                         |        | 514    |        |      |         | 362     |         |   |         | (12     | )     
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Special credit                               |                                         |        | (3,894 | )      |      |         |        |         |   |         |         |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Loss from investments in joint ventures, net |                                         |        | 350    |        |      |         | 267     |         |   |         |        |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Gain on sale of discontinued operations      |                                         |        |       |        |      |         |        |         |   |         | 803     |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Changes in operating assets and liabilities: |                                         |        |        |        |      |         |         |         |   |         |         |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Trade, unbilled, and other receivables  |        |        | (643   | )    |         |         | (869    | ) |         |         | (1,527 | )
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Accounts payable and accrued expenses   |        |        | (6,953 | )    |         |         | 7,426   |   |         |         | 3,396  |  
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Other current assets and liabilities    |        |        | 10,513 |      |         |         | (2,780  | ) |         |         | 5,395  |  
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Other noncurrent assets and liabilities |        |        | 528    |      |         |         | (10,796 | ) |         |         | (9,639 | )
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Net cash (used in) provided by operating activities                                                                         |                                              |                                         | 12,421 |        |        |      | (8,892  | )       |         |   | (4,168  | )      
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Cash flows from investing activities:                                                                                       |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Proceeds from sales of investment securities |                                         |        |       |        |      |         | 8,506   |         |   |         | 27      |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Purchase of investment securities            |                                         |        | (1,685 | )      |      |         |        |         |   |         |        |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Purchases of property and equipment          |                                         |        | (6,684 | )      |      |         | (16,735 | )       |   |         | (17,100 | )     
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Investment in joint ventures                 |                                         |        |       |        |      |         | 289     |         |   |         | (1,100  | )     
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Disposal of discontinued operations, net     |                                         |        |       |        |      |         |        |         |   |         | 8,164   |       
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Net cash used in investing activities                                                                                       |                                              |                                         | (8,369 | )      |        |      | (7,940  | )       |         |   | (10,009 | )      
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Cash flows from financing activities:                                                                                       |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Proceeds from issuance of common stock, net  |                                         |        | 448    |        |      |         | 701     |         |   |         | 235     |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Proceeds from exercise of options            |                                         |        | 3,573  |        |      |         | 2,655   |         |   |         | 4,006   |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Proceeds from line of credit/note            |                                         |        |       |        |      |         |        |         |   |         | 32,961  |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Payments on line of credit/note              |                                         |        |       |        |      |         |        |         |   |         | (23,426 | )     
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Repayment of loan to shareholder             |                                         |        | 961    |        |      |         | 909     |         |   |         | 864     |       
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Net cash provided by financing activities                                                                                   |                                              |                                         | 4,982  |        |        |      | 4,265   |         |         |   | 14,640  |        
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Net increase (decrease) in cash and cash equivalents 
	continuing operations                                               |                                              |                                         | 9,034  |        |        |      | (12,567 | )       |         |   | 463     |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Net (decrease) increase in cash and cash equivalents 
	discontinued operations                                             |                                              |                                         | (7,469 | )      |        |      | 1,929   |         |         |   | (2,752  | )      
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Net increase (decrease) in cash and cash equivalents                                                                        |                                              |                                         | 1,565  |        |        |      | (10,638 | )       |         |   | (2,289  | )      
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Cash and cash equivalents at beginning of period                                                                            |                                              |                                         | 13,313 |        |        |      | 14,878  |         |         |   | 4,240   |        
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Cash and cash equivalents at end of period                                                                                  |                                              | $                                       | 14,878 |        |        | $    | 4,240   |         |         | $ | 1,951   |        
|                                                                                                                            |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|Supplemental disclosures of cash flow information:                                                                          |                                              |                                         |        |        |        |      |         |         |         |   |         |        
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            | Cash paid during the year for:               |                                         |        |        |        |      |         |         |         |   |         |         |       
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Interest                                |        | $      | 3,286  |      |         | $       | 2,250   |   |         | $       | 2,154  |  
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                            |                                              | Income taxes                            |        |        | 1,317  |      |         |         | 1,995   |   |         |         | 3,540  |  

32



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##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS  (Continued)

Years ended December 31, 1997, 1998, and 1999

(In thousands)


Supplemental disclosures of non-cash investing and financing
activities:



| |                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In July 1999, the Company issued approximately
	2.8 million shares of Class A Common Stock to MCI/
	Worldcom in exchange for its 4.4% convertible subordinated notes.
	 As a result, both long-term debt and long-term deferred tax
	assets were reduced by $50.0 million and $12.6 million,
	 respectively, and shareholders equity increased
	$37.4 million.
|
| | In August 1999, the Company issued approximately
	0.9 million shares of Class A Common Stock to Telcom
	Ventures in exchange for its 9.0% convertible notes payable. As a
	 result, current debt was reduced by $5.0 million, accrued
	interest $0.2 million, and shareholders equity
	increased $5.2 million.                                                
|
| | In December 1999, the Company issued approximately
	0.108 million shares of Class A Common Stock in
	exchange for a $1.625 million note receivable from the
	Companys President and Chief Executive Officer. As a
	result, common stock and paid-in capital increased, offset by an
	increase in notes receivable from shareholders.                          

The accompanying notes are an integral part of the Consolidated
Financial Statements.

33



---



##### Table of Contents



LCC INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 1997, 1998 and 1999


(1) Description of Operations

LCC International, Inc. and subsidiaries (also referred to herein
 as the Company) is a leading provider of end to end
services relating to the design, engineering, deployment and
operation of wireless communications systems.

The Company operates in a highly competitive environment subject
to rapid technological change and emergence of new technologies.
Future revenues are dependent upon the re-engineering of existing
 wireless communications systems, introduction of existing
wireless technologies into new markets, the entrance of new
wireless providers into existing markets, the introduction of new
 technologies and the retention of existing management and
professional staff. Although the Company believes that its
services are transferable to emerging technologies, rapid changes
 in technology could have an adverse financial impact on the
Company.

(2) Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant
intercompany transactions and balances have been eliminated in
consolidation.

Cash Equivalents

Cash equivalents include all highly liquid investments purchased
with original maturities of three months or less.

Short-Term Investments

Short-term investments consist primarily of municipal bonds with
maturity dates of more than three months from the date of
acquisition. The portfolio of municipal bonds held by the Company
 has been classified based on managements intentions as to
future investment activity. Such investments are not intended to
be held to maturity and are classified as available for
sale and carried at market value with temporary unrealized
gains (losses) charged directly to shareholders
equity. At December 31, 1999 and 1998, the market value of
the municipal bonds held by the Company approximated its cost.
Other short-term investments are carried at cost plus accrued
interest which approximates their market value. All short-term
investments have maturity dates of one year or less.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to
concentration of credit risk consist primarily of trade
receivables. The Company sells its services globally. Generally,
the Company does not require collateral or other security to
support customer receivables. The Company performs ongoing credit
 evaluations of its customers financial condition and
maintains reserves for potential credit losses. The Company had
the following significant concentrations of trade receivables
from customers located outside the United States at
December 31, 1998 and 1999:

|              |  |                |       |      |  |   |       | 
|------------- |  | -------------- | ----- | ---- |  | - | ----- | 
|              |  | 1998           |       | 1999
|              |  |                |       |     
|              |  |               
|              |  | (In thousands)
|             
|             
|             
|             
|Latin America |  | $              | 3,887 |      |  | $ | 1,086 | 
|             
|             
|             
|             
|Europe        |  |                | 4,776 |      |  |   | 5,412 | 
|             
|             
|             
|             
|Middle East   |  |                | 29    |      |  |   | 2,245 | 
|             
|             
|             
|             
|Asia-Pacific  |  |                | 1,675 |      |  |   | 583   | 

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The Companys existing and potential customer base is
diverse and includes start-up companies and foreign enterprises.
Although the Company believes that the diversity of its customer
base has historically minimized the risk of incurring material
losses due to concentrations of credit risk, it may be exposed to
 a declining customer base in periods of market downturns, severe
 competition, exchange rate fluctuations or other international
developments (see notes  7 and  18).

Revenues generated from one customer were approximately
$15.4 million or 16.8% of total revenues for 1997. Revenues
generated from another customer were approximately
$16.0 million and $15.0 million, or 17.5% and 17.2% of
total revenues for 1997 and 1998, respectively. In addition,
revenues from another customer were approximately
$13.9 million or 15.9% of revenues in 1998. Revenues
generated from another customer were approximately
$10.3 million or 13.6% of total revenues for 1999. Revenues
generated from another customer were approximately
$8.5 million or 11.2% of 1999 revenues.

Property and Equipment

Property and equipment are stated at cost, less an allowance for
depreciation. Replacements and major improvements are
capitalized; maintenance and repairs are charged to expense as
incurred.

Depreciation is calculated using the straight-line method over
the estimated useful lives of the related assets. Furniture and
equipment are depreciated over useful lives which range from
eighteen months to seven years. RF transmission towers are
depreciated over a useful life of 25 years (see
note 21). The costs of leasehold improvements are
capitalized and amortized using the straight-line method over the
 shorter of their estimated useful lives or the terms of the
respective leases.

Recovery of Long-Lived Assets

The Companys policy is to review its long-lived assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The
Company recognizes an impairment loss when the sum of the
expected undiscounted future cash flows is less than the carrying
 amount of the asset. The measurement of the impairment losses to
 be recognized is based upon the difference between the fair
value and the carrying amount of the assets.

Investments in Joint Ventures

The Company uses the equity method of accounting for its
investments in, advances to and equity in the earnings and losses
 of its joint ventures.

Revenue Recognition

The Companys principal sources of revenues are engineering
and design services, program management and system deployment
services, and lease revenues from its tower business (see note
21). The Company recognizes revenues from long-term fixed price
contracts using the percentage-of-completion method, based on
individual contract costs incurred to date compared with total
estimated contract costs. Anticipated contract losses are
recognized as soon as they become known and estimable. The
Company also recognizes revenues on time and materials contracts
as the services are performed. Lease revenues from the tower
business are recognized over the term of the related lease.
Revenues earned but not yet billed are reflected as unbilled
receivables in the accompanying consolidated balance sheets. The
Company expects substantially all unbilled and billed receivables
 to be collected within one year.

Income Taxes

Deferred income taxes are determined in accordance with Statement
 of Financial Accounting Standards (SFAS)
No. 109. Under this statement, temporary differences arise
as a result of the differences between the reported amounts of
assets and liabilities and their tax basis. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all
of the

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35.1



---



##### Table of Contents



Certain of the Companys international operations are
subject to local income taxation. Currently, the Company is
subject to taxation on income from certain operations in Europe,
Latin America, the Far East, the Middle East and the non-U.S.
portions of North America where the Company has subsidiaries, has
 established branch offices or has performed significant services
 that constitute a permanent establishment for tax
reporting purposes. Foreign taxes account for a significant
portion of the provision for income taxes as reflected in the
Companys consolidated statements of operations (see
note 10). The foreign taxes paid or accrued by the Company
represent a potential credit for the Company against its Federal
income taxes.

Foreign Currency Translation

Gains and losses on translation of the accounts of the
Companys foreign operations where the local currency is the
 functional currency are accumulated and included in other
comprehensive loss within the accompanying consolidated statement
 of shareholders equity. Foreign currency transaction gains
 and losses are recognized currently in the consolidated
statements of operations.

Pervasiveness of Estimates

The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires
 management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.

Stock-Based Compensation

In October 1995, the Financial Accounting Standards Board
(FASB) issued SFAS No. 123, Accounting for
Stock-Based Compensation, which establishes financial
accounting and reporting standards for stock-based compensation
plans. This statement establishes a fair value based method of
accounting for stock based compensation plans.

The Corporation will continue to account for stock-based
compensation plans using the method of accounting prescribed by
APB Opinion No. 25, Accounting for Stock Issued to
Employees.The Corporation will make pro-forma disclosures of
 net income as if the fair value based method of accounting as
defined in SFAS No. 123 had been applied (see note 14).

Other Comprehensive Income (Loss)

During 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which established standards for
reporting and displaying comprehensive income and its components
in a financial statement that is displayed in equal prominence as
 other financial statements. Comprehensive income is defined as
net income plus the changes in equity of a business enterprise
during a period from transactions and other events and
circumstances from non-owner sources. Other comprehensive income
refers to revenues, expenses, gains and losses that under
generally accepted accounting principles are included in
comprehensive income, but excluded from net income. Other
comprehensive income (loss) consists solely of foreign currency
translation adjustments in 1997, 1998 and 1999. Changes in
components of other comprehensive income (loss) are reported
 net of income tax, as follows (in thousands).

|                                         |  |        |        |             |  |        |      |        |  |             |        |        |  |        |     |             |  |        |    |  |  |   |     |  |  |   |      |   |  |   |     |   |  |   |      |  
|---------------------------------------- |  | ------ | ------ | ----------- |  | ------ | ---- | ------ |  | ----------- | ------ | ------ |  | ------ | --- | ----------- |  | ------ | -- |  |  | - | --- |  |  | - | ---- | - |  | - | --- | - |  | - | ---- | -
|                                         |  |        |        |             |  |       
|                                         |  | 1997   |        | 1998        |  | 1999  
|                                         |  |        |        |             |  |       
|                                         |  | Pretax |        | Tax Expense |  | Net    |      | Pretax |  | Tax Expense |        | Net    |  | Pretax |     | Tax Expense |  | Net   
|                                         |  | Amount |        | (Credit)    |  | Amount |      | Amount |  | (Credit)    |        | Amount |  | Amount |     | (Credit)    |  | Amount
|                                         |  |        |        |             |  |        |      |        |  |             |        |        |  |        |     |             |  |       
|Foreign currency translation adjustments |  | $      | (2,179 | )           |  | $      | (767 | )      |  | $           | (1,412 | )      |  | $      | 222 |             |  | $      | 78 |  |  | $ | 144 |  |  | $ | (327 | ) |  | $ | (98 | ) |  | $ | (229 | )
|                                         |  |        |        |             |  |        |      |        |  |             |        |        |  |        |     |             |  |        |    |  |  |   |     |  |  |   |      |   |  |   |     |   |  |   |      |  

Reclassification of Prior Years Balances

Prior years balances have been reclassified to conform with
 the current-year presentation.

36



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(3) Discontinued Operations

In March 1999, the Companys Board of Directors adopted
 a plan to discontinue the operations comprising its software and
 hardware products segments. On October 22, 1999, the
Company sold its products businesses, which consist of the
design, development, manufacture, marketing, sale and servicing
of field testing and measurement products (and related software)
and network planning software for the wireless communications
industry (the Products Businesses), to Ericsson Radio
 Systems AB, a Swedish corporation, and certain of its affiliates
 (Ericsson), pursuant to an Asset Purchase Agreement,
 dated as of August 25, 1999.

Pursuant to the Asset Purchase Agreement, the company transferred
 substantially all of the assets of the Products Businesses for a
 purchase price of approximately $22.3 million, which
included an estimate of approximately $1.9 million for the
collection of certain accounts receivable of the Products
Businesses sold to Ericsson. In addition, Ericsson assumed
certain of the liabilities of the Products Businesses, including,
 among others, certain liabilities arising with respect to the
Products Businesses in the ordinary course of business consistent
 with past practice and certain liabilities arising under assumed
 contracts. As part of the transaction, the Company entered into
product supply agreements and a software license and related
support agreement with Ericsson pursuant to which the Company
will purchase or license certain of the products which were sold
to Ericsson.

Revenues from the Products Businesses were approximately
$64.0 million and $33.8 million for the years ended
December 31, 1997 and 1998, respectively, and approximately
$19.5 million for the period from January 1, 1999 to
October 22, 1999. Net income (loss) was approximately
$2.2 million and $(17.8) million for the years ended
December 31, 1997 and 1998, respectively. The gain on
disposal in 1999 was approximately $0.8 million, net of
losses during the phase out period of approximately
$8.9 million, and related tax expense of approximately $0.3
million and includes $1.9 million of receivables to be
remitted to the Company upon collection.

The components of net assets of discontinued operations included
in the Consolidated Balance Sheet at December 31, 1998 were
as follows (in thousands):

|                                          |                           |      |        |       | 
|----------------------------------------- | ------------------------- | ---- | ------ | ----- | 
|                                          |                           | 1998
|                                          |                           |     
|Receivables, net:                         |                           |      |        |      
|                                         
|                                         
|                                         
|                                         
|                                          | Trade accounts receivable |      | $      | 9,429 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Due from related parties  |      |        | 56    | 
|                                         
|                                         
|                                         
|                                         
|                                          | Unbilled receivables      |      |        | 801   | 
|                                         
|                                         
|                                         
|                                         
|Inventory                                 |                           |      | 6,841  |      
|                                         
|                                         
|                                         
|                                         
|Prepaid expenses and other current assets |                           |      | 190    |      
|                                         
|                                         
|                                         
|                                         
|Property and equipment, net               |                           |      | 3,170  |      
|                                         
|                                         
|                                         
|                                         
|Software development costs, net           |                           |      | 1,168  |      
|                                         
|                                         
|                                         
|                                         
|Other noncurrent assets, net              |                           |      | 3,432  |      
|                                         
|                                         
|                                         
|                                         
|Note payable                              |                           |      | (2,368 | )    
|                                         
|                                         
|                                         
|                                         
|Accounts payable                          |                           |      | (2,593 | )    
|                                         
|                                         
|                                         
|                                         
|Accrued expenses                          |                           |      | (4,379 | )    
|                                         
|                                         
|                                         
|                                         
|Deferred revenue                          |                           |      | (4,721 | )    
|                                         
|                                         
|                                         
|                                         
|Other liabilities                         |                           |      | (1,887 | )    
|                                          |                           |      |        |      
|                                          |                           | $    | 9,139  |      
|                                          |                           |      |        |      

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(4) Cash and Cash Equivalents

At December 31, cash and cash equivalents consisted of the
following (in thousands):

|                                |  |      |       |      |  |   |       | 
|------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                |  | 1998 |       | 1999
|                                |  |      |       |     
|Cash in banks                   |  | $    | 2,120 |      |  | $ | 1,644 | 
|                               
|                               
|                               
|                               
|Overnight repurchase agreements |  |      | 1,082 |      |  |   | 307   | 
|                               
|                               
|                               
|                               
|Short-term commercial paper     |  |      | 1,000 |      |  |   |      | 
|                               
|                               
|                               
|                               
|Short-term money market funds   |  |      | 38    |      |  |   |      | 
|                                |  |      |       |      |  |   |       | 
|                                |  | $    | 4,240 |      |  | $ | 1,951 | 
|                                |  |      |       |      |  |   |       | 

The fair value of overnight repurchase agreements, short-term
commercial paper and short-term money market funds approximate
their carrying value.

(5) Related Party Transactions

During 1997, 1998, and 1999 the Company provided services to
Telcom Ventures and various other companies owned, in part, by
Telcom Ventures or its members. Telcom Ventures owns the
Class B Common Stock shares outstanding, which has
preferential voting rights over the Class A Common Stock
shares outstanding of ten-to-one representing approximately 88%
of voting control. Revenues earned during 1997, 1998 and 1999 for
 services provided to these customers were approximately
$1.1 million, $0.8 million, and $1.6 million,
respectively. Receivables from these related parties were
$119,000 and $299,000 at December 31, 1998 and 1999,
respectively, and are included in due from related parties and
affiliates in the accompanying consolidated balance sheets. Also
included in due from related parties and affiliates are unbilled
receivables and advances to employees aggregating approximately
$381,000 and $291,000 at December 31, 1998 and 1999,
respectively. During calendar 1997 and through July 22,
1998, program management services were provided to the Company by
 Koll Telecommunications Services L.L.C. (Koll) (see
note 9), a joint venture of the Company.

During 1998, the Company made certain payments on behalf of
Telcom Ventures and its members which consisted primarily of
payroll services, fringe benefit payments, facility related
charges, business insurances, interest and foreign tax payments.
During 1999, the Company made certain payments on behalf of
Telcom Ventures which consisted primarily of fringe benefit
payments. At December 31, 1998 and 1999, outstanding amounts
 associated with these payments totaling $111,000, and $246,000,
respectively, are included in due from related parties and
affiliates within the accompanying consolidated balance sheets.

In September 1996, the Company lent $3.5 million to
Telcom Ventures to assist in the payment of taxes due in
connection with the assumption by the Company of
$30.0 million of convertible subordinated debt from Telcom
Ventures (see note 12). The note is payable over five years
with equal annual principal payments over the term. Interest
accrues at the rate of LIBOR plus 1.75% and is payable annually.
In November 1997, the Company received a payment of
approximately $1.0 million from Telcom Ventures representing
 payment of $0.7 million principal and approximately
$0.3 million interest under the terms of the note. In
October 1998, the Company received a payment of approximately
$0.9 million from Telcom Ventures representing payment of
$0.7 million principal and approximately $0.2 million interest.
In November 1999, $0.7 million of principal and
approximately $0.2 million of interest were offset against
the Companys $1.1 million promissory note with Telcom
Ventures (see below). The note is reflected as a reduction of
shareholders equity in the accompanying statement of
shareholders equity.

On January 30, 1997, a significant customer of the Company
acquired 81% of the outstanding shares of Wireless Ventures of
Brazil, Inc. (WVB), an operator of specialized mobile
 radio systems in Brazil, for $186 million in the
customers stock. WVB was principally owned by Telcom
Ventures.

In January 1999, the Company entered into a
$5.0 million convertible promissory note with Telcom
Ventures. Under the terms of the note, anytime after
August 1, 1999, the entire principal balance and accrued
interest thereon at a rate of 9.0 percent could be converted
 into shares of the Companys Class A Common

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On September 10, 1999 the Company entered into a
$1.1 million promissory note with Telcom Ventures. Under the
 terms of the note, the entire principal balance and accrued
interest thereon would be due on September 1, 2000. The
interest was initially established at 10.5%, with increments in
the interest rate of 1.5% every 3 months beginning
March 1, 2000. The proceeds of the note were used to finance
 the Companys investment in Italtel Sistemi (see
note 9). In November 1999, the Company paid the note
and accrued interest thereon.

In December 1999, the Company issued approximately 108,000
shares of Class A Common Stock in exchange for a
$1.625 million note receivable from the Companys
President and Chief Executive Officer. The note is payable in
December 2004 or the date he is no longer the Companys
 President and Chief Executive Officer. Upon the event of a
change in control of ownership of the Company, the note will be
forgiven. Interest accrues at the federal mid-term rate on the
date of the note and is payable quarterly. The note is reflected
as a reduction of shareholders equity in the accompanying
statement of shareholders equity.

(6) Property and Equipment

At December 31, 1998 and 1999, property and equipment
consisted of the following:

|                                               |  |                |         |      |  |   |         |  
|---------------------------------------------- |  | -------------- | ------- | ---- |  | - | ------- | -
|                                               |  | 1998           |         | 1999
|                                               |  |                |         |     
|                                               |  |               
|                                               |  | (In thousands)
|                                              
|                                              
|                                              
|                                              
|Computer equipment                             |  | $              | 8,756   |      |  | $ | 12,964  |  
|                                              
|                                              
|                                              
|                                              
|Furniture and office equipment                 |  |                | 3,533   |      |  |   | 6,371   |  
|                                              
|                                              
|                                              
|                                              
|Purchased computer software                    |  |                | 4,696   |      |  |   | 1,248   |  
|                                              
|                                              
|                                              
|                                              
|Leasehold improvements                         |  |                | 3,019   |      |  |   | 3,152   |  
|                                              
|                                              
|                                              
|                                              
|RF transmission towers                         |  |                | 17,461  |      |  |   | 32,785  |  
|                                              
|                                              
|                                              
|                                              
|Vehicles                                       |  |                | 129     |      |  |   | 380     |  
|                                               |  |                |         |      |  |   |         |  
|                                               |  |                | 37,594  |      |  |   | 56,900  |  
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and amortization |  |                | (15,462 | )    |  |   | (19,138 | )
|                                               |  |                |         |      |  |   |         |  
|                                               |  | $              | 22,132  |      |  | $ | 37,762  |  
|                                               |  |                |         |      |  |   |         |  

(7) Special Charge

In March 1996, the Company made investments in Pocket
Communications, Inc. (Pocket, formerly known as DCR
Communications, Inc.) and NextWave Telecom, Inc.
(NextWave) of $6.5 million and
$5.0 million, respectively. The $6.5 million investment
 in Pocket consists of loans convertible into shares of
non-voting common stock upon the satisfaction of certain
conditions. In connection with this investment, the Company
obtained a commitment from Pocket for the purchase of services
and products aggregating $65.0 million over the subsequent
five-year period. The $5.0 million investment in NextWave
consists of an equity investment of approximately
1.7 million shares. In connection with this investment, the
Company obtained a commitment from NextWave for the purchase of
services and products aggregating $50.0 million over the
subsequent five-year period. Through December 31, 1996,
revenues recognized under the commitments with Pocket and
NextWave were approximately $2.2 million and
$11.3 million, respectively, and related amounts receivable
were approximately $2.2 million and $9.6 million,
respectively. Included in the amounts receivable are notes
receivable from Pocket and NextWave of approximately $950,000 and
 $5.9 million, respectively. The notes bear interest at
prime plus 2%, and were payable upon maturity of the notes on
March 31, 1997. Both customers were development stage
enterprises pursuing the buildout and operation of networks
pursuant to licenses obtained in the auction of C-Block licenses
by the FCC and subject to risks typically associated with
start-up entities, such as (i) the uncertainty of securing
sufficient financing,

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On March 31, 1997, Pocket failed to pay interest due the
Company under the $6.5 million convertible loan agreement
and failed to pay principal and interest due the Company under
the $950,000 note agreement. Also on March 31, 1997,
NextWave failed to pay principal and interest due under the
$5.9 million note agreement. In addition, on April 1,
1997, Pocket announced that it had voluntarily sought court
protection under Chapter 11 of the U.S. Bankruptcy Code.
Given these developments and the uncertainty related to
Pockets and NextWaves ability to meet their future
obligations under the agreements outlined above, the Company
fully reserved its exposure with these customers and consequently
 recorded a special charge of $28.9 million pre-tax
($23.8 million after tax or $1.95 per share) at
December 31, 1996. The $28.9 million special charge
consisted of a reserve against the Companys aggregate
receivable exposure at December 31, 1996 of
$12.1 million (net of payments of $0.4 million received
 in January 1997), the recognition of an other than
temporary impairment of the Companys investments of
$11.5 million and accruals of approximately
$5.3 million related to loss contracts under which the
Company was obligated to perform at December 31, 1996.

On April 15, 1997, the Company and NextWave agreed to a
revised payment schedule for amounts outstanding under the note
receivable and other receivables due from NextWave to the
Company. Under the terms of the agreement, the Company was to
receive approximately $1.0 million per month from
May 15, 1997 through May 15, 1998. In addition, under
certain circumstances, in the event of the sale or issuance of
any debt or equity instruments/securities or the sale of any
assets by NextWave, the Company would be entitled to a prepayment
 equal to 30% of the gross proceeds from such transaction(s). In
May and June 1997, the Company agreed to defer
NextWaves obligations to prepay the foregoing obligations
out of the proceeds of NextWaves debt or equity financing
to August 20, 1997. Payments of $2.0 million were
received under the revised payment schedule through June 30,
 1997. NextWave failed to make the $1.0 million monthly
payments which were due July 15, 1997 through
October 15, 1997, as well as any payment that would have
been due on August 20, 1997 related to any debt or equity
financing.

During September 1997, the Company recognized an approximate
 $3.9 million recovery of the $28.9 million special
charge. Of the $3.9 million, $2.0 million represents
the payments received through June 1997 under the revised
payment schedule and $1.9 million represents additional
payments received in April 1997 from NextWave, net of
related expenses. For financial reporting purposes, the recovery
of the $3.9 million balance was deferred pending the lapse
in the third quarter of a 90 day window during which such
funds could have been subject to being treated as preference
payments recoverable by NextWave had it filed for protection
under the bankruptcy laws. During calendar 1998, NextWave also
sought court protection under Chapter 11 of the U.S.
Bankruptcy Code.

Pocket has filed a plan of reorganization, which is still under
consideration, but provides for little if any recovery for the
Company. NextWave has filed a plan of reorganization that has not
 been confirmed pending the resolution of certain litigation
between NextWave and the Federal Communication Commission
(FCC) involving the FCCs right to reauction
NextWaves licenses in July, 2000.

(8) Restructuring Charge

On October 20, 1998, the Companys Board of Directors
approved a restructuring plan that resulted in a total fourth
quarter charge of approximately $2.5 million, including
approximately $1.2 million related to continuing operations.
 The restructuring charge included $0.1 million related to
the Companys Services businesses, $1.1 million related
 to corporate general and administrative expenses and
$1.3 million related to the Companys products
businesses. The charge was taken to cover the one-time costs
associated with the closure of the Companys office in
Dusseldorf, Germany, a reduction in non-billable positions of
approximately 70 full and part-time employees and approximately
30 contractors. As of December 31, 1999, a total liability
of approximately $0.1 million remained, after the recovery
of approximately $0.3 million of reserves recorded

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(9) Investments in Joint Ventures

The Companys investment in joint ventures at
December 31, 1997 consisted of a 33.3% interest in Koll,
which was formed in October 1994 with two other unrelated
entities. Koll provides site acquisition and construction
management services to operators of wireless communications
systems in the United States. Operating costs and expenses of the
 Company include services provided by Koll, in the amount of
$37,000 in 1997.

The unaudited condensed financial statements of Koll as of and
for the year ended December 31, 1997:

|                                   |                      |                |   |       |  
|---------------------------------- | -------------------- | -------------- | - | ----- | -
|                                   |                      | 1997          
|                                   |                      |               
|                                   |                      | (In thousands)
|                                  
|                                  
|                                  
|                                  
|Condensed Statements of Operations |                      |                |   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues             |                | $ | 8,422 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Cost and expenses    |                |   | 8,982 |  
|                                   |                      |                |   |      
|                                   | Net loss             |                | $ | (560  | )
|                                   |                      |                |   |      
|Condensed Balance Sheets           |                      |                |   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Current assets       |                | $ | 3,826 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Noncurrent assets    |                |   | 2,608 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Current liabilities  |                |   | 2,799 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Stockholders equity |                |   | 3,635 |  

On July 20, 1998, the Company acquired the remaining 66.7%
membership interest in Koll bringing its total membership
interest to 100.0%. Prior to the acquisition, the Company owned
33.3% of the membership interest, Castle Rock Telecommunications
Co., LLC (CRT) held approximately 36.7% of the membership
interest, and Koll Management Services, Inc. (KMS), held the
remaining 30.0%. In the transaction, Koll redeemed the ownership
interests of KMS in exchange for KMSs assumption of certain
 contract rights and associated assets and liabilities. Koll also
 redeemed the membership interests of CRT in exchange for an
earn-out agreement entitling CRT to 40.0% of the pre-tax income,
after certain adjustments, derived by Koll from certain contracts
 with specified customers.

During 1996, the Company entered into master service, convertible
 note and stock option agreements with Communication Consulting
Services, Inc. (CCS), a provider of radio frequency
engineering services in connection with the design, optimization
and operation of wireless systems. Under the master service
agreement, CCS provided the Company with radio frequency
engineers effective November 1, 1996. Under the convertible
note agreement, the Company lent CCS a total of approximately
$602,000 which, at December 31, 1996, was included in
long-term notes receivable in the accompanying consolidated
balance sheet. Interest accrued on the loan at a variable rate
equal to the prime rate plus 1.5%. Interest was payable in
arrears on the last day each of March 1997, June 1997,
September 1997, and December 1997. The entire principal
 balance, together with any unpaid interest, was due
January 2, 1998. The loan was convertible, at the
Companys option, into shares representing 50% of the
authorized capital stock and/or equity securities of CCS. The
stock option agreement gives the Company an option to purchase an
 additional 10% of the common stock of CCS for a total purchase
price of $150,000. On April 7, 1997, the Company exercised
both the conversion right in the convertible note and the 10%
purchase right set forth in the stock option agreement.

On September 30, 1998, the Company sold its interest in CCS
to CCS Management for $1.2 million. The $1.2 million is
 payable in two installments consisting of (i) $600,000 due
on May 31, 1999 and (ii) $600,000 due on
November 30, 1999. CCSs management failed to make
either payment during 1999 and is currently in default of the
note. Interest, equal to 9%, is due monthly on the first day of
each month, beginning January 1, 1999. The initial interest
payment is for the period from October 1, 1998 to
January 1, 1999. As of December 31, 1999, the Company
has recorded a reserve of approximately $557,000 related to the
transaction.

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In September 1999, the Company, through its wholly-owned
subsidiary, LCC, United Kingdom, Limited, acquired 19.9% of
Tecnosistemi S.p.A. (formerly, Italtel Sistemi, S.p.A.) for
$1.1 million. Tecnosistemi is an Italian telecommunications
services company, and is a recently spun off division of the
Italtel Group whose major shareholders were Siemens and Telecom
Italia. Tecneudosia, a market leader in the design and
manufacturing of shelters for fixed and mobile telecom operators
and suppliers acquired 22% of Tecnosistemi; and the right to
acquire the 30% interest retained by the Italtel Group. The
Italtel Group will maintain a 30% interest in Tecnosistemi for a
period of one year from the closing at which time Tecneudosia
intends to assume such interest. In connection with the
transaction, the Italtel Group undertook to: (1) repay all
losses reflected on Tecnosistemis financial statements for
the fiscal year ending December 31, 1999, (2) pay to
Tecnosistemi up to Lire 95 billion, as necessary, during the
years 2000, 2001, and 2002, to cover costs incurred by
Tecnosistemi to reorganize its operations, and (3) purchase
from Tecnosistemi, on an exclusive basis, those services required
 by the Italtel Group and offered by Tecnosistemi in Italy.

(10) Income Taxes

The provision (benefit) for income taxes from continuing
operations consists of the following:

|          |                 |                |       |       |       |      |        |        |        |   |        |        |        |  
|--------- | --------------- | -------------- | ----- | ----- | ----- | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|          |                 | 1997           |       | 1998  |       | 1999
|          |                 |                |       |       |       |     
|          |                 |               
|          |                 | (In thousands)
|         
|         
|         
|         
|Current:  |                 |                |       |       |       |      |        |        |        |   |        |       
|         
|         
|         
|         
|          | Federal         |                | $     |      |       |      | $      |       |        |   | $      | 100    |       
|         
|         
|         
|         
|          | State and local |                |       |      |       |      |        |       |        |   |        |       |       
|         
|         
|         
|         
|          | Foreign         |                |       | 1,284 |       |      |        | 1,582  |        |   |        | 919    |       
|          |                 |                |       |       |       |      |        |        |        |   |        |       
|          |                 |                | 1,284 |       |       |      | 1,582  |        |        |   | 1,019  |       
|          |                 |                |       |       |       |      |        |        |        |   |        |       
|Deferred: |                 |                |       |       |       |      |        |        |        |   |        |       
|         
|         
|         
|         
|          | Federal         |                |       | (308  | )     |      |        | (5,782 | )      |   |        | (3,568 | )     
|         
|         
|         
|         
|          | State and local |                |       | 572   |       |      |        | (361   | )      |   |        | (128   | )     
|         
|         
|         
|         
|          | Foreign         |                |       |      |       |      |        |       |        |   |        |       |       
|          |                 |                |       |       |       |      |        |        |        |   |        |       
|          |                 |                | 264   |       |       |      | (6,143 | )      |        |   | (3,696 | )     
|          |                 |                |       |       |       |      |        |        |        |   |        |       
|          |                 | Total          |       | $     | 1,548 |      |        | $      | (4,561 | ) |        | $      | (2,677 | )
|          |                 |                |       |       |       |      |        |        |        |   |        |       

The 1998 and 1999 income tax provision related to continuing
operations does not include a $0.4 million tax benefit and a
 $1.5 million tax benefit, respectively, related to
exercising stock options which was recorded directly to paid-in
capital. In addition, the 1999 income tax provision related to
continuing operations does not include a tax charge of
$12.6 million related to the cancellation of indebtedness
income from the conversion of the note payable to MCI. The tax
charge was recorded directly to paid-in capital.

Income (loss) before income taxes from continuing operations
 includes the following components:

|         |       |                |       |       |  |      |         |         |   |   |        |        |  
|-------- | ----- | -------------- | ----- | ----- |  | ---- | ------- | ------- | - | - | ------ | ------ | -
|         |       | 1997           |       | 1998  |  | 1999
|         |       |                |       |       |  |     
|         |       |               
|         |       | (In thousands)
|        
|        
|        
|        
|Domestic |       | $              | 1,544 |       |  | $    | (16,203 | )       |   | $ | (5,248 | )     
|        
|        
|        
|        
|Foreign  |       |                | 5,394 |       |  |      | 4,684   |         |   |   | (3,641 | )     
|         |       |                |       |       |  |      |         |         |   |   |        |       
|         | Total |                | $     | 6,938 |  |      | $       | (11,519 | ) |   | $      | (8,889 | )
|         |       |                |       |       |  |      |         |         |   |   |        |       

A reconciliation of the statutory Federal income tax rate and the
 effective income tax rate from continuing operations for the
years ended December 31, 1997, 1998 and 1999 follows.

42



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|                                  |                                                          |      |      |       |   |      |       |       |   |  |       |       |  
|--------------------------------- | -------------------------------------------------------- | ---- | ---- | ----- | - | ---- | ----- | ----- | - |  | ----- | ----- | -
|                                  |                                                          | 1997 |      | 1998  |   | 1999
|                                  |                                                          |      |      |       |   |     
|Statutory Federal income tax rate |                                                          |      | 35.0 | %     |   |      | (35.0 | )%    |   |  | (35.0 | )%   
|                                 
|                                 
|                                 
|                                 
|Effect of:                        |                                                          |      |      |       |   |      |       |       |   |  |       |      
|                                 
|                                 
|                                 
|                                 
|                                  | State and local income taxes, net of Federal tax benefit |      |      | 3.1   |   |      |       | (2.0  | ) |  |       | (1.1  | )
|                                 
|                                 
|                                 
|                                 
|                                  | Foreign                                                  |      |      | 18.2  |   |      |       | 10.0  |   |  |       | 14.6  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Tax credits                                              |      |      | (18.2 | ) |      |       | (10.0 | ) |  |       | 2.6   |  
|                                 
|                                 
|                                 
|                                 
|                                  | Non deductible expenses                                  |      |      | 7.4   |   |      |       | 9.0   |   |  |       | 8.5   |  
|                                 
|                                 
|                                 
|                                 
|                                  | Other                                                    |      |      | 2.1   |   |      |       | 1.1   |   |  |       | 8.3   |  
|                                 
|                                 
|                                 
|                                 
|                                  | Valuation Allowance                                      |      |      | (25.3 | ) |      |       | (12.7 | ) |  |       | (28.0 | )
|                                  |                                                          |      |      |       |   |      |       |       |   |  |       |      
|Effective income tax rate         |                                                          |      | 22.3 | %     |   |      | (39.6 | )%    |   |  | (30.1 | )%   
|                                  |                                                          |      |      |       |   |      |       |       |   |  |       |      

The tax effects of temporary differences that give rise to
significant portions of the net deferred tax assets at
December 31, 1998 and 1999 are presented below:

|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |        |       |      |  
|------------------------------- | ------------------------------------------------------------------------ | -------------------------- | -------------------------------- | ---- | ----- | - | ------ | ------ | ----- | ---- | - |  | ----- | - | ------ | ------ | ----- | ---- | -
|                                |                                                                          |                            |                                  |     
|                                |                                                                          | 1998                       |                                  | 1999
|                                |                                                                          |                            |                                  |     
|                                |                                                                          |                            |                                  |      |       |   |        |       
|                                |                                                                          |                           
|                                |                                                                          | (In thousands)            
|                               
|                               
|                               
|                               
|Deferred tax assets:            |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                               
|                               
|                               
|                               
|                                | Accounts receivable, principally due to allowance for doubtful
	accounts |                            |                                  |      |       |   | $      | 3,610  |       |      |   |  |       |   | $      | 75     |      
|                               
|                               
|                               
|                               
|                                | Special charge:                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |        |      
|                               
|                               
|                               
|                               
|                                |                                                                          | Receivables                |                                  |      | 2,769 |   |        |        |       |      |   |  | 924   |   |        |        |       |     
|                               
|                               
|                               
|                               
|                                |                                                                          | Investment                 |                                  |      | 1,884 |   |        |        |       |      |   |  |      |   |        |        |       |     
|                               
|                               
|                               
|                               
|                                |                                                                          | Accruals                   |                                  |      | 138   |   |        |        | 4,791 |      |   |  | 15    |   |        |        | 939   |     
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                                | Inventory valuation method                                               |                            |                                  |      |       |   |        | 1,117  |       |      |   |  |       |   |        |       |      
|                               
|                               
|                               
|                               
|Property and equipment          |                                                                          |                            |                                  |      |       |   | 340    |        |       |      |   |  |       |   | 225    |       
|                               
|                               
|                               
|                               
|                                | Non-cash compensation                                                    |                            |                                  |      |       |   |        | 2,484  |       |      |   |  |       |   |        | 265    |      
|                               
|                               
|                               
|                               
|                                | Accruals:                                                                |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |        |      
|                               
|                               
|                               
|                               
|                                |                                                                          | Vacation                   |                                  |      | 609   |   |        |        |       |      |   |  | 365   |   |        |        |       |     
|                               
|                               
|                               
|                               
|                                |                                                                          | Incentive compensation     |                                  |      | 20    |   |        |        |       |      |   |  |      |   |        |        |       |     
|                               
|                               
|                               
|                               
|                                |                                                                          | Accrued expenses           |                                  |      | 4,997 |   |        |        | 5,626 |      |   |  | 4,234 |   |        |        | 4,599 |     
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                                | Deferred revenue                                                         |                            |                                  |      |       |   |        | 215    |       |      |   |  |       |   |        | 73     |      
|                               
|                               
|                               
|                               
|                                | Net operating loss carry forward                                         |                            |                                  |      |       |   |        | 8,061  |       |      |   |  |       |   |        | 8,347  |      
|                               
|                               
|                               
|                               
|                                | Foreign tax credit carry forward                                         |                            |                                  |      |       |   |        | 5,739  |       |      |   |  |       |   |        | 6,302  |      
|                               
|                               
|                               
|                               
|                                | Foreign temporary differences                                            |                            |                                  |      |       |   |        | 155    |       |      |   |  |       |   |        | 155    |      
|                               
|                               
|                               
|                               
|                                | Research tax credit carryover                                            |                            |                                  |      |       |   |        | 108    |       |      |   |  |       |   |        | 217    |      
|                               
|                               
|                               
|                               
|                                | Other                                                                    |                            |                                  |      |       |   |        | 490    |       |      |   |  |       |   |        | 506    |      
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|Total gross deferred tax assets |                                                                          |                            |                                  |      |       |   | 32,736 |        |       |      |   |  |       |   | 21,703 |       
|                               
|                               
|                               
|                               
|                                | Less valuation allowance                                                 |                            |                                  |      |       |   |        | (7,443 | )     |      |   |  |       |   |        | (4,954 | )    
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                                | Deferred tax assets net of valuation allowance                           |                            |                                  |      |       |   |        | 25,293 |       |      |   |  |       |   |        | 16,749 |      
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|Deferred tax liabilities:       |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                               
|                               
|                               
|                               
|                                |                                                                          | Software development costs |                                  |      |       |   |        |        | (440  | )    |   |  |       |   |        |        |      |     
|                               
|                               
|                               
|                               
|                                |                                                                          | Other                      |                                  |      |       |   |        |        | (98   | )    |   |  |       |   |        |        | (104  | )   
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|                                |                                                                          |                            | Total gross deferred liabilities |      |       |   |        |        |       | (538 | ) |  |       |   |        |        |       | (104 | )
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       
|Net deferred tax assets         |                                                                          |                            |                                  |      |       | $ | 24,755 |        |       |      |   |  |       | $ | 16,645 |       
|                                |                                                                          |                            |                                  |      |       |   |        |        |       |      |   |  |       |   |        |       

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The components giving rise to the net deferred tax assets
described above have been included in the accompanying balance
sheet as of December 31, 1998 and 1999 as follows:

|                 |  |      |        |      |  |   |        | 
|---------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                 |  | 1998 |        | 1999
|                 |  |      |        |     
|Current asset    |  | $    | 12,050 |      |  | $ | 5,083  | 
|                
|                
|                
|                
|Noncurrent asset |  |      | 12,705 |      |  |   | 11,562 | 
|                 |  |      |        |      |  |   |        | 
|                 |  | $    | 24,755 |      |  | $ | 16,645 | 
|                 |  |      |        |      |  |   |        | 

At December 31, 1999, the Company had $22.1 million of
U.S. Federal and state operating loss carryforwards from
continuing operations which expire between 2011 and 2019 and
foreign tax credits for U.S. tax purposes of $4.6 million
which expire between 2001 and 2004.

The Company also had $3.4 million of foreign operating loss
carry forwards from discontinued operations which expire between
2006 and 2008.

In addressing the realizability of deferred tax assets,
management considers whether it is more likely than not that some
 portion or all of the deferred tax assets will not be realized.
The ultimate realization of deferred tax assets is dependent upon
 the generation of future taxable income during the periods in
which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities,
projected future taxable income and tax planning strategies in
making this assessment. A valuation allowance has been
provided for deferred tax assets which management believes are
not more likely than not to be realized.

Foreign income tax expense is generated from business conducted
in countries where the Company has subsidiaries or has
established branch offices or has performed significant services
that constitute a permanent establishment for tax
reporting purposes.

(11) Note Payable

In March 1999, the Company amended and restated the credit
facility with the Chase Manhattan Bank, as Administrative Agent
(Chase), (together with the LCC Europe Credit
Facility the Credit Facility) which was established
in 1996. The Credit Facility, consisted of a revolving loan and
letter of credit facility in an aggregate principal amount not to
 exceed $20.0 million for the Company and $2.5 million
for LCC Europe (the LCC Europe Credit Facility).

Approximately $4.5 million was outstanding under the Credit
Facility at December 31, 1999. Approximately
$2.4 million was outstanding under the LCC Europe Credit
Facility at December 31, 1998 and is included in net assets
of discontinued operations in the accompanying consolidated
balance sheets. Outstanding letters of credit were
$5.8 million and $0.8 million at December 31, 1998
 and 1999, respectively. In March 2000, the Credit facility
was paid-off in its entirety (see note 21).

(12) Convertible Subordinated Debt

In June 1994, the Company issued to MCI Worldcom
(MCI) a $20.0 million convertible Subordinated Note Due
 2000 (the Subordinated Note). The Subordinated Note
bore interest at a rate equal to 6.8%, payable semiannually. The
entire principal amount of the Subordinated Note was due in
June 2000.

In June 1994, Telcom Ventures issued a $30.0 million
convertible Subordinated Note Due 2000 (the Telcom Ventures
 Subordinated Note) to the same investor. The Telcom
Ventures Subordinated Note bore interest at a rate equal to 6.8%,
 payable semiannually. Effective September 27, 1996, in
connection with the Companys initial public offering of
Class A Common Stock, the Company assumed the
$30.0 million Telcom Ventures Subordinated Note from Telcom
Ventures. As a result of this assumption the Company has the
exclusive right to exercise all Telcom Ventures rights
under the Telcom Ventures Subordinated Note and is solely
responsible for the payment of interest and principal thereunder.

44



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##### Table of Contents



On October 23, 1997, the Company announced it had agreed
with MCI to defer the Companys option to convert the notes
in 1997. As per the arrangement, interest payable was reduced
from 6.8% to 4.4% per annum.

On July 13, 1999, the Company received notice of conversion
from MCI of its convertible subordinated notes in the aggregate
principal amount of $50.0 million. The notes were converted
into 2,841,099 shares of the Companys Class A Common Stock
on July 27, 1999.

(13) Health and Retirement Plans

The Company has a defined contribution profit sharing plan under
Section 401(k) of the IRC that provides for voluntary employee
contributions of 1.0 to 15.0 percent of compensation for
substantially all employees. The Company makes a matching
contribution of 50.0 percent of an employees
contribution up to 6.0 percent of each employees
compensation. Company contributions and other expenses associated
 with the plan were approximately $444,000, $652,000 and $548,000
 for the years ended December 31, 1997, 1998, and 1999,
respectively.

The Company is self-insured for group health, life, and short and
 long-term disability claims up to certain stop losses.

(14) Incentive Plans

At December 31, 1997, 1998, and 1999 the Company had two
stock-based incentive plans, an employee stock purchase plan and
an employee stock option plan, which are described below. The
Company applies APB Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized for its fixed stock option
plans and employee stock purchase plan. Had compensation cost for
 the Companys stock-based compensation plans and employee
stock purchase plan been determined on the fair value at the
grant dates for awards under those plans, consistent with
Financial Accounting Standards Board Statement No. 123
(SFAS No. 123), the Companys income
(loss) from continuing operations and income
(loss) from continuing operations per share would have been
reduced to the pro forma amounts indicated below.

|                                                   |              |                                       |   |             |      |             |   |        |       |   |   |        |       |  
|-------------------------------------------------- | ------------ | ------------------------------------- | - | ----------- | ---- | ----------- | - | ------ | ----- | - | - | ------ | ----- | -
|                                                   |              | 1997                                  |   | 1998        |      | 1999       
|                                                   |              |                                       |   |             |      |            
|                                                   |              | (Pro forma)                           |   | (Pro forma) |      | (Pro forma)
|                                                   |              |                                      
|                                                   |              | (In thousands, except per share data)
|Income (loss) from continuing operations           |              |                                       |   |             |      |             |   |        |       |   |   |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | As reported  |                                       | $ | 5,390       |      |             | $ | (6,958 | )     |   | $ | (6,212 | )    
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Pro forma    |                                       |   | 3,262       |      |             |   | (9,312 | )     |   |   | (7,613 | )    
|Income (loss) from continuing operations per share |              |                                       |   |             |      |             |   |        |       |   |   |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | As reported: |                                       |   |             |      |             |   |        |       |   |   |        |      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Basic                                 |   | $           | 0.37 |             |   | $      | (0.45 | ) |   | $      | (0.36 | )
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Diluted                               |   |             | 0.34 |             |   |        | (0.45 | ) |   |        | (0.36 | )
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Pro forma:   |                                       |   |             |      |             |   |        |       |   |   |        |      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Basic                                 |   | $           | 0.22 |             |   | $      | (0.60 | ) |   | $      | (0.44 | )
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |              | Diluted                               |   |             | 0.20 |             |   |        | (0.60 | ) |   |        | (0.44 | )

Income (loss) from continuing operations reflects only
options granted in 1997, 1998 and 1999. Therefore, the full
impact of calculating compensation cost for stock options under
SFAS No. 123 is not reflected in the pro forma net income
(loss) amounts presented above as compensation cost is
reflected over the options vesting period of up to
five-years.

45



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##### Table of Contents



The per share weighted-average fair value of stock options
granted during 1997, 1998 and 1999 was $8.41, $10.02 and $3.88,
respectively, on the date of grant using the Black Scholes
option-pricing model with the following weighted-average
assumptions:

|                        |  |      |           |      |  |      |           |  |  |  |           | 
|----------------------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  |  | --------- | 
|                        |  | 1997 |           | 1998 |  | 1999
|                        |  |      |           |      |  |     
|Expected dividend yield |  |      | 0%        |      |  |      | 0%        |  |  |  | 0%        | 
|                       
|                       
|                       
|                       
|Risk-free interest rate |  |      | 6.0%      |      |  |      | 5.0%      |  |  |  | 6.0%      | 
|                       
|                       
|                       
|                       
|Expected life           |  |      | 2-8 years |      |  |      | 2-8 years |  |  |  | 3-5 years | 
|                       
|                       
|                       
|                       
|Volatility              |  |      | 65.0%     |      |  |      | 65.0%     |  |  |  | 60.0%     | 

Under the Companys Employee Stock Purchase Plan, 360,000
shares of Class A Common Stock were available for purchase by
eligible employees of the Company beginning in 1997. Rights to
purchase shares are deemed granted to participating employees as
of the beginning of each applicable period, as specified by the
Compensation and Stock Option Committee of the Companys
Board of Directors. The purchase price for each share is not less
 than 85% of the fair market value of the share of Class A
Common Stock on the first or last trading day of such period,
whichever is lower. Under the Employee Stock Purchase Plan, the
Company sold 65,448 shares to employees in 1997, 100,710 shares
to employees in 1998, and 55,898 shares in 1999. Compensation
cost of approximately $161,000, $175,000, and $54,000,
respectively, would have been recognized under SFAS No. 123
for the fair value of the employees purchase rights and is
included in proforma net income (loss) from continuing operations
 above. Compensation cost was estimated using the Black Scholes
model with the following assumptions.

|                        |  |      |          |      |  |      |          |  |  |  |            | 
|----------------------- |  | ---- | -------- | ---- |  | ---- | -------- |  |  |  | ---------- | 
|                        |  | 1997 |          | 1998 |  | 1999
|                        |  |      |          |      |  |     
|Expected dividend yield |  |      | 0%       |      |  |      | 0%       |  |  |  | 0%         | 
|                       
|                       
|                       
|                       
|Expected life           |  |      | 3 months |      |  |      | 3 months |  |  |  | 1-3 months | 
|                       
|                       
|                       
|                       
|Volatility              |  |      | 65%      |      |  |      | 65%      |  |  |  | 60-70%     | 
|                       
|                       
|                       
|                       
|Risk-free interest rate |  |      | 3%       |      |  |      | 2.5-3.0% |  |  |  | 3%         | 

The weighted average fair value of the purchase rights granted in
 1997, 1998, and 1999 was $2.46, $1.74, and $0.96, respectively.

In April 1994, the Company adopted the Phantom Membership
Plan (the Phantom Membership Plan). Under the Phantom
 Membership Plan, the Members Committee was authorized to grant
awards (Phantom Membership Awards) to those employees
 of the Company whose responsibilities and decisions, in the
Members Committees opinion, affect the long-term sustained
growth and profitability of the Company. Each Phantom Membership
Award entitled the recipient thereof to receive, no later than
May 1 of each year, an annual award based on a specified
percentage of the Companys net income for the preceding
fiscal year. The Phantom Membership Plan also included a
long-term award. Under the long-term award, once a Phantom
Membership Award was fully vested, the recipient had the right to
 require the Company to purchase, and the Company had the right
to require such recipient to sell, all or any portion of the
recipients Phantom Membership Award based on the fair
market value of the Company as defined under the Phantom
Membership Plan. In connection with the Companys initial
public offering, all long-term awards granted under the Phantom
Membership Plan were replaced with options granted under the 1996
 Employee Stock Option Plan and the annual award feature of the
Phantom Membership Plan was terminated. The options vest over the
 original vesting period of the Phantom Membership Plan awards,
generally ratably over, or at the end of, 3 or 5 years.

Non-cash compensation related to the long-term award feature of
the Phantom Membership Plan, including compensation expense for
membership awards converted to stock options under the 1996
Employee Stock Option Plan, was $0.5 million, $0.4 million,
and $3,000 for 1997, 1998, and 1999, respectively. The liability
for which was included in paid-in capital in the accompanying
consolidated balance sheets.

In connection with its initial public offering, the Company
established the 1996 Employee Stock Option Plan, which authorized
 the issuance of up to 3,224,000 shares of Class A Common
Stock pursuant to options

46



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Also in connection with the Companys initial public
offering, the Company established the 1996 Directors Stock
Option Plan. The Directors Plan provides for the
formula grant of options, and authorizes the issuance
 of up to 60,000 shares of Class A Common Stock and 250,000
shares of Class B Common Stock. An additional 80,000 shares
of Class A Common Stock were reserved under the
Directors Plan in 1998 and, subject to shareholder
approval, an additional 110,000 shares of Class A Common
Stock will be reserved under the Directors Plan in 2000.
The option exercise price for options granted under the
Directors Plan is 100% of the fair value of the shares on
the date of grant. Each eligible director who is not eligible to
hold shares of Class B Common Stock was granted an initial
option to purchase 10,000 shares of Class A Common Stock in
connection with the offering. Each eligible director who is
eligible to hold shares of Class B Common Stock and who was
a director as of the offering was granted an initial option to
purchase 35,000 shares of Class B Common Stock in connection
 with the offering, and will be granted additional options to
purchase 22,500 shares of Class B Common Stock as of each of
 the next four annual meetings of the stockholders of the Company
 if the director continues to be an eligible director. Options
granted with respect to Class A Common Stock will become
immediately exercisable with respect to directors who were
directors of the Company prior to July 1, 1996, and will
become exercisable with respect to one-third of the shares of
Class A Common Stock that are subject to the options on each
 of the first three anniversaries of the date of grant subject to
 acceleration of vesting on a change of control with respect to
directors who became directors of the Company after July 1,
1996.

The Company has reserved 85,000 shares of Class A Common
Stock for issuance pursuant to options to be granted to a person
or entity designated by The Carlyle Group. The option exercise
price for these options are and will be 100% of the fair market
value of the Class A Common Stock on the date of grant of
the option. An initial option to purchase 25,000 shares of
Class A Common Stock was granted in connection with the
Offering, and an additional option was or will be granted to
purchase 15,000 shares of Class A Common Stock on each of
the next four anniversaries of the initial date of grant. Options
 granted will vest immediately. The options will expire no later
than the fifth anniversary of the date of grant.

On December 11, 1998, the Company re-priced substantially
all options previously granted under the 1996 Employee Stock
Option Plan to $5.00 per share which exceeded the fair market
value of the stock on that date. Approximately 887,000 share
options were subject to re-pricing.

Changes in stock options outstanding were as follows:

|                             |  |           |       |                |  |                |       |                |  |                |        |   |  |   |       |  |  |  |       |  
|---------------------------- |  | --------- | ----- | -------------- |  | -------------- | ----- | -------------- |  | -------------- | ------ | - |  | - | ----- |  |  |  | ----- | -
|                             |  |           |       |                |  |               
|                             |  | 1997      |       | 1998           |  | 1999          
|                             |  |           |       |                |  |               
|                             |  |           |       | Weighted-      |  |                |       | Weighted-      |  |               
|                             |  | Number of |       | Average        |  | Number of      |       | Average        |  | Number of     
|                             |  | Shares    |       | Exercise Price |  | Shares         |       | Exercise Price |  | Shares        
|                             |  |           |       |                |  |                |       |                |  |               
|                             |  |           |       |                |  | (In thousands) |       | (per share)    |  | (In thousands)
|                            
|                            
|                            
|                            
|Balance at beginning of year |  |           | 2,813 |                |  | $              | 8.54  |                |  |                | 2,509  |   |  | $ | 9.89  |  |  |  | 2,213 |  
|                            
|                            
|                            
|                            
|Granted                      |  |           | 418   |                |  |                | 15.54 |                |  |                | 1,342  |   |  |   | 18.31 |  |  |  | 2,078 |  
|                            
|                            
|                            
|                            
|Exercised                    |  |           | (531  | )              |  |                | 6.08  |                |  |                | (431   | ) |  |   | 6.74  |  |  |  | (584  | )
|                            
|                            
|                            
|                            
|Terminated                   |  |           | (191  | )              |  |                | 13.08 |                |  |                | (1,207 | ) |  |   | 17.95 |  |  |  | (908  | )
|                             |  |           |       |                |  |                |       |                |  |                |        |   |  |   |       |  |  |  |       |  
|Balance at end of year       |  |           | 2,509 |                |  |                | 9.89  |                |  |                | 2,213  |   |  |   | 7.42  |  |  |  | 2,799 |  
|                             |  |           |       |                |  |                |       |                |  |                |        |   |  |   |       |  |  |  |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                             |  |                |      | 
|---------------------------- |  | -------------- | ---- | 
|                             |  |               
|                             |  | 1999          
|                             |  |               
|                             |  | Weighted-     
|                             |  | Average       
|                             |  | Exercise Price
|                             |  |               
|                             |  | (per share)   
|                            
|                            
|                            
|                            
|Balance at beginning of year |  | $              | 7.42 | 
|                            
|                            
|                            
|                            
|Granted                      |  |                | 7.46 | 
|                            
|                            
|                            
|                            
|Exercised                    |  |                | 4.68 | 
|                            
|                            
|                            
|                            
|Terminated                   |  |                | 8.93 | 
|                            
|                            
|                            
|                            
|Balance at end of year       |  |                | 7.62 | 

47



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##### Table of Contents



The following table summarizes information about options at
December 31, 1999.

|                |  |                     |       |                     |  |               |      |                   |  |              |       |  |  |  |     |  |  |   |       | 
|--------------- |  | ------------------- | ----- | ------------------- |  | ------------- | ---- | ----------------- |  | ------------ | ----- |  |  |  | --- |  |  | - | ----- | 
|                |  |                     |       |                    
|                |  | Options Outstanding |       | Options Exercisable
|                |  |                     |       |                    
|                |  |                     |       | Weighted Avg.       |  | Weighted Avg. |      |                   |  | Weighted Avg
|Range of        |  | Number at           |       | Remaining           |  | Exercise      |      | Number at         |  | Exercise    
|Exercise Prices |  | December 31, 1999   |       | Contractual Life    |  | Price         |      | December 31, 1999 |  | Price       
|                |  |                     |       |                     |  |               |      |                   |  |             
|                |  | (In thousands)      |       | (In years)          |  |               |      | (In thousands)    |  |             
|               
|               
|               
|               
|$ 3.81- 4.25    |  |                     | 427   |                     |  |               | 7.27 |                   |  | $            | 4.08  |  |  |  | 311 |  |  | $ | 4.04  | 
|               
|               
|               
|               
|$ 5.00- 5.75    |  |                     | 1,557 |                     |  |               | 8.80 |                   |  |              | 5.33  |  |  |  | 313 |  |  |   | 5.00  | 
|               
|               
|               
|               
|$ 7.94-12.13    |  |                     | 124   |                     |  |               | 6.33 |                   |  |              | 10.81 |  |  |  | 82  |  |  |   | 12.13 | 
|               
|               
|               
|               
|$13.56-16.00    |  |                     | 621   |                     |  |               | 8.94 |                   |  |              | 13.92 |  |  |  | 90  |  |  |   | 16.00 | 
|               
|               
|               
|               
|$18.25-20.38    |  |                     | 70    |                     |  |               | 5.04 |                   |  |              | 18.71 |  |  |  | 58  |  |  |   | 18.61 | 
|                |  |                     |       |                     |  |               |      |                   |  |              |       |  |  |  |     |  |  |   |       | 
|                |  |                     | 2,799 |                     |  |               | 8.39 |                   |  |              | 7.62  |  |  |  | 854 |  |  |   | 7.42  | 
|                |  |                     |       |                     |  |               |      |                   |  |              |       |  |  |  |     |  |  |   |       | 

In September 1994, the Company adopted an Incentive
Compensation Plan (the Incentive Compensation Plan).
Under the Incentive Compensation Plan, the Members Committee was
authorized to grant awards (Incentive Awards) to
those employees of the Company whose responsibilities and
decisions, in the Members Committees opinion, affect the
long-term sustained growth and profitability of the Company.

Each Incentive Award entitles the recipient thereof to receive a
cash payment on the date specified in the corresponding award
agreement. As of December 31, 1994 and 1995, 20 and 60
employees, respectively, had been granted Incentive Awards under
the Incentive Compensation Plan. No new grants were made
subsequent to 1995. Compensation expense accrued in connection
with the distribution of the value of vested Incentive Awards was
 $409,000 and $4,000 for the years ended December 31, 1997
and 1998, respectively, which has been included in other current
liabilities in the accompanying consolidated balance sheets. As
of March 29, 1999, all Incentive Awards granted under the
Incentive Compensation Plan were paid in full.

(15) Lease Commitments

The Company leases office facilities and certain equipment,
principally in the United States, under operating leases expiring
 on various dates over the next eight years. The lease agreements
 include renewal options and provisions for rental escalations
based on the Consumer Price Index and require the Company to pay
for executory costs such as taxes and insurance. The lease
agreements also allow the Company to elect an early out provision
 by giving notice and paying certain lease termination penalties.

Benefits associated with a rent abatement period and certain
lease incentives for office facilities are reflected ratably over
 the period of the lease. For leases which have been terminated
(see below), the applicable portion of the benefit has been
offset against the lease termination penalty. The total deferred
rent benefit was approximately $763,000 and $874,000 at
December 31, 1998 and 1999, respectively.

Future minimum rental payments and receivables under
non-cancelable operating leases, excluding executory costs, are
as follows:

|           |  |                |        |                 |  |   |       | 
|---------- |  | -------------- | ------ | --------------- |  | - | ----- | 
|           |  |                |        | Rental         
|           |  | Rental         |        | Receivables    
|           |  | Payable        |        | Under Subleases
|           |  |                |        |                
|           |  |               
|           |  | (In thousands)
|          
|          
|          
|          
|2000       |  | $              | 4,459  |                 |  | $ | 2,150 | 
|          
|          
|          
|          
|2001       |  |                | 4,312  |                 |  |   | 1,650 | 
|          
|          
|          
|          
|2002       |  |                | 3,721  |                 |  |   | 263   | 
|          
|          
|          
|          
|2003       |  |                | 3,295  |                 |  |   |      | 
|          
|          
|          
|          
|2004       |  |                | 3,358  |                 |  |   |      | 
|          
|          
|          
|          
|Thereafter |  |                | 8,681  |                 |  |   |      | 
|           |  |                |        |                 |  |   |       | 
|           |  | $              | 27,826 |                 |  | $ | 4,063 | 
|           |  |                |        |                 |  |   |       | 

48



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##### Table of Contents



Rent expense under operating leases was approximately
$5.3 million, $6.9 million and $6.2 million for
the years ended December 31, 1997, 1998, and 1999,
respectively.

The Company also incurs rent expense for ground leases and
receives rental income from its tenants for the use of its RF
transmission towers (Subsequently sold, see note 21).
Certain ground leases and leases with tenants include renewal
options and/or escalation clauses. Future minimum ground/tower
leasing expense/revenue under tower leases at December 31,
1999 are as follows:

|           |  |                |       |             |  |   |     | 
|---------- |  | -------------- | ----- | ----------- |  | - | --- | 
|           |  | Rental         |       | Rental     
|           |  | Payable        |       | Receivables
|           |  |                |       |            
|           |  |               
|           |  | (In thousands)
|          
|          
|          
|          
|2000       |  | $              | 540   |             |  | $ | 712 | 
|          
|          
|          
|          
|2001       |  |                | 1,953 |             |  |   |    | 
|          
|          
|          
|          
|2002       |  |                | 4,266 |             |  |   |    | 
|          
|          
|          
|          
|2003       |  |                |      |             |  |   |    | 
|          
|          
|          
|          
|2004       |  |                |      |             |  |   |    | 
|          
|          
|          
|          
|Thereafter |  |                |      |             |  |   |    | 

(16) Contingencies

The Company is party to various non-material legal proceedings
and claims incidental to its business. Management does not
believe that these matters will have a material adverse effect on
 the consolidated results of operations or financial condition of
 the Company.

Albert Grimes et al. V LCC International, Inc. et al.,
Civil Action No. 16957-NC, in the Court of Chancery of the
State of Delaware, Castle County. On February 12, 1999, the
minority shareholders of the Companys majority-owned
Microcell subsidiary filed a suit against the Company, the
directors appointed by the Company to the Microcell Board and
Microcell itself, seeking rescission of the shareholders
agreement between the Company and the minority shareholders
(which concerns management of Microcell, funding commitments and
other matters), the appointment of a custodian or receiver, and
unspecified monetary damages. In connection with the sale of the
Company towers to Pinnacle Towers, Inc., the parties settled all
pending litigation, and all claims were dismissed with prejudice
on March 7, 2000.

(17) Earnings Per Share

During 1997 the Company adopted Financial Accounting Standards
Board Statement No. 128, Earnings per Share (SFAS No. 128). SFAS No. 128
supersedes Accounting Principles Board Opinion No. 15, Earnings per Share and its related
interpretations and promulgates new accounting standards for the
computation and manner of presentation of the Companys
earnings per share data. Under SFAS No. 128 the Company is
required to present basic and diluted earnings per share. Basic
earnings per share excludes dilution and is computed by dividing
income available to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could
occur if securities or other contracts to issue common stock were
 exercised or converted into common stock or resulted in the
issuance of common stock that shared in the earnings of the
Company. The reconciliation of

49



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##### Table of Contents





|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |       |       |  
|--------------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------- | ----- | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ---- | ------ | ---- | ------ | ------- | ------- | ------- | ------ | ------ | - | ------ | - | ----- | ----- | ----- | - | ------ | ------ | ------ | - | ------ | - | ------ | - | ----- | ----- | ----- | -
|                                                    |                                                                              |                                       |       |        |       |       
|                                                    |                                                                              | 1997                                  |       | 1998   |       | 1999  
|                                                    |                                                                              |                                       |       |        |       |       
|                                                    |                                                                              |                                       |       | Per    |       |        |        | Per    |        |        |      | Per   
|                                                    |                                                                              | Net                                   |       |        |       | Shares |        | Net    |        |        |      | Shares |      | Net    |         |         |         | Shares
|                                                    |                                                                              | Income                                |       | Shares |       | Amount |        | (Loss) |        | Shares |      | Amount |      | (Loss) |         | Shares  |         | Amount
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |       
|                                                    |                                                                              |                                      
|                                                    |                                                                              | (In thousands, except per share data)
|                                                   
|                                                   
|                                                   
|                                                   
|Basic EPS                                           |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|Net income (loss) available to common shareholders: |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|Continuing operations                               |                                                                              | $                                     | 5,390 |        |       |        |        |        |        |        |      |        |      | $      | (6,958  | )       |         |        |        |   |        |   |       |       |       | $ | (6,212 | )      |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|Discontinued Operations                             |                                                                              |                                       | 2,185 |        |       |        |        |        |        |        |      |        |      |        | (17,785 | )       |         |        |        |   |        |   |       |       |       |   |       |        |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|Gain on disposal                                    |                                                                              |                                       |      |        |       |        |        |        |        |        |      |        |      |        |        |         |         |        |        |   |        |   |       |       |       |   | 803    |        |        |   |        |   |        |   |       |      
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|Total                                               |                                                                              | $                                     | 7,575 |        |       |        | 14,740 |        |        |        |      |        |      | $      | (24,743 | )       |         |        | 15,509 |   |        |   |       |       |       | $ | (5,409 | )      |        |   | 17,302 |   |        |   |       |      
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|Continuing Operations                               |                                                                              |                                       |       |        |       |        |        |        |        | $      | 0.37 |        |      |        |         |         |         |        |        |   |        | $ | (0.45 | )     |       |   |        |        |        |   |        |   |        | $ | (0.36 | )    
|                                                   
|                                                   
|                                                   
|                                                   
|Discontinued Operations                             |                                                                              |                                       |       |        |       |        |        |        |        |        | 0.15 |        |      |        |         |         |         |        |        |   |        |   | (1.15 | )     |       |   |        |        |        |   |        |   |        |   | 0.05  |      
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|Total                                               |                                                                              |                                       |       |        |       |        |        |        |        | $      | 0.51 |        |      |        |         |         |         |        |        |   |        | $ | (1.60 | )     |       |   |        |        |        |   |        |   |        | $ | (0.31 | )    
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|Effective of Dilutive Securities                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Convertible debt                                                             |                                       |       |        |       |        |        |       |        |        |      |        |      |        |         |         |         |        |        |  |        |   |       |       |       |   |        |        |        |   |        |  |        |   |       |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Stock option plans                                                           |                                       |       |        |       |        |        | 1,215  |        |        |      |        |      |        |         |         |         |        |        |  |        |   |       |       |       |   |        |        |        |   |        |  |        |   |       |       |      
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|Dilutive EPS                                        |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Net income (loss) available to common stockholders and
	assumed conversions: |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |       |      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Continuing Operations                                                        |                                       | $     | 5,390  |       |        |        |        |        |        | $    | 0.34   |      |        | $       | (6,958  | )       |        |        |   |        |   | $     | (0.45 | )     |   | $      | (6,212 | )      |   |        |   |        |   | $     | (0.36 | )    
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Discontinued Operations                                                      |                                       |       | 2,185  |       |        |        |        |        |        |      | 0.14   |      |        |         | (17,785 | )       |        |        |   |        |   |       | (1.15 | )     |   |        |       |        |   |        |   |        |   |       |      |      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Gain on disposal                                                             |                                       |       |       |       |        |        |        |        |        |      |        |      |        |         |        |         |        |        |   |        |   |       |       |       |   |        | 803    |        |   |        |   |        |   |       | 0.05  |      
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      
|                                                    |                                                                              | Total                                 |       | $      | 7,575 |        |        |        | 15,955 |        |      | $      | 0.47 |        |         | $       | (24,743 | )      |        |   | 15,509 |   |       | $     | (1.60 | ) |        | $      | (5,409 | ) |        |   | 17,302 |   |       | $     | (0.31 | )
|                                                    |                                                                              |                                       |       |        |       |        |        |        |        |        |      |        |      |        |         |         |         |        |        |   |        |   |       |       |       |   |        |        |        |   |        |   |        |   |       |      

The Companys convertible subordinated debt was exchanged
into 2.8 million shares of the Companys Class A
Common Stock during 1999. The convertible subordinated debt, was
outstanding during calendar 1997 and 1998, but was not included
in the computation of diluted earnings per share because the
effect of which would have been anti-dilutive. Options to
purchase 2.2 million and 2.8 million shares of
Class A Common Stock were outstanding during 1998 and 1999,
respectively, but were not included in the computation of diluted
 earnings per share because the effect of which would have been
anti-dilutive.

(18) Segment Reporting

The Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information, during the
 fourth quarter of 1998. SFAS No. 131 established standards for
reporting information about the operating segments in interim and
 annual financial reports issued to stockholders. It also
established standards for related disclosures about products and
services and geographic areas. Operating segments are defined as
components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief
 operating decision maker, or decision making group, in deciding
how to allocate resources and assess performance. The
Companys chief operating decision making group is the
Executive Committee which is comprised of the Chief Operating
Officer and the lead executives of each of the Companys
operating segments. The operating segments are managed separately
 because each operating segment represents a strategic business
unit that offers distinct services.

The Companys operating segments include Services
(Engineering and Design Services and Program Management Services)
 and Tower ownership and management. Engineering and Design
Services provides engineering and design services for cellular
phone system operators, personal communication system
(PCS) operators and other wireless communication
systems providers. Program Management Services provides program
and construction management services related to the build-out of
wireless communication systems. Tower ownership and management
acquires, builds, owns and manages telecommunications towers.

The accounting policies of the operating segments are the same as
 those described in the summary of significant accounting
policies. The Company evaluates performance based on stand alone
operating segment

50



---



##### Table of Contents





Operating Segments:



|     |                                     |                |   |                 |        |       |   |        |       |  |   |        |        | 
|---- | ----------------------------------- | -------------- | - | --------------- | ------ | ----- | - | ------ | ----- |  | - | ------ | ------ | 
|     |                                     |                |   | Tower Ownership |        |      
|     |                                     |                |   | and             |        |      
|     |                                     | Services       |   | Management      |        | Total
|     |                                     |                |   |                 |        |      
|1997 |                                     |                |   |                 |        |       |   |        |       |  |   |       
|    
|    
|    
|    
|     | Net revenue from external customers |                | $ | 91,289          |        |       | $ |       |       |  | $ | 91,289 |       
|    
|    
|    
|    
|     | Intersegment revenues               |                |   | 397             |        |       |   |       |       |  |   | 397    |       
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     |                                     | Total revenues |   | $               | 91,686 |       |   | $      |      |  |   | $      | 91,686 | 
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     | Depreciation and amortization       |                | $ | 1,934           |        |       | $ | 88     |       |  | $ | 2,022  |       
|    
|    
|    
|    
|     | Interest income                     |                |   | 147             |        |       |   |       |       |  |   | 147    |       
|    
|    
|    
|    
|     | Interest expense                    |                |   | (14             | )      |       |   | 122    |       |  |   | 108    |       
|    
|    
|    
|    
|     | Income tax expense (benefit)        |                |   | 4,721           |        |       |   | (256   | )     |  |   | 4,465  |       
|    
|    
|    
|    
|     | Net income (loss)                   |                |   | 16,446          |        |       |   | (893   | )     |  |   | 15,553 |       
|    
|    
|    
|    
|     | Segment assets                      |                |   | 26,854          |        |       |   | 3,735  |       |  |   | 30,589 |       
|    
|    
|    
|    
|     | Expenditures for property           |                |   | 716             |        |       |   | 3,048  |       |  |   | 3,764  |       
|    
|    
|    
|    
|1998 |                                     |                |   |                 |        |       |   |        |       |  |   |       
|    
|    
|    
|    
|     | Net revenue from external customers |                | $ | 86,328          |        |       | $ | 860    |       |  | $ | 87,188 |       
|    
|    
|    
|    
|     | Intersegment revenues               |                |   | 1,180           |        |       |   |       |       |  |   | 1,180  |       
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     |                                     | Total revenues |   | $               | 87,508 |       |   | $      | 860   |  |   | $      | 88,368 | 
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     | Depreciation and amortization       |                | $ | 1,185           |        |       | $ | 451    |       |  | $ | 1,636  |       
|    
|    
|    
|    
|     | Interest income                     |                |   | 338             |        |       |   |       |       |  |   | 338    |       
|    
|    
|    
|    
|     | Interest expense                    |                |   |                |        |       |   | 1,016  |       |  |   | 1,016  |       
|    
|    
|    
|    
|     | Income tax expense (benefit)        |                |   | 4,361           |        |       |   | (1,692 | )     |  |   | 2,669  |       
|    
|    
|    
|    
|     | Net income (loss)                   |                |   | 6,650           |        |       |   | (2,581 | )     |  |   | 4,069  |       
|    
|    
|    
|    
|     | Segment assets                      |                |   | 26,899          |        |       |   | 18,250 |       |  |   | 45,149 |       
|    
|    
|    
|    
|     | Expenditures for property           |                |   | 757             |        |       |   | 14,860 |       |  |   | 15,617 |       
|    
|    
|    
|    
|1999 |                                     |                |   |                 |        |       |   |        |       |  |   |       
|    
|    
|    
|    
|     | Net revenue from external customers |                | $ | 73,289          |        |       | $ | 2,504  |       |  | $ | 75,793 |       
|    
|    
|    
|    
|     | Intersegment revenues               |                |   | 268             |        |       |   |       |       |  |   | 268    |       
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     |                                     | Total revenues |   | $               | 73,557 |       |   | $      | 2,504 |  |   | $      | 76,061 | 
|     |                                     |                |   |                 |        |       |   |        |       |  |   |       
|     | Depreciation and amortization       |                |   | 1,112           |        |       |   | 1,220  |       |  |   | 2,332  |       
|    
|    
|    
|    
|     | Interest income                     |                |   | 192             |        |       |   |       |       |  |   | 192    |       
|    
|    
|    
|    
|     | Interest expense                    |                |   | 9               |        |       |   | 1,785  |       |  |   | 1,794  |       
|    
|    
|    
|    
|     | Income tax expense (benefit)        |                |   | 2,672           |        |       |   | (1,238 | )     |  |   | 1,434  |       
|    
|    
|    
|    
|     | Net income (loss)                   |                |   | 8,875           |        |       |   | (4,111 | )     |  |   | 4,764  |       
|    
|    
|    
|    
|     | Segment assets                      |                |   | 24,070          |        |       |   | 31,098 |       |  |   | 55,168 |       
|    
|    
|    
|    
|     | Expenditures for property           |                |   | 1,691           |        |       |   | 15,240 |       |  |   | 16,931 |       

51



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A reconciliation of the totals reported for the operating
segments to the applicable line items in the consolidated
financial statements is as follows (in thousands):

|                                     |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                     |  | 1997 |        | 1998 |  | 1999
|                                     |  |      |        |      |  |     
|Revenues                             |  |      |        |      |  |      |        |   |  |   |        |  
|                                    
|                                    
|                                    
|                                    
|Revenues for reportable segments     |  | $    | 91,686 |      |  | $    | 88,368 |   |  | $ | 76,061 |  
|                                    
|                                    
|                                    
|                                    
|Eliminations                         |  |      | (397   | )    |  |      | (1,180 | ) |  |   | (268   | )
|                                     |  |      |        |      |  |      |        |   |  |   |        |  
|Total consolidated revenues          |  | $    | 91,289 |      |  | $    | 87,188 |   |  | $ | 75,793 |  
|                                     |  |      |        |      |  |      |        |   |  |   |        |  
|Assets                               |  |      |        |      |  |      |        |   |  |   |        |  
|                                    
|                                    
|                                    
|                                    
|Total assets for reportable segments |  |      |        |      |  | $    | 45,149 |   |  | $ | 55,168 |  
|                                    
|                                    
|                                    
|                                    
|Unallocated corporate assets         |  |      |        |      |  |      | 39,055 |   |  |   | 27,700 |  
|                                     |  |      |        |      |  |      |        |   |  |   |        |  
|Total consolidated assets            |  |      |        |      |  | $    | 84,204 |   |  | $ | 82,868 |  
|                                     |  |      |        |      |  |      |        |   |  |   |        |  

|                        |                               |         |   |              |  |              |   |              |   |  |   |        |   |  |   |        |  
|----------------------- | ----------------------------- | ------- | - | ------------ |  | ------------ | - | ------------ | - |  | - | ------ | - |  | - | ------ | -
|                        |                               |         |   | Unallocated  |  |              |   |             
|                        |                               | Segment |   | Corporate    |  |              |   | Consolidated
|Other Significant Items |                               | Total   |   | Expenditures |  | Eliminations |   | Total       
|                        |                               |         |   |              |  |              |   |             
|1997                    |                               |         |   |              |  |              |   |              |   |  |   |        |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 2,022        |  |              | $ | 1,388        |   |  | $ |       |   |  | $ | 3,410  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 147          |  |              |   | 711          |   |  |   | (122   | ) |  |   | 736    |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   | 108          |  |              |   | 3,303        |   |  |   | (122   | ) |  |   | 3,289  |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 4,465        |  |              |   | (2,895       | ) |  |   | (22    | ) |  |   | 1,548  |  
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 3,764        |  |              |   | 2,920        |   |  |   | 6,684  |   |  |   |        |  
|                       
|                       
|                       
|                       
|1998                    |                               |         |   |              |  |              |   |              |   |  |   |        |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 1,636        |  |              | $ | 773          |   |  | $ |       |   |  | $ | 2,409  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 338          |  |              |   | 1,576        |   |  |   | (1,016 | ) |  |   | 898    |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   | 1,016        |  |              |   | 2,295        |   |  |   | (1,016 | ) |  |   | 2,295  |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 2,669        |  |              |   | (7,089       | ) |  |   | (141   | ) |  |   | (4,561 | )
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 15,617       |  |              |   | 1,118        |   |  |   |       |   |  |   | 16,735 |  
|                       
|                       
|                       
|                       
|1999                    |                               |         |   |              |  |              |   |              |   |  |   |        |   |  |   |       
|                       
|                       
|                       
|                       
|                        | Depreciation and amortization |         | $ | 2,332        |  |              | $ | 1,296        |   |  | $ |       |   |  | $ | 3,628  |  
|                       
|                       
|                       
|                       
|                        | Interest income               |         |   | 192          |  |              |   | 1,920        |   |  |   | (1,785 | ) |  |   | 327    |  
|                       
|                       
|                       
|                       
|                        | Interest expense              |         |   | 1,794        |  |              |   | 2,145        |   |  |   | (1,785 | ) |  |   | 2,154  |  
|                       
|                       
|                       
|                       
|                        | Income taxes                  |         |   | 1,434        |  |              |   | (4,111       | ) |  |   |       |   |  |   | (2,677 | )
|                       
|                       
|                       
|                       
|                        | Expenditures for property     |         |   | 16,931       |  |              |   | 169          |   |  |   |       |   |  |   | 17,100 |  

52



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Information concerning principal geographic areas was as follows
(in thousands):

|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |        |       | 
|---------------------- | ------------------- | ---------------------------- | ------ | -------- | ------ | -------- | ----- | -------- | --- | -------- | ------ | -------- | ------ | - | ------ | ------ | --- | - | ------ | ------ | ------ | - | ------ | ------ | ----- | 
|                       |                     |                              |        |          |        |         
|                       |                     | 1997                         |        | 1998     |        | 1999    
|                       |                     |                              |        |          |        |         
|                       |                     |                              |        | Net      |        |          |       | Net      |     |          |        | Net     
|                       |                     | Revenues                     |        | Property |        | Revenues |       | Property |     | Revenues |        | Property
|                       |                     |                              |        |          |        |          |       |          |     |          |        |         
|North America          |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                      
|                      
|                      
|                      
|                       | United States       |                              | $      | 61,682   |        |          | $     | 7,524    |     |          | $      | 47,065   |        |   | $      | 21,721 |     |   | $      | 40,370 |        |   | $      | 35,353 |      
|                      
|                      
|                      
|                      
|                       | Canada and Mexico   |                              |        | 2,740    |        |          |       |         |     |          |        | 3,492    |        |   |        |       |     |   |        | 1,654  |        |   |        |       |      
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|Total North America    |                     |                              | 64,422 |          |        |          | 7,524 |          |     |          | 50,557 |          |        |   | 21,721 |        |     |   | 42,024 |        |        |   | 35,353 |       
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|Europe and Middle East |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                      
|                      
|                      
|                      
|                       | United Kingdom      |                              |        | 3,964    |        |          |       |         |     |          |        | 825      |        |   |        | 3      |     |   |        | 1,476  |        |   |        | 1,896  |      
|                      
|                      
|                      
|                      
|                       | Belgium             |                              |        | 1,230    |        |          |       |         |     |          |        | 3,384    |        |   |        |       |     |   |        | 4,261  |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Netherlands         |                              |        | 1,443    |        |          |       |         |     |          |        | 7,113    |        |   |        |       |     |   |        | 8,718  |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Egypt               |                              |        |         |        |          |       |         |     |          |        |         |        |   |        |       |     |   |        | 3,655  |        |   |        | 182    |      
|                      
|                      
|                      
|                      
|                       | Italy               |                              |        |         |        |          |       |         |     |          |        |         |        |   |        |       |     |   |        | 2,766  |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Other               |                              |        | 1,603    |        |          |       | 2        |     |          |        | 2,487    |        |   |        | 1      |     |   |        | 2,161  |        |   |        | 15     |      
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                       |                     | Total Europe and Middle East |        |          | 8,240  |          |       |          | 2   |          |        |          | 13,809 |   |        |        | 4   |   |        |        | 23,037 |   |        |        | 2,093 | 
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|Latin America          |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                      
|                      
|                      
|                      
|                       | Brazil              |                              |        | 5,513    |        |          |       | 165      |     |          |        | 14,516   |        |   |        | 407    |     |   |        | 6,685  |        |   |        | 316    |      
|                      
|                      
|                      
|                      
|                       | Argentina           |                              |        | 258      |        |          |       |         |     |          |        | 836      |        |   |        |       |     |   |        | 120    |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Other Latin America |                              |        | 358      |        |          |       |         |     |          |        | 326      |        |   |        |       |     |   |        | 522    |        |   |        |       |      
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                       |                     | Total Latin America          |        |          | 6,129  |          |       |          | 165 |          |        |          | 15,678 |   |        |        | 407 |   |        |        | 7,327  |   |        |        | 316   | 
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|Asia-Pacific           |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                      
|                      
|                      
|                      
|                       | Malaysia            |                              |        | 5,331    |        |          |       |         |     |          |        | 4,036    |        |   |        |       |     |   |        | 289    |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Korea               |                              |        | 1,569    |        |          |       |         |     |          |        | 650      |        |   |        |       |     |   |        | 78     |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | China               |                              |        |         |        |          |       |         |     |          |        |         |        |   |        |       |     |   |        | 405    |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Phillipines         |                              |        | 1,610    |        |          |       |         |     |          |        | 885      |        |   |        |       |     |   |        | 1,369  |        |   |        |       |      
|                      
|                      
|                      
|                      
|                       | Other               |                              |        | 3,543    |        |          |       |         |     |          |        | 1,422    |        |   |        |       |     |   |        | 1,264  |        |   |        |       |      
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|                       |                     | Total Asia-Pacific           |        |          | 12,053 |          |       |          |    |          |        |          | 6,993  |   |        |        |    |   |        |        | 3,405  |   |        |        |      | 
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|All other              |                     |                              | 445    |          |        |          |      |          |     |          | 151    |          |        |   |       |        |     |   |       |        |        |   |       |       
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       
|Total                  |                     | $                            | 91,289 |          |        | $        | 7,691 |          |     | $        | 87,188 |          |        | $ | 22,132 |        |     | $ | 75,793 |        |        | $ | 37,762 |       
|                       |                     |                              |        |          |        |          |       |          |     |          |        |          |        |   |        |        |     |   |        |        |        |   |        |       

53



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(19) Quarterly Data (Unaudited)

|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |       |  
|------------------------------------------------------------ | ------- | ---------------------------------------- | ------ | ------- | - | ------- | ------ | ------- | - | - | ------ | ----- | - | - | ------- | ----- | -
|                                                             |         |                                         
|                                                             |         | 1998                                    
|                                                             |         |                                         
|                                                             |         | 1st                                      |        | 2nd     |   | 3rd     |        | 4th    
|                                                             |         | Quarter                                  |        | Quarter |   | Quarter |        | Quarter
|                                                             |         |                                          |        |         |   |         |        |        
|                                                             |         |                                         
|                                                             |         | (In thousands, except per share amounts)
|                                                            
|                                                            
|                                                            
|                                                            
|Revenues                                                     |         | $                                        | 22,633 |         |   | $       | 21,790 |         |   | $ | 22,236 |       |   | $ | 20,529  |      
|                                                            
|                                                            
|                                                            
|                                                            
|Operating income (loss)                                      |         |                                          | 1,707  |         |   |         | (981   | )       |   |   | (5,311 | )     |   |   | (4,919  | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Income (loss) from continuing operations before income taxes |         |                                          | 1,211  |         |   |         | (1,378 | )       |   |   | (5,838 | )     |   |   | (5,514  | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Income (loss) from continuing operations                     |         |                                          | 731    |         |   |         | (832   | )       |   |   | (3,526 | )     |   |   | (3,331  | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Income (loss) from discontinued operations                   |         |                                          | (432   | )       |   |         | (1,364 | )       |   |   | (3,553 | )     |   |   | (12,436 | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Net income (loss)                                            |         |                                          | 299    |         |   |         | (2,196 | )       |   |   | (7,079 | )     |   |   | (15,767 | )    
|                                                            
|                                                            
|                                                            
|                                                            
|Income (loss) per share:                                     |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                            
|                                                            
|                                                            
|                                                            
|Continuing operations:                                       |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic   |                                          | $      | 0.05    |   |         | $      | (0.05   | ) |   | $      | (0.23 | ) |   | $       | (0.21 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                             | Diluted |                                          | $      | 0.05    |   |         | $      | (0.05   | ) |   | $      | (0.23 | ) |   | $       | (0.21 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|Discontinued operations:                                     |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic   |                                          | $      | (0.03   | ) |         | $      | (0.09   | ) |   | $      | (0.23 | ) |   | $       | (0.80 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                             | Diluted |                                          | $      | (0.03   | ) |         | $      | (0.09   | ) |   | $      | (0.23 | ) |   | $       | (0.80 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|Net income (loss) per share:                                 |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Basic   |                                          | $      | 0.02    |   |         | $      | (0.14   | ) |   | $      | (0.45 | ) |   | $       | (1.01 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      
|                                                             | Diluted |                                          | $      | 0.02    |   |         | $      | (0.14   | ) |   | $      | (0.45 | ) |   | $       | (1.01 | )
|                                                             |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |         |      

54



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|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |      | 
|----------------------------------------------------------------- | ------- | ---------------------------------------- | ------ | ------- | - | ------- | ------ | ------- | - | - | ------ | ----- | - | - | ------ | ---- | 
|                                                                  |         |                                         
|                                                                  |         | 1999                                    
|                                                                  |         |                                         
|                                                                  |         | 1st                                      |        | 2nd     |   | 3rd     |        | 4th    
|                                                                  |         | Quarter                                  |        | Quarter |   | Quarter |        | Quarter
|                                                                  |         |                                          |        |         |   |         |        |        
|                                                                  |         |                                         
|                                                                  |         | (In thousands, except per share amounts)
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Revenues                                                          |         | $                                        | 17,673 |         |   | $       | 16,131 |         |   | $ | 18,242 |       |   | $ | 23,747 |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Operating income (loss)                                           |         |                                          | (338   | )       |   |         | (4,182 | )       |   |   | (1,385 | )     |   |   | 234    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) from continuing operations before income taxes      |         |                                          | (2,218 | )       |   |         | (5,021 | )       |   |   | (1,660 | )     |   |   | 10     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) from continuing operations                          |         |                                          | (1,892 | )       |   |         | (3,167 | )       |   |   | (1,160 | )     |   |   | 7      |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Gain on disposal of discontinued operations, net of tax provision |         |                                          |       |         |   |         |       |         |   |   |       |       |   |   | 803    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net income (loss)                                                 |         |                                          | (1,892 | )       |   |         | (3,167 | )       |   |   | (1,160 | )     |   |   | 810    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (loss) per share                                           |         |                                          |       |         |   |         |       |         |   |   |       |       |   |   |       |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Continuing operations:                                            |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      |     | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      |     | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|Discontinued operations:                                          |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      |        |   |         | $      |        |   |   | $      |      |   |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      |        |   |         | $      |        |   |   | $      |      |   |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|Net income (loss) per share:                                      |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Basic   |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     
|                                                                  | Diluted |                                          | $      | (0.12   | ) |         | $      | (0.20   | ) |   | $      | (0.06 | ) |   | $      | 0.04 | 
|                                                                  |         |                                          |        |         |   |         |        |         |   |   |        |       |   |   |        |     

See note 8 with respect to the restructuring charge recorded
 by the company in October 1998. All periods presented have
been restated to reflect the hardware and software businesses as
discontinued operations (see note 3).

(20) Fair Value Of Financial Instruments

The following table presents the carrying amount and estimated
fair value of the Companys financial instruments in
accordance with SFAS No. 107 Disclosure about Fair
Value of Financial Instruments.

|                                    |                                   |                |       |                |  |          |       |                |  |  |   |       |  |  |   |       | 
|----------------------------------- | --------------------------------- | -------------- | ----- | -------------- |  | -------- | ----- | -------------- |  |  | - | ----- |  |  | - | ----- | 
|                                    |                                   |                |       |               
|                                    |                                   | 1998           |       | 1999          
|                                    |                                   |                |       |               
|                                    |                                   | Carrying       |       | Estimated Fair |  | Carrying |       | Estimated Fair
|                                    |                                   | Amount         |       | Value          |  | Amount   |       | Value         
|                                    |                                   |                |       |                |  |          |       |               
|                                    |                                   |               
|                                    |                                   | (In thousands)
|                                   
|                                   
|                                   
|                                   
|Liabilities:                        |                                   |                |       |                |  |          |       |                |  |  |   |       |  |  |   |      
|                                   
|                                   
|                                   
|                                   
|                                    | Convertible subordinated debt     |                | $     | 50,000         |  |          | $     | 10,654         |  |  | $ |      |  |  | $ |      | 
|                                   
|                                   
|                                   
|                                   
|Shareholders Equity:               |                                   |                |       |                |  |          |       |                |  |  |   |       |  |  |   |      
|                                   
|                                   
|                                   
|                                   
|                                    | Notes receivable from shareholder |                |       | 2,100          |  |          |       | 2,100          |  |  |   | 3,025 |  |  |   | 3,025 | 
|                                   
|                                   
|                                   
|                                   
|Off balance sheetletters of credit |                                   |                | 3,700 |                |  |          | 3,700 |                |  |  |  |       |  |  |  |      

The carrying amounts of financial instruments, including cash and
 cash equivalents, accounts and notes receivable, and accounts
payable approximated fair value as of December 31, 1998 and
1999 because of the relatively short duration of these
instruments.

Convertible subordinated debt the fair value
at December 31, 1998 is based on the fair market value of
the Class A Common Stock assuming conversion into 2,841,099
shares.

Notes receivable from shareholders the
carrying value of the notes receivable approximated the fair
value as the instruments included a market rate of interest.

55



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##### Table of Contents



Letters of credit the fair value of letters of
 credit was estimated based on fees currently charged for similar
 agreements or the estimated cost to terminate or settle the
obligations.

Financial guarantees are conditional commitments issued by the
Company to guarantee the payment of certain liabilities of
unconsolidated affiliates. No such guarantees were outstanding at
 December 31, 1998 or 1999.

(21) Subsequent Events

From January 1, 2000 to March 3, 2000 the Company
borrowed a total of $9.7 million under its Credit Facility
with Chase. In March 2000, the Company used approximately
$14.4 million of the proceeds from the sale of its tower
portfolio (see below) to repay the Companys outstanding
balance under the Credit Facility. The Credit Facility was then
terminated and all of Chases liens and security interests
in the Companys assets were released.

On February 15, 2000, Microcell Management, Inc., a
subsidiary of LCC International, Inc., and the Company entered
into a Settlement and Release Agreement (Settlement
Agreement) with the minority shareholders of Microcell.
Pursuant to the Settlement Agreement, the 16.25% minority
shareholder interest was redeemed for approximately
$4.2 million. Pursuant also to the Settlement Agreement, the
 pending litigation involving LCC, Microcell, and the minority
shareholders was settled and dismissed with prejudice. As a
result of the redemption, Microcell became a wholly-owned
subsidiary of the Company.

On March 3, 2000, Microcell completed the initial closing of
 the sale of its telecommunication tower portfolio to Pinnacle
Towers Inc. (Pinnacle) pursuant to an Asset Purchase
Agreement between Pinnacle and Microcell. Pursuant to the Asset
Purchase Agreement, Microcell agreed to sell up to 197 tower
 sites owned or to be constructed by Microcell for a total
purchase of $80 million in cash payable when the sites are
conveyed to Pinnacle. At the initial closing, 134 tower sites
were conveyed to Pinnacle for proceeds of $56.7 million. The
 Company used approximately $14.4 million of the proceeds
from the initial closing to repay the Companys outstanding
obligations under the Credit Facility. In addition, approximately
 $4.0 million was applied to or reserved for transaction
costs, $4.2 million was applied to redeem the minority
shares under the Settlement Agreement as described above and the
balance of $34.1 million held for current operating
activities. As a part of the sale transaction, Microcell and
Pinnacle entered into a Master Antenna Site Lease pursuant to
which Microcell has agreed to lease, until December 31,
2002, the unoccupied space on each telecommunication tower sold
to Pinnacle (see note 15). Microcell and Pinnacle have also
entered into a Tower Services Agreement pursuant to which
Microcell will provide Pinnacle with site audit, maintenance, and
 program management services regarding site improvements and
capacity upgrades for an initial 204 sites and additional
sites for which Pinnacle deems the services are necessary. The
Services Agreement provides for minimum annual payments to
Microcell of $10 million for project management and site
audit services; it also provides for approximately
$1.0 million per year for maintenance services based on the
current number of sites as to which Microcell has been engaged.

LCC INTERNATIONAL, INC. AND SUBSIDIARIES




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

None.

PART III




Item 10. Directors and Executive Officers of the
Registrant

Reference is made to the information set forth under the caption
Election of Directors appearing in the Proxy
Statement to be filed within 120 days after the end of the
Companys fiscal year, which information is incorporated
herein by reference.

56



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##### Table of Contents






Item 11. Executive Compensation

Reference is made to the information set forth under the caption
Election of Directors Executive Compensation
appearing in the Proxy Statement to be filed within 120 days
 after the end of the Companys fiscal year, which
information is incorporated herein by reference.




Item 12. Security Ownership of Certain Beneficial
Owners and Management

Reference is made to the information set forth under the caption
Beneficial Ownership of Common Stock appearing in the
 Proxy Statement to be filed within 120 days after the end
of the Companys fiscal year, which information is
incorporated herein by reference.




Item 13. Certain Relationships and Related
Transactions

Reference is made to the information set forth under the caption
Election of Directors  Compensation Committee
Interlocks and Insider Participation and 
Certain Relationships and Related Transactions
appearing in the Proxy Statement to be filed within 120 days
 after the end of the Companys fiscal year, which
information is incorporated herein by reference.

PART IV




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



| |        |                                                                                                                                                         
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(1) | The following consolidated financial statements of registrant and
	 its subsidiaries and report of independent auditors are included
	 in Item 8 hereof.

Report of Independent Auditors.

Consolidated Statements of Operations  Years Ended
December 31, 1997, 1998, and 1999.

Consolidated Balance Sheets as of December 31, 1998 and
1999.

Consolidated Statements of Shareholders Equity Years
Ended December 31, 1997, 1998 and 1999.

Consolidated Statements of Cash Flows  Years Ended
December 31, 1997, 1998 and 1999.

Notes to Consolidated Financial Statements.



| |        |                                                                                                                                                                                                                                                                                                                                         
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(2) | Except as provided below, all schedules for which provision is
	made in the applicable accounting regulations of the Securities
	and Exchange Commission either have been included in the
	Consolidated Financial Statements or are not required under the
	related instructions, or are inapplicable and therefore have been
	 omitted.

Schedule II  Valuation and Qualifying Accounts

57



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| |        |                                                                                                      
| | ------ | -----------------------------------------------------------------------------------------------------
| | (a)(3) | The following exhibits are either provided with this Report or
	are incorporated herein by reference:

|        |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | ----- | ------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                    
|Number  |       | Exhibit Description
|        |       |                    
|        | 3.1   |                     |  |  Restated Certificate of Incorporation of the Company.*                                                                                                                                                                                                                                                                                                                                                             
|        | 3.2   |                     |  |  Amended and Restated Bylaws of the Company.*                                                                                                                                                                                                                                                                                                                                                                       
|        | 4.1   |                     |  |  Form of Class A and Class B Common Stock
	certificates.*                                                                                                                                                                                                                                                                                                                                                           
|        | 4.2   |                     |  |  LCC International, Inc. 1996 Directors Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                         
|        | 4.3   |                     |  |  LCC International, Inc. 1996 Employee Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                          
|        | 4.4   |                     |  |  LCC International, Inc. 1996 Employee Stock Purchase
	Plan.*                                                                                                                                                                                                                                                                                                                                                       
|        | 4.5   |                     |  |  Amendment No. 1 to LCC International, Inc. Employee
	Stock Purchase Plan**                                                                                                                                                                                                                                                                                                                                         
|        | 4.6   |                     |  |  Amendment to LCC International, Inc. 1996 Directors Stock
	Option Plan, dated April 22, 1997. ********                                                                                                                                                                                                                                                                                                             
|        | 4.7   |                     |  |  Amendment to LCC International, Inc. 1996 Directors Stock
	Option Plan, dated April 16, 1998. *****                                                                                                                                                                                                                                                                                                                
|        | 4.8   |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated April 16, 1998. *****                                                                                                                                                                                                                                                                                                                 
|        | 4.9   |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated July 27, 1999. *******                                                                                                                                                                                                                                                                                                                
|        | 4.10  |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated December 16, 1999                                                                                                                                                                                                                                                                                                                     
|        | 10.1  |                     |  |  1994 LCC, L.L.C. Incentive Compensation Plan.*                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.2  |                     |  |  Amended and Restated Service Agreement, dated as of
	October 1, 1996, by and between TSI, a division of LCC
	International, Inc., and Nextel Communications, Inc.****                                                                                                                                                                                                                                              
|        | 10.3  |                     |  |  Amended and Restated Software License Agreement, dated as
	of October 1, 1996 by and between LCC, a division of LCC
	International, Inc., and Nextel Communications, Inc.****                                                                                                                                                                                                                                      
|        | 10.4  |                     |  |  Amended and Restated Shareholders Rights Agreement
	dated February   , 1996 between NextWave Telecom
	Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                       
|        | 10.5  |                     |  |  Letter Agreement dated March   , 1996
	between NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                             
|        | 10.6  |                     |  |  Letter Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                             
|        | 10.7  |                     |  |  Subscription Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                       
|        | 10.8  |                     |  |  Convertible Loan and Investment Agreement dated
	March  20, 1996 by and between LCC, L.L.C. and DCR
	Communications, Inc.*                                                                                                                                                                                                                                                                                         
|        | 10.9  |                     |  |  Letter Agreement dated March 20, 1996 by and between
	LCC, L.L.C. and DCR Communications, Inc.*                                                                                                                                                                                                                                                                                                                    
|        | 10.10 |                     |  |  Agreement dated May 17, 1996, between LCC, L.L.C. and
	 West*Park Associates Limited Partnership for office space at
	7925 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.11 |                     |  |  Agreement dated May 17, 1996, between LCC, L.L.C. and
	 West*Park Associates Limited Partnership for office space at
	7927 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.12 |                     |  |  Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                            
|        | 10.13 |                     |  |  Intercompany Agreement dated as of August 27, 1996
	among Telcom Ventures, L.L.C., LCC, L.L.C., LCC International,
	Inc., Cherrywood Holdings, Inc., Rajendra Singh, Neera Singh,
	certain trusts for the benefit of members of the Singh family,
	Carlyle-LCC Investors I, L.P., Carlyle-LCC Investors II, L.P.,
	Carlyle-LCC Investors III, L.P., Carlyle-LCC IV (E), L.P., MDLCC,
	 L.L.C. and TC Group, L.L.C.*
|        | 10.14 |                     |  |  Registration Rights Agreement dated July 25, 1996
	among LCC International, Inc., RF Investors, L.L.C. and MCI
	Telecommunications Corporation.*                                                                                                                                                                                                                                                                   

58



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|        |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                        
|------- | ----- | ------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                    
|Number  |       | Exhibit Description
|        |       |                    
|        | 10.15 |                     |  |  Form of Indemnity Agreement between LCC International,
	Inc. and each of Rajendra Singh, Neera Singh, Piyush Sodha, Mark
	D. Ein, Arno A. Penzias, Geoffrey S. Carroll, Steven J. Gilbert,
	J. Michael Bonin, Kathryn M. Condello, Peter A. Deliso, Richard
	Hozik, Frank F. Navarrete, Donald R. Rose, Gerard L. Vincent,
	Louis R. Olsen, Stuart P. Lawson and Michael S. McNelly.*
|        | 10.16 |                     |  |  Overhead and Administrative Services Agreement dated
	August 27, 1996 between LCC International, Inc. and Telcom
	Ventures, L.L.C.*                                                                                                                                                                                                                                                  
|        | 10.17 |                     |  |  Agreement of Merger dated September 15, 1996 between
	LCC, L.L.C. and LCC International, Inc.*                                                                                                                                                                                                                                                                                       
|        | 10.18 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for directors who will receive Class
	B Common Stock.*                                                                                                                                                                                                                                           
|        | 10.19 |                     |  |  Form of Promissory Note by Telcom Ventures, L.L.C. to LCC
	International, Inc.*                                                                                                                                                                                                                                                                                                      
|        | 10.20 |                     |  |  Form of Stock Option Agreement between LCC International,
	Inc. and the Carlyle Option Designees.*                                                                                                                                                                                                                                                                                   
|        | 10.21 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan incentive stock option agreement.*                                                                                                                                                                                                                                                                                 
|        | 10.22 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan non-incentive stock option agreement.*                                                                                                                                                                                                                                                                             
|        | 10.23 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan non-incentive stock option agreement (for employees who had
	 been eligible to participate in the LCC, L.L.C. 1994 Phantom
	Membership Plan or the LCC, L.L.C. 1996 Employee Option Plan).*                                                                                                                        
|        | 10.24 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for directors who will receive Class
	A Common Stock (other than Mark D. Ein).*                                                                                                                                                                                                                  
|        | 10.25 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for Mark D. Ein.*                                                                                                                                                                                                                                                                                
|        | 10.26 |                     |  |  Form of Phantom Membership Plan Exchange Agreement.*                                                                                                                                                                                                                                                                                                                                 
|        | 10.27 |                     |  |  Letter Agreement dated August 22, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                           
|        | 10.28 |                     |  |  Series D Convertible Debenture Due March 27,
	2001 by DCR Communications, Inc. dated March 27, 1996.*                                                                                                                                                                                                                                                                                
|        | 10.29 |                     |  |  Series D Convertible Debenture Due May 10, 2001
	by DCR Communications, Inc. dated May 10, 1996.*                                                                                                                                                                                                                                                                                    
|        | 10.30 |                     |  |  [Intentionally omitted]                                                                                                                                                                                                                                                                                                                                                              
|        | 10.31 |                     |  |  Contract for Engineering and Construction of Terrestrial
	Repeater Network System between XM Satellite Radio Inc. and LCC
	International, Inc. dated August 18, 1999. *******                                                                                                                                                                                                        
|        | 10.32 |                     |  |  Ericsson Radio Systems AB Asset Purchase Agreement dated
	dated August 25, 1999. ******                                                                                                                                                                                                                                                                                              
|        | 10.33 |                     |  |  Letter, dated October 22, 1999, among LCC
	International, Inc., LCC Europe AS and Ericsson Radio Systems AB.
	 ******                                                                                                                                                                                                                                                                
|        | 10.34 |                     |  |  Asset Purchase Agreement between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.
	*********                                                                                                                                                                                                                                                            
|        | 10.35 |                     |  |  Amendment No. 1 to Asset Purchase Agreement between
	Pinnacle Towers Inc. and Microcell Management Inc., dated
	March 2, 2000. *********                                                                                                                                                                                                                                             
|        | 10.36 |                     |  |  Master Antenna Site Lease between Pinnacle Towers Inc. and
	 Microcell Management, Inc. dated February 24, 2000.
	*********                                                                                                                                                                                                                                                          
|        | 11    |                     |  |  Calculation of Pro Forma Net Income (Loss) Per Share.                                                                                                                                                                                                                                                                                                                                
|        | 21    |                     |  |  Subsidiaries of the Company.                                                                                                                                                                                                                                                                                                                                                         
|        | 23.1  |                     |  |  Consent of KPMG LLP.                                                                                                                                                                                                                                                                                                                                                                 
|        | 27    |                     |  |  Financial Data Schedule.                                                                                                                                                                                                                                                                                                                                                             



---



|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Incorporated by reference to the Exhibits on the Companys
	Registration Statement on Form S-1 (Registration No. 
	333-6067).

59



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|          |                                                                                                                                                                                                         
|--------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**        | Incorporated by reference to the Exhibits to the Companys
	Registration Statement on Form S-8 (File No. 333-17803)
	 which was filed with the Securities and Exchange Commission on
	December 13, 1996.
|         
|***       | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on April  15, 1997.                                 
|         
|****      | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on October 27, 1997.                                
|         
|*****     | Incorporated by reference to the attachments to the
	Companys definitive proxy statement on Schedule 14A
	filed with the Securities and Exchange Commission on April 
	17, 1998.                       
|         
|******    | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on November 8, 1999.                                
|         
|*******   | Incorporated by reference to the Exhibits to the Companys
	Quarterly Report on Form 10-Q which was filed with the
	Securities and Exchange Commission on November 12, 1999.                            
|         
|********  | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on March  30, 1999.                                 
|         
|********* | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on March 20, 2000.                                  



|  |                                                                                                                                                                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Confidential treatment has been granted for certain portions of
	this document. The copy filed as an exhibit omits the information
	 subject to the confidential treatment request.

(b)  Financial Statement Schedules. Schedule II

Valuation and Qualifying Accounts

Schedules not listed above have been omitted because the
information required to be set forth therein is not applicable or
 is shown in the financial statements or notes thereto.

(b)  Reports on Form 8-K.

On November 8, 1999 the Company filed a Current Report on
Form 8-K which reported that on October 22, 1999, the
Company had sold its products businesses to Ericsson Radio
Systems AB pursuant to an Asset Purchase Agreement, dated as of
August 25,1999, between the Company, LCC Europe AS, a
wholly-owned subsidiary of the Company, and Ericsson.

(c)  Exhibits to this Form 10-K are attached or
incorporated by reference as stated above.

(d)  None.

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GLOSSARY OF TERMS

A-block auction  An auction held by
 the FCC to award 30 MHz PCS licenses for 51 MTAs. The A-block
auction, held in conjunction with the B-block auction, was
concluded in March 1995, and licenses were awarded on
June 23, 1995.

alphanumeric  A message or other
type of readout containing both letters (alphas) and
numbers (numerics). In cellular, alphanumeric
memory dial is a special type of dial-from-memory option
that displays both the name of the individual and that
individuals phone number on the cellular phone handset. The
 name also can be recalled by using the letters on the phone
keypad. By contrast, standard memory dial recalls numbers from
number-only locations.

AMPS  Advanced Mobile Phone
Service. The United States analog cellular standard.

analog  A method of storing,
processing and transmitting information through the continuous
variation of a signal.

antenna  A device for transmitting
and/or receiving signals.

B-block auction  An auction held by
 the FCC to award 30 MHz PCS licenses for 51 MTAs. The B-block
auction, held in conjunction with the A-block auction, was
concluded in March 1995, and licenses were awarded on
June 23, 1995.

base station  A central radio
transmitter/receiver that maintains communications with the
mobile phone within a specified range.

Broadband PCS  High frequency, next
 generation wireless services.

BTA  Basic Trading Area. A service
area designed by Rand McNally and adopted by the FCC to promote
the rapid deployment and ubiquitous coverage of PCS and
providers. There are 493 BTAs in the United States.

C-block auction  An auction held by
 the FCC to award 30 MHz PCS licenses for 493 BTAs to
entrepreneurial businesses having gross revenues of less than
$125 million in each of the last two years and total assets
of less than $500 million. Bidding credits and installment
payment options were granted to small businesses having average
gross revenues for the preceding three years of less than
$40 million. The C-block auction was concluded in
May 1996. Licenses were awarded in late 1996 and early 1997.

CDMA  Code Division Multiple
Access. A digital wireless transmission technology for use in
wireless telephone communications. CDMA is a spread spectrum
technology in which calls are assigned a pseudo random code to
encode digital bit streams. The coded signals are then
transmitted over the air on a frequency between the end user and
a cell site, where they are processed by a base station. CDMA
allows more than one wireless user to simultaneously occupy a
single RF band.

cell  The basic geographic area
covered by a single transmitter/receiver in a wireless phone
system.

cellular network  A telephone
system based on a grid of cells deployed primarily at
 800 and 900 MHz. Each cell contains transmitters, receivers and
antennas, and is connected to switching gear and control
equipment.

cell-splitting  Adding a cell to
overlap coverage of an existing site, which adds capacity to the
area served by that existing site.

channel  A single path, either RF
or voice, for transmitting electrical signals.

D-block auction  An auction held by
 the FCC to award 10 MHz PCS licenses for 493 BTAs. The D-block
auction, held in conjunction with the E-block and F-block
auctions, was concluded on January 14, 1997.

DCS  Digital Communications
Service. A GSM-based system in the 1800/1900 band.

digital  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 technolo-

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digital protocols  Methodologies
that serve to manage the communication for digital signal
transmission. CDMA and TDMA are examples of high level digital
protocols.

E-block auction  An auction held by
 the FCC to award 10 MHz PCS licenses for 493 BTAs. The E-block
auction, held in conjunction with the D-block and F-block
auctions, was concluded on January 14, 1997.

ETACS  Enhanced Total Access
Cellular System. The European analog cellular standard.

F-block auction  An auction held by
 the FCC to award 10 MHz PCS licenses for 493 BTAs. The F-block
auction, held in conjunction with the D-block and E-block
auctions, was concluded on January 14, 1997.

FCC  Federal Communications
Commission. The government agency responsible for regulating
telecommunications in the United States.

frequency  The number of cycles per
 second, measured in hertz, of a periodic oscillation or wave in
radio propagation.

Global Positioning System  A
satellite-based network provided by the U.S. government which
allows the user thereof to pinpoint precisely his or her location
 at any place in the world.

GSM  Global System for Mobile
Communications. A distributed open networking architecture
standard for digital wireless systems world-wide. GSM is a TDMA
technology which assigns calls into multiple time slots.

hand-off  The act of transferring
communication with a mobile unit from one base station to
another. A hand-off transfers a call from the current base
station to the new base station.

hertz  A measurement of
electromagnetic energy, equivalent to one wave or
cycle per second.

iDEN  Integrated Dispatch Enhanced
Network. iDEN is a technology and a network solution for
providing communications services in the SMR spectrum.

INFLEXION  A technology for
providing voice narrowband PCS developed by Motorola.

infrastructure equipment  Fixed
infrastructure equipment consisting of base stations, base
station controllers, antennas, switches, management information
systems and other equipment making up the backbone of the
wireless communication system that receives, transmits and
processes signals from and to subscriber equipment and/or between
 wireless systems and the public switched telephone network.

IS-54  The first U.S. Digital
Cellular Standard, based on TDMA and adopted by the CTIA in 1990.

IS-136  North American Interim
Standard-digital TDMA system specification.

ITU  International
Telecommunications Union

KHz  Kilohertz (one thousand
hertz).

LMDS  Local Multipoint Distribution
 System. A fixed broadband point-to-multipoint system. Initially
designed as an alternative multichannel video programming
service, LMDS has emerged as an alternative for offering local
exchange service, wireless telephony, data, internet access,
video and other broadband services.

MHz  Megahertz (millions of hertz).

microcells  Cell sites with small
coverage radius. Antenna heights are generally low, being 40 feet
 in height or less and typically have a service area of 1/4 to 2
miles.

microcell site  comprised of a
microcell base station and electrical and transmission
termination equipment. This equipment provides the radio
interface between the PCS network and the customers

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MMDS  Multichannel Multipoint
Distribution System. A fixed broadband point-to-multipoint
system. Initially designed as an alternative multichannel video
programming service, MMDS has emerged as an alternative for
offering local exchange service, wireless telephony, data,
internet access, video and other broadband services.

MTA  Major Trading Area. A PCS area
 designed by Rand McNally and adopted by the FCC. There are 51
MTAs in the United States.

MTSO  Mobile Telephone Switching
Office. The central computer that connects a wireless phone call
to the public switching telephone network (PSTN). The MTSO
controls the entire systems operations, including
monitoring calls, billing and handoffs.

Narrowband PCS  Identifier given by
 the FCC for PCS spectrum in the 900 MHz frequency range. 50/50
KHz (paired), 50/12.5 KHz (paired) and 50 KHz
(unpaired) were recently auctioned by the FCC and purchased
by companies such as PageNet, Inc., Mtel, and AT&T
Corporation. Narrowband PCS is expected to provide advanced data
and voice communications for devices traditionally known as radio
 pagers, including acknowledgment and two-way paging capability.

network equipment  The fixed
infrastructure consisting of base stations, base station
controllers, mobile switching centers and related information
processing control points that manages communications between the
 mobile unit and the public switched telephone network.

PCS  Personal Communications
Services. FCC terminology describing intelligent, digital
wireless, personal two-way communications systems at the 1900 MHz
 band.

PCS 1900  1900 MHz GSM-based
digital cellular radio technology.

Public Switched Telephony Network 
The wireline telephone network.

REFLEX   Two way narrowband PCS
protocol developed by Motorola.

RF  Radio frequency. Frequencies of
 the electromagnetic spectrum that are associated with radio wave
 propagation.

SMR  Specialized Mobile Radio,
referring to systems that serve non-public special mobile
communication markets (for example, taxi cabs). Recent FCC
rulings have permitted these operators to offer cellular-like
services to the public.

switch  A central facility capable
of routing calls from one point to another. Usually a point of
connection to the PSTN.

TDMA  Time Division Multiple
Access. A digital wireless transmission technology that converts
analog voice signals into digital data and puts more than one
voice channel on a single RF channel by separating the users in
time.

3G  A single next generation
standard for the Americas, Europe, Japan, Korea and China which
the ITU and other standard bodies are attempting to develop. This
 next generation of service will enable carriers to deploy key
capabilities that current so-called 2G wireless
technologies such as TDMA, CDMA and GSM are unable to support,
provide open standards and architecture and lower cost, higher
capacity and improved performance. Anticipated 3G capabilities
include wireline quality voice service, collaborative working
between multimedia and high speed data, user customization
allowing the subscriber better control over features such as
voicemail routing, announcements and call screening,
mobility-enabled services such as vehicular navigation and
emergency services, wireless local loop capabilities, seamless
global roaming, zone identification and billing and satellite
interworking. The ITU has received numerous proposals from
several countries and standards groups recommending
specifications for the new standard and has formed an
operators standards forum for the purpose of forging a
consensus with respect to the new standard among operators,
vendors and standards groups.

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UNIX  A multiuser, multitasking
operating system.

uplink  The radio path from a
handset or mobile user to the cell site.

wireless  A radio-based system
allowing transmission of telephone and/or data signals through
the air without a physical connection, such as a metal wire or
fiber optic cable.

wireless local loop  A system that
eliminates the need for a wire loop connecting users to the
public switched telephone network, which is used in conventional
wired telephone systems, by transmitting voice messages over
radio waves for the last mile connection between the
location of the customers telephone and a base station
connected to the network equipment.

64



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized as of the 30th day of March, 1999.



| |                        
| | -----------------------
| | LCC INTERNATIONAL, INC.



| |     |                            
| | --- | ---------------------------
| | By: | /s/ C. THOMAS FAULDERS, III

| | 
| | 
| | 

| |  |                                                                           
| |  | --------------------------------------------------------------------------
| |  | C. Thomas Faulders, III Chairman, President 
	 and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated and
on the dates indicated.

|                                                   |  |                                                                                  |  |               
|-------------------------------------------------- |  | -------------------------------------------------------------------------------- |  | --------------
|Signatures                                         |  | Title                                                                            |  | Date          
|                                                   |  |                                                                                  |  |               
|/s/ C. THOMAS FAULDERS, IIIC. Thomas Faulders, III |  | President and Chief Executive Officer and Chairperson of the
	Board of Directors |  | March 30, 2000
|                                                  
|/s/ DAVID N. WALKERDavid N. Walker                 |  | Treasurer and Chief Financial Officer (Principal Financial
	Officer)             |  | March 30, 2000
|                                                  
|Mark D. Ein                                        |  | Director                                                                         |  | March   , 2000
|                                                  
|Steven Gilbert                                     |  | Director                                                                         |  | March   , 2000
|                                                  
|Gregory Ledford                                    |  | Director                                                                         |  | March   , 2000
|                                                  
|/s/ ARNO PENZIASArno Penzias                       |  | Director                                                                         |  | March 30, 2000
|                                                  
|/s/ NEERA SINGHNeera Singh                         |  | Director                                                                         |  | March 30, 2000
|                                                  
|/s/ RAJENDRA SINGHRajendra Singh                   |  | Director                                                                         |  | March 30, 2000

65



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SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS



|                             |                                 |                     |  |                    |  |                |  |            |  |               |  |     |  |  |  |       |  |  |  |        | 
|---------------------------- | ------------------------------- | ------------------- |  | ------------------ |  | -------------- |  | ---------- |  | ------------- |  | --- |  |  |  | ----- |  |  |  | ------ | 
|                             |                                 |                     |  |                    |  |                |  |           
|                             |                                 |                     |  | Column C           |  |                |  |           
|                             |                                 |                     |  |                    |  |                |  |           
|                             |                                 |                     |  |                    |  |                |  |           
|Column A                     |                                 | Column B            |  | Additions          |  | Column D       |  | Column E  
|                             |                                 |                     |  |                    |  |                |  |           
|                             |                                 | Balance at          |  | Charged to         |  | Charged to     |  |            |  | Balance at   
|Description                  |                                 | Beginning of period |  | costs and expenses |  | other accounts |  | Deductions |  | end of period
|                             |                                 |                     |  |                    |  |                |  |            |  |              
|Year ended December 31, 1997 |                                 |                     |  |                    |  |                |  |            |  |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtful accounts |                     |  | 13,769             |  |                |  | 3,206      |  |               |  |     |  |  |  | 5,046 |  |  |  | 11,929 | 
|Year ended December 31, 1998 |                                 |                     |  |                    |  |                |  |            |  |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtfulaccounts  |                     |  | 11,929             |  |                |  | 2,047      |  |               |  |    |  |  |  | 3,523 |  |  |  | 10,453 | 
|Year ended December 31, 1999 |                                 |                     |  |                    |  |                |  |            |  |               |  |     |  |  |  |       |  |  |  |       
|                            
|                            
|                            
|                            
|                             | Allowance for doubtful accounts |                     |  | 10,453             |  |                |  |           |  |               |  | 850 |  |  |  | 3,443 |  |  |  | 7,860  | 

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EXHIBIT INDEX

|        |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | ----- | ------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                    
|Number  |       | Exhibit Description
|        |       |                    
|        | 3.1   |                     |  |  Restated Certificate of Incorporation of the Company.*                                                                                                                                                                                                                                                                                                                                                             
|        | 3.2   |                     |  |  Amended and Restated Bylaws of the Company.*                                                                                                                                                                                                                                                                                                                                                                       
|        | 4.1   |                     |  |  Form of Class A and Class B Common Stock
	certificates.*                                                                                                                                                                                                                                                                                                                                                           
|        | 4.2   |                     |  |  LCC International, Inc. 1996 Directors Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                         
|        | 4.3   |                     |  |  LCC International, Inc. 1996 Employee Stock Option Plan.*                                                                                                                                                                                                                                                                                                                                                          
|        | 4.4   |                     |  |  LCC International, Inc. 1996 Employee Stock Purchase
	Plan.*                                                                                                                                                                                                                                                                                                                                                       
|        | 4.5   |                     |  |  Amendment No. 1 to LCC International, Inc. Employee
	Stock Purchase Plan**                                                                                                                                                                                                                                                                                                                                         
|        | 4.6   |                     |  |  Amendment to LCC International, Inc. 1996 Directors Stock
	Option Plan, dated April 22, 1997. ********                                                                                                                                                                                                                                                                                                             
|        | 4.7   |                     |  |  Amendment to LCC International, Inc. 1996 Directors Stock
	Option Plan, dated April 16, 1998. *****                                                                                                                                                                                                                                                                                                                
|        | 4.8   |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated April 16, 1998. *****                                                                                                                                                                                                                                                                                                                 
|        | 4.9   |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated July 27, 1999. *******                                                                                                                                                                                                                                                                                                                
|        | 4.10  |                     |  |  Amendment to LCC International, Inc. 1996 Employee Stock
	Option Plan, dated December 16, 1999                                                                                                                                                                                                                                                                                                                     
|        | 10.1  |                     |  |  1994 LCC, L.L.C. Incentive Compensation Plan.*                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.2  |                     |  |  Amended and Restated Service Agreement, dated as of
	October 1, 1996, by and between TSI, a division of LCC
	International, Inc., and Nextel Communications, Inc.****                                                                                                                                                                                                                                              
|        | 10.3  |                     |  |  Amended and Restated Software License Agreement, dated as
	of October 1, 1996 by and between LCC, a division of LCC
	International, Inc., and Nextel Communications, Inc.****                                                                                                                                                                                                                                      
|        | 10.4  |                     |  |  Amended and Restated Shareholders Rights Agreement
	dated February   , 1996 between NextWave Telecom
	Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                       
|        | 10.5  |                     |  |  Letter Agreement dated March   , 1996
	between NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                             
|        | 10.6  |                     |  |  Letter Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                             
|        | 10.7  |                     |  |  Subscription Agreement dated March 12, 1996 between
	NextWave Telecom, Inc. and LCC, L.L.C.*                                                                                                                                                                                                                                                                                                                       
|        | 10.8  |                     |  |  Convertible Loan and Investment Agreement dated
	March 20, 1996 by and between LCC, L.L.C. and DCR
	Communications, Inc.*                                                                                                                                                                                                                                                                                          
|        | 10.9  |                     |  |  Letter Agreement dated March 20, 1996 by and between
	LCC, L.L.C. and DCR Communications, Inc.*                                                                                                                                                                                                                                                                                                                    
|        | 10.10 |                     |  |  Agreement dated May 17, 1996, between LCC, L.L.C. and
	 West*Park Associates Limited Partnership for office space at
	7925 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.11 |                     |  |  Agreement dated May 17, 1996, between LCC, L.L.C. and
	 West*Park Associates Limited Partnership for office space at
	7927 Jones Branch Drive, McLean, Virginia, 22102.*                                                                                                                                                                                                                                           
|        | 10.12 |                     |  |  Letter Agreement dated May 31, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                                                                                                                                                                            
|        | 10.13 |                     |  |  Intercompany Agreement dated as of August 27, 1996
	among Telcom Ventures, L.L.C., LCC, L.L.C., LCC International,
	Inc., Cherrywood Holdings, Inc., Rajendra Singh, Neera Singh,
	certain trusts for the benefit of members of the Singh family,
	Carlyle-LCC Investors I, L.P., Carlyle-LCC Investors II, L.P.,
	Carlyle-LCC Investors III, L.P., Carlyle-LCC IV (E), L.P., MDLCC,
	 L.L.C. and TC Group, L.L.C.*
|        | 10.14 |                     |  |  Registration Rights Agreement dated July 25, 1996
	among LCC International, Inc., RF Investors, L.L.C. and MCI
	Telecommunications Corporation.*                                                                                                                                                                                                                                                                   
|        | 10.15 |                     |  |  Form of Indemnity Agreement between LCC International,
	Inc. and each of Rajendra Singh, Neera Singh, Piyush Sodha, Mark
	D. Ein, Arno A. Penzias, Geoffrey S. Carroll, Steven J. Gilbert,
	J. Michael Bonin, Kathryn M. Condello, Peter A. Deliso, Richard
	Hozik, Frank F. Navarrete, Donald R. Rose, Gerard L. Vincent,
	Louis R. Olsen, Stuart P. Lawson and Michael S. McNelly.*                              

67



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|        |       |                     |  |                                                                                                                                                                                                                                                                
|------- | ----- | ------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                    
|Number  |       | Exhibit Description
|        |       |                    
|        | 10.16 |                     |  |  Overhead and Administrative Services Agreement dated
	August 27, 1996 between LCC International, Inc. and Telcom
	Ventures, L.L.C.*                                                                                                                          
|        | 10.17 |                     |  |  Agreement of Merger dated September 15, 1996 between
	LCC, L.L.C. and LCC International, Inc.*                                                                                                                                                               
|        | 10.18 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for directors who will receive Class
	B Common Stock.*                                                                                                                   
|        | 10.19 |                     |  |  Form of Promissory Note by Telcom Ventures, L.L.C. to LCC
	International, Inc.*                                                                                                                                                                              
|        | 10.20 |                     |  |  Form of Stock Option Agreement between LCC International,
	Inc. and the Carlyle Option Designees.*                                                                                                                                                           
|        | 10.21 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan incentive stock option agreement.*                                                                                                                                                         
|        | 10.22 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan non-incentive stock option agreement.*                                                                                                                                                     
|        | 10.23 |                     |  |  Form of LCC International, Inc. 1996 Employee Stock Option
	 Plan non-incentive stock option agreement (for employees who had
	 been eligible to participate in the LCC, L.L.C. 1994 Phantom
	Membership Plan or the LCC, L.L.C. 1996 Employee Option Plan).*
|        | 10.24 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for directors who will receive Class
	A Common Stock (other than Mark D. Ein).*                                                                                          
|        | 10.25 |                     |  |  Form of LCC International, Inc. Directors Stock Option
	Plan stock option agreement for Mark D. Ein.*                                                                                                                                                        
|        | 10.26 |                     |  |  Form of Phantom Membership Plan Exchange Agreement.*                                                                                                                                                                                                         
|        | 10.27 |                     |  |  Letter Agreement dated August 22, 1996 between LCC
	International, Inc. and Arno Penzias.*                                                                                                                                                                   
|        | 10.28 |                     |  |  Series D Convertible Debenture Due March 27,
	2001 by DCR Communications, Inc. dated March 27, 1996.*                                                                                                                                                        
|        | 10.29 |                     |  |  Series D Convertible Debenture Due May 10, 2001
	by DCR Communications, Inc. dated May 10, 1996.*                                                                                                                                                            
|        | 10.30 |                     |  |  [Intentionally omitted]                                                                                                                                                                                                                                      
|        | 10.31 |                     |  |  Contract for Engineering and Construction of Terrestrial
	Repeater Network System between XM Satellite Radio Inc. and LCC
	International, Inc. dated August 18, 1999. *******                                                                                
|        | 10.32 |                     |  |  Ericsson Radio Systems AB Asset Purchase Agreement dated
	dated August 25, 1999. ******                                                                                                                                                                      
|        | 10.33 |                     |  |  Letter, dated October 22, 1999, among LCC
	International, Inc., LCC Europe AS and Ericsson Radio Systems AB.
	 ******                                                                                                                                        
|        | 10.34 |                     |  |  Asset Purchase Agreement between Pinnacle Towers Inc. and
	Microcell Management, Inc. dated February 24, 2000.
	*********                                                                                                                                    
|        | 10.35 |                     |  |  Amendment No. 1 to Asset Purchase Agreement between
	Pinnacle Towers Inc. and Microcell Management Inc., dated
	March 2, 2000. *********                                                                                                                     
|        | 10.36 |                     |  |  Master Antenna Site Lease between Pinnacle Towers Inc. and
	 Microcell Management, Inc. dated February 24, 2000.
	*********                                                                                                                                  
|        | 11    |                     |  |  Calculation of Pro Forma Net Income (Loss) Per Share.                                                                                                                                                                                                        
|        | 21    |                     |  |  Subsidiaries of the Company.                                                                                                                                                                                                                                 
|        | 23.1  |                     |  |  Consent of KPMG LLP.                                                                                                                                                                                                                                         
|        | 27    |                     |  |  Financial Data Schedule.                                                                                                                                                                                                                                     



---



|    |                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Incorporated by reference to the Exhibits on the Companys
	Registration Statement on Form S-1 (Registration No. 
	333-6067).                                                                           
|   
|**  | Incorporated by reference to the Exhibits to the Companys
	Registration Statement on Form S-8 (File No. 333-17803)
	 which was filed with the Securities and Exchange Commission on
	December 13, 1996.
|   
|*** | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on April  15, 1997.                                 

68



---



##### Table of Contents





|          |                                                                                                                                                                                  
|--------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|****      | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on October 27, 1997.         
|         
|*****     | Incorporated by reference to the attachments to the
	Companys definitive proxy statement on Schedule 14A
	filed with the Securities and Exchange Commission on April 
	17, 1998.
|         
|******    | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on November 8, 1999.         
|         
|*******   | Incorporated by reference to the Exhibits to the Companys
	Quarterly Report on Form 10-Q which was filed with the
	Securities and Exchange Commission on November 12, 1999      
|         
|********  | Incorporated by reference to the Exhibits to the Companys
	Annual Report on Form 10-K which was filed with the
	Securities and Exchange Commission on March  30, 1999.          
|         
|********* | Incorporated by reference to the Exhibits to the Companys
	Current Report on Form 8-K which was filed with the
	Securities and Exchange Commission on March 20, 2000.           



|  |                                                                                                                                                                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Confidential treatment has been granted for certain portions of
	this document. The copy filed as an exhibit omits the information
	 subject to the confidential treatment request.

69