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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F

|           |  |                                                                                              
|---------- |  | ---------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                              
|          
|[     ]    |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | OR                                                                                           
|          
|[ X ]      |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934         
|           |  | For the fiscal year ended: DECEMBER 31, 2002                                                 
|          
|           |  | OR                                                                                           
|          
|[     ]    |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934     
|           |  | For the transition period
from              
to                                              

Commission file number 333-12218

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

(Translation of Registrants name into English)

THE NETHERLANDS(Jurisdiction of incorporation or organization)

World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|None                |  | None                                     

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

Class A subordinate voting shares with nominal value of 0.10(Title of Class)

Indicate the number of outstanding shares of each of the issuers classes of
capital or common stock as of the close of the period covered by the annual
report.

45,868,498 Class A subordinate voting shares with nominal value of 0.10
38,230,950 Class B multiple voting shares with nominal value of 0.50

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.

|        |  |       
|------- |  | ------
|þ   Yes |  | o   No

Indicate by check mark which financial statement item the registrant has
elected to follow.

|            |  |            
|----------- |  | -----------
|o   Item 17 |  | þ   Item 18



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TABLE OF CONTENTS


TABLE OF CONTENTS



|                                                 |                                                                                        |  |  |  |  |  |  | 
|------------------------------------------------ | -------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|EXPLANATORY NOTES                               
|EXCHANGE RATE INFORMATION                       
|FORWARD-LOOKING STATEMENTS                      
|PART I                                          
|                                                 | ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        
|                                                 | ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                      
|                                                 | ITEM 3  KEY INFORMATION                                                              
|                                                 | ITEM 4  INFORMATION ON THE COMPANY                                                   
|                                                 | ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 
|                                                 | ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   
|                                                 | ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            
|                                                 | ITEM 8  FINANCIAL INFORMATION                                                        
|                                                 | ITEM 9  THE OFFER AND LISTING                                                        
|                                                 | ITEM 10  ADDITIONAL INFORMATION                                                      
|                                                 | ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                  
|                                                 | ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|PART II                                         
|                                                 | ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES                            
|                                                 | ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|                                                 | ITEM 15  CONTROLS AND PROCEDURES                                                     
|                                                 | ITEM 16 [RESERVED]                                                                    
|PART III                                        
|                                                 | ITEM 17  FINANCIAL STATEMENTS                                                        
|                                                 | ITEM 18  FINANCIAL STATEMENTS                                                        
|                                                 | ITEM 19  EXHIBITS                                                                    
|Exit Deed                                       
|English Translation Summary of License June 17  
|English Translation Summary of License June 20  
|Share Retention and Subordination Deed          
|List of Subsidiaries of Clearwave N.V.          
|Certification Pursuant to 18 U.S.C. Section 1350



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|                           |                                                                                        |  |    |    | 
|-------------------------- | -------------------------------------------------------------------------------------- |  | -- | -- | 
|EXPLANATORY NOTES          |                                                                                        |  | 2  |   
|EXCHANGE RATE INFORMATION  |                                                                                        |  | 3  |   
|FORWARD-LOOKING STATEMENTS |                                                                                        |  | 3  |   
|PART I                     |                                                                                        |  | 4  |   
|                           | ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         |  |    | 4  | 
|                           | ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                       |  |    | 4  | 
|                           | ITEM 3  KEY INFORMATION                                                               |  |    | 5  | 
|                           | ITEM 4  INFORMATION ON THE COMPANY                                                    |  |    | 15 | 
|                           | ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                  |  |    | 35 | 
|                           | ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                    |  |    | 48 | 
|                           | ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                             |  |    | 57 | 
|                           | ITEM 8  FINANCIAL INFORMATION                                                         |  |    | 58 | 
|                           | ITEM 9  THE OFFER AND LISTING                                                         |  |    | 59 | 
|                           | ITEM 10  ADDITIONAL INFORMATION                                                       |  |    | 60 | 
|                           | ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  |    | 67 | 
|                           | ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  |    | 70 | 
|PART II                    |                                                                                        |  | 71 |   
|                           | ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES                             |  |    | 71 | 
|                           | ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  |    | 72 | 
|                           | ITEM 15  CONTROLS AND PROCEDURES                                                      |  |    | 73 | 
|                           | ITEM 16 [RESERVED]                                                                     |  |    | 74 | 
|PART III                   |                                                                                        |  | 75 |   
|                           | ITEM 17  FINANCIAL STATEMENTS                                                         |  |    | 75 | 
|                           | ITEM 18  FINANCIAL STATEMENTS                                                         |  |    | 76 | 
|                           | ITEM 19  EXHIBITS                                                                     |  |    | 77 | 




EXPLANATORY NOTES

All references herein to the Company, we, us or our are references
to ClearWave N.V. (ClearWave), a Netherlands corporation incorporated in
September, 1999, and, unless the context otherwise requires, its subsidiaries
and operating companies. All references to TIW herein are references to
Telesystem International Wireless Inc. a Canadian company incorporated on
September 9, 1996, and, unless the context otherwise requires, its subsidiaries
and operating companies.

All references herein to dollars and $ refer to the lawful currency of
the United States of America, unless otherwise expressly stated. All references
herein to Cdn$ refer to the lawful currency of Canada; all references herein
to Euro or  refer to the lawful single currency of the European Monetary
Union; all references herein to Leu refer to the lawful currency of Romania;
and all references herein to Koruna refer to the lawful currency of the Czech
Republic.

Our financial statements are presented in U.S. dollars and have been
prepared in accordance with United States generally accepted accounting
principles (U.S. GAAP) and all financial information presented herein has
been derived from those financial statements. For a discussion of the principal
differences between U.S. GAAP and Canadian generally accepted accounting
principles (Canadian GAAP), see Note 16 to the Consolidated Financial
Statements.

Information contained in this document concerning the wireless
telecommunications industry, our general expectations concerning this industry
and our market positions and market shares are based on estimates we prepared
using data from publicly available industry sources as well as from various
research analysts reports, market research and industry analyses, and on
assumptions made, based on our knowledge of this industry, which we believe to
be reasonable. We believe, however, that this data is inherently imprecise,
although generally indicative of relative market positions and market shares.

Certain data concerning the wireless telecommunications industry found in
this document were taken from the following independent publications: Global
Mobile®, published by Baskerville Communications Corporation and EMC World
Celular database. Industry and company data is approximate and reflects
rounding in certain cases. Unless otherwise indicated, all operating data
presented herein is as of December 31, 2002.




EXCHANGE RATE INFORMATION





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The following table sets forth the exchange rates for one U.S. dollar in
effect at the end of the periods noted and the average of the exchange rates on
the last day of each month during such periods. The exchange rates expressed
in Canadian dollars and Euros are based on the noon buying rate as reported by
the Federal Reserve Bank of New York; the exchange rates expressed in Romanian
Leu are based on the daily fixing rate as reported by the National Bank of
Romania; and the exchange rates expressed in Czech Koruna are based on the
daily fixing rate as reported by the Czech National Bank. As of May 14, 2003,
such exchange rates were Cdn$1.3786 = $1.00;
1.1498 = $1.00; Leu 32,622.00 =
$1.00; Koruna 27.423 = $1.00.

|                |  |      |           |         |  |      |           |         |  |      |           |         |  |     |           |         |  |     |           |         |  |  |           |  |  |  |           |  |  |  |           |  |  |  |           |  |  |  |          | 
|--------------- |  | ---- | --------- | ------- |  | ---- | --------- | ------- |  | ---- | --------- | ------- |  | --- | --------- | ------- |  | --- | --------- | ------- |  |  | --------- |  |  |  | --------- |  |  |  | --------- |  |  |  | --------- |  |  |  | -------- | 
|                |  | 2002 |           | 2001    |  | 2000 |           | 1999    |  | 1998
|                |  |      |           |         |  |      |           |         |  |     
|                |  | End  |           | Average |  | End  |           | Average |  | End  |           | Average |  | End |           | Average |  | End |           | Average
|                |  |      |           |         |  |      |           |         |  |      |           |         |  |     |           |         |  |     |           |        
|Canadian Dollar |  |      | 1.5718    |         |  |      | 1.5666    |         |  |      | 1.5956    |         |  |     | 1.5490    |         |  |     | 1.4995    |         |  |  | 1.4855    |  |  |  | 1.4440    |  |  |  | 1.4852    |  |  |  | 1.5375    |  |  |  | 1.4874   | 
|Euro            |  |      | 1.0492    |         |  |      | 1.0241    |         |  |      | 1.1235    |         |  |     | 1.1167    |         |  |     | 1.0652    |         |  |  | 1.1132    |  |  |  | 0.9930    |  |  |  | 0.9891    |  |  |  | 0.8519    |  |  |  | 0.8508   | 
|Romanian Leu    |  |      | 33,475.00 |         |  |      | 33,525.70 |         |  |      | 31,597.00 |         |  |     | 29,060.90 |         |  |     | 25,926.00 |         |  |  | 21,662.00 |  |  |  | 18,250.00 |  |  |  | 15,621.00 |  |  |  | 11,000.00 |  |  |  | 9,009.00 | 
|Czech Koruna    |  |      | 30.1410   |         |  |      | 30.5470   |         |  |      | 36.2590   |         |  |     | 38.0380   |         |  |     | 37.8130   |         |  |  | 38.5900   |  |  |  | 36.0000   |  |  |  | 34.6000   |  |  |  | 29.9000   |  |  |  | 32.3000  | 




FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements concerning our
future operations, economic performances, financial conditions and financing
plans, including such things as business strategy and measures to implement
strategy, competitive strengths, goals, expansion and growth of the wireless
telecommunications industry and our business and operations and references to
future success. Forward-looking statements may be identified by use of
forward-looking terminology such as believe, intend, may, will,
expect, estimate, anticipate, continue, or similar terms, variations of
those terms or the negative of those terms. These statements are based on
certain assumptions and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected future
developments as well as other factors we believe are appropriate in the
circumstances. However, whether actual results and developments will conform
with our expectations and predictions is subject to a number of risks and
uncertainties, including, among other things, the risk factors discussed above.
Consequently, all of the forward-looking statements made in this document are
qualified by these cautionary statements, and there can be no assurance that
the actual results or developments anticipated by us will be realized or, even
if substantially realized, that they will have the expected consequences to or
effects on us and our subsidiaries or their businesses or operations.





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PART I




ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.




ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.





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ITEM 3  KEY INFORMATION

The following tables set forth certain consolidated financial information
derived from our Consolidated Financial Statements for the fiscal years ended
December 31, 2002, 2001, 2000, 1999, and 1998, which have been audited by Ernst
& Young LLP. You should read this Selected Financial Data together with
Operating and Financial Review and Prospects and our Consolidated Financial
Statements, and the notes thereto, incorporated by reference in this form 20-F.
Our Consolidated Financial Statements have been prepared in accordance with
U.S. GAAP. For a discussion of the principal differences between U.S. GAAP and
Canadian GAAP, see Note 16 to the Consolidated Financial Statements.

|                                                         |  |                                                       |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |  |         |  
|-------------------------------------------------------- |  | ----------------------------------------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                         |  | Years Ended December 31                              
|                                                         |  |                                                      
|                                                         |  | 2002                                                  |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                                         |  | $                                                     |         | $    |  | $    |         | $    |  | $   
|                                                         |  |                                                       |         |      |  |      |         |      |  |     
|                                                         |  | (in thousands of U.S. dollars, except per share data)
|Statement of Income (Loss) Data:                         |  |                                                       |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |  |         |  
|Revenues                                                 |  |                                                       | 694,454 |      |  |      | 516,308 |      |  |      | 341,604 |   |  |  | 233,965 |   |  |  | 160,838 |  
|Operating income (loss)                                  |  |                                                       | 95,349  |      |  |      | 21,254  |      |  |      | (47,160 | ) |  |  | (3,780  | ) |  |  | (26,659 | )
|Net income (loss)                                        |  |                                                       | 13,287  |      |  |      | 7,335   |      |  |      | (19,102 | ) |  |  | 38,001  |   |  |  | (31,743 | )
|Income
(loss) per share Basic and Diluted(1)             |  |                                                       | 0.16    |      |  |      | 0.09    |      |  |      | (0.23   | ) |  |  | 0.45    |   |  |  | (0.38   | )
|Other Financial Data:                                    |  |                                                       |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |  |         |  
|Operating
income before depreciation and amortization(2) |  |                                                       | 249,635 |      |  |      | 141,607 |      |  |      | 40,861  |   |  |  | 48,473  |   |  |  | 11,463  |  
|Capital
expenditures(3)                                  |  |                                                       | 206,896 |      |  |      | 234,473 |      |  |      | 438,472 |   |  |  | 204,882 |   |  |  | 168,798 |  

|                                |  |                                                         |            |      |  |      |            |      |  |      |            |   |  |  |            |   |  |  |            |  
|------------------------------- |  | ------------------------------------------------------- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  |  | ---------- | - |  |  | ---------- | -
|                                |  | As at December 31                                      
|                                |  |                                                        
|                                |  | 2002                                                    |            | 2001 |  | 2000 |            | 1999 |  | 1998
|                                |  | $                                                       |            | $    |  | $    |            | $    |  | $   
|                                |  |                                                         |            |      |  |      |            |      |  |     
|                                |  | (in thousands of U.S. dollars, except number of shares)
|Balance Sheet Data:             |  |                                                         |            |      |  |      |            |      |  |      |            |   |  |  |            |   |  |  |            |  
|Total assets                    |  |                                                         | 1,335,877  |      |  |      | 1,192,116  |      |  |      | 1,082,734  |   |  |  | 561,168    |   |  |  | 421,632    |  
|Share capital and share premium |  |                                                         | 185,332    |      |  |      | 185,332    |      |  |      | 185,332    |   |  |  | 185,332    |   |  |  |           |  
|Deficit                         |  |                                                         | (32,221    | )    |  |      | (45,508    | )    |  |      | (52,843    | ) |  |  | (33,741    | ) |  |  | (71,742    | )
|Shareholders equity            |  |                                                         | 148,752    |      |  |      | 134,042    |      |  |      | 129,402    |   |  |  | 93,927     |   |  |  | 123,271    |  
|Number
of shares(1)             |  |                                                         | 84,099,448 |      |  |      | 84,099,448 |      |  |      | 84,099,448 |   |  |  | 84,099,448 |   |  |  | 84,099,448 |  



---

|(1) |  | The number of shares and loss per share have been calculated for the
periods prior to 2000 on the basis of attributing the reorganized capital
structure as if it had always existed.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | We use the term operating income (loss) before depreciation and
amortization which may not be comparable to similarly titled measures reported
by other companies. Operating income (loss) before depreciation and
amortization should not be considered in isolation or as an alternative
measurement of operating performance or liquidity to net loss, operating loss,
cash flows from operating activities or any other measure of performance under
GAAP. We believe that operating income (loss) before depreciation and
amortization is viewed as a relevant supplemental measure of performance in the
wireless telecommunications industry.
|   
|(3) |  | Capital expenditures consist of acquisitions of capital assets (including
non-cash items), excluding those assets acquired through business acquisitions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

CAPITALIZATION AND INDEBTEDNESS

Not applicable.

REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.





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RISK FACTORS

TIW may exercise voting control over us and therefore certain decisions may be
made by it that are detrimental to your interests.

TIW holds, as at May 1, 2003, a 94.9% voting interest in us. As a result,
TIW would have the right to determine the outcome of any action requiring
shareholder approval, including the appointment of all of the members of our
board of management and our supervisory board. In addition, TIW would have the
ability to prevent or cause a change in control of us and our subsidiaries. As
a result, TIW may make decisions concerning the operation of our business with
which you do not agree.

We may not be able to obtain the additional financing necessary to fund the
operation of our business, which could result in the loss of our licenses or
require that we delay or modify our business plans.

The business of our operations is capital-intensive. Our operating
companies also expect to have significant future capital requirements,
particularly in relation to the expansion of their cellular operations and the
servicing of their debt. Our operating companies intend to finance such future
capital requirements from cash flow from operating activities, borrowing under
existing credit facilities, capital contributions by shareholders and through
other externally generated funds such as disposition of assets, the sale of
debt and equity securities, vendor financing and project financing from
commercial banks and international financial agencies. The ability to generate
sufficient short-term and long-term capital in the future is dependent upon
many factors, including general economic conditions in the countries where we
conduct our principal operations, financial market conditions, our and such
operating companies financial and operating performance and prospects and
market perceptions thereof. There can, however, be no assurance that the
operating companies will be able to obtain the financing required to make
planned capital expenditures, provide working capital or meet other cash needs.
Failure to obtain required financing could have a material adverse effect on
us and, among other things, could result in the loss or revocation of licenses
held by the operating companies or require that certain planned projects be
delayed or abandoned.

In addition, we may be required to make additional equity investments, in
our operating companies. Our inability to do so could result in the dilution or
loss in value of our equity interest and could impair our ability to obtain
outside financing. We are relying on financing support from the minority
shareholders of TIW Czech N.V. to finance their share of such additional equity
investments in Ceský Mobil a.s. as they may be required. TIW Czech N.V. may
also be required to repurchase the shares of a minority holder in Ceský Mobil
pursuant to a put option granted by Telesystem International Wireless
Corporation N.V. and assigned to TIW Czech N.V. Our portion of the funds
required should the put options be exercised is approximately $5 million as at
December 31, 2002. If we are unable to provide the required funding, we may
suffer dilution of our beneficial equity interest in Ceský Mobil.

In the event there has not been an initial public offering of the shares
of MobiFon by October 1, 2004, certain minority shareholders in MobiFon holding
in aggregate approximately 21% of the outstanding shares of MobiFon, may
require TIWC or, at TIWCs option, us to make an offer to acquire their shares
of MobiFon at a price representing the fair market value of such shares as
determined by an independent valuation and shall be payable, at
TIWCs option, in cash or in marketable securities. This right terminates upon an initial
public offering of our shares that meets certain criteria. Should such right be
exercised, we may not have the necessary cash on hand to pay the purchase
price.

Should TIW demand repayments of its advances to us, we may not be able to
refinance these advances on comparable terms.

As at March 31, 2003, our total indebtedness to TIW and its affiliates
amounted to approximately $55 million consisting mostly of demand notes at the
corporate level of $54.1 million. The demand notes are convertible into shares
at the option of TIW and its affiliates subject to certain conditions and based
on terms to be established at the date of conversion. Covenants with respect to
other debts restrict the ability of our subsidiaries to pay dividends or make
other distributions and we do not currently have enough available cash
resources to repay the demand notes and the interest thereon. TIW reports a
going concern uncertainty in its financial statements. In the event that TIWs
creditors enforce their claim, uncertainty may arise regarding the timing for
repayment of these demand notes. Should those demand notes not be converted
into shares, any refinancing, if required, may be on terms which are more
onerous than that of the current demand notes.

We have a history of operating losses, and may continue to lose money in the
future.

Our subsidiary Ceský Mobil has generated substantial operating losses since
inception. In addition, while Ceský Mobil currently generates positive cash
flow from operations, it has generated negative cash flow from operations in
the past and continues to generate net losses. There can be no
assurance that our operations will improve their profitability or that they
will generate net earnings and enough positive cash flow in the future. The growth of these operations
will depend on a number of significant financial, logistical, technical,
marketing, legal, competitive, economic and





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other factors, the outcome of which cannot be predicted. We have sustained
significant losses since inception. As of December 31, 2002, we had an
accumulated deficit of $32.2 million. Although we generated net income of
$13.3 million and $7.3 million for the years ended December 31, 2002 and
December 31, 2001 respectively, we incurred net losses of $19.1 million for the
year ended December 31, 2000. There can be no assurance that we will be able
to sustain or improve profitability in the future. Failure to sustain or
improve profitability would adversely affect our ability to service our
indebtedness.

Because we will have to allocate substantial amounts of cash to service our
debt, we may not have the necessary funds available to properly support our
network build-out and operations.

As of December 31, 2002, we had $828.4 million of consolidated short-term
loans and long-term debt including $90.4 million in indebtedness to TIW and its
affiliates. A substantial portion of our current operating cash flow must be
dedicated to the payment of our debt, which may result in our being unable to
pursue favorable business opportunities or expand or accelerate our networks
and operations. In addition, our debt service payments may become so high that
we have difficulty making those payments. If we fail to pay our debts or other
liabilities when due, we would be in default of our payment obligations. This
could result in our not being able to continue funding our network build-out
and other operations, which could result in our being unable to properly
service or retain our existing customers and attract new customers.

The terms of our indebtedness require us or our subsidiaries to meet certain
covenants and limit our ability to engage in various transactions, which may
hinder our operating and growth strategies.

We are required to maintain financial ratios and satisfy financial
condition tests pursuant to the terms of our indebtedness. A breach under any
of the covenants in our debt instruments may result in a default, which may
cause our debts to become immediately due at a time when we are unable to pay
them. We may not be able to comply with these covenants in the future, and we
may not be able to obtain waivers if we breach a covenant in the future. Our
inability to draw on our credit facilities may result in our being unable to
finance our operations or pursue desirable business opportunities. In addition,
MobiFon and Ceský Mobil have uncommitted working capital facilities that the
lenders may terminate at any time, and the lenders may refuse any request by
MobiFon or Ceský Mobil to draw on these facilities. If these facilities are
terminated by the lenders or repayment of outstanding balances is demanded, we
may need to obtain additional short-term financing to meet our cash flow needs.
Insufficient working capital could result in our being unable to finance the
day-to-day operations of our business, which could reduce our revenues and
adversely affect the quality of our services.

Our holding company structure may make it difficult to generate cash flows from
the operating companies.

We are a holding company with no material sources of income or assets of
our own other than the equity interests that we own in our subsidiaries and
operating companies. We conduct substantially all of our operations through
such subsidiaries and operating companies. Our cash flow and, consequently,
our ability to service our indebtedness depend upon the ability of our
subsidiaries and operating companies to pay dividends or otherwise make
distributions to us. Our subsidiaries and operating companies are separate and
distinct legal entities and will have no obligation, contingent or otherwise,
to pay any dividends or make any other distributions to us or to otherwise pay
amounts due with respect to our indebtedness or to make funds available for
such payments.

We may be unable to access the cash flow, if any, of our operating companies because:



| |  | we may not have the requisite control to unilaterally cause such entities to pay dividends to their equity holders;                                                                                                                                                                                                                                 
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | certain of such entities are currently or may become parties to credit or other borrowing agreements that restrict or
prohibit the payment of dividends, and such entities are likely to continue to be subject to such restrictions and
prohibitions for the foreseeable future;                                                                   
| 
| |  | it can be expected that Ceský Mobil will generally reinvest all of its cash flow and that MobiFon will continue to reinvest
at least part of its cash flow in their respective businesses in the future; and                                                                                                                                        
| 
| |  | some of the countries in which such entities conduct business impose legal limitations on the declaration of dividends and
tax the payment and repatriation of such dividends or otherwise restrict the repatriation of funds, even though we
typically structure our operations to minimize any such tax on such payment and repatriation of funds.

Although our subsidiary MobiFon has declared and paid dividends in the
recent past and has initiated a share repurchase in 2002, we may not be able to
generate any significant cash through dividends or other distributions from the
operating companies in the near future, and there can be no assurance that we
will be able to generate any significant cash flow from the operating companies
at any





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time in the future.

We may not be able to sell or transfer our ownership interests in our operating
companies on commercially acceptable terms.

Our ability to sell or transfer our ownership interests in our operating companies is generally subject to:



| |  | contractual limitations in favor of strategic partners including, in certain cases, restrictions on sales or transfers,
co-sale rights or rights of first refusal, and             
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | provisions in local operating licenses and local governmental regulations that, in certain cases, may restrict the transfer
of our ownership interests in such operating companies.

Moreover, we have been required, along with local partners, to pledge our
equity interests in certain operating companies to secure credit facilities
obtained by those operating companies, and we may be prohibited from or
restricted in transferring or otherwise disposing of such equity interests so
long as they are pledged as collateral for those credit facilities. In addition
our operating companies currently have no publicly traded securities, and there
can be no assurance that there will in the future be either a public or private
market for the securities of our operating companies. As a result, our ability
to liquidate any or all of our investments may be substantially limited.

Even if any sales are completed, the prices realized on those sales could
be less than our investment, and there may be substantial local taxes, currency
exchange controls or other restrictions on repatriation of monies imposed on us
in the case of any such sales.

Romanian shareholders arrangements

Any issuance, sale or transfer of our shares may trigger rights of first
refusal given to shareholders of MobiFon, under MobiFons contract of
association. Such rights apply to direct sales of our shares and, as long as
the shares of MobiFon that we hold represent more than 25% of the fair market
value of our assets, to indirect sales. These rights entitle shareholders of
MobiFon to purchase a proportionate number of shares of MobiFon held by us upon
a sale of our equity shares, at the same proportionate price in the case of
cash transactions in our shares, or at the fair market value of the MobiFon
shares, in the case of non-cash transactions in our shares. On December 12,
2000, we obtained from Vodafone Europe B.V., a holder of more than 20% of the
outstanding shares of MobiFon, a waiver from its right of first refusal under
certain circumstances such as future primary issuances of our class A
subordinate voting shares and the resale of certain of our shares.

In consideration for the waiver, TIW agreed with Vodafone that we or our
affiliates will control the voting of the shares in MobiFon that we hold. TIW
further agreed to directly or indirectly maintain voting control of us except
as provided below. TIW also agreed that for so long as Vodafone continues to
hold at least 10% of the outstanding equity of MobiFon:



| |  | Until December 11, 2003, Telesystem International Wireless Corporation
N.V. (TIWC) will not sell to a third party shares of ClearWave that
would convey voting control over ClearWave unless Vodafone is afforded
the right to submit an offer to acquire all of TIWCs interest in
ClearWave. If Vodafone submits such an offer, TIWC cannot sell a
controlling interest in ClearWave to another party for six months
after the Vodafone offer is received except on terms more advantageous
to TIWC than Vodafones offer.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | In the event of a change of voting control of ClearWave, TIWC will
ensure that Vodafones right of first refusal over MobiFon shares will
be exercisable for a number of MobiFon shares equal to the greater of                                                                                                                                                                                                                                                                                                               



| | (1) |  | the number of MobiFon shares determined by the contract of
association to be covered; and                                                               
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | the lesser of (a) the number of such shares required to increase
Vodafones equity interest in MobiFon to 50.1%, and (b) 30% of MobiFons
issued equity.

Vodafones right of first refusal continues to apply in respect of any
direct transfer of MobiFon shares that we hold or of the shares of our
affiliates which own MobiFon shares.

As a result of these arrangements, third parties other than Vodafone could
be discouraged from seeking voting control of us, and any proposed change of
control transaction that might benefit our shareholders could be delayed or
abandoned. Our ability to grow our business through acquisitions could also be
made harder, because Vodafones right of first refusal would be triggered if we
issued shares for that purpose.





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We have to take into account the rights of the minority shareholders in our
subsidiaries and our lenders when we make management decisions.

We have an agreement with Vodafone that provides that major business,
financial and technical decisions concerning MobiFon require consensus, with
both parties using their best efforts to achieve such consensus. Accordingly,
we may need to take into account the views of or compromise with our minority
shareholders in reaching decisions on fundamental business and strategic
matters with respect to MobiFon. In addition, the existence of these minority
shareholders may result in our making management decisions in some cases on the
basis of the requirements of one subsidiary independently of the other, instead
of from a combined point of view. If we need to enlist co-investors in the
future to help fund acquisition opportunities, we may need to enter into
agreements that grant these co-investors rights to participate in the
management of these businesses.

The lenders under MobiFons and Ceský Mobils credit facilities have a
number of approval and veto rights over how we operate these businesses. These
rights can be used effectively to limit our discretion in managing our
operations, for example by requiring us to focus on generating sufficient cash
flow to pay principal and interest on our debt and restricting us from making
further investments in our business.

We compete with companies that have greater resources than we have and use
technologies different than ours.

The wireless telecommunications industry is highly competitive. A number
of large international telecommunications companies are actively engaged in
programs to develop and commercialize wireless telecommunications services in
both developing and developed countries. In many cases, we will also compete
against landline carriers. Most of these companies have substantially greater
financial and other resources, research and development staffs and technical
and marketing capabilities than we do. We believe that there is increasing
competition for additional licenses and increased competition to the extent
others obtain such licenses.

Political, economic and social developments may restrict our operations, which
could negatively affect our sales and revenues or cause us to discontinue
certain of our operations.

Countries in Central and Eastern Europe have experienced and may continue
to experience periods of political instability, including changes of
government, and social and labor unrest. In addition, countries in Central and
Eastern Europe, including Romania and the Czech Republic, are attempting to
make substantial reforms to their economies. We are exposed to greater risks of
war, embargoes, expropriation, nationalization with or without compensation,
confiscatory taxation, renegotiation or nullification of existing concessions
and contracts, corruption, fluctuating currency values, hard currency shortages
and currency controls than if our operations were concentrated in North America
or countries of the European Union. Due to the implementation of reforms and
changes in government infrastructure, it may be difficult for us to enforce any
rights we may have or to know if we are in compliance with all applicable laws,
rules and regulations. Changes in laws, regulations or governmental policy, or
the interpretation thereof, affecting our business activities, including the
imposition of price controls and new taxes, may increase our costs or restrict
our ability to operate our businesses. Political, economic, social or other
developments in these or other emerging markets may cause us to change the way
we conduct our business or force us to discontinue our operations altogether.

Rapid technological changes or the adoption of incompatible standards could
render our services obsolete or non-competitive.

We may face competition from new technologies and services introduced in
the future. The wireless telecommunications industry is experiencing
significant technological change, as evidenced by the introduction of new
standards for mobile communications, such as universal mobile
telecommunications systems, commonly referred to as UMTS, and generalized
packet radio service, ongoing improvements in the capacity and quality of
digital technology, shorter development cycles for new products and
enhancements and changes in end-user requirements and preferences. Such
continuing technological advances make it difficult to predict the extent of
the future competition we may face. As a result, there can be no assurance that
existing, proposed or as yet undeveloped technologies will not become dominant
in the future and render the technologies we use less profitable or even
obsolete. There can be no assurance that new products and services that are
more commercially effective than our products and services will not be
developed. Furthermore, there can be no assurance that we will be successful
in responding in a timely and cost-effective way to keep up with these
developments. Changing our products or services in response to market demand
may require the adoption of new technologies that could render many of the
technologies that we are currently implementing less competitive or
obsolete. To respond successfully to technological advances and emerging
industry standards, we may require substantial capital expenditure and access
to related or enabling technologies in order to integrate the new technology
with its existing technology. We may not be successful in modifying our
network infrastructure in a timely and cost-effective manner to facilitate such
integration, which could adversely affect our quality of services, our results
of operations and our business and prospects.

Ceský Mobil, has decided not to participate in the auction for licenses
giving the right to operate networks using UMTS or other





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recently developed technologies. The acquisition of these licenses and
the build out of these networks by our competitors could make the products and
services which our operating companies offer less attractive and consequently
have an impact on our revenues and profitability.

Any development or growth on our part could increase our indebtedness and our
expenses.

We have grown rapidly since our inception. As part of our development
strategy, we consider development and acquisition opportunities in the wireless
telecommunications industry on an ongoing basis and at any time may be engaged
in various stages of discussions regarding such opportunities or the increase
of our equity participation in our existing operations. Such growth strategy
presents the risks inherent to identifying and assessing the value, strengths
and weaknesses of development and acquisition opportunities, to evaluating the
costs and uncertain returns of building and expanding the facilities for
operating systems and to integrating and managing the operations of additional
operating systems. Any such growth strategy will place significant demands on
our operational, financial and marketing resources and will result in our
subsidiaries, operating companies, and us incurring substantial additional
indebtedness. In addition to the risks associated with increased leverage,
there can be no assurance that we will be able to correctly identify
appropriate investment opportunities or successfully manage any businesses we
may acquire, or that we will not incur significant unanticipated expenses.

We may not be able to satisfy conditions in our agreements dealing with changes
in control.

Our Romanian and Czech operating companies have entered into senior credit
facilities with bank syndicates under which a direct or indirect change of
control of such operating companies could trigger default provisions under
these borrowing facilities, unless the lenders consent.

If we are unable to secure additional operating licenses on favorable terms, we
will not be able to expand our networks throughout Central and Eastern Europe.

Licenses to conduct wireless operations in each country throughout Central
and Eastern Europe are granted to a limited number of companies. Competition
for these licenses among us and other wireless telecommunications providers
will be intense. We may not have the financial means to compete successfully
for these licenses. These licenses may also contain terms that restrict aspects
of our operations, such as pricing and marketing, which could decrease our
profitability or cause us not to bid for these licenses. If we are unable to
secure additional operating licenses on favorable terms, we may fail to expand
in Central and Eastern Europe or we may incur substantially increased costs in
executing our expansion throughout Central and Eastern Europe.

We may be unable to make acquisitions that would benefit our business, and
acquisitions that we do complete may not benefit our business as planned.

We continuously seek to identify development and acquisition opportunities
in Central and Eastern Europe. Pursuing these opportunities involves risks. We
may not be able to:



| |  | Properly identify appropriate investment opportunities;                                     
|- |  | --------------------------------------------------------------------------------------------
| 
| |  | Obtain the financing necessary to consummate such acquisitions; or                          
| 
| |  | Correctly evaluate the costs and uncertain returns of building and expanding our facilities.

Some of our competitors have more experience in consummating acquisitions
and greater financial resources than we have, which could make outbidding our
competitors for attractive acquisitions in Central and Eastern Europe
significantly more difficult for us. We may be unable to successfully integrate
and manage the operations of any business we may acquire. These acquisitions
could also result in our having to incur additional indebtedness or contingent
liabilities, each of which could restrict the operations of our business and
negatively affect our financial condition. These activities will place
significant demands on our operational, financial and marketing resources and
we may not be able to profitably implement this strategy.

We are subject to governmental regulation and licensing requirements, which may
increase our operating costs and may dictate where and how we operate.

Our operations are subject to governmental regulation, which may change
from time to time. To date, certain operating
companies have been subject to service requirements, restrictions on
interconnection of wireless systems to government-owned or private telephone
networks, subscriber rate-setting and requirements that the operating companies
or development projects complete





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construction, meet network coverage tests or commence commercial operation
of the networks by specified deadlines and other requirements. In addition,
licenses may contain restrictions on foreign ownership or share transfers.
These restrictions or conditions may be difficult to comply with, particularly
given demographic, geographic or other issues in a particular market. Failure
to comply with these restrictions or conditions may result in penalties or in
the loss or revocation of a license. Furthermore, changes in the regulatory
framework may limit the ability to add subscribers to developing systems.

The ability of our operations to retain and exploit their existing
telecommunications licenses and to renew them on favorable terms when they
expire is essential to our operations. The governmental agencies responsible
for the administration of licenses may, however, unilaterally limit, revoke or
otherwise adversely modify the terms of these licenses in the future, and we,
along with our operating companies, may have limited or no legal recourse if
these events occur. In certain cases, the governmental issuer has explicitly
reserved the right to modify certain license terms, to terminate the license in
the public interest and to take over the operating companys network and
services in the interest of national security. There can be no assurance that
our operations will be able to retain or renew their licenses or satisfy the
conditions of such licenses or that the restrictions imposed upon such licenses
will permit the commercial exploitation of such licenses, any of which could
have a material adverse effect on us.

We believe that the opportunity to acquire substantial new wireless
telecommunications licenses in developed and developing countries will exist
only for a limited time. Although our operating companies have obtained certain
operating licenses through private negotiations or without having to
participate in competitive financial bidding processes, governments of
developed and developing countries are increasingly requiring financial bidding
for licenses. This requirement has increased the cost of these licenses, and
may restrict our ability to obtain additional licenses. Furthermore, relevant
governmental authorities may grant additional licenses with respect to the same
or different technologies and covering the same geographical areas as the
operating companies licenses and may preclude us from competing for such
additional licenses. The availability of only limited frequency ranges may
provide some protection against the issuance of competing licenses.

Our operations also are subject to laws and regulations governing
environmental protection, including requirements for the management, use and
disposal of hazardous substances. Such laws and regulations can impose
substantial fines and criminal sanctions for violations, and may require us to
remediate contaminated soil and groundwater affecting property we operate.

Competition in our markets could increase our churn rates and decrease our
average revenue per user, which would adversely affect our operating income.

Churn rates reflect the number of customers who disconnect or are
disconnected from our networks in a given period. An increase in our churn
rates may raise our operating costs, as we seek to add a greater number of new
customers to maintain our subscriber growth. Our aggressive pricing strategy
in the Czech Republic, and the anticipated response to that strategy by our
competitors, as well as the recent aggressive pricing strategies of our
competitors in Romania, could lead to increased, or more volatile, churn rates
as well as lower average revenue per user. The growth of consumer awareness,
additional service offerings from competitors and an increased focus on the
retail consumer market segment may increase churn rates and reduce average
revenue per user.

Because we are unable to thoroughly screen the creditworthiness of potential
customers, we may incur fraud and bad debt expenses and recognize less revenue.

The fraud and bad debt we experience in a given period will directly
reduce our net income and cash flow. Our ability to screen applicants for
creditworthiness is limited due to the lack of credit reporting agencies or
data in Central and Eastern Europe. Our screening processes and gradual
restrictions on access to our services in the event of non-payment may not be
effective in limiting our fraud and bad debt exposure. Consequently, we may
have a large number of customers that are unable to pay their bills on time, if
at all.

Our inability to maintain agreements with other telecommunications providers
upon which we rely to connect calls originating or terminating outside of our
networks may result in an interruption of our service and a possible loss of
customers.

The success of our wireless systems will in some cases depend upon
services provided by other telecommunications providers, some of which are our
competitors. For example, the operating companies generally require
interconnection agreements with national or regional telephone companies in
order for their wireless systems to connect with landline telephone systems,
and may require the use of other microwave or fiber optic networks to link
their wireless systems. Although the operating companies have
entered into required interconnection agreements or have interconnection
arrangements in place, these agreements and arrangements typically have limited
terms and must be periodically renegotiated or renewed. The revocation, loss or
modification of any of these existing agreements or arrangements or the failure
to obtain necessary agreements or arrangements in the future on terms favorable
to the operating company could have a material adverse effect on us.





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We are subject to currency exchange risks, which may negatively impact our
financial results and may increase our costs to repay our debts.

Our operations depend, in large part, on the economics of the markets in
which we have interests. Those markets are in countries with economies in
various stages of development or structural reform, some of which are subject
to rapid fluctuations in terms of consumer prices, employment levels, gross
domestic product and interest and foreign exchange rates. Many developing
countries, such as Romania, have experienced substantial, and in some periods
extremely high, rates of inflation and resulting high interest rates for many
years. Inflation and rapid fluctuations in interest rates have had and may
continue to have negative effects on the economies and securities markets of
certain developing countries which in turn may have adverse effects on
operations in those countries, including the ability to obtain financing, the
ability of subscribers to pay for services provided by the operating companies
or the ability to support the growth of such operations.

The value of our investment in Ceský Mobil is partially a function of the
currency exchange rate between the U.S. dollar and the Czech Koruna, its
functional currency. The devaluation of the functional currency applicable to
an operating company will result in a reduction in the carrying value of our
investment in such operating company. Such reduction is accounted for as a
reduction of shareholders equity until the sale of the investee, at which time
the cumulative gain or loss is recorded as part of the gain or loss on sale. In
addition, Ceský Mobil reports its results of operations in the local currency,
and accordingly, our results of operations will be affected by changes in
currency exchange rates between the Koruna and the U.S. dollar. We have entered
into hedging arrangements in the Czech Republic to systematically hedge against
foreign currency exchange rate risks on portions of our long-term debt
denominated in Euro. In certain circumstances, we may decide to accept the
inherent currency risk, principally because of the relatively high cost of
buying, or the inability to buy, forward cover in currencies of the countries
in which we operate. We do not anticipate any near-term changes in
managements objectives and strategies with respect to managing such exposures.
Until December 31, 2002, Romania was defined for accounting purposes as a
highly inflationary economy and the U.S. dollar, our functional currency, was
used as their measurement currency. In 2003, an assessment as to which
currency is MobiFons functional currency will be made. MobiFons borrowings
are in U.S. dollars and tariffs are adjusted to account for the effects of the
devaluation of the Romanian lei versus the U.S. dollar due to inflation.
Consequently, exchange fluctuations have not had a material effect on our
consolidated results in the past. However, Romania is currently a second wave
European Union accession candidate and it is foreseeable that the Euro will
take prominence in Romania in the future. Consequently, depending on the result
of our assessment and the progression of Romania towards the Euro, exchange
rate fluctuations may have a more significant impact on our results of operations
in the future. As a result, we may experience economic loss with respect to
our investments and fluctuations in our results of operations solely as a
result of currency exchange rate fluctuations. Many of the currencies of
developing countries have experienced steady, and at times significant,
devaluations relative to the U.S. dollar, and significant exchange rate
fluctuations have occurred in the past and may again occur in the future, all
of which could have a material adverse effect on us.

Any revenues operating companies generate will generally be paid to the
operating companies in the local currency. By contrast, some significant
liabilities of the operating companies, such as liabilities for the financing
of telecommunications equipment, may be payable in U.S. dollars or in
currencies other than the local currency. As a result, any devaluation in the
local currency relative to the currencies in which such liabilities are payable
could have a material adverse effect on us. Certain of our investees may have
financing arrangements which are governed by financial ratio covenants measured
in U.S. dollars or Euros. A devaluation of the local currency to the U.S.
dollar or the Euro could result in a failure to meet certain of these financial
ratios. In the event that such ratios are not met and the financial ratio
covenants are not renegotiated or waived, there could be an acceleration of
certain of the debts of such affiliates.

Because any future investment by us may be limited to a minority interest, we
may not be able to determine or influence significant decisions of the
businesses in which we invest.

In some cases, we may need to take minority interests in our operations
because either applicable laws limit foreign investors to minority equity
positions or the financial resources required to make bids for large market
licenses have resulted in us joining consortia to pursue such opportunities.
Our strategy is to obtain influence through board of directors and management
representation, supermajority voting requirements, veto rights and financial
controls, although we are not always successful in obtaining such rights.

Though we have not taken any minority voting positions as of the date of
this annual report, we may take such positions in the future which could
preclude us from controlling such entities and implementing strategies that we
favor, including strategies
involving the expansion or development of projects or the pursuit of
certain financing alternatives. We may also be unable or unwilling to provide
additional equity to minority-owned affiliates, which would result in the
dilution of our equity interest or a significant impairment or loss of the
value of our investment. We may depend on our partners to construct or operate
projects. There can be no assurance that such partners will have the same level
of experience, technical ability, human resources and other attributes that we





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possess or that the projects require. Any such partners may have conflicts
of interest, including those relating to their status as a provider of goods
and services to the operating company. In addition, we may be unable to access
cash flow, if any, of our operating companies.

We may not be able to attract and retain key personnel and adequately staff our
operations, which could impair the execution of our business plans.

Our success and our growth strategy depend in large part on our ability to
attract and retain key management, marketing, finance and operating personnel,
both at holding and operating company levels. There can be no assurance that we
will continue to attract and retain the qualified personnel needed for our
business. In addition, the loss of the services of one or more members of our
senior management team could have a material adverse effect on us.

We rely initially on expatriate personnel as operations at the country
level are established, while training local personnel to assume most management
positions as soon as practicable. We fill some senior executive positions with
expatriates supplied by TIW pursuant to support agreements between us and TIW
or its subsidiaries. Other senior executive positions are filled with
expatriates supplied or recommended by our other strategic partners. Our
failure to maintain these agreements or our failure to attract experienced
expatriate personnel to live and work in our target markets for extended
periods could impair the execution of our business plan because of managements
lack of experience in Central and Eastern Europe and unfamiliarity with our
business.

In addition, none of the members of our supervisory board or our board of
management or those of MobiFon or Ceský Mobil have entered into any agreement
with either of such companies that restricts any such member from leaving such
company. The chief technology officer of MobiFon is an appointee from and
employee of Vodafone Europe B.V., and may return to Vodafone at any time.

Our controlling shareholder may transfer its interest in us to a third party in
a transaction that does not require your consent and in which you will not
receive a control premium for your shares.

If TIW receives a third-party offer to purchase our shares that it holds,
it might not have the obligation to require the prospective purchaser to extend
such offer to you or any of our other shareholders. Because any sale by TIW may
be in a private transaction, TIW may receive a control premium on the sale of
our shares that will not be realized by you.

TIW, our controlling shareholder, may be in direct or indirect competition with
us and, as a result, may prohibit us from pursuing beneficial business
opportunities.

TIW and its other affiliates are in the business of developing and
operating international wireless telecommunications businesses, including
businesses that use the same or similar technologies or provide the same
services as our existing and potential operations. As a result, TIWs and its
affiliates interests may conflict with ours or preclude us from taking
advantage of potential expansion opportunities. As a result, we may not be
able to expand our business in certain parts of Central and Eastern Europe.

Our class A subordinate voting shares are not listed on a stock exchange and
there can be no assurance that we will be able to obtain approval for any such
listing.

There is currently no market on which to trade the class A subordinate
voting shares and there can be no assurance that an active market will ever
develop or be maintained for our shares.

If listed, the trading price of our class A subordinate voting shares may
decline due to reasons unrelated to the performance of our business.

The market price of our class A subordinate voting shares is likely to be
volatile and could be subject to wide fluctuations in response to factors
relating to our particular business and the region where we operate, such as:



| |  | Political and social developments in Central and Eastern Europe.                                                 
|- |  | -----------------------------------------------------------------------------------------------------------------
| 
| |  | The award of new licenses to our competitors.                                                                    
| 
| |  | Announcements of technological innovations or new wireless services by our competitors.                          
| 
| |  | Changes in the trading prices of our class A subordinate voting shares on any exchange where they will be traded.





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Regardless of the performance of our business, this volatility could
adversely affect the market price of our class A subordinate voting shares,
which may affect your ability to recognize a return on your investment.

If we do not comply with the Foreign Corrupt Practices Act (United States) or
the Corruption of Foreign Public Officials Act (Canada), we and our officers
and the members of our board of management or our supervisory board may become
subject to monetary or criminal penalties.

We are subject to the U.S. Foreign Corrupt Practices Act (United States)
and the Corruption of Foreign Public Officials Act (Canada), which generally
prohibit companies and their intermediaries from bribing foreign officials for
the purpose of obtaining or keeping business. We will take precautions to
comply with the Foreign Corrupt Practices Act (United States) and the
Corruption of Foreign Public Officials Act (Canada), including adoption of
formal compliance policies. However, these precautions may not protect us
against liability under the Foreign Corrupt Practices Act (United States) or
the Corruption of Foreign Public Officials Act (Canada), particularly as a
result of actions that may be taken in the future by agents and other
intermediaries through whom we may have exposure under the Foreign Corrupt
Practices Act (United States) or the Corruption of Foreign Public Officials Act
(Canada) even though we may have limited or no ability to control such persons.

Because of our articles of association and our organization under Dutch law,
you may find it difficult to pursue legal remedies against the members of our
supervisory board or board of management.

Both our articles of association and our corporate affairs are governed by
Dutch corporate law. The rights of our shareholders and the responsibilities of
the boards that direct our affairs are different from those established under
the statutes and judicial precedents of the United States and Canada and other
jurisdictions. You may find it more difficult to protect your interests against
actions by members of our supervisory board or board of management than you
would if we were a U.S. or Canadian corporation. Furthermore, under our
articles of association, we have indemnified the members of our supervisory
board and our board of management against liabilities resulting from
proceedings against such members in connection with their membership on either
board, if such member acted in good faith and in a manner he believed to be in
our best interests.

Because judgements of Canadian or U.S. courts are not directly enforceable in
The Netherlands, you may find it more difficult to enforce your rights than if
we were a Canadian or U.S. company.

Judgments of Canadian or U.S. courts including judgments against us, the
members of our supervisory board and our board of management or our officers
that are predicated on the civil liability provisions of the applicable
securities laws in Canada or the United States are not directly enforceable in
The Netherlands. Even if you prevail in a claim in a Canadian or U.S. court,
you may find it difficult or impossible to enforce your rights in The
Netherlands. Furthermore, you may find it difficult or impossible to effect
service of process on the members of our supervisory board and our board of
management, our officers and others connected to us.

If we are not able to obtain qualified subcontractors, equipment or sites on a
timely or cost-efficient basis, we will be unable to build out and operate our
networks as planned.

The operating companies in which we invest typically require substantial
construction of new telecommunications networks and additions to existing
wireless networks. Construction activity will require the operating companies
to obtain qualified subcontractors and necessary equipment on a timely basis,
the availability of which varies significantly from country to country.
Construction projects are subject to cost overruns and delays not within the
control of the operating company or its subcontractors, such as those caused by
acts of governmental entities, including failure to issue required permits with
respect to siting and other matters, financing delays and catastrophic
occurrences. Delays also can arise from design changes and material or
equipment shortages or delays in delivery. The successful build-out of our
wireless networks will also depend on the lease or acquisition of sites for the
location of cells or transmission equipment. The site selection process may
require obtaining zoning variances or other state and local governmental
permits for certain of such sites. There can be no assurance that lease or
acquisition agreements will be negotiated on terms favorable to our operations
or that necessary permits and approvals will be obtained. Accordingly, there
can be no assurance that the operating companies will be able to complete
current or future construction projects for the amount budgeted or within the
time periods projected, or at all.

Failure to complete construction for the amount budgeted or on a timely
basis could jeopardize subscriber contracts, franchises and licenses and could
have a material adverse effect on us. In particular, telecommunications
licenses often are granted on the
condition that network construction be completed or commercial operations
be commenced by a specified date. Failure to comply with these deadlines could
result in the loss or revocation of the licenses.





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##### Table of Contents



Concerns about radio frequency emission may lead to increased regulation or
discourage the use of cellular telephones, which could result in our having to
change our business plan or reduce our subscriber revenues.

Media reports have suggested that certain radio frequency emissions from
cellular telephones may be linked to certain medical conditions such as cancer.
In addition, certain interest groups have requested investigations into claims
that digital transmissions from handsets used in connection with digital
wireless technologies pose health concerns and cause interference with hearing
aids and other medical devices. There can be no assurance that the findings of
such studies will not have a material adverse effect on our business or will
not lead to governmental regulation. The actual or perceived health risks of
wireless communications devices could adversely affect wireless communications
service providers, including our operating companies, through reduced
subscriber growth, reduced network usage per subscriber, threat of product
liability lawsuits or reduced availability of financings to the wireless
telecommunications industry.

This annual report contains forward-looking statements and information relating
to our business, our industry and us that may not be realized.

All statements other than statements of historical facts included in this
prospectus are forward-looking statements. When we use words such as believe,
intend, expect, anticipate, project, estimate, predict and similar expressions,
we intend to identify forward-looking statements. These forward-looking
statements, which include statements contained in sections entitled Risk
Factors, Operating and Financial Review and Prospects and Information on
the Company, are based on information currently available to us and are
subject to a number of risks, uncertainties and other factors that could cause
our actual results, performance, prospects or opportunities to differ
materially from those expressed in or implied by, these forward-looking
statements.

These risks, uncertainties and other factors include: changes in economic,
political and social conditions; changes in government regulations; changes in
technology and the development of new technology; foreign currency
fluctuations; competition; and the availability, terms and deployment of
capital. Our risks are more specifically described elsewhere in this section.
If one or more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect, our actual results may vary materially from those
expected, estimated or projected.

We may also be subject to other risks that we cannot predict.

Our future performance may also be affected by other factors such as
competitive pressures, government actions relating to our licenses resulting
from factors out of our control or our ability to negotiate license
requirements, technological changes, local taxes, devaluation of local
currencies, recession and inflation.




ITEM 4  INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

We are a leading provider of wireless telecommunications services in
Romania through MobiFon and a rapidly growing wireless telecommunications
services provider in the Czech Republic through Ceský Mobil. MobiFon received
its 900 MHz national license in November 1996 and launched commercial service
in April 1997. MobiFon operates in Romania under the highly recognized brand
name Connex. Ceský Mobil was awarded a dual 900 MHz and 1800 MHz national
license in October 1999 and launched commercial service in the Czech Republic
in March 2000 under the brand name Oskar.

As of December 31, 2002, we had licenses covering 32.7 million persons.
We grew at an average of more than 79,400 net new subscribers per month in 2002
and added a total of over 953,000 net new subscribers in 2002. As of December
31, 2002 we had approximately 3,815,000 subscribers which based on our
percentage of ownership of MobiFon and Ceský Mobil as of that date represents
approximately 1,945,000 equity subscribers. We intend to use our existing
operations as a platform from which to pursue new opportunities, including
broadening our service offerings through innovative technologies and expanding
our presence in the Central and Eastern Europe.

We were incorporated under the laws of The Netherlands on September 17,
1999, under the name TIW Eastern Europe N.V. to hold TIWs wireless
telecommunications interests in Central and Eastern Europe. On May 30, 2000,
we changed our name to ClearWave N.V. TIW transferred its beneficial equity
interests in MobiFon and Ceský Mobil to us in October 1999. Our principal
executive office is located at World Trade Center, Strawinskylaan 707,
1077 XX Amsterdam, The Netherlands, and our telephone number is 31 (20)
305.09.80. Our executive office is located at Ceský Mobil,
Vinohradská 167, 100
00 Prague 10, Czech Republic, and our telephone number is 420-2-7117-1111. Our
agent for service of process in the United States is CT Corporation System, 111
Eighth Avenue, New York, NY, 10011, (212) 894-8500.





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The following table sets forth, by segment, the progression since 1998 in
the number of subscribers and equity subscribers.

|            |                       |  |              |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |         | 
|----------- | --------------------- |  | ------------ | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  |  | ------- |  |  |  | ------- | 
|            |                       |  | December 31,
|            |                       |  |             
|            |                       |  | 2002         |           | 2001 |  | 2000 |           | 1999 |  | 1998
|            |                       |  |              |           |      |  |      |           |      |  |     
|MobiFon     |                       |  |              |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|            | Subscribers           |  |              | 2,635,000 |      |  |      | 2,003,600 |      |  |      | 1,171,800 |  |  |  | 702,100 |  |  |  | 325,300 | 
|            | Equity Subscribers(1) |  |              | 1,644,400 | (2)  |  |      | 1,272,300 |      |  |      | 690,200   |  |  |  | 384,000 |  |  |  | 201,700 | 
|Ceský Mobil |                       |  |              |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|            | Subscribers           |  |              | 1,179,800 |      |  |      | 858,400   |      |  |      | 301,700   |  |  |  |        |  |  |  |        | 
|            | Equity Subscribers(1) |  |              | 272,500   |      |  |      | 191,500   |      |  |      | 65,200    |  |  |  |        |  |  |  |        | 
|Total       |                       |  |              |           |      |  |      |           |      |  |      |           |  |  |  |         |  |  |  |        
|            | Subscribers           |  |              | 3,815,000 |      |  |      | 2,862,000 |      |  |      | 1,473,500 |  |  |  | 702,100 |  |  |  | 325,300 | 
|            | Equity Subscribers(1) |  |              | 1,944,800 |      |  |      | 1,463,800 |      |  |      | 755,400   |  |  |  | 384,000 |  |  |  | 201,700 | 



---

|(1) |  | Equity subscribers represent our ultimate proportionate ownership in
subscriber figures of our operations, based on our equity ownership
percentage in such operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | During the fourth quarter of 2002, we tendered, as part of a share
repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of
MobiFon for total cash consideration of $24.6 million, bringing our
ownership in MobiFon to 62.4%. Other shareholders of MobiFon have until
June 30, 2003 to tender their shares in the share repurchase which may
cause our ownership interest in MobiFon to increase. On March 19, 2003 we
closed the sale of 11,135,555 shares of MobiFon for total cash
consideration of $42.5 million. Following the share repurchase and the
sale, our ultimate ownership of MobiFon is expected to vary between 56.6%
and 57.7% depending on the extent of the participation of other MobiFon
shareholders in the share repurchase. As a result, our equity subscribers
on a pro forma basis as at December 31, 2002 for Romania may vary between
1,491,410 and 1,520,395.

Romania.MobiFon was the first GSM operator to launch services in
Romania and offers a full range of voice services as well as advanced data
applications. MobiFon serves its customers on its state-of-the-art network,
which covers approximately 97% of the population and all major highways in
Romania. During the twelve months ended December 31, 2002, MobiFon added
631,600 net subscribers, an increase of 32% from December 31, 2001. MobiFon
grew at a rate of 52,600 subscribers per month in 2002 and had 2,635,200
subscribers at December 31, 2002, up from 2,003,600 at the end of 2001. Our
reports indicate that this represents a 53% market share. Since launching
service in April 1997, MobiFon has developed an exceptional track record both
in terms of subscriber growth and financial performance. MobiFon achieved
operating income before depreciation and amortization break-even in the third
quarter of 1998, 17 months after launch of services. It recorded an operating
income before depreciation and amortization of $231.6 million in 2002, a 24%
increase over the $186.4 million recorded in 2001.

Czech Republic.Ceský Mobil received the third national GSM license in
the Czech Republic in October 1999. Ceský Mobil is committed to compete not
only in traditional voice services, but also in new technologies such as (i)
general packet radio service or GPRS, an evolved technology that permits
increased high-speed wireless Internet access and data transmissions, and (ii)
wireless application protocol or WAP, a technology that allows direct Internet
access through cellular devices. When Ceský Mobil launched commercial service
in March 2000, its network covered 50% of the Czech Republics population,
including all major Czech cities. Ceský Mobil achieved 98% population coverage
by December 31, 2000, in advance of its mid-2001 license requirement. The
Czech Republic cellular market grew during 2002 by 1,635,000 subscribers, or
23%, to a total of 8,581,000 subscribers, representing a penetration rate of
84.2% of the population. With the addition of 321,325 net subscribers in 2002,
representing a 37% increase since the beginning of 2002, Ceský Mobil continues
to be one of the fastest growing start-up cellular operators in Central and
Eastern Europe. It reached 1,179,800 subscribers as at December 31, 2002.

BUSINESS OVERVIEW

Strategy

We seek to be a leading provider of wireless telecommunications services
in Central and Eastern Europe. We are implementing the following strategies to
achieve this objective:

Developing leading brand names through innovative marketing programs.We
believe establishing strong brand names is essential to our success in Central
and Eastern Europe. As such, we have developed easily-remembered and
familiar-sounding brands that embody accessible technology and good value. We
use advertising, event marketing and direct mail techniques to saturate our





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markets with our brands and promote high levels of brand awareness. We
intend our branding to convince customers that our offerings are the most
effective, affordable and accessible cellular services for their everyday
needs.

Offering simple and competitive pricing plans.We offer simple pricing
plans that are designed to compare favorably to the prices offered both by our
Romanian and Czech wireless competitors and by wireless operators in
neighbouring markets. In Romania, our services are also priced to be
competitive with the fixed line services of RomTelecom, the national fixed line
telephone company. Our rates for making in-country long distance calls
historically have been cheaper than RomTelecoms fixed line rates at certain
times of the day, which encourages customers to use wireless instead of fixed
line phone service.

Tailoring our marketing, distribution and customer care strategies to suit
local markets.We believe that each market requires different marketing,
distribution and customer care strategies based on a number of factors,
including:



| |  |  | The number of wireless operators;                                                  
| | - |  | -----------------------------------------------------------------------------------
|
| |  |  | The timing of our entrance into the market versus that of our competitors;         
|
| |  |  | The pricing structures of our wireless competitors and the fixed line operator; and
|
| |  |  | Local subscriber profiles.                                                         

Our local management teams evaluate the competitive environment of each
market in light of these factors and determine the appropriate marketing and
distribution strategies and level of customer service.

Deploying and operating high-quality networks in our territories.We
deploy high quality networks to provide our customers with service that is
equivalent to the service provided by competing operators. We actively monitor
the performance of the network to determine areas of local network congestion
where additional network capacity is required. We also continuously work with
the local regulatory authorities to acquire additional channels and spectrum
when necessary, which allows us to increase network capacity to accommodate
growth of subscribers and traffic.

Introducing advanced data-related services that will allow users to engage
in mobile commerce.We plan to continuously upgrade our networks to ensure
that we are able to provide advanced value-added data transmission and wireless
Internet access. We believe that the current worldwide trend towards the
convergence of technologies, such as personal computing and cellular telephony,
will facilitate the widespread use of wireless devices to provide Internet
access. We intend to capitalize on our platforms to offer such wireless
services through technologies which include general packet radio service and
wireless application protocol.

Capitalizing on our existing operations to expand our presence in Central
and Eastern Europe.We currently have wireless licenses and operations in
Romania and the Czech Republic and are reviewing other wireless opportunities
in Central and Eastern Europe. We believe that a substantial presence will
allow us to take advantage of operational synergies and economies of scale. For

example, our operating companies share information and services, techniques and
marketing strategies, and the negotiation of supply contracts for network and
subscriber equipment from major equipment vendors. Similarly, we employ best
practices and benchmarking techniques across our systems to continually develop
and improve our performance. We also believe that developing a significant
wireless presence in Central and Eastern Europe would enhance our strategic
value. We intend to continue to evaluate acquisition, joint venture, strategic
alliance and start-up opportunities throughout Central and Eastern Europe, and
to bid for additional licenses as they become available in markets we believe
are attractive.

ORGANIZATIONAL STRUCTURE

The following chart summarizes the equity interests we hold, directly and
indirectly, in each of MobiFon and Ceský Mobil as at December 31, 2002, unless
otherwise specified. Percentages in brackets represent the voting interests we
hold where they differ from the equity interests we hold. The chart omits
certain holding companies.





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##### Table of Contents



(TIW EQUITY INTERESTS CHART)



---

|(1) |  | Equity interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Voting interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(3) |  | As at April 30, 2003. During the fourth quarter of 2002, we tendered,
as part of a share repurchase initiated by MobiFon, an aggregate of
6,460,250 shares of MobiFon for total cash consideration of $24.6
million, bringing our ownership in MobiFon to 62.4%. Other shareholders
of MobiFon have until June 30, 2003 to tender their shares in the share
repurchase which may cause our ownership interest in MobiFon to
increase. On March 19, 2003 we closed the sale of 11,135,555 shares of
MobiFon for total cash consideration of $42.5 million. Following the
share repurchase and the sale, our ultimate ownership of MobiFon is
expected to be between 56.6% and 57.7% depending on the extent of the
participation of other MobiFon shareholders in the share repurchase.
|   
|(4) |  | As at March 31, 2003. Capital contributions funded prior to year end
but formalized in the first quarter of 2003 increased TIW Czech N.V.s
ownership in Ceský Mobil a.s from 95.5 to 96.3%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

ClearWave Holdings B.V. and TIW Czech N.V. are organized under the laws of
the Netherlands. MobiFon S.A. and Ceský Mobil a.s. are organized, respectively,
under the laws of Romania and the Czech Republic.

Operations

The following table sets forth our operations and interests and certain
information related thereto, as of December 31, 2002, unless otherwise
specified.

|                  |  |            |  |            |         |               |  |                |      |          |               |                |           |             |           |        |      |     |  |  |      |  |      |  |           |     |           | 
|----------------- |  | ---------- |  | ---------- | ------- | ------------- |  | -------------- | ---- | -------- | ------------- | -------------- | --------- | ----------- | --------- | ------ | ---- | --- |  |  | ---- |  | ---- |  | --------- | --- | --------- | 
|                  |  |            |  |            |         |               |  |                |      | Licensed |               |                |           |             |           |        |      |     |  |  |      |  |      |  |           |    
|                  |  |            |  |            |         | Start-up      |  | Population     |      |          |               |                |           | Corporation |           | Equity |      |     |  | 
|                  |  |            |  |            |         | date of       |  | Coverage       |      | Total    |               | Ownership      |           | persons     |           | Equity
|                  |  | Technology |  | Operations |         | (in millions) |  | Subscribers(1) |      | (%)      | (in millions) | Subscribers(2)
|                  |  |            |  |            |         |               |  |                |      |          |               |               
|Romania           |  | GSM        |  |            | Q2 1997 |               |  |                | 22.4 |          |               |                | 2,635,200 |             |           |        | 62.4 | (3) |  |  | 14.0 |  |      |  | 1,644,400 | (3)
|Czech Republic(4) |  | GSM        |  |            | Q1 2000 |               |  |                | 10.3 |          |               |                | 1,179,800 |             |           |        | 23.1 |     |  |  | 2.4  |  |      |  | 272,500   |    
|Total             |  |            |  |            |         |               |  |                |      |          | 32.7          |                |           |             | 3,815,000 |        |      |     |  |  |      |  | 16.4 |  |           |     | 1,944,800 | 





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##### Table of Contents





---

|(1) |  | As of December 31, 2002, unless otherwise specified. Figures include
1,693,987 prepaid subscribers in Romania and 760,014 in the Czech Republic
but exclude internet subscribers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Proportional operational data represent the combination of ClearWaves
ultimate proportionate ownership in each of its subsidiaries and is not
intended to represent any measure of performance in accordance with
generally accepted accounting principles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) |  | During the fourth quarter of 2002, we tendered, as part of a share
repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of
MobiFon for total cash consideration of $24.6 million, bringing our
ownership in MobiFon to 62.4%. Other shareholders of MobiFon have until
June 30, 2003 to tender their shares in the share repurchase which may
cause our ownership interest in MobiFon to increase. On March 19, 2003 we
closed the sale of 11,135,555 shares of MobiFon for total cash
consideration of $42.5 million. Following the share repurchase and the
sale, our ultimate ownership of MobiFon is expected to be between 56.6%
and 57.7% depending on the extent of the participation of other MobiFon
shareholders in the share repurchase. As a result, our equity subscribers
on a pro forma basis as at December 31, 2002 for Romania may be between
1,491,410 and 1,520,395.
|   
|(4) |  | Through an intermediate holding company, we have voting control of Ceský
Mobil.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Market Opportunity

Europe represents one of the worlds largest wireless communications
markets, with, according to EMC World Cellular Database, approximately 35.6% of
the 1,135.4 million cellular subscribers worldwide as of December 2002. Since
1996, the European cellular market has grown, according to EMC World Cellular
Database, at a compound annual growth rate of 48.8%, from 37.7 million
subscribers in 1996 to 403.9 million in 2002. As a result of this rapid growth,
the European market is now almost three times as large as the USA/Canada
market, based on number of subscribers.

The universal GSM standard in Europe, established by the European
Telecommunications Standards Institute, as well as the calling party pays
approach and the early adoption of pre-paid packages, have contributed to this
significant growth. The creation of a single open standard and the large market
size has fostered significant competition among network equipment providers,
which has driven down the costs associated with network deployment and
handsets. The wireless operators have been able to pass these savings directly
to consumers through reducing both handset and service plan prices. European
wireless service providers are also rapidly adding data transmission,
multimedia and Internet applications to their networks, which are expected to
contribute to future growth.

While the majority of the growth in Europe has historically occurred in
the Western European markets which are now close to saturation, growth has
accelerated in some countries in Central and Eastern Europe in recent years.
The wireless communications market in Central and Eastern Europe grew at a
compound annual growth rate of 91.3%, from 1.5 million subscribers in 1996 to
approximately 76.0 million in 2002. During 2002, according to EMC World
Cellular Database, wireless markets in Central and Eastern Europe added 25.2
million cellular subscribers, representing an annual growth rate of 49.6%. In
comparison the wireless market in Western Europe grew at a rate of 8.9% in
2002. Despite this accelerated growth in subscribers, the penetration rate in
Central and Eastern European countries wireless markets lags behind that of
Western European markets with penetration rates as at December 31, 2002 of 4.1%
in Belarus to 90.4% in Slovenia in Central and Eastern Europe and of 61.6% in
France to 104.1% in Luxembourg in Western Europe. We believe this further
highlights the growth potential of Central and Eastern Europe. As at December
31, 2002, the penetration rates in Romania and the Czech Republic were
respectively 22.3% and 84.2%.

There is a growing trend in certain countries for mobile phone users to
subscribe to services of more than one operator for the same region through the
use of a single handset but different subscriber identity module cards commonly
referred to as SIM cards. This trend suggests that penetration rates could
expand beyond the 100% mark since penetration is calculated based on number of
subscriptions to cellular services rather than number of persons using cellular
services.

In addition to the growing demand for traditional voice services, we
believe that many markets in Central and Eastern Europe will embrace data
transmission and Internet-based services via technologies such as general
packet radio service and Enhanced Data GSM Environment (EDGE).

We believe that several other factors make Central and Eastern Europe
attractive for wireless telecommunications services, especially as a substitute
for traditional fixed-line services:



| | 1. |  | the region typically has relatively less developed fixed-line
telecommunications systems than Western Europe. For example, according
to the 2001 Annual Report of the Greek telecommunications company OTE,
Romania had fixed-line
penetration of approximately 18.8% as at January 1, 2002 and the Czech
Republic had fixed-line penetration of 36%, versus 58% in the United
Kingdom;
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | waiting lists for the installation of fixed-line phones can be
lengthy. In Romania, the estimated waiting time for a domestic-only
fixed-line phone was 2.7 years at the end of 2001 (with 580,000 persons
on the waiting list), with a longer wait for an                                                                                                                             





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| |  |  | international line. In the Czech Republic, although waiting list periods have
declined over recent years to an average of one month in 2002, a negative
perception of fixed line service persists.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The cost to consumers of wireless service is becoming increasingly
competitive with fixed-line rates. For example, during peak hours, MobiFons
average price per minute under certain plans for business customers and other
high-end users is less than that of the national fixed-line phone company for
national long-distance calls.

The telecommunication market deregulation which became effective on
January 1, 2003 in Romania has caused the entrance of new players in the
Romanian telecommunications industry. New technology and data networks will be
used by these new players to capture a share of international, fixed and
fixed-wireless voice revenues, mostly from the business segment of the market. Thus,
our revenue market share may be adversely affected by this increased
competition. In addition, deregulation may result in increased pressure on
pricing and profit margins for some revenue streams. Expanding our services
portfolio will allow us to protect our revenue and exploit other areas of
communication connectivity such as international incoming calls. Also, MobiFon
intends to offer packages to its business customers providing custom solutions
that integrate mobile and fixed voice communication together with mobile and
fixed data transmission.

Products and Services

We currently offer GSM and GPRS (General Packet Radio Service) wireless
services as well as data services. Our service packages offer users a variety
of practical, simple services and are priced competitively with the service
packages of the other operators in our markets. We also sell handsets and offer
customers access to web-based services via their handsets.

Basic and Value-added Voice Services

We provide basic voice services for wireless telephone communications over
a GSM network. As with the rest of Europe, we follow the calling party pays
model in billing. We supplement these basic voice services with a range of
value-added services, many of which are standard in each of our service
packages. These additional services include voice mail, short messaging system,
international roaming and call management capabilities such as call forwarding,
call waiting, call hold, call barring, conference calls and caller
identification. In most cases, we were the first cellular wireless operator to
introduce these value-added services in Romania.

Both in Romania and the Czech Republic, based on short messaging system,
we developed a wide range of entertainment services, some of them unique on the
market, targeting mostly the youth segment. We provide, among other things, the
ability to chat, to play games, to read horoscopes and to send voice quotes
from one phone to another. Personalization of handsets through ring tones and
logos is also available. Revenues and penetration of short messaging service is
stimulated by the continuous introduction of innovative SMS-based services and
promotions.

In Romania we began the implementation in 2002 of partnerships with
thirdparties, on a revenue sharing model, to provide services based on
interactive voice response systems and short messaging systems. These value
added services marketed by our partners and including mostly entertainment
services started to represent a growing revenue potential from the Romanian
market in 2002.

Data, Internet and Advanced Messaging Services

We offer a range of data applications, including (1) wireless application
protocol commonly referred to as WAP, (2) general packet radio service commonly
referred to as GPRS, and (3) basic data and fax transmission.

Wireless application protocol-enabling technologies permit the deployment
of data applications, including the ability to access e-mail and the Internet.
WAP allows to offer utility services as well as games and other entertainment
services. We launched wireless application protocol services at MobiFon on
August 1, 2000 and on October 30, 2000 at Ceský Mobil. GPRS permits the
transfer of data and use of data services at much faster speeds than current
GSM capabilities and represents the next step in the evolution of GSM networks
toward third-generation technologies. Possible service capabilities via general
packet radio service include remote high-speed Internet and Local Area Network
access, high quality audio clips and still image capabilities.

In Romania, we launched GPRS services at the end of 2001 and currently
provide GPRS and Local Area Network access addressing mostly the needs of the
business segment, being the segment where we identify the highest interest and
potential for vertical applications implementation. We offer at MobiFon a
flexible selection of GPRS packages in order to address the many different
needs of our customer based and to remain competitive in the market.

In the Czech Republic we launched GPRS services for our postpaid customers
in February 2002 after an innovative trial period in which 150 users of GPRS
technology participated. These 150 participants thoroughly tested and used
our GPRS offering and continued to provide technical support to other users.
This was enabled through a dedicated website where these 150 technoid users





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##### Table of Contents



could converse with one another and on an additional website where they
could converse with the public at large about their GPRS experiences with our
service. On January 27, 2003, Ceský Mobil launched GPRS services also for
prepaid subscribers. Ceský Mobil currently has over 40 000 activated GPRS
subscribers. In February 2003, Ceský Mobil launched Oskar GPRS Connect services
which enable our business subscribers to access their corporate networks via a
secure GPRS connection.

Using WAP, GPRS and also SMS we offer our customers a variety of Content
Services enabling them to gather information such as weather reports, traffic
reports, lottery results and news headlines, access entertainment applications,
and to perform banking transactions from a handset. These services are
typically offered in partnership with 3rd party Content Providers on a
revenue-sharing basis. We earn revenues on these services by charging not only
for access to these services but also for the content that they provide.

In the Czech Republic, Ericsson provides general packet radio service
functionality with dedicated platforms serving the interconnected general
packet radio service support node, gateway general packet radio service support
node and packet control unit, and Siemens provides our wireless application
protocol infrastructure. At MobiFon, GPRS functionality is provided by Siemens
with dedicated platforms SGSN (Serving GPRS Support Node) and GGSN (Gateway
GPRS Support Node), and Ericsson provides the wireless application protocol
platform.

MMS, a Multi Media Messaging Service which enables users to send and
receive pictures, sounds and animations in addition to text, is being deployed
throughout Europe. In the Czech market our competitors introduced MMS in late
2002. We are readying the infrastructure for this service and expect to launch
it in both the Czech Republic and Romania in 2003.

Our GSM technology can migrate easily to provide advanced wireless data
services, either by deploying further enhancements to GPRS, such as faster
coding schemes, and/or introducing EDGE, a technology upgrade to the GSM
standard that the European Telecommunications Standards Institute has
standardized. EDGE, which has been deployed in North America and Asia, enables
data to travel at the same speed as that of the first phase of third-generation
technology, and thus could allow GSM operators who do not have third-generation
licenses to compete with operators that do. Older wireless technologies are not
as flexible and cannot offer similar services as easily.

In Romania, we currently offer dial-up Internet access nationally and are
currently the largest internet service provider in Romania with more than
200,000 dial-up customers. We also offer dedicated internet access and virtual
private network data services to the business segment of the market and we have
more than 2,000 dedicated access and virtual private network ports. In response
to the needs of our customers we have developed some specific added value
services such as virtual private dial-up network, web hosting, server
collocation and Connex Netzone, the first Wireless Local Area Network (WLAN)
service launched in Romania.

MobiFon has developed a wide range of data services for both business and
individual customers. For businesses we offer internet dedicated access,
virtual private networks, quality fixed voice access running on customer data
infrastructure, frame relay access, dial-up gold, dial-up ISDN, virtual private
dial-up networks, WLAN, web hosting and server collocation. For individuals we
offer pre-paid dial-up, domain name registration and various services delivered
and included within our myX Portal package.

Handsets

We sell a broad selection of high-quality handsets. We currently offer
multi-mode handsets manufactured by Sony-Ericsson, Mitsubishi, Motorola, Nokia,
Siemens and Alcatel and expect to offer handsets from more manufacturers as
they become available. We offer dual-mode and tri-mode handsets, which can
operate on the GSM 900, GSM 1800 and GSM 1900 networks. These multi-mode
handsets allow us to offer our customers roaming across a number of GSM
networks in North America, Europe and Asia.

The handsets have many advanced features, including word prompts and
easy-to-use menus, one-touch dialing, multiple ring settings and call logs.
Handsets may also be programmed to allow us to offer value-added services, such
as voice mail, call waiting, call forwarding, call barring, conference calling
and caller identification. In certain cases our handsets are enabled for WAP,
GPRS, MMS, EMS and/or Java. All the handsets we are selling are phase 2/2+
compliant and support OTA in order to help us introduce new value added
services to our customer base.

Our historical policy generally has been to limit the extent to which we
subsidize the cost of handsets. We believe that the lack of significant handset
subsidies contributes to reduced churn, as the incentive to switch operators to
obtain a more modern handset at a subsidized rate is reduced. In addition, the
lack of a complete handset subsidy accelerates our per subscriber payback
period, which
recently in both Romania and the Czech Republic has been reached in
approximately three months, and decreases the cost of subscriber acquisition.
Furthermore, we believe that a non-subsidized handset reduces the likelihood of
bad debt because those users who can cover the full cost of a handset are also
more likely to be able to pay their bills.





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We intend to continue where feasible our practice of minimally subsidizing
handsets. Currently, we do not subsidize handsets for new acquisition of
prepaid consumers. However, we may subsidize handset costs in some of our
service packages as part of our initiative to promote new technologies and gain
market share. Also, in Romania, we may have to match any future introduction of
increased handset subsidies by our three competitors there, which could affect
our subscriber payback period and increase the cost of subscriber acquisition.
Furthermore, as the third GSM market entrant in the Czech Republic, we may
subsidize handset costs in some of our service packages as part of our
initiative to gain market share. We have partially offset handset subsidies in
the Czech Republic through a reduction in distribution costs, made possible by
our direct sales and delivery network.

Service Packages and Pricing

We tailor our service packages to be competitive and simple to understand
and to allow each customer to choose a package that suits his or her usage
requirements. We bill customers for post-paid service, that is, via monthly
bills rendered after the service is provided, on the basis of either
per-second, and in some cases per-minute, rates or a packaged-minute plan.
Customers can also choose to subscribe to our service under pre-paid packages,
whereby a customer may purchase an airtime card that gives him or her calling
time equivalent to the amount paid for the card. Our pricing strategies depend
on the competitive environment, the subscriber profiles and the regulatory
requirements in each of our operating markets.

Post-paid and Pre-paid Service Plans

Post-paid service. We offer a number of post-paid cellular service
packages that are targeted to specific types of subscribers and their expected
usage patterns. These packages often include a specified number of minutes, as
part of the monthly fee, with an overcall rate charged after such minutes are
used. GSM roaming is available to subscribers traveling in other countries
where we have signed roaming agreements with the local GSM operators. When
roaming on a foreign GSM network, the subscriber is charged for the service of
relaying the call internationally and for the actual number of minutes used.
The per minute charges are at the rates charged by the local GSM operator plus
a margin.

Pre-paid service. We offer pre-paid cellular pricing packages to enable
customers who prefer a pre-payment option or whose credit profiles do not
qualify for post-paid service, to take advantage of our wireless services.
Pre-paid service requires no contract and no monthly fee. The customer
purchases an airtime card that gives him or her calling time equivalent to the
amount paid for the card, and the customer can easily access further airtime by
purchasing additional airtime cards. As of December 31, 2002, pre-paid
subscribers accounted for 64% of each of our Romanian and Czech Republic
subscriber bases, as compared to 63% and 71% respectively as of December 31,
2001. Pre-paid customers accounted for 68% and 46% of the net added
subscribers in Romania and the Czech Republic, respectively, during the
twelve-month period from December 31, 2001 to December 31, 2002. We began
offering pre-paid service in the Czech Republic on April 19, 2000.

In line with our strategy of offering diversity and flexibility to our
customers, with a focus on increased profitability, in Romania we introduced in
2002 the first innovative airtime recharging mechanism for voice and data
pre-paid customers, available at the points of sales and the ATMs of the
largest bank in Romania. Ceský Mobil also has a recharging system available at
numerous ATMs in the Czech Republic. The main benefits of the e-voucher system
are the wide range of the credit values, its 24 hour availability and the
reduction of the costs associated with production and distribution of plastic
recharging cards.

Pricing

We believe that our pricing structures compare favorably to the prices
offered both by our Romanian and Czech wireless competitors and by wireless
operators in neighboring markets. In Romania, our services are also priced to
be competitive with the fixed line services of RomTelecom, the national fixed
line phone company. For some post-paid programs, our rates for making
in-country long distance calls historically have been cheaper than RomTelecoms
fixed line rates at certain times of the day, which encourages customers to use
wireless instead of fixed line phone service.

MobiFons initial launch strategy emphasized feature-rich service
offerings that appealed to corporations, governmental agencies and other
high-end subscribers. As part of our strategy to address the Romanian retail
consumer market, we introduced programs that appeal to specific mass-market
segments, based on disposable income research. Consequently, our prepaid
portfolio was diversified to attract not only customers who preferred to use
the service mainly for incoming calls, but also those customers who
could not afford a postpaid program but had a higher propensity to make
outgoing calls. On the postpaid side, we introduced low-end programs, with
affordable monthly fees and flexible per minute rates, stimulating usage during
non-peak hours, week-ends and/or for certain destinations. Our pre-paid
products, together with the post-paid programs for the low-end consumer
segment, were the major driving force in increasing our acquisition of new
subscribers.





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As the third GSM market entrant in the Czech Republic, we initially
differentiated ourselves from our competitors through our pricing strategy by
aggressively pricing our feature-rich service plans. In the Czech Republic, we
estimate that our prices are generally lower than those of our current
competitors, Eurotel Praha and T-Mobile, for comparable plans and based on
various usage assumptions. Our Czech competitors have already lowered their
prices in response to our launch and may further lower their prices in the
future. We have designed simplified service packages to provide our subscribers
with everyday low pricing. We offer several service packages with per-second
billing after the first minute and allow customers to carry over unused minutes
for use in the following month. We have also lowered barriers to subscribing
to our services by eliminating activation fees.

We offer several post-paid and pre-paid pricing plans targeted at specific
market clusters. Two plans, marketed under the names Write Me and Between
Us, are contained in our Czech Republic license and are required to be offered
until December 31, 2003. The Write Me package is designed for low-usage
subscribers who desire wireless access, are high-SMS users and also appreciate
the convenience of wireless at affordable rates. The Between Us package is
designed for subscribers who incur over 300 outgoing minutes of use per month,
with the majority of their calls occurring within the Oskar Network. The
Between Us plan is our only consumer plan that is available as a contract
plan. In addition to these plans, and in connection with our new marketing
campaigns designed to attract higher value customers in the Czech Republic, we
also offer new packages targeted toward high-end users and business
subscribers.

Marketing and Distribution

Marketing

In Romania, our marketing strategy focuses on protecting and growing
revenue and profitability from the existing customer base, strengthening
leadership by maintaining market share advantage, strengthening brand image and
improving customer satisfaction. Taking the advantage of the opportunities
offered by the newly deregulated telecom market, Connex has developed a new
approach to the business customers designed to protect GSM revenues and capture
as much as possible from the potential telecom needs of our high-end subscribes
by integrating mobile voice, fixed voice and data in a single concept which we
refer to as Integrated Service Strategy.

A consumer survey we commissioned in November 2002 showed that we achieved
a Connex brand awareness level of 95.3% in Romania. The survey revealed that
top-of-mind brand awareness was 52% for Connex, versus 43% for Orange. We
accomplished such brand recognition through an extensive advertising campaign
that focused on brand visibility through television, billboard and magazine
advertisements. After having achieved brand awareness in Romania, we are now
building on our brand image through various programs and campaigns to ensure
brand loyalty.

In the Czech Republic, we have established brand recognition through
extensive use of our advertising icon, Oskar. Our brand is developed around a
personality that is friendly, human, and Czech. These attributes are reflected
in everything we do, from developing services to designing the layout of our
stores. We believe that our brand strategy clearly differentiates us from the
other market competitors. In less than two years after launch of operations we
had achieved in-country brand awareness which was on par with or exceeded that
of the competition but more importantly, Oskar has now achieved brand
recognition levels similar to world premiere brands such as Coca Cola. Over
the past two years Oskar has positioned itself as an agent of innovation and a
leading force behind changes in the Czech mobile market. Oskar has built one
of the strongest Czech brands and laid down a new style of communication.

Having launched with a mass market brand and tagline of Everybody,
Everyday, Oskar has since repositioned its brand to appeal to mid and high
value subscribers and the small business market. Oskar has positioned itself
as the customer advocate that challenges conventions on behalf of customers.

A number
of MobiFons advertising campaigns have won international awards
in the specialized fora: in 1999, the award for best advertising campaign of
the year was granted by the Advertising Association for the image campaign
The future sounds good; in 2001, Connex was awarded a Golden Drum award for
television advertising in the Telecommunications category, granted at the
Portoroz Festival; in 2002, at the Cannes 3GSM Conference, the advertising
campaign for Connex Play was among the nominees for best marketing campaigns.
Since launch, Oskar has won over 45 domestic and international awards. Oskar
was also nominated for Best Mobile operator in 2001 and 2002 and Best Branding
Campaign in 2001 at the prestigious World
Communication Awards.

Distribution

We tailor our distribution schemes to our service packages and according
to our strategic position in our markets.

In Romania, Connex distributes through 3 channels; a direct sales force
that serves the top 6,500 business accounts, a network of





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corporate stores in strategic cities for consumers and small business and
through both exclusive and non exclusive independent distributors. Distribution
is also separated by our product offerings  postpaid and prepaid. Exclusive
independent distributors distribute both post and prepaid products and services
with a heavy emphasis on postpaid (handsets and activations). We have also
developed non-exclusive channels with a variety of specialty retail stores and
hypermarkets. In addition, prepaid products are distributed through high
traffic retail locations such as gas stations, lottery outlets and kiosks.
Recent electronic means of recharging prepaid products through Automated Teller
Machines have also resulted in partnerships with financial institutions such as
Banca Commerciala Romana. As of the beginning of 2003 our distribution network
includes 10 corporate stores, more than 750 exclusive postpaid locations and
more than 4,700 points of sale for prepaid cards. Also, a special distribution
channel was developed for selling data services. Due to the data services
characteristics (need for integration in a complete information technology
solution, services complexity, high value, need for customized support) we have
developed a non-exclusive channel of data partners. Connex Data Partners are
national and regional resellers, including system integrators and service
providers, who have the resources, skills and assets to meet the demands of the
large enterprise and metro markets for integrated information technology
solutions.

In the Czech Republic, Oskar relies on direct channels of distribution to
target both consumer and business customers. One of Oskars primary channels
of distribution is direct delivery. Through this channel, customers can order
service packages and handsets over the phone from a fully dedicated telesales
team. Delivery to your office or your home is free and expected within 48
hours. Direct delivery allows us to minimize the number of the external
parties involved in the sale, build closer customer relationships and reduce
acquisition costs by eliminating costs associated with dealers and dealer
commissions. Additionally, eliminating intermediaries helps us to maintain
standardized distribution processes and procedures and allows us to ensure that
every contact with our customers is consistent with the Oskar brand image.

Oskar also operates a retail channel of distribution through its 38
corporate stores and 2 mobile stores. The larger corporate stores are located
in the larger urban centers of the Czech Republic, while the smaller stores
focus on providing a physical presence in regional shopping centers and
secondary cities. Our distribution strategy in the Czech Republic also includes
a team of dedicated sales representatives for larger business accounts and
third-party distributors of pre-paid airtime cards.

Customer Care

We view customer care as an essential element in our strategy and seek to
promote our customer focus to minimize customer churn. With our increasing
focus on the retail consumer segments in our markets, we are making increasing
use of automated customer service that matches the level of service with what
customers pay for their subscription. Customers who subscribe to more expensive
services receive personalized customer service, while customers who subscribe
to more economical packages are served through our interactive voice response
unit and through internet access to key features of their account and general
information. We have established toll-free customer care call center telephone
lines staffed by trained employees to answer inquiries by existing and
potential subscribers. We utilize fully integrated, flexible customer care and
billing systems to ensure that customer service representatives are fully
equipped to deal with customer concerns on a real time basis. We closely
monitor customer care calls and use information gathered from these calls to
identify and remedy system shortfalls and to customize marketing strategies and
pricing and promotional plans.

As the first GSM entrant in Romania, we established the benchmark quality
and service standards for that market. We believe that our customer care
initiatives in Romania have been key in allowing us to maintain our low churn
rates and high levels of customer satisfaction. Through permanent refining of
internal processes, we reached very high levels of productivity in the call
center and we make an on-going effort to control the number of calls per
customer in a market where the need for education regarding cellular service is
still very high. In the Czech Republic we offer customer care options to our
subscribers including our extensive and user-friendly self-care program which
has allowed us to handle large growths in the subscriber base without adding
corresponding staff in the customer service group.

Billing

Billing is governed by the nature of the subscribers service package. Our
billing and customer care systems are fully convergent. The integration of
billing data and customer service information in a single system provides our
staff with a comprehensive view of our subscribers account. We use an
automated collections process, making use of short text messaging services,
interactive voice response and voice mail.

In the Czech Republic, we have chosen a best-in-class billing system that
enables us to maintain competitive advantages in the area of flexibility, speed
to market, convergence and scalability. Its state-of-the-art flexibility allows
the rapid configuration of new
products and services and supports innovative discounting and packaging
concepts. Multi-tiered tariff schemes, bundling of services and cross-product
discounts are all integral parts of this convergent billing solution, which
also provides room for expansion into other





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lines of business. The ability to sort information in this way allows us
to further customize our pricing and billing plans, and offer our customers
additional value-added services, which we believe will help us increase market
penetration and capture market share.

In Romania, we started a process of replacing our old billing system in
mid-2002, as it reached limitations in terms of functionality and it approached
capacity limits. The new system is a best-in-class product that will provide
maximum flexibility, will allow for rapid configuration of new products and
services and will support innovative discounting and packaging concepts. It
employs state-of-the-art technology that will provide both GSM/data and
prepaid/postpaid convergence, allowing us to offer bundled services and
cross-product discounting in a consistent manner across all product lines and
payment channels. The new billing system has been in use since November 2002
for new subscribers in parallel with the old solution, which it will completely
replace in mid-2003 providing Connex with a significant competitive advantage.

Bad Debt and Churn Management

Exposure to bad debt is managed through account spending limits. Each
operating companys fraud department reviews billing reports to monitor
potential fraud or credit abuse. In Romania, actual bad debt write-offs have
historically been fully covered by reserves which, in 2002, amounted to 2.0% of
billable revenue. Once customers are deactivated for non-payment, an extended
legal collection process is performed, in order to recover losses and increase
the level of awareness in the market about the importance of clearing
customers debt. All of the GSM operators in Romania have access to a shared
database of subscribers who have been removed from their network for
nonpayment. An individual in this database who wishes to subscribe to our
service must pay a deposit.

To assist in managing and reducing both bad debt and churn levels in the
Czech Republic, we have implemented an initial mandatory deposit for any
postpaid activation and an account spending limit. With the account spending
limit, as a customer reaches 50% and 75% of this limit, he or she is notified
that he or she is within the percentage of his or her spending limit. At 100%,
the customer is hotlined, which prevents him or her from making outgoing
calls until the account is brought under the spending limit. As the customers
creditworthiness is proven, we proactively increase their credit limit (similar
to credit card companies) to increase spending and ARPU. New post-paid
subscribers who do not pay their invoice have their service restricted five
days after the invoice due date. They are removed from our subscribers numbers
31 days after the due date of their invoice. Uncollectible account balances
are written off 180 days after their due date. In the Czech Republic actual
bad debt write-offs amounted to 7.7% of applicable service revenues in 2000,
5.0% in 2001 and 1.8% in 2002.

In the telecommunications industry, the term churn refers to the rate at
which customers leave an operators network. This can occur for a number of
reasons. In the case of voluntary churn, the customer may decide that he cannot
afford the service, move out of the coverage area or decide to subscribe to a
competing service. In the case of involuntary churn, post-paid customers who
have not paid their bill are, after a period of attempted collection, removed
from the network by us. At MobiFon, we include in our churn calculation those
pre-paid subscribers whose services we terminated after several months have
lapsed since they last placed an outgoing call. MobiFon adjusts the number of
months of permitted inactivity based on market practice and currently churns
customers after 12 months. At Ceský, our pre-paid churn policy is based upon
the amount of time that has elapsed since the customer replenished his account
rather than on activity. Churn rates increase our operating costs by forcing
us to increase our spending on marketing and incentive plans to maintain
current subscribers and continue to attract new ones. A future increase in
churn would likely increase our costs in those areas.

MobiFons average monthly churn rate was 2.12% in 2000, 1.68% in 2001 and
1.85% in 2002.

Ceský Mobil average monthly churn rate, which includes for 2002
subscribers who have had no activity in their account for more than 6 months,
was 1.32% in 2000, 1.86% in 2001 and 2.40% in 2002.

Competition

During the past 10 years, the international wireless telecommunications
industry has experienced rapid growth. The continued emergence of new service
and bearer technologies and deregulation of the industry in a significant
number of countries have created a number of business opportunities and,
consequently, led to increased competition and proliferation of services.
Pan-American, Pan-European and even global network operators have emerged to
leverage economies of scale. Our success will depend on our
ability to compete with other wireless telecommunications network
operators, particularly with respect to brand recognition, services, pricing,
network quality and coverage, management, reliability, marketing and
distribution.

In some instances, our competitors or their principal corporate
shareholders have been operating for a number of years in our markets or in
other markets for wireless services, are currently serving a substantial
subscriber base, have greater name recognition





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and have significantly greater financial, technical, marketing, sales and
distribution resources than those available to us. However, we believe that our
brand recognition and pricing strategies will provide us with an edge over
these competitors. Although we currently face competition from other forms of
telecommunications technologies, we believe that our GSM-based wireless
networks should continue to enjoy cost and accessibility advantages over these
other technologies.

Romania.Besides MobiFon, Romania currently has three other licensed
mobile operators holding a total of four separate licenses: (1) MobilRom, the
other digital GSM 900 operator, (2) RomTelecom, a digital GSM 1800 operator,
and (3) Telemobil, a digital CDMA/2000 and an analog NMTP operator using the
Nordic mobile telephone protocol.



| | (1) |  | MobilRom, majority owned by France Telecom and operated initially
under the name Dialog, won its 900 MHz license at the same time as
MobiFon in November 1996 and launched its services in June 1997.
MobilRom is owned by a consortium led by France Telecom. Dialog
re-branded its services under the Orange brand on April 5, 2002.                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | RomTelecom, the national fixed-line phone company, in which the
part-privatized Greek telecommunications company OTE has a 54.0% equity
interest, acquired its 1800 MHz license in connection with its
privatization in November 1998. It launched its operations under the
brand name Cosmorom in 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (3) |  | Telemobil won its analog nordic mobile telephone protocol license in
March 1992 and launched operations in May 1993 but never succeeded in
reaching significant market penetration. In December 2001, Telemobil
launched a new service based on an advanced form of code division
multiple access technology known as CDMA/2000. Inquam Romania, in which
Qualcomm Inc. and Omnia Holdings are investors, is now the main
shareholder of Telemobil. Telemobil is the first European mobile
operator to use code division multiple access technology and the first
to use the 450 MHz band worldwide. Telemobil has titled its new service
Zapp and is trying to position its technology as the first
third-generation service in Romania.

According to their respective 2002 year end financial reports, as of
December 31, 2002, MobiFon/Connex had a market share of 52.5%, MobilRom of
44.1%, Cosmorom of 2.0% and Telemobil of 1.4%.

|              |  |               |  |                |  |               |  |                     |  |              |      |   |  |  |  |  |  |  |  | 
|------------- |  | ------------- |  | -------------- |  | ------------- |  | ------------------- |  | ------------ | ---- | - |  |  |  |  |  |  |  | 
|Operator      |  | Brand Name    |  | Technology     |  | License Award |  | Start of Operations |  | Market Share
|              |  |               |  |                |  |               |  |                     |  |             
|1) MobilRom   |  | Dialog/Orange |  | GSM 900        |  | November 1996 |  | June 1997           |  |              | 44.1 | %
|2) RomTelecom |  | Cosmorom      |  | GSM 1800       |  | November 1998 |  | June 2000           |  |              | 2.0  | %
|3) Telemobil  |  | Zapp          |  | CDMA 2000/NMTP |  | March 1992    |  | May 1993            |  |              | 1.4  | %
|4) MobiFon    |  | Connex        |  | GSM 900        |  | November 1996 |  | April 1997          |  |              | 52.5 | %

Czech Republic.Besides Ceský Mobil, the Czech Republic currently has two
other licensed mobile operators holding a total of five licenses: (1) Eurotel
Praha, a digital GSM 900/1800 Mobile Telephone Protocol and analog nordic
mobile telephone protocol (NMT450) operator and a holder of a UMTS license; and
(2) Radiomobil, another digital GSM 900/1800 operator and holder of a Universal
Mobile Telecommunications System license.



| |  |  | (1) Eurotel Praha won its NMT450 license in November 1990 and launched
commercial analog service operations in September 1991. The entry of
GSM services reversed Eurotel Prahas earlier nordic mobile telephone
protocol subscriber growth. Eurotel Praha won its 900 MHz GSM license
in March 1996 and launched commercial operations in July 1996. Eurotel
Praha was allocated 1800 MHz frequencies in July 2001. Shareholders of
Eurotel Praha include Ceský Telecom, the national fixed-line operator.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | (2) Radiomobil won its 900 MHz license in March 1996 and began providing
commercial service under the brand name Paegas in September 1996.
Radiomobil was allocated 1800 MHz frequencies in July 2001. Radiomobils
shareholders include
Deutsche Telekom AG. In April 2002 Radiomobil rebranded its services to
the T-Mobile brand name, and is underway with changing its company name
to T-Mobile Czech Republic.                                                                                       





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As of December 31, 2002, Eurotel was the market leader with a 45.4% market
share (including the subscribers using its nordic mobile telephone protocol
services  1% of total Eurotel subscribers); T-Mobile had a 40.9% market
share. As of December 31, 2002, Ceský Mobil had a market share of 13.7%.

Both T-Mobile and Eurotel acquired UMTS licences in December 2001 but have
not yet officially announced when they expect to launch their respective UMTS
operations. The terms of the UMTS licenses provide that the operations
ventures must cover 90% of Prague by January 2005. In February 2003, Eurotel
announced that it is performing a technical trial of UMTS in Prague in
conjunction with Nokia. Customer trials and/or public relations events are
expected as early as the third quarter of 2003. According to industry sources,
Eurotel and T-Mobile are expected to launch UMTS service in the second or third
quarter of 2004 in Prague. Depending upon customer demand, other major centres
such as Brno, Ostrava and Plzen might be covered post 2005.

|                     |  |                       |  |               |  |               |  |                     |  |              |      |  
|-------------------- |  | --------------------- |  | ------------- |  | ------------- |  | ------------------- |  | ------------ | ---- | -
|Operator             |  | Brand Name            |  | Technology    |  | License Award |  | Start of Operations |  | Market Share
|                     |  |                       |  |               |  |               |  |                     |  |             
|Eurotel Praha        |  | Eurotel/Go            |  | GSM 900/1800  |  | March 1996    |  | July 1996           |  |              | 45.4 | %
|                     |  | Eurotel               |  | NMT 450       |  | November 1990 |  |                     |  |              |      |  
|                     |  |                      |  | UMTS          |  | December 2001 |  |                     |  |              |      |  
|T-Mobile/ Radiomobil |  | T-Mobile/Paegas/Twist |  | GSM 900/1800  |  | March 1996    |  | September 1996      |  |              | 40.9 | %
|                     |  |                      |  | UMTS          |  | December 2001 |  |                     |  |              |      |  
|Ceský Mobil          |  | Oskar                 |  | GSM 1800/900* |  | October 1999  |  | March 2000          |  |              | 13.7 | %



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|* |  | Used outside of Prague
|- |  | ----------------------

Future Competition

In the future, as we build out our GSM networks and offer enhanced services, we
will face competition from other wireless communication technologies, such as
specialized mobile radio systems, enhanced specialized mobile radio systems,
data-only, packet-switched networks and satellite-based voice and data
transmissions technologies, as well as other technologies that have not yet
been developed.

We may also compete directly with additional conventional fixed line
telecommunications service providers and with cable operators who expand into
offering two-way communications services over their networks.

The introduction of two-way messaging services may allow the paging industry to
compete with us for some of the enhanced services we intend to introduce.
Several entities are currently operating or developing global satellite
networks to provide domestic and international cellular communications services
from geostationary and low earth orbit satellites. We do not expect them to
compete with land-based wireless communication services on price. However, they
may eventually augment or replace communications that have segments of
land-based wireless systems. At the very least, we may also be challenged by
existing wireless systems that have been upgraded from analog to digital,
evolving industry standards, ongoing improvements in the capacity and quality
of digital technology, shorter development cycles for new products and
enhancements, and changes in end-user requirements and preferences.

Regulatory Environment

Romania. In 2002 the old Telecommunication Law was replaced by The
Emergency Government Ordinance 79/2002 (the Ordinance) and the 591/2002 Law
regarding The General Regulatory Framework in Communication (the new
telecommunication law). This new framework has been complemented by other
regulations regarding, among other things, access and interconnection, data
protection, numbering and SMP designation and obligations.

Under the new regulatory regime the old license has been replaced by three
separate licenses:



| |  |  | Authorization to provide electronic communication networks and services
| | - |  | -----------------------------------------------------------------------
|
| |  |  | A license to use allocated numbering resources                         
|
| |  |  | GSM frequency license to use radio-electric frequencies                





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Companies that provide any communications networks or services are now
subject to general authorization procedures.

While the Ministry of Communication and Information Technology (MCIT) will
be in charge of radio spectrum management at the national level, the National
Regulatory Authority for Communications (NRAC) will be in charge of numbering
resources management. MCIT will grant radio spectrum only to the
companies that obtained the general authorizations. The
same treatment will apply regarding numbering resources, only that the license
will be issued by NRAC.

The new regulatory framework contains provisions regulating significant
market power positions. In December 2002, an obligation to publish a Reference
Interconnection Offer (RIO) with respect to interconnection termination rates
set by the regulatory authority was imposed on RomTelecom, given its
significant market power as provider of access to the public networks of fixed
telephony. In February 2003 RomTelecom complied with their obligation and
published the requested RIO.

MobiFon has been designated as having significant market power, as a
result, regulatory authorities have imposed maximum interconnection termination
rates of $0.11/min until December 31, 2003 and of $0.10 from January 1, 2004 to
July 2004 and on the basis of the long run incremental cost model thereafter.
Regulatory authorities have also imposed on MobiFon certain interconnection
obligations with respect to transparency (the publishing of interconnection
rate) and account separation. The same obligations were applied to Orange,
MobiFon main competitor. Only transparency obligations were imposed on
Cosmorom and Zapp.

Czech Republic.A resolution of the Czech Republic government dated
August 10, 1994 set out the principles of the national telecommunications
policy and maintained Ceský Telecoms monopoly, until December 31, 2000, on the
fixed-line long distance and international telephone services market. The same
resolution also restricted competition in the fixed-line local telephone
services market for the same period. In 1997, the Czech Republic became a
signatory to the World Trade Organization Reference Paper on Telecommunications
through its Additional Commitments to the Schedule on Basic telecommunications
services, which committed the country to liberalizing its telecommunications
market. Following this agreement, in April 1999, the Czech government adopted
a resolution setting out the principles of a new national telecommunications
policy. Among the main goals of this policy was the preparation of a
Telecommunications Act to open the Czech Republics telecommunications market
to competition by December 31, 2001. The new Telecommunications Act came into
force July 1, 2000.

The Telecommunications Act:



| |  | regulates the telecommunications industry;                                                                                                                                                             
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | provides for a certain level of state regulation and control over the telecommunications sector; and                                                                                                   
| 
| |  | provides for the full liberalization of the telecommunications market, including the implementation of
call-by-call carrier selection and full number portability for fixed network subscriber numbers.

The Czech Telecommunications Office, known as the CTU, constituted under
the Act as the national regulatory authority, is responsible for
telecommunications, including licenses, pricing and pricing policies and
dispute resolution. As of January 1, 2003, responsibilities for the telecom
industry policies moved from the Ministry of Transport and Communications to
the newly established Ministry of Informatics. The Telecommunications Act of
2000 is now currently under review by this Ministry, and is scheduled to be
replaced, most likely in 2004, by a new Act on Electronic Communications, so as
to harmonize applicable laws to those of the European Union.

Licenses

Romania.Until January 1, 2003, MobiFon held one of three licenses issued
to provide nationwide GSM-based cellular telecommunications services throughout
Romania. MobiFon paid an initial license fee of $50 million in 1996 and an
additional $25 million in 1999 for the extension of the license term to 2011.
In addition, MobiFon must pay a recurring annual fee of $5 million per year for
the 22 channels allocated in the 900 MHz range under the license. MobiFon
purchased 40 additional channels in the 900 MHz frequency ranges, at an annual
price per channel of $230,000 for national coverage, $35,000 for Bucharest and
$2,300 for each other city. Of the 62 channels, MobiFon uses 31 on a national
basis. MobiFon has access to 12.4 MHz of spectrum in the 900 MHz band, and
since December 31, 2002, MobiFon may have access to spectrum in the
1800 MHz band for additional fees. This additional spectrum will enable it to increase network
capacity and to maintain the performance criteria required by its license. As
of January 1, 2003, the old license has been replaced by three
separate grants,
namely, an authorization to provide electronic communication
networks and services, a numbering license and a GSM frequency license
which has been continued by government ordinance on the terms of the
pre-January 2003 license. In addition, MobiFon must pay annual fees
of approximately $0.2 million for the right to operate microwave
frequencies to connect GMS base stations to switching centers.





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If we fail to comply with the authorization to provide electronic
communication networks, the regulatory authority may apply administrative fines
up to 5% of turnover. Breaches which are subject to administrative fines
include the following: (i) breach of obligations regarding the general
authorization, (ii) using radio frequency without having a license, (iii) using
numbering resources without a license and (iv) not complying with the license
terms and obligations.

Czech Republic.In 2002, so as to more accurately reflect the language of the
Telecommunications Act, the former GSM Authorization has been replaced by CTU
decision 5379/2002-610 on granting of the Telecommunication license to
establish and operate public mobile telecommunication networks under the GSM
standard issued on June 17, 2002, and by CTU decision 8951/2002-610 on granting
of the Telecommunication license to provide the public telephone service
through the public mobile telecommunication network issued on June 20, 2002.
Both of these decisions came into force on November 13, 2002, following an
appeal process, and the licenses are valid for a period of 18 years.

Ceský Mobil paid an initial license fee of one billion Koruna ($28.5
million), and must also pay a recurring annual fee for the right to operate GSM
base stations and radio operating stations, which amounts to approximately 72
million Koruna ($2.2 million) now that Ceský Mobil has reached 98% population
coverage. In addition, Ceský Mobil must pay a recurring annual fee for the
right to operate microwave frequencies to connect GSM base stations to
switching centers. In 2002, this fee amounted to approximately 77 million
Koruna ($2.4 million).

Ceský Mobil is now entitled to 18 MHz of spectrum in the 1800 MHz band. In
addition, it has the right to use 4 MHz of spectrum in the 900 MHz band. The
Czech Telecommunication Office can reallocate frequencies with six months
notice. In the process that resulted in the issuance of the new licences, 20
additional channels in the 1800 MHz band were allocated to Ceský Mobil.

The new Telecommunication Act, issued in July 2000, regulates a number of
issues that were previously included in the former Authorization, thus removing
the need to incorporate such issues in the licenses. Consequently, the new
licenses are much less detailed than the Authorization, basically only
maintaining the price obligations (old tariffs T1 I Hear You and T2
Agreement with Oskar  pricing plans) until December 31, 2003, and some
minimum quality parameters of coverage of area and population.

The
Czech Telecommunication Office is entitled to restrict, suspend or
terminate Ceský Mobils license for a number of reasons,
including a significant public interest, or a material breach of the
provisions of the License, or of the Telecommunication Act. Furthermore, when the initial Authorization was issued, Ceský Mobil had
undertaken to construct the technological infrastructure required to provide
Internet access to schools and libraries throughout the Czech Republic, by
October 8, 2002. Ceský Mobil has submitted a comprehensive proposal to fulfill
its obligation within the required deadline, and negotiations are still
underway with different ministries to discuss the potential implementation of
the proposal.

Ownership Restrictions

Some of our licenses place restrictions on our ability to dispose of our
interests in our operating companies. For example, Ceský Mobils initial
Authorization requires us to notify the Czech Telecommunication Office in
writing at least 45 days before Ceský Mobil or any shareholder holding more
than 25% of its registered capital is involved in a transaction involving more
than 10% of its registered capital. This is only a notice requirement; the
license does not give the Czech Telecommunication Office a right to approve the
transfer. However, this notification obligation was not replicated in the new
Licenses of Ceský Mobil that came into force on November 13, 2002, and
therefore is no longer applicable.

Co-Investors

Romania.Our strategic partners in MobiFon are (1) Vodafone Europe B.V.,
(2) Deraso Holding B.V., a group of financial investors led by J.P. Morgan
Partners, LLC and (3) certain other minority investors including, since March
2003, an affiliate of Emerging Market Partnership (EMP).

During the fourth quarter of 2002, we tendered as part of a share
repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of MobiFon
for total cash consideration of US $24.6 million bringing our ownership
percentage in MobiFon from 63.5% to 62.4%, as of December 31, 2002. As at that
date, the participation of our partners in MobiFon was 20.8% for Vodafone,
14.9% for
Deraso, and less than two percent for the other minority investors. Other
shareholders of MobiFon have until June 30, 2003 to tender their shares in the
share repurchase which may cause their ownership interest in MobiFon to
decrease and ClearWaves ownership interest in MobiFon to increase.

On March 19, 2003 we announced the sale to an affiliate of Emerging Market
Partnership of 11,135,555 of our shares of MobiFon for total cash consideration
of US $42.5 million. Following this sale, our ultimate ownership of MobiFon
decreased to 56.6%. This





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ownership percentage could vary
between 56.6% and 57.7% depending on the
extent of the participation of other MobiFon shareholders in the share
repurchase which ends on June 30, 2003. For the same reason, EMPs ultimate
ownership may vary between 5.7% and 5.9%.

Czech Republic.Our interest in Ceský Mobil is held through TIW Czech
N.V. Our strategic and financial partners in TIW Czech N.V. are large
institutional investors. We hold a 50.8% voting interest and 24.2% equity
interest in TIW Czech N.V. with the institutional investors holding the
remaining 49.2% voting and 76.8% equity interest. TIW Czech N.V. holds a 96.3%
direct interest in Ceský Mobil and its co-shareholders in
Ceský Mobil Ceská konsolidacní agentura and United Pan-Europe Communications N.V.,
hold the remaining 3.7% interest. Through this shareholding structure, we
currently control 96.3% of Ceský Mobil.

Exit Agreements

We entered into an exit agreement dated December 3, 1999, as amended, with
our co-shareholders in TIW Czech as well as RomGSM, a shareholder in MobiFon.
The object of this agreement is to allow these parties to participate in
certain transactions that create liquidity for ClearWaves shares. Two events
trigger tag-along rights for our co-shareholders under the exit agreement:



| |  | a sale by TIWC of our shares pursuant to a bona fide arms length transaction for cash or liquid stock; or
|- |  | ----------------------------------------------------------------------------------------------------------
| 
| |  | a public sale of our shares.                                                                              

Accordingly, such shareholders would have the right to participate in the
particular transaction on terms as close as possible to those applicable to
TIWC or us by selling all or some of their shares in TIW Czech and MobiFon. We
and TIWC also have the right, under certain conditions, to require such
participation.

In the event there has not been an initial public offering of the shares
of MobiFon by October 1, 2004, certain minority shareholders in
MobiFon holding in aggregate approximately 21% of the outstanding
shares of MobiFon, may require TIWC or, at TIWCs option, us to make an offer to acquire its shares of MobiFon at a price
representing the fair market value of such shares as determined by an
independent valuation and shall be payable, at TIWCs option, in cash or in
marketable securities. This right terminates upon a public
sale of our shares, that meets certain criteria.

As part of the creation of Ceský Mobil, a minority shareholder was granted
a put option on all common shares in the capital of Ceský Mobil that the
minority shareholder holds. As a result TIW Czech may have to purchase this
minority shareholders shares of Ceský Mobil for a price equal to the total
subscription price paid for the shares plus interest calculated from their
respective dates of issuance at a rate of 7% per annum. This option remains
exercisable until October 8, 2003. As at December 31, 2002, this minority
shareholder had contributed $13.0 million to the equity of Ceský Mobil.

Networks

We chose major cellular equipment vendors to design and build networks
that provided us with state-of-the-art service that allowed us to begin
operating quickly and to expand and upgrade our service as we acquired more
subscribers and new technology became available. Flexibility to keep up with
new technology is essential to comply with license requirements and compete
effectively. We have also invested significantly in advanced operation and
maintenance systems to provide quality service to our existing network
subscribers. We continuously monitor network traffic and measure the real-time
technical performance of our services against global benchmarks. Our
comprehensive surveillance of traffic-related activities enables us to respond
quickly to conditions in which the traffic load exceeds expected levels.

We purchase most equipment for our networks through competitive tendering.
The two key principles guiding procurement decisions are benchmarking, to the
extent available, and quality of products that provide value to the customer.
Another principle influencing procurement decisions is avoidance of conflicts
of interests. We and the other shareholders in our operating companies provide
experts who review contracts and prices, and then benchmark them against
contracts and prices obtained in cellular networks throughout the world. As a
rule, when an equity partner is to provide equipment or services, or if any
potential conflict of interest arises for any other reason, the shareholders,
above a size threshold, and the Board of Directors, as applicable, of our
operating companies must approve the final purchase for items exceeding a
specified threshold.

Romania.MobiFon began the development of its GSM-based cellular network,
using 900 MHz frequencies, in December 1996. By March 1, 1997, MobiFons
network was operational and covered Bucharest, the capital of Romania,
including access roads and airports, as well as eight other major cities. As at
December 31, 2002, MobiFons state-of-the-art network covered 96% of the





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population of Romania and all major highways in Romania. As of that date,
MobiFons network consisted of 1021 remote base stations, 386 repeaters, 24
base station controllers, 11 cellular switching centers, 2 transit switching
centers and 10 public switched telephone network (PSTN) interconnection points.
Use of ATM technology and voice compression techniques led to significant
increase in network efficiency, preserving a high quality level. Starting
January 1, 2003 MobiFon ensures direct international traffic interconnection
with four carriers, no longer using transit through the local PSTN for such
traffic. We will be installing additional base stations and other equipment to
increase capacity and enhance coverage and quality of service, and starting
2003 we have access to the 1800 MHz frequencies, to be used when needed for
additional capacity. We have also installed the first-ever wind and solar
powered cell sites in Central and Eastern Europe.

Czech Republic.The design for the Czech network employs both 900 MHz and
1800 MHz frequencies, taking into account certain availability restrictions on
the 900 MHz band. This design offers benefits with respect to greater rural
coverage and greater capacity in dense urban environments. Ceský Mobil was
using Ericsson and Siemens exclusively to construct its network, but now
tenders the construction work to the most competitive contractors. While Ceský
Mobil is utilizing Ericsson mobile switching centers throughout the network, it
uses Ericsson cellsite equipment in the eastern part of the country and Siemens
cellsite equipment in the western part of the country. As at March 31, 2003,
Ceský Mobils network covered 99% of the population. As of that date, Ceský
Mobils network consisted of over 2,429 base stations, 58 base station
controllers, 6 cellular switching centers and diverse network interconnection
points to all the major telecom operators in the Czech Republic
including Cesky Telecom, Eurotel, T-mobile, Aliatel, Contactel, and GTS. Of the 6 cellular
switching centers, 3 of them also perform the function of transit switching.
We believe the network addresses current capacity adequately.

We plan and construct each of our wireless telecommunications networks to
meet a forecasted level of subscriber density and traffic demand. Once this
level is exceeded, we are normally able to increase network capacity to
maintain service standards by using techniques such as sectorization and cell
splitting. Other wireless telecommunications network operators and
infrastructure manufacturers have also developed techniques we can use to
ensure service quality at minimal cost, such as microcells. Until technological
limitations on network capacity are reached, we can usually add additional
capacity in increments that closely match demand and at less than the
proportionate cost of initial capacity.

Operations and Maintenance

We design, in consultation with our vendors, state-of-the-art operation
and maintenance systems and efficient network management structures. Our
primary objectives are high customer satisfaction and compliance with license
requirements.

Our network management structures are divided into two main functional
areas:



| |  |  | Operations. This group operates the entire network, including base
stations or cellsites, base station controllers, transmission and
microwave systems, switches and value added services platforms and
systems.                                                                             
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Network planning, engineering and implementation. This group plans,
designs and implements the network, including cell planning, frequency
planning, network dimensioning and switching systems upgrades, and
develops and introduces new products, services and technologies in the
network.

Our networks use standard monitoring and supervision features provided by
the cellular switching centers, base stations, base station controllers and
transmission equipment. These functions enable us to examine the state of the
network in real-time and to produce both fault reports and performance reports.
We continuously monitor the traffic on the networks and respond to conditions
that may affect service or traffic levels.

To ensure peak network reliability and service quality, our maintenance
plans feature preventive and corrective maintenance programs, as well as
procedures backed by system tools proven in other GSM systems throughout
Europe. Our operations group continuously monitors and analyzes traffic trouble
reports and potential network problems and analyzes network event data to
determine where non-routine maintenance may be needed. Our operations group
also sets appropriate alarm threshold levels for detection of equipment
problems such as low batteries, equipment or circuit outages and security
violations. They also continually refine maintenance procedures and
documentation to improve mean-time-to-restoration for problems that directly
affect subscribers and establish routine maintenance and testing of all
switching, radio equipment and interconnect facilities.

We have safeguarded our networks against disaster by using, at various
locations, redundant/physically diverse transmission
systems, redundant/physically diverse system components, battery back-ups,
generators, fire suppression systems, and of course regional support staff.
Regional centers maintain replacement parts for critical components in the
event of switching center or other system failures. As a result of these
precautions, we were able to keep our Romanian and Czech networks up and
operating an average





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of respectively 99.89% and 99.90% of the time in 2001 and an average of
respectively 99.91% and 99.94% of the time in 2002. We, through our local
expertise, and our suppliers, through their servicing and maintenance
departments, work together to adequately support and maintain our networks.

Roaming and Interconnection Agreements

Romania.MobiFon is a signatory of the GSM Memorandum of Understanding
which is now known as the GSM Association. This association establishes common
technology standards, thus facilitating worldwide roaming. As of December 31,
2002, MobiFon had negotiated roaming agreements with 221 operators in 95
countries and is continuing to negotiate additional roaming agreements. The
roaming agreements allow MobiFons post-paid subscribers to use their own
handsets in locations wherever GSM cellular service is provided, or to roam in
such locations with a handset that is compatible with the local network.
Presently the main objective is to increase the number of new roaming
destinations for MobiFons customers, with a special emphasis on remote holiday
destinations and Latin American countries. To maximize inbound roaming revenue,
MobiFon has designed its network to emit the strongest signal in key
international entry points, such as airports, so that visitors have a higher
probability of picking up the MobiFon signal on arrival in Romania.

In order to further maximize the roaming revenue MobiFon has started to
negotiate and open prepaid roaming relations based on CAMEL Phase1 and Phase 2
technologies. The prepaid roaming agreements allow MobiFons Kamarad prepaid
subscribers to use their own handsets and prepaid cards wherever the prepaid
roaming service is available. As of December 31, 2002, MobiFon was offering
for its prepaid customers the possibility to roam in 16 networks covering 11
countries. On the other hand at the same date MobiFon was offering prepaid
inbound roaming services for 13 of our roaming partners.

In August 1997, MobiFon signed an initial one-year interconnection
agreement with RomTelecom, extendable for additional 12-month periods. MobiFon
and RomTelecom have extended this agreement to August 2003. Under this
agreement, MobiFon will share revenues with RomTelecom for calls routed on the
two networks. On March 12, 1998, the parties signed a first addendum to the
interconnection agreement detailing the settlement procedure and the exchange
of traffic information between parties. They signed a second addendum on May
2, 1999, providing the procedures for applying the fixed national-mobile tariff
and for the settlement method in case of possible differences due to exchange
rate fluctuations. On July 30, 1999, RomTelecom and MobiFon signed an addendum
to the interconnection agreement providing that, with the exception of those
services specified by the two networks, users of either RomTelecoms or
MobiFons services can access the services supplied on either network. The
addendum further contemplates that the two companies would address the terms
and conditions applying to services other than basic interconnection services
through separate agreements. The leasing of RomTelecoms facilities for
MobiFons use is not subject to interconnection conditions but to the
negotiation of an agreement between the parties.

A December 2002 decision of the Romanian Telecomunication National
Regulatory Agency for Communications (NRAC) designated RomTelecom as a
significant market power with respect to the access to public networks of fixed
telephony. The decision imposed on RomTelecom an obligation to publish a
Reference Interconnection Offer with interconnect termination rate set by the
NRA. In February 2003 Romtelecom published the RIO.

Another decision of NRAC, issued in March 2003, designated MobiFon as a
significant market power with respect to call termination into its own network.
The decision set the maximum level of the interconnect termination rate that
MobiFon can charge. Other obligations resulting from the significant market
power designation include offering interconnection services for call
termination into MobiFon network to any authorised operator, to publish the
interconnection rates and to offer non-discriminatory conditions to all
operators requesting interconnection for call termination into MobiFons
network.

Due to the changes in the regulatory environment resulting in the
obligations imposed by NRAC to both operators, in March 2003, MobiFon and
RomTelecom have entered into the negotiation of a new interconnection agreement
based on RomTelecoms RIO and MobiFons Interconnect Offer.

On May 5, 1997, MobiFon concluded a Bill & Keep interconnection
agreement with MobilRom which applied until May 12, 1999, when MobiFon entered
into another interconnection agreement with an initial term of 12 months,
extendable for additional 12-month periods. MobiFon extended its agreement
with MobilRom for an additional 12 months to May 2003. This interconnection
agreement, like the one entered into with RomTelecom, provides for the
interconnection of MobiFons network with that of MobilRom and the sharing of
revenues from calls routed on the two networks. MobiFon and MobilRom signed
two addenda to the interconnection agreement, one on May 28, 1999, and another
on October 9, 2000, providing procedures for settlement and
monthly traffic information exchanges and also providing the availability
of the short messaging system service between the two networks.





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In March 2003, MobilRom (Orange) was also designated as a significant
market power with respect to call termination in its own network. The same
obligations as those imposed on MobiFon were imposed on MobilRom as a result of
the decision.

Due to changes in the regulatory environment resulting from the
obligations imposed by NRA on both operators in February 2003, Orange and
MobiFon have entered into negotiations for a new interconnection agreement.

MobiFon also entered into an interconnection agreement with Cosmorom on
March 20, 2000, for an initial term of 24 months, now extended for an
additional 24-month period. This interconnection agreement, like the ones
previously signed with other parties, provides for the interconnection of
MobiFons network with that of Cosmorom and the sharing of revenues from calls
routed on the two networks. On April 12, 2001 MobiFon entered into an addendum
to the interconnection agreement providing the availability of the short
messaging system service between the two networks. MobiFon concluded the
latest interconnection agreement with Telemobil S.A., the Nordic mobile
telephone protocol operator, on March 20, 2001, with an initial term of 24
months, extendable for additional 24-month periods. In 2001, Telemobil
re-branded it service to the brand Zapp and obtained a licence for operating
CDMA technology. On August 9, 2002 MobiFon and Telemobil (Zapp) entered into an
addendum to the interconnection agreement providing the availability of the
short message system service between the two networks.

Due to the Romanian telecommunications market liberalisation in 2003,
which ended RomTelecoms monopoly for international traffic to and from
Romania, MobiFon entered into bilateral international interconnection agreement
in to secure international traffic with certain international carriers
including carriers in Germany, Italy and Austria.

Czech Republic.Ceský Mobil is a full member of the GSM Association
(formerly known as the group of signatories of the GSM Memorandum of
Understanding). As of March 31, 2003 Ceský Mobil had launched commercial
roaming service with 137 operators in 71 countries including all of the
operators in its neighboring countries.

Ceský Mobil is directly or indirectly interconnected with all major
players in the Czech telecommunications market. This list of directly
interconnected parties includes: Ceský Telecom, Aliatel, GTS, Contactel,
Pragonet, who each provide fixed line services in the Czech market and Eurotel
and T-Mobile, who are of course, the other two mobile operators in the market.
Due to the current regulatory requirements, Ceský Mobil will have to
interconnect directly with others licensed alternative operators that request
change from indirect to direct interconnection.

Over the past years, Ceský Mobil had been actively lobbying with the
national regulatory authority (CTU) to bring traditionally high interconnection
rates closer to the true costs of providing mobile call termination services.
On November 27, 2001, the CTU issued a price decision establishing a fully
allocated cost-based methodology for setting interconnection rates for calls
terminating in mobile networks, as well as a establishing a maximum rate of
3.66 Korunas per minute. This represented a 43% decrease compared to the
previously valid rate.

As the traffic exchanged between Ceský Mobil and its two competitors
(Eurotel and T-Mobile) has not been balanced and works to Ceský Mobils
disadvantage, such rate reduction has a significant positive impact on Ceský
Mobils net position on interconnection payments to other mobile networks. Both
Eurotel and T-Mobile have challenged this price decision and are requesting
rates that are, on average, approximately 1 Koruna higher than the maximum
established.

On September 3, 2002, the CTU issued a new price decision setting the
interconnection rates for calls terminating into fixed networks based on a
version of the LRIC (long-run incremental cost) model. This resulted in a 22%
decrease of the rates compared to the previous blended termination rate.
Although this new methodology has not been implemented as of yet in mobile
networks, it is expected that CTU will adopt a similar costing method in the
near future, which may lead to additional decreases in the level of mobile
interconnection rates, and thus further improve our net position on
interconnection payments. Ceský Mobil is advocating for the regulator to
mandate the use of a similar methodology to established interconnection rates
for calls terminating in mobile networks as soon as practicable.

Procurement and Financing

Romania. MobiFon has met its cash requirements as of December 31, 2002,
by aggregate capital contributions of $270.6 million, of which approximately
$25 million has been returned, as at December 31, 2002, to shareholders through
a share repurchase, and borrowings under it new bank facilities of $255
million.

In August 2002, MobiFon renegotiated its long term credit facility by
closing new senior secured corporate loan facilities for an aggregate $300
million. MobiFon used those amounts primarily to repay the remaining debt
totalling $231 million (including





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principal, interest and cancellation fees) under its previous facility and
to pay for continued network deployment and equipment costs. MobiFon also has
a total of $20 million of working capital facilities with ABN AMRO Bank Romania
and Citibank SA.

MobiFon s future capital requirements will include network expansion,
debt repayment, new license and dividends. We expect cash flows from MobiFon
s operations to be sufficient to cover all requirements.

Czech Republic.Ceský Mobil has met its cash requirements through
December 31, 2002, primarily from shareholder contributions of $350.0 million
and from $443.1 million of borrowings under its senior secured syndicated
credit facility entered into on July 19, 2000.

Ceský Mobils senior secured syndicated credit facility consists of
approximately $295.7 million and Koruna 5.5 billion, totalling approximately
$492 million, carrying interest for Euro drawings at a rate of EURIBOR plus
1.75% (2.25% in the case of the non-revolving tranche representing
approximately 10% of the entire Euro drawings) and for Koruna drawings at a
rate of PRIBOR plus 1.75% (2.25% in the case of the non-revolving tranche
representing approximately 34% of the entire Koruna drawings) reimbursable
through instalments between June 2004 to December 2009. As at December 31,
2002, Ceský Mobil had drawn approximately $443.1 million under this facility.
Ceský Mobil has and will continue to use the funds to finance the construction,
operation, working capital, debt service and related requirements of its GSM
network in the Czech Republic including the repayment of amounts financed under
supply contracts with Siemens and Ericsson.

Ceský Mobils capital requirements will include expanding its cellular
network and financing its working capital requirements. Ceský Mobil expects
that these requirements will be financed by drawings under its senior secured
syndicated credit facility, by way of shareholders funding commitments, and
from operating cash flow. In conjunction with our partners, we have provided
$350.0 million in funding to Ceský Mobil as at December 31, 2002.

Environmental

We are subject to certain local, regional, national and foreign laws and
regulations governing environmental protection. Such laws and regulations
impose strict requirements for the use, management and disposal of hazardous
substances. We believe that we are in substantial compliance with existing
environmental laws and regulations and do not expect the costs of complying
with environmental laws to have a material impact on our capital expenditures,
earnings or competitive position in the foreseeable future. As requirements in
the countries in which we operate become more stringent, however, we may become
subject to increasingly rigorous requirements governing fuel storage for our
towers, investigation and cleanup of contaminated properties on which our
towers are located, and emissions of, and human exposure to, radio frequency
emissions.

Employees.

Romania.As of December 31, 2002, MobiFon had a total of
approximately 1,700 employees.

Czech
Republic.As of December 31, 2002, Ceský Mobil had a
total of approximately 1,350
employees.

PROPERTY, PLANTS AND EQUIPMENT

Romania.

MobiFon leases approximately 9,500 square meters of office space for its
head office in Bucharest for approximately $3 million annually including
operating expenses. MobiFon also leases:



| | (1) |  | 12,700 square meters for its call center, 3 MSCs & IT operations at its
AVRIG facility in Bucharest for approximately $4.5 million annually
including operating expenses; 
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | 9,200 square meters for its MSCs, engineering offices and warehouse at
our DBC facility in Bucharest for approximately $2.6 million annually
including operating expenses;
|
| | (3) |  | 2,500 square meters for our network spares warehouse in Bucharest for
approximately $225,000 annually including operating expenses;                                        
|
| | (4) |  | 1,400 square meters for our call center in Brasov for approximately
$300,000 annually including operating expenses;                                                        





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| | (5) |  | an aggregate of 3,100 square meters throughout Romania for its
remaining MSCs for an aggregate of approximately $580,000 annually
including operating expenses;                            
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (6) |  | an aggregate of 2,000 square meters throughout Romania for its
corporate stores for an aggregate of approximately $680,000 annually
including operational expenses;                         
|
| | (7) |  | an aggregate of 3,400 square meters for its 6 regional sales offices
and for its regional engineering offices for a total of approximately
$500,000 annually including operational expenses;
|
| | (8) |  | various locations for the operation of cell sites for an aggregate of
approximately $12.2 million annually including operating expenses.                                                    

In addition, cleaning and security costs for all MobiFon facilities are
$1.3 million annually. Also, all MobiFon expenses noted above exclude value
added tax of 19%.

Czech Republic.

Ceský Mobil leases approximately 12,394 square meters of office space for
its head office in Prague for approximately $2.6 million including operating
expenses, cleaning and security. Ceský Mobil also leases:



| | (1) |  | 2,785 square meters for its call center in Chrudim for approximately                                                                                                                                                                            
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | $332,000 annually including operating expenses, cleaning and security;                                                                                                                                                                          
|
| | (2) |  | an aggregate of 2,350 square meters throughout the Czech Republic
for its regional stores, retail stores and mobile stores for a total of
approximately $1.24 million annually including operating expenses but
excluding security and cleaning;
|
| | (3) |  | an aggregate of 522 square meters for its 3 regional sales offices
and for its regional operating center for a total of approximately
$68,000 annually including operating expenses, cleaning and security;                                     
|
| | (4) |  | an aggregate of 4,500sqm square meters for its three mobile switch
centers for an aggregate of approximately $883,000 annually including
operating expenses, cleaning and security;                                                             
|
| | (5) |  | an aggregate of 785 square meters for its 6 Regional Operation
Centers (ROC) for a total of approximately $88,000 annually including
operating expenses, cleaning and security;                                                                 
|
| | (6) |  | lines that connect cell sites to switching centers for an aggregate
annual amount of approximately $6.3 million; and                                                                                                                            
|
| | (7) |  | various properties for the operation of cell sites for an aggregate
of approximately $19.0 million annually including operating expenses and
maintenance costs.                                                                                 




ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Our Operating and Financial Review and Prospects is intended to assist in
the understanding and assessment of the trends and significant changes in the
results of operations and financial condition of ClearWave N.V. (ClearWave).
Historical results may not indicate future performance. Our forward-looking
statements are subject to a variety of factors that could cause actual results
to differ materially from those contemplated by these statements. This review
should be read in conjunction with our consolidated financial statements and
accompanying notes.

OVERVIEW

We develop, acquire and operate wireless telecommunications networks in
Central and Eastern Europe (the Region). We currently have two operating
subsidiaries, MobiFon S.A. (MobiFon) in Romania and Ceský Mobil a.s. (Ceský
Mobil) in the Czech Republic. MobiFon received its 900 MHz license in
November 1996, launched commercial service in April 1997 and is currently the
largest provider of cellular telecommunications in Romania. Ceský Mobil was
awarded an 1800 MHz license in
October 1999 and launched commercial service in March 2000 as the third
licensed cellular telecommunications provider in the Czech Republic.





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##### Table of Contents



On February 13, 2001, a reorganization of our share capital took place, in
which the 150,001 issued and outstanding shares of common stock were converted
into 300,002 Class B Multiple Voting Shares and $21.5 million of share premium
was converted into 45,868,498 Class A Subordinate Voting Shares and 37,930,948
Class B Multiple Voting Shares. In connection with TIWs February 14, 2001
public offering of units, we became a registrant with the Securities and
Exchange Commission in the United States and with the Canadian securities
commissions. The continuity of our number of shares throughout this operating
and financial review and prospects and the consolidated financial statements
reflects the attribution of the new capital structure adopted on February 13,
2001 as though it has always existed.

Since the inception of these operations, we have experienced significant
growth and as at December 31, 2002, our operations had 3,815,000 subscribers,
which, based on our percentage equity ownership in our operations, represent
1,944,800 equity subscribers. Our operations licenses entitle us to serve
geographical areas that include approximately 32.7 million persons which, based
on our percentage equity ownership in our operations, represent approximately
16.6 million persons as at December 31, 2002. As a part of our development
strategy, we selectively consider strategic opportunities in the wireless
telecommunications industry on an ongoing basis, especially in those geographic
markets where we are already present, and at any time may be engaged in various
stages of discussion regarding potential development projects, mergers,
acquisitions or divestitures in these markets. Any such expansion is likely to
increase our capital requirements and to initially have a negative impact on
our future results of operations given our business is capital intensive, and
wireless telecommunications networks such as ours typically incur losses in
their initial years of operations.

OPERATIONS

Romania  Cellular

Cellular services in Romania are provided by MobiFon, which holds a
license for national GSM-based cellular services. Our initial investment in
Romania was made in November 1996 and commercial operations were launched in
April 1997. ClearWaves equity interest in MobiFon increased from 54.7% to
58.9% in June 2000 and then to 63.5% in February 2001, following the sale by
certain minority shareholders of their MobiFon shares to ClearWave. On October
30, 2002, the shareholders of MobiFon approved distributions of up to $38.8
million by means of a share repurchase. Shareholders can tender their shares
between October 30, 2002 and June 30, 2003 in order to realize their pro-rata
share of this distribution amount of which ClearWaves share is $24.6 million.
In the event not all MobiFon shareholders exercise their options to sell their
entire pro-rata portion, any of the MobiFon shareholders shall have the right
to buy-back the shares sold to MobiFon at the same purchase price by December
31, 2003. A first distribution of $16.6 million was paid on October 30, 2002,
of which $15.8 million was paid to ClearWave. A further distribution of $8.8
million was paid to ClearWave on December 19, 2002. The effect of these
distributions was to decrease ClearWaves equity interest in MobiFon from 63.5%
to 62.4%. MobiFons shareholders are not required to participate pro-rata in
the share repurchase and ClearWave has also retained its right to buy-back the
shares sold to MobiFon. Accordingly, our ownership of MobiFon may vary between
62.4% and 63.5%, throughout the tender period, depending on the timing and the
extent of each shareholders participation in the repurchase.

On December 18, 2002 we reached an agreement for the sale of 11.1 million
shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then
issued and outstanding share capital of MobiFon for a total cash consideration
of $42.5 million. The transaction closed on March 19, 2003. As a result of
the above transactions, our ownership in MobiFon will be reduced from the pre
share repurchase level of 63.5% down to between 56.6% and 57.7% depending on
the outcome of the share repurchase.

Czech Republic  Cellular

Ceský Mobil holds a license to provide GSM-based cellular services in the
Czech Republic and launched commercial services in March 2000.
ClearWaves
indirect ownership in Ceský Mobil increased from 22.3% to 23.3% following the
January 20, 2003 registration of capital contributions made in 2001 and 2002.

ClearWaves equity interest in Ceský Mobil is held through TIW Czech N.V.,
in which ClearWave owns 50.8% voting rights and a 24.2% equity interest.

As part of the creation of Ceský Mobil, a minority shareholder was given a
put option and, as a result, TIW Czech may be required to purchase the Ceský
Mobil shares owned by this minority shareholder for an amount equal to the
amount paid, in Czech Koruna, for such shares by the minority shareholder plus
interest of 7.0% per annum. This put option is exercisable during a period of
two years beginning in October 2001. As at December 31, 2002, this minority
shareholder has contributed $13 million to the equity of Ceský Mobil.
ClearWaves share of this commitment, if exercised, is $4.6 million as at
December 31, 2002 and would result in ClearWaves ultimate ownership of Ceský
Mobil increasing from 23.3% to 24.2%.





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##### Table of Contents



ACCOUNTING TREATMENT AND CHANGES IN ACCOUNTING POLICIES

Unless otherwise indicated, all financial data and discussion herein are
based upon financial statements prepared in accordance with U.S. GAAP. For a
discussion of the principal differences between U.S. GAAP and Canadian GAAP,
see note 16 to our consolidated financial statements.

INVESTMENTS

In accordance with U.S. GAAP, we consolidate revenues and expenses of each
subsidiary that we have the ability to control. In this regard, we consolidate
the results of ClearWave Holdings B.V. and its subsidiary MobiFon and TIW Czech
N.V. and its subsidiary Ceský Mobil. Since our equity interest in MobiFon and
Ceský Mobil is 62.4% and 22.3%, respectively, a significant part of the net
income (net loss) of these subsidiaries is allocated to minority interest.

Romania has experienced high levels of inflation and significant
devaluation in the Lei against the dollar. In 2002, inflation reached 17.9% for
the year and was 30.3% and 40.7% for 2001 and 2000, respectively. Consequently,
for accounting purposes, Romania has been treated as a highly inflationary
economy since MobiFons inception. Accordingly, our reporting currency, the
dollar, was used to measure MobiFons results of operations for all periods.

REVENUE RECOGNITION

Revenues from airtime and roaming, including those billed in advance, are
recognized when services are provided or when contracts expire in cases where
services have not been used. Revenues from handsets and related equipment are
recognized upon shipment except for those included in a bundled package with
airtime, which are deferred and amortized over the term of the contract. When
handsets, related equipment and access to network are bundled with airtime, the
revenue for the airtime is measured at the price of the airtime on a
stand-alone basis. When prepaid cards are sold to dealers, the revenue from the
airtime is measured at the face value of the time sold but such revenue is
initially deferred until the airtime is actually used by the customer or the
card expires. Commissions to dealers are classified within selling, general
and administrative expenses.

USE OF ESTIMATES

The preparation of our consolidated financial statements in accordance
with U.S. GAAP requires us to use estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

Our business is capital intensive and property plant and equipment and
licenses had a carrying value as at December 31, 2002 of $1.1 billion. These
long-lived assets are assessed for recoverability based on our business plans
which include key assumptions and estimates regarding, among other items,
interest rates, growth of the economies in which we operate, the renewal of our
licenses, local tax rates, competition, foreign currency and cellular
penetration rates. Changes in these key assumptions could have significant
implications on our business plans.

CHANGE IN ACCOUNTING POLICIES

Effective January 1, 2001, we adopted SFAS 133, as amended by SFAS 137 and
138, which establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. Our policy is to manage interest cost
using a mix of fixed and variable rate debt. To manage this mix in a cost
efficient manner, we enter into interest rate swaps, in which we agree to
exchange, at specified intervals, the difference between fixed and variable
interest amounts calculated by reference to an agreed-upon notional principal
amount; we also manage foreign currency exposure through hedging contracts. In
accordance with SFAS 133, hedges related to anticipated transactions are
designated and documented at the inception of the respective hedge as cash flow
hedges and evaluated for effectiveness quarterly.

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets. Under the new standard, goodwill is no longer amortized. Similar
requirements were also issued in Canada under Section 3062 of the CICA
Handbook. Effective January 1, 2002, we adopted SFAS 142 and applied its
recommendations prospectively.

The following table reconciles the reported net income (loss) and adjusted
net income (loss) excluding amortization of goodwill:





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##### Table of Contents



|                                                           |  |  |        |  |  |  |       |  |  |  |         |  
|---------------------------------------------------------- |  |  | ------ |  |  |  | ----- |  |  |  | ------- | -
|                                                           |  |  | 2002   |  |  |  | 2001  |  |  |  | 2000   
|For the years ended December 31, [in thousands of dollars] |  |  | $      |  |  |  | $     |  |  |  | $      
|                                                           |  |  |        |  |  |  |       |  |  |  |         |  
|Reported net income (loss)                                 |  |  | 13,287 |  |  |  | 7,335 |  |  |  | (19,102 | )
|Amortization of goodwill                                   |  |  |       |  |  |  | 2,607 |  |  |  | 811     |  
|                                                           |  |  |        |  |  |  |       |  |  |  |         |  
|Adjusted net income (loss)                                 |  |  | 13,287 |  |  |  | 9,942 |  |  |  | (18,291 | )
|Adjusted basic and diluted earnings (loss) per share       |  |  | 0.16   |  |  |  | 0.12  |  |  |  | (0.22   | )
|                                                           |  |  |        |  |  |  |       |  |  |  |         |  

COMPOSITION OF OPERATING REVENUES AND EXPENSES

Cellular operations are the primary source of our revenues. Operating
revenues include cellular revenues, as well as equipment revenues. Cellular
service revenues primarily consist of variable airtime charges, in-bound
interconnection charges and recurring fixed access charges. Equipment revenues
consist of revenues from the sale of handsets and accessories. Equipment sales
are not fundamental to our business. In fact, we frequently offer handsets
below cost, as an incentive for our customers to subscribe to our services, and
these subsidies are accounted for as cost of revenues at the time of sale.

Our operations are capital intensive and our operating costs are composed
of significant fixed costs with relatively low variable costs that are a
function of the subscriber base level. Accordingly, subscriber growth is
critical to the improvement of operating margins and results of operations.

Operating expenses include cost of revenues, selling, general and
administrative expenses and depreciation and amortization expenses. Cost of
revenues consists of fixed costs such as leased line charges, recurring
spectrum fees, site rental and network maintenance, including overhead, as well
as variable costs such as cost of equipment sold and interconnection charges.
Selling, general and administrative expenses consist primarily of salaries,
wages and related benefits for selling, general and administrative personnel,
advertising, promotional expenses, bad debt and corporate, business development
and other overhead expenses. Depreciation and amortization expenses consist
primarily of depreciation recorded for our cellular networks, as well as
amortization of intangibles such as wireless telecommunication license costs.

RESULTS OF OPERATIONS

The following discussions compare the results of operations for the years
ended December 31, 2002, December 31, 2001 and December 31, 2000, for ClearWave
on a consolidated basis, MobiFon, and Ceský Mobil.





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##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS

|                                       |  |      |         |      |  |      |         |   |  |  |         |  
|-------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|For the years ended December 31,       |  | 2002 |         | 2001 |  | 2000
|(in thousands of dollars)              |  | $    |         | $    |  | $   
|                                       |  |      |         |      |  |     
|Revenues                               |  |      | 694,454 |      |  |      | 516,308 |   |  |  | 341,604 |  
|Total operating expenses               |  |      | 599,105 |      |  |      | 495,054 |   |  |  | 388,764 |  
|                                       |  |      |         |      |  |      |         |   |  |  |         |  
|Operating income (loss)                |  |      | 95,349  |      |  |      | 21,254  |   |  |  | (47,160 | )
|Interest expense                       |  |      | (71,786 | )    |  |      | (66,703 | ) |  |  | (36,543 | )
|Interest and other income              |  |      | 1,921   |      |  |      | 3,951   |   |  |  | 6,020   |  
|Foreign exchange gain (loss)           |  |      | 2,109   |      |  |      | 2,939   |   |  |  | (4,937  | )
|Loss related to extinguishment of debt |  |      | (10,100 | )    |  |      |        |   |  |  |        |  
|Income taxes                           |  |      | 32,273  |      |  |      |        |   |  |  |        |  
|Minority interest                      |  |      | 28,067  |      |  |      | 45,894  |   |  |  | 63,518  |  
|Net income (loss)                      |  |      | 13,287  |      |  |      | 7,335   |   |  |  | (19,102 | )
|                                       |  |      |         |      |  |      |         |   |  |  |         |  

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

Revenues increased to $694.5 million in 2002 from $516.3 million in 2001.
MobiFons continued growth contributed $74.4 million and Ceský Mobil, which was
launched in early 2000, contributed $103.7 million of the increase.

Total operating expenses increased to $599.1 million in 2002 from $495.1
million in 2001. Included in total operating expenses are cost of revenues,
which increased to $269.0 million from $216.7 million due primarily to the
$25.5 million and $11.6 million increase in cost of services in the Czech
Republic and Romania, respectively, incurred in support of their revenue
increase. Selling, general and administrative expenses increased by 11.3% to
$175.9 million in 2002 compared to $158.0 million, in support of a 34.5%
revenue increase. Operations in the Czech Republic and in Romania contributed
$13.2 million and $5.8 million, respectively, of this expense increase.

Depreciation and amortization increased to $154.3 million in 2002 from
$120.4 million in 2001, an increase of $33.9 million. A higher tangible asset
base in Romania and in the Czech Republic contributed $9.1 million and $24.8
million to such increase, respectively.

Interest expense increased by $5.1 million to $71.8 million in 2002 mainly
reflecting the increased costs at Ceský Mobil as a result of its drawings on
its syndicated credit facility. The foreign exchange gain was $2.1 million in
2002, compared to $2.9 million in 2001. The 2002 gain is represented by gains
in Ceský Mobil of $4.0 million which primarily related to the appreciation of
the Czech Koruna over the Euro, partially offset by a $1.9 million loss
realized by MobiFon.

The loss on debt extinguishment relates to MobiFons refinancing of its
long-term facility and consists of unamortized deferred financing costs in the
amount of $5.2 million and additional interest paid and cancellation fees
totaling $4.9 million.

The income tax expense of $32.3 million relates to MobiFon which has
generated net income and has utilized all its net operating loss carryforwards.
We had available, as at December 31, 2002, net operating loss carry forwards
in the amount of $172.4 million from Ceský Mobil which consists of $6.4
million, $90.7 million, $65.2 million and $10.1 million expiring in 2006, 2007,
2008 and 2009, respectively. We may be limited in our ability to use these
loss carry forwards in any one year due to the uncertainty of generating
sufficient taxable income and, as a result, the related future tax asset has
been fully provided for by the valuation allowance.

Our share of losses allocated to minority interest amounted to $28.1
million in 2002, compared to $45.9 million in 2001. The 2002 minority interest
is composed of our share of losses of subsidiaries attributed to minority
interest in TIW Czech, partly offset by our share of earnings attributed to
minority interest in MobiFon.

As a result of the foregoing, net income for the year ended December 31,
2002 was $13.3 million compared to $7.3 million in 2001, and the corresponding
basic and diluted earnings per share was $0.16, compared to $0.09 for 2001.





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##### Table of Contents



Year Ended December 31, 2001 Compared to the Year Ended December 31, 2000

Revenues increased to $516.3 million in 2001 from $341.6 million in 2000.
MobiFons continued growth contributed $64.7 million and Ceský Mobil, which was
launched in early 2000, contributed $109.9 million of the increase.

Total operating expenses increased to $495.1 million in 2001 from $388.8
million in 2000. Included in total operating expenses are cost of revenues,
selling, general and administrative expenses and depreciation and amortization.
Cost of revenues increased to $216.7 million from $133.3 million due largely
to the $60.6 million increase in cost of services in the Czech Republic
incurred in support of its revenue increase. Selling, general and
administrative expenses decreased by $9.4 million to $158.0 million from $167.4
million in 2000, primarily due to MobiFon which contributed $7.9 million to
such decrease.

Depreciation and amortization increased to $120.4 million in 2001 from
$88.0 million in 2000, an increase of $32.4 million. A higher asset base in
Romania and in the Czech Republic contributed $11.8 million and $20.5 million
to such increase, respectively.

Interest expense increased by $30.2 million to $66.7 million in 2001.
Ceský Mobil accounted for $20.2 million of the increase due to increased
borrowings under its syndicated senior credit facility while interest expense
at corporate, largely related to interest on advances from TIW and affiliates,
increased $10.1 million. Interest income decreased to $4.0 million in 2001
from $6.0 million in 2000, primarily due to the reduction in the amount of cash
and cash equivalents held during the year at Ceský Mobil. The foreign exchange
gain was $2.9 million in 2001, compared to a loss of $4.9 million in 2000. The
2001 gain is a result of the depreciation of the Euro over the Czech Koruna,
which accounted for $6.8 million, partially offset by a $3.8 million loss
realized by MobiFon.

We had available, as at December 31, 2001, net operating loss carry
forwards in the amount of $155.6 million, the majority of which are associated
with our operations in the Czech Republic. We may be limited in our ability to
use these loss carry forwards in any one year due to the uncertainty of
generating sufficient taxable income and, as a result, the related future tax
asset has been fully provided for by the valuation allowance.

Share of losses allocated to minority interest amounted to $45.9 million
in 2001, compared to $63.5 million in 2000. The 2001 minority interest is
composed of the losses of subsidiaries attributed to minority interest in TIW
Czech, partly offset by the share of earnings attributed to minority interest
in MobiFon.

As a result of the foregoing, net income for the year ended December 31,
2001 was $7.3 million compared to a loss of $19.1 million in 2000, and the
corresponding basic and diluted earnings per share was $0.09, compared to basic
and diluted loss per share of $0.23 for 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Revenues increased to $341.6 million in 2000 from $234.0 million in 1999.
MobiFons continued growth contributed $73.6 million and Ceský Mobil, which was
launched in early 2000, contributed $34.0 million of the increase.

Total operating expenses increased to $388.8 million in 2000 from $237.7
million in 1999. Included in total operating expenses are cost of revenues,
selling, general and administrative expenses and depreciation and amortization.
Cost of revenues increased to $133.3 million from $83.3 million due in part to
the commercial launch of Ceský Mobil in March 2000. Selling, general and
administrative expenses increased by $65.2 million to $167.4 million in 2000.
Ceský Mobils launch in early 2000 accounted for $58.7 million of the increase.

Depreciation and amortization increased to $88.0 million in 2000 from
$52.3 million in 1999, an increase of $35.7 million. A higher asset base in
Romania accounted for $13.7 million of the increase. The depreciation of the
Czech Republic network assets commenced in 2000 and accounted for $22.0
million.

Interest expense increased by $11.5 million to $36.5 million in 2000.
MobiFons higher level of borrowings under their credit facility accounted for
this increase. Interest income increased to $6.0 million in 2000 from $3.9
million in 1999, primarily due to surplus cash balances held at Ceský Mobil.
The foreign exchange loss was $4.9 million in 2000, compared to $15.2 million
in 1999.
The 2000 loss is a result of the devaluation of the Lei in Romania, which
accounted for $6.5 million, partially offset by a $1.6 million gain experienced
by Ceský Mobil.

Due to the uncertainty of generating sufficient taxable income, the tax
benefit of our losses has been fully provided for by the valuation allowance.





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##### Table of Contents



Share of losses allocated to minority interest amounted to $63.5 million
in 2000, compared to $15.9 million in 1999. The 2000 minority interest is
composed of the share of losses of subsidiaries attributed to minority interest
in TIW Czech, partly offset by the share of earnings attributed to minority
interest in MobiFon.

As a result of the foregoing, net loss for the year ended December 31,
2000 was $19.1 million compared to net income of $38.0 million in 1999, and the
corresponding basic and diluted loss per share was $0.23 in 2000 compared to
basic and diluted earnings per share of $0.45 in 1999.

MOBIFON

|                                                      |                                              |      |         |         |  |      |         |         |  |  |         |         | 
|----------------------------------------------------- | -------------------------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  |  | ------- | ------- | 
|For the years ended December 31,                      |                                              | 2002 |         | 2001    |  | 2000
|(in thousands of dollars)                             |                                              | $    |         | $       |  | $   
|                                                      |                                              |      |         |         |  |     
|Revenues                                              |                                              |      |         |         |  |      |         |         |  |  |         |        
|                                                      | Services                                     |      |         | 425,567 |  |      |         | 359,868 |  |  |         | 299,470 | 
|                                                      | Equipment                                    |      |         | 21,214  |  |      |         | 12,475  |  |  |         | 8,097   | 
|                                                      |                                              |      |         |         |  |      |         |         |  |  |         |         | 
|                                                      |                                              |      | 446,781 |         |  |      | 372,343 |         |  |  | 307,567 |        
|                                                      | Cost of services                             |      |         | 81,462  |  |      |         | 69,835  |  |  |         | 62,366  | 
|                                                      | Cost of equipment                            |      |         | 39,160  |  |      |         | 27,236  |  |  |         | 18,347  | 
|                                                      | Selling, general and administrative expenses |      |         | 94,613  |  |      |         | 88,836  |  |  |         | 96,735  | 
|                                                      |                                              |      |         |         |  |      |         |         |  |  |         |         | 
|Operating income before depreciation and amortization |                                              |      | 231,546 |         |  |      | 186,436 |         |  |  | 130,119 |        
|                                                      | Depreciation and amortization                |      |         | 86,919  |  |      |         | 77,791  |  |  |         | 65,965  | 
|                                                      |                                              |      |         |         |  |      |         |         |  |  |         |         | 
|Operating income                                      |                                              |      | 144,627 |         |  |      | 108,645 |         |  |  | 64,154  |        

We use the term operating income before depreciation and amortization,
also defined as EBITDA, which may not be comparable to similarity titled
measures reported by other companies. Operating income before depreciation and
amortization should not be considered in isolation or as an alternative
measurement of operating performance or liquidity to net income (loss),
operating income (loss), cash flows from operating activities or any other
measure of performance under GAAP. We believe that operating income (loss)
before depreciation and amortization is viewed as a relevant supplemental
measure of performance in the wireless telecommunications industry.

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

MobiFons service revenues increased to $425.6 million in 2002 from $359.9
million in 2001, reflecting the continued subscriber growth. MobiFon added
631,600 cellular subscribers, compared to 831,800 net additions in the same
period in 2001 to reach 2,635,200 subscribers at as December 31, 2002 compared
to 2,003,600 at the end of 2001.

Cost of service revenues decreased as a percentage of service revenues to
19.1% in 2002 compared to 19.4% in 2001 and was $81.5 million in 2002 compared
to $69.8 million in 2001. The decrease as a percentage of service revenues was
largely attributable to a lower proportion of interconnection costs associated
with higher on network calling. The cost of equipment continues to exceed
associated equipment revenues, consistent with our policy to sell equipment at
prices that will attract new subscribers.

Selling, general and administrative expenses increased to $94.6 million in
2002 compared to $88.8 million in the previous year. However, as a percent of
service revenue, selling, general and administrative expenses decreased to
22.2% for 2002 compared to 24.7% for 2001 as a result of both the continued
success from the implementation of a cost control program in 2001 and strong
credit policies which reduced bad debt expense. MobiFons operating income
before depreciation and amortization increased to $231.5 million in 2002 from
$186.4 million in 2001 due to the above factors.

Depreciation and amortization increased to $86.9 million in 2002 from
$77.8 million the previous year as a result of network expansion in Romania
during 2002 and 2001 and due to the shortening of estimated lives on certain
assets in the fourth quarter of 2002. As a result of the foregoing, the
operating income increased to $144.6 million in 2002 from $108.6 million in
2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

MobiFons service revenues increased to $359.9 million in 2001 from $299.5
million in 2000, reflecting the continued subscriber growth. MobiFon added
831,800 cellular subscribers, compared to 469,700 net additions in the same
period in 2000, to reach 2,003,600 subscribers as at December 31, 2001 compared
to 1,171,800 at the end of 2000.





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Cost of service revenues decreased as a percentage of service revenues to
19.4% in 2001, compared to 20.8% in 2000, and was $69.8 million in 2001
compared to $62.4 million in 2000. The decrease as a percentage of service
revenues was attributable to continued tight control over operating costs and
economies of scale. The cost of equipment continues to exceed associated
equipment revenues, consistent with our practice to sell equipment at prices
that will attract new subscribers.

Selling, general and administrative expenses decreased to $88.8 million in
2001 compared to $96.7 million in the previous year, as a result of both the
continued success from the implementation of a cost control program in 2000,
further reductions in selling and marketing expenses of $4.8 million, and
strong credit policies which reduced bad debt expense by $1.5 million.
MobiFons operating income before depreciation and amortization increased to
$186.4 million in 2001 from $130.1 million in 2000 due to the above factors.

Depreciation and amortization increased to $77.8 million in 2001 from
$66.0 million the previous year as a result of network expansion in Romania
during 2001 and 2000. As a result of the foregoing, the operating income
increased to $108.6 million in 2001 from $64.2 million in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

MobiFons service revenues increased to $299.5 million in 2000 from $211.4
million in 1999, reflecting continued subscriber growth. MobiFons subscriber
base increased to 1,171,800 at the end of 2000 from 702,100 at the end of 1999.

Cost of service revenues decreased as a percentage of revenues to 20.8% in
2000, compared to 24.0% in 1999, and was $62.4 million in 2000 compared to
$50.7 million in 1999. Most of the decrease as a percentage of revenues was
attributed to continued tight controls over operational expenses and economies
of scale. The cost of equipment continued to exceed associated revenues,
consistent with our practice to sell equipment at prices that will attract new
subscribers.

Selling, general and administrative expenses remained stable at $96.7
million in 2000 compared to $95.7 million in the previous year, despite the
growth of MobiFons subscriber base reflecting the implementation of a cost
control program and a reduction in selling and marketing expenses, compared to
1999. MobiFons operating income before depreciation and amortization
increased to $130.1 million in 2000 from $54.9 million in 1999 due to
subscriber growth.

Depreciation and amortization increased to $66.0 million in 2000 from
$52.2 million the previous year as a result of the significant network
expansion in Romania during late 1999 and 2000. As a result of the foregoing,
the operating income increased to $64.2 million in 2000 from $2.7 million in
1999.

CESKÝ MOBIL

|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 
|------------------------------------------------------------ | -------------------------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  |  | -------- | ------ | 
|For the years ended December 31,                             |                                              | 2002 |         | 2001    |  | 2000
|(in thousands of dollars)                                    |                                              | $    |         | $       |  | $   
|                                                             |                                              |      |         |         |  |     
|Revenues                                                     |                                              |      |         |         |  |      |         |         |  |  |          |       
|                                                             | Services                                     |      |         | 227,342 |  |      |         | 125,928 |  |  |          | 21,508 | 
|                                                             | Equipment                                    |      |         | 20,331  |  |      |         | 18,037  |  |  |          | 12,529 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 
|                                                             |                                              |      | 247,673 |         |  |      | 143,965 |         |  |  | 34,037   |       
|                                                             | Cost of services                             |      |         | 122,741 |  |      |         | 97,275  |  |  |          | 36,654 | 
|                                                             | Cost of equipment                            |      |         | 25,594  |  |      |         | 22,323  |  |  |          | 15,969 | 
|                                                             | Selling, general and administrative expenses |      |         | 79,143  |  |      |         | 65,921  |  |  |          | 63,418 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 
|Operating income (loss) before depreciation and amortization |                                              |      | 20,195  |         |  |      | (41,554 | )       |  |  | (82,004  | )     
|                                                             | Depreciation and amortization                |      |         | 67,367  |  |      |         | 42,562  |  |  |          | 22,056 | 
|                                                             |                                              |      |         |         |  |      |         |         |  |  |          |        | 
|Operating loss                                               |                                              |      | (47,172 | )       |  |      | (84,116 | )       |  |  | (104,060 | )     

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

Ceský Mobils service revenues increased to $227.3 million in 2002 from
$125.9 million in 2001, reflecting continued subscriber growth and the effect
of the appreciation of the Koruna versus the U.S. dollar. Ceský Mobil added
321,400 net cellular subscribers, compared to 556,700 net additions in the same
period in 2001, to reach 1,179,800 subscribers as at December 31, 2002 compared
to 858,400 at the end of 2001.





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Cost of service revenues increased by 26.2% to $122.7 million in 2002
compared to $97.3 million in 2001 in support of the 80.5% increase in service
revenues. Cost of equipment continued to be greater than associated revenues
consistent with our practice to sell equipment at prices to attract new
subscribers.

Selling, general and administrative expenses increased by 20.1% to $79.0
million despite the 37.4% subscriber growth in 2002. Ceský Mobils operating
income before depreciation and amortization increased to $20.2 million in 2002
from an operating loss before depreciation and amortization of $41.6 million in
2001 due primarily to revenue increases from subscriber growth coupled with
economies of scale and tight controls over operating costs which constrained
operating costs increases.

Depreciation and amortization increased to $67.4 million in 2002 from
$42.6 million the previous year as a result of network expansion during 2002
and 2001. As a result of the foregoing, the operating loss decreased to $47.2
million in 2002 from $84.1 million in 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Ceský Mobils service revenues increased to $125.9 million in 2001 from
$21.5 million in 2000, reflecting continued subscriber growth and a full year
of operations in 2001, compared to 10 months of commercial operations in 2000.
Ceský Mobil added 556,700 net cellular subscribers, compared to 301,700 net
additions in the same period in 2000, to reach 858,400 subscribers as at
December 31, 2001 compared to 301,700 at the end of 2000.

Cost of service revenues increased by 165% to $97.3 million in 2001,
compared to $36.7 million in 2000, in support of the 486% increase in service
revenues. Cost of equipment continued to be slightly greater than associated
revenues consistent with our practice to sell equipment at prices to attract
new subscribers.

Selling, general and administrative expenses remained stable at $65.9
million despite the strong subscriber growth in 2001 due to tight cost
controls, compared to $63.4 million in the previous year. Ceský Mobils
operating loss before depreciation and amortization decreased to $41.6 million
in 2001 from $82.0 million in 2000 due primarily to subscriber growth.

Depreciation and amortization increased to $42.6 million in 2001 from
$22.1 million the previous year as a result of network expansion during 2000
and 2001.

As a result of the foregoing, the operating loss decreased to $84.1
million in 2001 from $104.1 million in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Ceský Mobils service revenues were $21.5 million in 2000, reflecting the
launch of commercial operations in March 2000. Ceský Mobils subscriber base
was 301,700 at the end of 2000.

Cost of service revenues was $36.7 million in 2000. Cost of equipment was
higher than associated revenues consistent with our practice to sell equipment
at prices to attract new customers and incentives offered on commercial launch.

Selling, general and administrative expenses were $63.4 million in 2000
compared to $4.7 million in the previous year, due to the commercial launch of
operations in March 2000 and related subscriber and operations growth. Ceský
Mobils operating loss before depreciation and amortization increased to $82.0
million in 2000 from $4.7 million in 1999 due to the above.

Depreciation and amortization increased to $22.1 million in 2000 from nil
the previous year as a result of network expansion during 1999 and 2000. As a
result of the foregoing, the operating loss was $104.1 million in 2000,
compared to $4.7 million in 1999.

LIQUIDITY AND CAPITAL RESOURCES

The following table is a summary of our consolidated cash flows for the
years ended December 31, 2002, 2001, and 2000.





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CASH FLOW DATA

|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|For the years ended December 31,                                    |  | 2002 |          | 2001 |  | 2000
|(in thousands of dollars)                                           |  | $    |          | $    |  | $   
|                                                                    |  |      |          |      |  |     
|Cash provided by operating activities                               |  |      | 152,778  |      |  |      | 54,158   |   |  |  | 94,922   |  
|Cash used in investing activities                                   |  |      | (242,893 | )    |  |      | (309,563 | ) |  |  | (344,501 | )
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|                                                                    |  |      | (90,115  | )    |  |      | (255,405 | ) |  |  | (249,579 | )
|Cash provided by financing activities                               |  |      | 80,795   |      |  |      | 189,786  |   |  |  | 340,495  |  
|Net effect of exchange rate translation on
cash and cash equivalent |  |      | 721      |      |  |      | (628     | ) |  |  | 4,436    |  
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Net change in cash and cash equivalents                             |  |      | (8,599   | )    |  |      | (66,247  | ) |  |  | 95,352   |  
|Cash and cash equivalents, beginning of period                      |  |      | 54,982   |      |  |      | 121,229  |   |  |  | 25,877   |  
|                                                                    |  |      |          |      |  |      |          |   |  |  |          |  
|Cash and cash equivalents, end of period                            |  |      | 46,383   |      |  |      | 54,982   |   |  |  | 121,229  |  

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

For the year ended December 31, 2002, operating activities provided cash
of $152.8 million compared to $54.2 million for the same period last year. The
year-over-year increase is mainly explained by the $108.0 million increase in
operating income before depreciation and amortization. Furthermore, results
for 2001 include a significant increase in working capital mainly related to
Ceský Mobil.

Investing activities used cash of $242.9 million for the year ended
December 31, 2002, essentially for the expansion of cellular networks in
Romania and the Czech Republic. This compares to cash used in investing
activities of $309.6 million for the year ended December 31, 2001. MobiFons
and Ceský Mobils operations utilized cash of $100.3 million and $142.6
million, respectively, for 2002 capital expenditures.

Financing activities generated cash of $80.8 million for the year ended
December 31, 2002. This is mainly explained by subsidiarys shares issued to
minority interests and net borrowings of debt of $29.9 million and $83.1
million, respectively, partially offset by subsidiarys distributions paid to
minority interests of $10.8 million, financing costs of $8.6 million and by the
$12.8 million in net repayments of advances to our parent.

Cash and cash equivalents as of December 31, 2002 totaled $46.4 million,
including $1.2 million at the corporate level. As of December 31, 2002, total
consolidated indebtedness was $828.4 million which included third party debt of
$267.7 million and $470.3 million at MobiFon and Ceský Mobil, respectively, and
$90.4 million of amounts due to TIW and its affiliates, primarily at the
corporate level.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Cash provided by operating activities was $54.2 million for the year ended
December 31, 2001, compared to $94.9 million for 2000. The year-over-year
decline is entirely attributable to increased working capital needs at Ceský
Mobil as MobiFons operating income before depreciation and amortization showed
continued growth and Ceský Mobils operating loss before depreciation and
amortization was reduced relative to that experienced in 2000.

Investing activities used cash of $309.6 million during the year ended
December 31, 2001, reflecting $286.4 million of cash used for acquisitions of
property, plant and equipment and $23.2 million for the acquisition of
additional shares of MobiFon. MobiFon and Ceský Mobil operations accounted for
$125.3 million and $161.1 million of the capital spending, respectively.

Financing activities generated cash of $189.8 million for the year ended
December 31, 2001. We borrowed $114.1 under our long-term debt facilities, and
received $65.8 million in proceeds from investees shares issued to minority
shareholders and $35.6 million in net advances from our parent. These sources
of funds were offset by a $25.7 million repayment of long term debt.

Total consolidated indebtedness as of December 31, 2001 was $723.2
million, including $101.6 million of amounts due to TIW and its affiliates,
primarily at the corporate level.





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Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Cash provided by operating activities in 2000 was $94.9 million compared
to $25.3 million in 1999. The difference is mainly due to an improvement in
working capital partially offset by a reduction in operating income before
depreciation and amortization.

Cash used in investing activities in 2000 amounted to $344.5 million.
This amount mainly relates to the acquisition and build-out of property, plant
and equipment in MobiFon and Ceský Mobil for $85.0 million and $239.5 million,
respectively.

Cash provided by financing activities in 2000 was $340.5 million compared
to $111.2 million in 1999. Of the 2000 amount, $49.1 million related to
proceeds from invested capital and other cash contributions from our parent,
TIWC, $19.8 million relates to advances made by TIWC, $169.4 million relates to
increase of long-term debt, net of repayments, of which $176.4 million is
attributable to Ceský Mobil, and $121.3 million was provided by the issuance of
investees shares to minority interests.

SOURCES OF FINANCING

Prior to 2002, substantially all of our cash requirements at the corporate
level were met by the proceeds from invested capital and other cash advances
from TIW and its affiliates. During 2002, however, as described below,
distributions from MobiFon have enabled the repayment of some of those
advances. At December 31, 2002, we had demand notes payable to our parent
company of $88.1 million.

During 2002, MobiFon approved aggregate distributions of $66.3 million
consisting of dividends of $27.5 million and share repurchases of $38.8
million. We received $42.0 million of these distributions in 2002 and utilized
a portion of such proceeds to repay some of the advances from our parent and
accrued interest thereon.

On October 30, 2002, the shareholders of MobiFon approved distributions of
up to $38.8 million by means of a share repurchase. Shareholders can tender
their shares between October 30, 2002 and June 30, 2003 in order to realize
their pro-rata share of this distribution amount of which our share is $24.6
million and is included in the $42.0 million of distributions received in 2002.
In the event not all MobiFon shareholders exercise their options to sell their
entire pro-rata portion, any of the MobiFon shareholders shall have the right
to buy-back the shares sold to MobiFon at the same purchase price by December
31, 2003. The effect of these distributions was to decrease our equity
interest in MobiFon from 63.5% to 62.4%. MobiFons shareholders are not
required to participate pro-rata in the share repurchase and we have also
retained our right to buy-back the shares sold to MobiFon. Accordingly, our
ownership of MobiFon may vary between 62.4% and 63.5%, throughout the tender
period, depending on the timing and the extent of each shareholders
participation in the repurchase. As it is not determinable that all
shareholders of MobiFon will participate pro-rata in the share repurchase,
pending expiration of the tender period, distributions made through share
repurchases have been accounted for in a manner similar to dividends declared
by a subsidiary and the amount that MobiFon is committed to distribute to
minority interests is presented within current liabilities.

On December 18, 2002, we reached an agreement for the sale of 11.1 million
shares of MobiFon, representing 5.7% of the then issued and outstanding share
capital of MobiFon, for a total cash consideration of $42.5 million. The
transaction closed on March 19, 2003. As a result of the above transactions,
our ownership in MobiFon will be reduced from the pre share repurchase level of
63.5% down to between 56.6% and 57.7% depending on the outcome of the share
repurchase.

At the operating company level, we seek, where possible, to finance the
cash requirements of developing and expanding our operations on a
project-by-project basis. Although projects are typically financed by
contributions from our partners and us in the form of equity and shareholder
advances, we seek to obtain third party financing after the initial stages of a
projects development. Sources of financing at the operating company level may
include vendor financing provided by equipment suppliers, project financing
from commercial banks and international financial institutions such as the
European Bank for Reconstruction and Development, bank lines of credit and the
sale of debt securities by the operating companies.

MOBIFON

MobiFons cash requirements as at December 31, 2002 have been met by
aggregate capital contributions of $270.6 million and by $255.0 million in
borrowings, net of repayments, under its bank facilities and $12.7 million in
capital leases.

In September 1997, the European Bank for Reconstruction and Development
(EBRD) arranged a $190.0 million loan facility for MobiFon. This facility
included a $10.0 million subordinate loan bearing interest at 15% maturing in
2003, nine-year senior loans totaling $110.0 million bearing interest at LIBOR
plus 3.25% and a $70.0 million eight-year syndicated senior loan bearing
interest at





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LIBOR plus 3.05%. MobiFon entered into agreements, including interest
rate swap agreements, pursuant to which $158.8 million of the above borrowings
had effective fixed interest rates from 8.35% to 9.75% until April 2002.

In January 1999, MobiFon closed a second long-term loan facility totaling
$105.0 million, jointly arranged by ABN AMRO N.V. and the EBRD. This second
EBRD facility comprised loans of $40.0 million and a $65.0 million syndicated
export credit facility. Borrowings under this facility bore variable interest
rates and were repayable in installments through 2006. MobiFon used the
proceeds to complete the build-out of its cellular network and to pay $25.0
million to extend its ten-year license by five years to November 2011.

On August 27, 2002, MobiFon closed a $300 million senior loan facility.
This new facility is composed of two tranches. Tranche I consists of a term
loan of $238 million, fully drawn as at December 31, 2002, for which the
proceeds were used to repay the interest and principal balance of the
syndicated senior credit facilities entered into in 1997 and 1999 and the
subordinated loans. A loss on extinguishment of debt of $10.1 million was
recognized on early repayment. Tranche II consists of a term loan of up to $62
million of which $17 million was drawn as at December 31, 2002. Each tranche
is repayable in quarterly installments starting in January 2004 and maturing in
October 2008. The interest rate on the facility is LIBOR + 3.5% up to December
31, 2003. Thereafter, the interest rate will range from LIBOR + 2.5% to LIBOR
+ 4.0% depending on certain financial ratios, including debt and capital
ratios. As permitted by the loan agreement, the LIBOR portion of the interest
rates on $87.3 million of Tranche I and $6.2 million of Tranche II have been
fixed at 3.64% and 3.52% respectively.

Under the facility, MobiFon must comply with certain affirmative covenants
such as the maintenance of certain financial covenants and ratios, including
debt and capital ratios. The facility allows for distributions of cash
provided from operations net of capital expenditures and scheduled debt service
subject to MobiFon meeting certain financial ratios and maintaining minimum
cash balances. To the extent such ratios are not met, a portion or all of
these cash flows may be required to be used for mandatory prepayments of the
facility. The facility is collateralized by a pledge of ours and of the
minority interests shares in MobiFon and by substantially all of the assets of
MobiFon. A commitment fee of 1% per annum is applicable to the unused Tranche
II facility [$45 million at December 31, 2002] up to December 31, 2003 when the
unused facility will expire under the credit agreement.

MobiFon entered into interest rate swap arrangements on notional principal
amounts of $100 million and $30 million whereby the LIBOR portion of the
interest on the related loan principal has been effectively fixed at 3.6% and
3.7%, respectively. The weighted average effective interest rate on the
balance outstanding on this facility at December 31, 2002 is 6.9%.

MobiFon also has $20.0 million of working capital facilities with ABN AMRO
Romania S.A., and with Citibank S.A., secured by a first right over the
proceeds from any foreclosure of the pledge of MobiFons bank accounts.

CESKÝ MOBIL

The cash requirements of Ceský Mobil through December 31, 2002 have been
met primarily by shareholder contributions of $350.0 million and by borrowings
under its senior secured syndicated credit facility and financing under supply
contracts to be refinanced by the syndicated facility entered into on July 19,
2000 which using December 31, 2002 exchange rates, amount to $470.3 million.

In July 2000, Ceský Mobil entered into an agreement for a senior secured
syndicated credit facility. The syndicated credit facility is composed of two
tranches. Tranche A is in the form of a committed revolving credit facility
converting to a term loan of up to 269.1 million and Koruna 3.8 billion,
[totaling $407.0 million] carrying interest at a rate of EURIBOR plus 1.75% for
Euro drawings and PRIBOR plus 1.75% for Koruna drawings, reimbursable by
installments determined as a percentage of amounts drawn under the facility
until June 2004 which will continue to be repaid until the maturity in December
2008. Tranche B consists of a term loan of up to 26.6 million and Koruna 1.7
billion, [totaling $84.9 million] carrying interest at EURIBOR plus 2.25% for
Euro drawings and PRIBOR plus 2.25% for Koruna drawings, reimbursable by
installments determined as a percentage of amounts drawn under the facility
starting in December 2008 until the maturity in December 2009. Drawings under
either tranche must be on a dollar-for-dollar basis with the other tranche.

Ceský Mobil entered into interest rate and currency swaps arrangements
pursuant to which 116.3 million [$122.0 million] of the Euro based borrowings
as at December 31, 2002 are effectively Koruna based and, together with an
additional 3.0 billion Koruna [$98.6 million] have effective fixed interest
rates ranging from 8.59% to 9.98% until November 2005. Swaps have also been
entered into on 71.7 million [$75.3 million] drawn which has the effect of
fixing the Euro to Koruna conversion rate on the interest
payments and changing the referenced interest rate from EURIBOR to PRIBOR.
Interest on this 71.7 million draw has also been capped through the use of
option agreements which are detailed as follows. 21.5 million [$22.6 million]
and a further 287.6 million Koruna [$9.5 million] are subject to interest rate
option agreements which provide that the PRIBOR component of the interest rate
on these





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borrowings will not exceed 8.61%, until November, 2005; 50.2 million
[$52.7 million] and 701.2 million Koruna [$23.3 million] are subject to
interest rate option agreements which provide that the interest rate on these
borrowings will not exceed 9.99%, until November, 2005. The effective weighted
average interest rate on this credit facility is 7.0% at December 31, 2002
[8.0% in 2001].

Ceský Mobil used the funds drawn under its senior secured syndicated
credit facility to finance the construction, operation, working capital, debt
service and related requirements of their GSM network in the Czech Republic
including the repayment of amounts financed under supply contracts with Siemens
and Ericsson.

The facility is collateralized by a pledge of TIW Czechs shares in Ceský
Mobil and of substantially all of the assets of Ceský Mobil. Under this
facility, Ceský Mobil must respect certain financial covenants and coverage
tests. Furthermore, prior to each draw down, the ratio of senior debt to
invested capital in Ceský Mobil must not exceed 60:40 or the total invested
capital in Ceský Mobil will equal or exceed the Euro equivalent of $350.0
million. We and our partners have funded all of the required capital.

As a result of MobiFons and Ceský Mobils syndicated senior credit
facilities, substantially all of ClearWaves net assets are restricted,
however, subject to fulfillment of certain conditions, cash distributions to
shareholders are permissible under MobiFons credit facilities.

FUTURE CAPITAL REQUIREMENTS

We expect to have significant future capital requirements, particularly in
relation to the expansion and addition to capacity of our existing networks,
and the servicing of debt. We intend to finance such future capital
requirements from cash flow from operating activities, borrowing under our
existing credit facilities, minority shareholders funding under share
subscription agreements and through other externally generated funds such as
the sale of debt and equity securities, vendor financing and project financing
from commercial banks and international financial agencies. Our future cash
commitments may also include our 24.2% share of the possible exercise of a put
option held by a minority shareholder of Ceský Mobil. TIW Czech N.V. may be
required to purchase the Ceský Mobil shares owned by the minority shareholder
for an amount equal to the amount paid, in Czech Koruna, for such shares plus
interest of 7.0% per annum. As at December 31, 2002, this minority shareholder
has contributed $13.0 million to the equity of Ceský Mobil and the Companys
share of this commitment, if exercised, is $4.6 million.

As at December 31, 2002, our total indebtedness to TIW and its affiliates
amounted to $90.4 million consisting of accounts payable of $2.3 million and
demand notes at the corporate level of $88.1 million. The demand notes are
convertible into shares at the option of TIW and its affiliates subject to
certain conditions. We intend to use available cash surplus at the corporate
level, after considering potential funding requirements in TIW Czech N.V. and
corporate expenses that are expected to be generated from transactions on
MobiFons shares to reimburse part of these advances. TIW reports a going
concern uncertainty in its financial statements. In the event that TIWs
creditors enforce their claims, uncertainty may arise regarding the timing for
repayment of these demand notes.

MobiFons future capital requirements will include debt repayment and
network expansion, both of which are expected to be financed by cash flows from
operations and by drawings on its senior facility. Ceský Mobils capital
requirements will include the expansion of its cellular network and the
financing of its losses. These requirements are expected to be financed by
drawings under its senior secured syndicated credit facility and by way of
shareholders subscriptions. As at December 31, 2002, our operations had
purchase commitments of approximately $14 million with network equipment and
systems support providers.

As of December 31, 2002, MobiFon is also committed to a frame leasing
agreement with a national power supplier for 17 years or the end of the GSM
license period whichever is shorter commencing in 2003, whereby the power
supplier agreed to lease out 2 fiber optic strands over certain voltage poles
and technical space to MobiFon, and MobiFon agreed to lease out communication
capacity to the power supplier over a minor portion of the capacity of the
enabled fiber. The leases payments and receipts, which individually are
estimated to reach $5 million per annum by the end of the contract, are
expected to offset one another such that minimal cash payments, if any, will be
made by either party. The estimated cost to MobiFon to enable the entire
leased fiber to be utilized is $8.5 million of which $3.4 million has been
incurred as at December 31, 2002.

In the event there has not been an initial public offering of the shares of
MobiFon by October 1, 2004, a minority shareholder of MobiFon may require the
Company or TIW, at TIWs option, to make an offer to acquire the minority
shareholders shares. The purchase price of such shares will be their fair
market value as determined by an independent evaluator and shall be payable in

cash or, at TIWs option, shares of TIW. The share ownership sold on March 19,
2003 is the object of a similar arrangement.





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We are a holding company with no material business operations, sources of
income or operating assets of our own other than the shares of our subsidiaries
and operating companies. Our cash flow and, consequently, our ability to meet
our debt service obligations is dependent upon the payment of funds by our
subsidiaries in the form of loans, dividends, advances or otherwise.

We regularly evaluate opportunities for the expansion of our operations or
for further investments in wireless telecommunications projects, including
increases in ownership in our current operations. The future capital
requirements related to such investment activities, if any, will be incremental
to the anticipated capital contributions to existing operations, and therefore
additional corporate financing will be required to fund such development
projects or to further support current operations. The ability to generate
short-term and long-term capital in the future is dependent upon many factors,
including general economic conditions in the countries where we conduct our
principal operations, and financial market conditions.

EXCHANGE RATES

We report our financial statements in U.S. dollars. We operate in
different currency jurisdictions and virtually all of our revenues and a
substantial portion of our operating expenses are in currencies other than our
reporting currency. As a result, we are exposed to exchange rate risk. Any
significant change in the relevant exchange rates, whether of a short-term
nature or a steady long-term change in relative valuation, could have a
material effect on our financial statements. In Romania, significant
devaluation relative to the U.S. dollar has occurred in the past and may occur
again in the future. In addition, we experience fluctuations in our results of
operations solely as a result of exchange rate fluctuations.

Where possible, we adjust our tariffs for the effects of inflation, one of
the factors affecting relative exchange rates. However, due to regulatory
restrictions and market conditions, we may be unable to adjust our local
tariffs in response to changes in the exchange rates relative to our reporting
currency and may therefore be unable to protect ourselves from currency rate
fluctuations.

Until December 31, 2002, Romania was defined for accounting purposes as a
highly inflationary economy and the U.S. dollar, our functional currency, was
used as their measurement currency. In 2003, an assessment as to which
currency is MobiFons functional currency will be made. MobiFons borrowings
are in U.S. dollars and tariffs are adjusted to account for the effects of the
devaluation of the Romanian lei versus the U.S. dollar due to inflation.
Consequently, exchange fluctuations have not had a material effect on our
consolidated results in the past. However, Romania is currently a second wave
European Union accession candidate and it is foreseeable that the Euro takes
prominence in Romania in the future. Consequently, depending on the result of
our assessment and the progression of Romania towards the Euro, exchange rate
fluctuations may have a more significant impact on our results of operations in
the future.

At the corporate level, we may elect to enter hedging arrangements from
time to time in the future, although we are not currently party to any such
transaction and do not have a policy to systematically hedge against foreign
currency fluctuations. At the operating company level, we seek to reduce our
foreign exchange exposure arising from transactions through a policy of
matching, where possible, assets and liabilities. In some cases, we may borrow
in U.S. dollars or Euro because it is either advantageous for the operating
companies to incur debt obligations in such currency or because such currency
denominated borrowings are the only funding source available to the operating
company at the time. Ceský Mobil has hedged a portion of its variable rate
debt, by entering into interest rate and cross currency swaps in which Ceský
Mobil has agreed to exchange, at specified intervals, the difference between
fixed and variable interest on 116.3 million and 3.0 billion Koruna of
variable rate debt until November 2005.

Additionally, these swaps have fixed the foreign currency rates on the
Euro based debt from the Euro to Koruna. A swap was entered into on a further
71.7 million of borrowings which fixed the foreign currency rate on the
interest payments from Euro to Koruna and changed the referenced interest rate
from EURIBOR to PRIBOR. Interest on this 71.7 million draw has also been
capped through the use of option agreements which are detailed as follows:
21.5 million [$22.6 million] and a further 287.6 million Koruna [$9.5 million]
are subject to interest rate option agreements which provide that the PRIBOR
component of the interest rate on these borrowings will not exceed 8.61%, until
November 2005; 50.2 million [$52.7 million] and 701.2 million Koruna [$23.3
million] are subject to interest rate option agreements which provide that the
interest rate on these borrowings will not exceed 9.99%, until November 2005.
Ceský Mobil also entered into a 6-month Euro to Koruna cross currency swap
arrangement for 60.0 million [$63.0 million] on May 11, 2002 and upon
expiration, Ceský Mobil entered into a similar swap arrangement for a further 6
months. In January 2003, a further 40.0 million of Ceský Mobils Euro based
borrowing exposure was hedged in this manner and Ceský Mobil purchased a
currency call option to hedge currency risk on the principal of an additional
10.0 million of Euro based debt. For the remaining amounts, we have
decided to accept for the time being the inherent currency risk, principally
because of the relatively high cost of buying, or the inability to buy, forward
cover in currencies of the countries in which we operate.





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INFLATION

Inflation has not been a material factor affecting our business to date.
Although system equipment costs may increase over time as a result of
inflation, we expect that the cost of subscriber equipment will decrease over
time as volume increases, although there can be no assurance that this will be
the case. General operating expenses such as salaries, employee benefits and
lease costs are, however, subject to normal inflationary or deflationary
pressures.

In Romania and the Czech Republic, the effects of inflation may become
significant to our operations. Where permitted, and subject to competitive
pressures, we intend to increase our tariffs to account for the effects of
inflation. However, in those jurisdictions where tariff rates are regulated or
specified in the license, such as in the Czech Republic, we may not be able to
mitigate the impact of inflation on our operations.

REGULATORY ENVIRONMENT

We operate in regulated industries and in the normal course of business,
our operational subsidiaries actions are subjected to scrutiny by various
regulatory agencies, which, from time to time, will initiate administrative
proceedings against us for alleged breaches to different regulations including
arrangements for interconnection fees. We believe that the ultimate outcome of
any of such proceedings currently in progress will not be materially adverse to
us.

MobiFon and Ceský Mobil hold one of three licenses issued to provide
nationwide GSM-based cellular telecommunications services in their respective
countries. Our operational subsidiaries are committed to pay minimum annual
spectrum fees of approximately $10.0 million. Starting in 2003, the new
Romanian regulatory act will provide for other fees based on a percentage of
revenue and other bases that have yet to be determined. The conditions to the
various license agreements require our operational subsidiaries to
substantially meet the deployment plans set out in their license agreement and,
in certain instances, to provide a specified level of services in their
respective coverage areas. The Companys future performance may be affected by
factors such as political changes including government actions relating to its
licenses, changes in technology and competition.




ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

Supervisory Board and Board of Management

Our supervisory board supervises our general affairs and business. It also
supervises and provides advice to the board of management. In fulfilling their
duties, all members of the supervisory board must serve our best interests.

Our articles of association provide for at least three members to serve on
the supervisory board. Three of the five individuals appointed to the
supervisory board as of the date hereof are also officers or employees of TIW
or its affiliates and two are independent within the meaning of the guidelines
of the TSX. Under Dutch law, members of the supervisory board cannot serve as
members of our board of management, nor may a person serve as a member of the
supervisory board after the annual general meeting of shareholders during the
fiscal year of such persons seventy-second birthday.

Members of the supervisory board are appointed by the general meeting of
shareholders from a non-binding nomination, drawn up by the supervisory board.
Any remuneration for members of the supervisory board is determined by the
general meeting of shareholders.

Our articles of association do not impose any quorum requirements for
meetings of our supervisory board. Decisions of the supervisory board generally
will require the approval of a majority of the votes cast. Members of the
supervisory board may be suspended or dismissed by the general meeting of
shareholders at any time. A suspension may not last longer than three months in
total, even after having been extended one or more times. If no decision on a
termination of the suspension or dismissal has been made following such time,
the suspension will end.

The board of management, under the supervision of the supervisory board,
is entrusted with managing us and our subsidiaries.
The board of management must be comprised of at least three members. The
general legal authority to represent us is vested in the board of management
and in each member of the board of management acting alone. An absolute
majority of votes cast by all managing directors in office is necessary to
adopt resolutions of the board of management. Certain resolutions of the board
of management determined from time to time may be subject to the approval of
the supervisory board. Lack of such authorization does not, however, affect the
authority of the board of management or any of its individual members to
legally bind us. The members of the board of





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management are appointed by the general meeting of shareholders from a
binding nomination, drawn up by the supervisory board, of at least two nominees
for each vacancy to be filled. If the supervisory board fails to make use of
its right to draw up a binding nomination or fails to do so in a timely manner,
the general meeting of shareholders is free to make the appointment. The
general meeting of shareholders may at all times override the binding of the
supervisory boards nomination by adopting a resolution to this effect with
two-thirds of the votes cast representing more than half of the issued capital.

The general meeting of shareholders may suspend and dismiss the members of
the board of management. The supervisory board may also suspend the members of
the board of management. Even after having been extended, a suspension shall
not last for more than three months. If after that time no decision has been
reached on the lifting of the suspension or the removal from office, the
suspension shall cease to exist. The remuneration and other conditions of
employment of each member of the board of management is determined by the
supervisory board.

The following tables list the persons proposed to be elected at our next
annual meeting of shareholders on June 27, 2003 as members of our supervisory
board and as members of our board of management and the executive officers of
our operating subsidiaries:

Supervisory Board

|                          |  |                           |  | 
|------------------------- |  | ------------------------- |  | 
|Name                      |  | Municipality of Residence
|                          |  |                          
|Charles Sirois (Chairman) |  | Montreal, Quebec, Canada 
|Margriet Zwarts           |  | Montreal, Quebec, Canada 
|Mario Bertrand            |  | Monaco (Monte Carlo)     
|Pier Carlo Falotti        |  | Switzerland              
|Henri de Maublanc         |  | Paris, France            

Board of Management

|                       |  |                           |  | 
|---------------------- |  | ------------------------- |  | 
|Name                   |  | Municipality of Residence
|                       |  |                          
|Alexander Tolstoy(1)   |  | Prague, Czech Republic   
|Kees van Ravenhorst(1) |  | Amsterdam, Netherlands   
|James J. Jackson(1)    |  | Prague, Czech Republic   
|Yves Normand(1)        |  | Amsterdam, Netherlands   



---

|(1) |  | Alexander Tolstoy and Kees van Ravenhorst have been members of our board
of management since June 27, 2000 and September 17, 1999 respectively.
James J. Jackson and Yves Normand have been members of our board of
management since June 21, 2002.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Executive Officers

|                  |  |                           |  |                                                                                                                                                     
|----------------- |  | ------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Municipality of Residence |  | Position                                                                                                                                            
|                  |  |                           |  |                                                                                                                                                     
|Alexander Tolstoy |  | Prague, Czech Republic    |  | President and Chief Executive Officer,
ClearWave; Chairman of the Board and Chief
Executive Officer, MobiFon and Ceský Mobil;
President, Ceský Mobil
|James J. Jackson  |  | Prague, Czech Republic    |  | Chief Financial
Officer, ClearWave and MobiFon, Chairman of Supervisory Board,
Ceský Mobil                                                          
|Edward Lattimore  |  | Bucharest, Romania        |  | President and Chief Operating Officer, MobiFon                                                                                                      
|Karla Stephens    |  | Prague, Czech Republic    |  | Chief Operating Officer, Ceský Mobil                                                                                                                

Information Concerning Members of our Supervisory Board, Members of our Board
of Management and Executive Officers of our Company and our Operating
Subsidiaries

Charles Siroisis Chairman of the Board of TIW and Chairman of the Board,
Chief Executive Officer and controlling shareholder of Telesystem Ltd., one of
TIWs principal shareholders. From 1992 to February 2000, Mr. Sirois was
Chairman and Chief Executive Officer of Teleglobe Inc. From 1988 to 1990, Mr.
Sirois was Chairman of the Board and Chief Executive Officer of BCE Mobile
Communications Inc., and prior to that, he was Chief Executive Officer of two
of the companies that formed BCE Mobile, National Pagette Ltd. and National
Mobile Radio Communications Inc. He is currently a director of the Canadian
Imperial Bank of Commerce and the CGI Group Inc. Mr. Sirois is also a member of
the Business Council on National Issues and is a
founding member of the Washington-based Global Information Infrastructure
Commission (GIIC). Mr. Sirois received the Order of Canada in 1994 and was made
a knight of the Ordre national du Québecin April 1998.





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Margriet Zwartsis General Counsel and Secretary of TIW. Prior to her
appointment in March 1998, she was in private practice, initially with the law
firm Martineau Walker and from 1989 with the law firm Ogilvy Renault, where she
was a partner from 1991. She holds a Bachelors degree in Civil Law and a
Bachelors degree in Common Law from McGill University and a Masters degree in
English literature from the University of Toronto. She is a member of the
Quebec Bar and the Law Society of Upper Canada.

Mario Bertrandis President, New Ventures of TIW. Prior to organizational
changes effected in May 1999, Mr. Bertrand was President, Europe of TIW and,
prior to May 1997, held the position of Managing Director, Europe with
Telesystem International Wireless Service since 1995. Mr. Bertrand was a guest
lecturer at the École Nationale dAdministration Publique and the Sorbonne,
both in Paris, in 1994, President and Chief Executive Officer of Télé-Métropole
Inc. from 1991 to 1993, President and Chief Executive Officer of M. Stores Inc.
in 1990 and served as Chief of Staff to the Premier of Quebec from 1986 to
1990.

Henri de Maublancis President, founder and majority shareholder of the
Clarisse-Politel group, and President of the Aquarelle.com group, which is
controlled by Clarisse and is one of the leading e-commerce web sites in
France. From 1985 to 1995, Mr. de Maublanc was the President and Chief
Executive Officer of Politel, the leading operator of servers in France for
interactive services by minitel and telephone. Prior to that, in 1984 and 1985,
he directed the development of the Le Nouvel Observateurgroup. He started his
career with Exxon. Mr. de Maublanc is president of Association pour le
Commerce et les Services En Ligne, or the Association for E-commerce and Online
Services, which is a trade association for companies involved in the
development of new information technologies. He is a member of the Conseil
Supérieur de la Télématique, and he has participated in the development of new
technologies of information and communication networks and other
telecommunications networks, notably with the French government. He was, in
1999, a member of the advisory board of Teleglobe Inc.

Pier Carlo Falottiwas Executive Vice President and member of the
Executive Committee of Oracle EMEA from 1998 to 2000. He joined Oracle EMEA in
1996 as Senior Vice President. Prior to joining Oracle in 1996, Mr. Falotti
held the position of President and CEO of AT&T Europe. When the company was
split in 1995, he remained with AT&T as Executive Vice President responsible
for international activities. Mr. Falotti is currently a member of the Board of
Directors of Logitech (USA & Switzerland), First Virtual Corporation (USA),
Linkvest (Switzerland) and Centric Software (USA).

Alexander Tolstoywas appointed as our President and Chief Executive
Officer effective September 1999, and is currently the Chairman of the Board
and Chief Executive Officer of MobiFon and Ceský Mobil as well as President of
Ceský Mobil. When we and our partners were awarded the GSM 900 license in
Romania, Mr. Tolstoy was appointed to MobiFon as its first President and Chief
Executive Officer. From 1995 until November 1996, he managed the establishment
of TIWs GSM companies in India and China. From 1987 to 1994, Mr. Tolstoy was
Vice President, Western Region for Bell Mobility Cellular in Canada. From 1970
to 1987, he held various management positions at Bell Canada and Bell Canada
International. Mr. Tolstoy is married to Ms. Stephens.

Kees van Ravenhorstwas elected Managing Director and has been acting as
corporate secretary of ClearWave since its incorporation. Mr. van Ravenhorst
joined TIW in December 1996 and has been managing the Amsterdam office of
Telesystem International Wireless Corporation N.V. since October 1997. Prior to
joining TIW, Mr. van Ravenhorst was employed as a legal and financial
consultant at BCE Inc. and Bell Canada International between 1993 and 1995 and
was a practicing lawyer in Amsterdam since 1981. Mr. van Ravenhorst was first
admitted as a member of the Quebec Bar in 1993 and the Netherlands Bar in 1981.

James J. Jacksonwas appointed as ClearWaves Chief Financial Officer in
September 1999, Ceský Mobils Chief Financial Officer in April 2000 and
MobiFons Senior Vice President and Chief Financial Officer in 1997. From 1995
to 1997 Mr. Jackson was Vice Chairman, Finance, for Quadrant Amroq Bottling Co.
Ltd., a venture capital firm holding the franchise for Pepsi Cola in Romania.
Prior to that, he worked for fifteen years at Alcan Aluminium Ltd., including
as President of one of its venture capital groups. Mr. Jackson is a member of
the Institute of Chartered Accountants of Canada and is a registered Certified
Public Accountant in the United States. Mr. Jackson left ClearWave, Ceský
Mobil and MobiFon in February 2001 and returned to ClearWave as Chief Financial
Officer in July, 2001.

Yves Normandis a financial officer of TIWC since October 2000 and was
appointed a managing director of TIWC in April 2001. Mr. Normand joined TIW in
July 1996 as a controller and also held other financial positions at TIW Prior
to July 1996, Mr. Normand was a controller at Biochem Immonosystems Inc. in
Montreal and was a senior manager at Deloitte & Touche from 1988 to 1993. Mr.
Normand holds a bachelors degree in Business Administration from the École des
Hautes Études Commerciales in Montreal and is a member of the Canadian
Institute of Chartered Accountants.

Edward Lattimorewas appointed President and Chief Operating Officer of
MobiFon in February 2000. From 1985 to 1988, and then from 1999 to 2000, he was
Branch Manager  London, Ontario, Director of Marketing  Toronto, Ontario and
Senior Vice President, Western Canada for Bell Mobility Cellular, Toronto,
Ontario. Between 1988 and 1999, Mr. Lattimore served at BCTEL Mobility,
Burnaby, BC, as Manager, Marketing; Vice President, Strategy and Marketing;
Vice President Marketing and Vice





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President, General Manager, Wireless Services; and Vice President, General
Manager Wireless Business Systems. From 1981 to 1985, he was Branch Sales
Manager for Xerox.

Karla Stephenswas appointed as Ceský Mobils Chief Operating Officer on September 1, 1999.
From November 1996 until September 1999, Ms. Stephens was the Vice President of
Marketing at MobiFon and, in 1999, assumed the additional responsibility for
MobiFons Sales and Distribution functions. Ms. Stephens joined TIW in 1995 as
Director of Sales and Marketing for China Unicom. Prior to joining TIW, Ms.
Stephens worked for Bell Mobility Cellular in Canada. Ms. Stephens is married
to Mr. Tolstoy.

Committees of the Supervisory Board

The audit committee. The audit committee is responsible for making
recommendations to the board of management regarding the selection of
independent auditors, reviewing the results and scope of the audit and other
services provided by our independent accountants and reviewing and evaluating
our audit and control functions. The Supervisory board is currently exercising
the functions of the audit committee.

The compensation committee. The compensation committee is responsible for
reviewing and, as it deems appropriate, recommending to the supervisory board
with respect to members of the board of management, and to the board of
management with respect to other managerial employees, policies, practices and
procedures relating to compensation and the establishment and administration of
employee benefit plans. The compensation committee is responsible for making
recommendations to the board of management in relation to any employee stock
option, stock purchase or other rights plans, and advises and consults with our
officers as may be requested regarding managerial personnel policies. The
Supervisory Board is currently exercising the functions of the compensation
committee.

COMPENSATION OF SUPERVISORY BOARD MEMBERS AND EXECUTIVE OFFICERS

Reproduced in this section are extracts taken from our Notice of Annual
and Special Meeting of Shareholders and Management Proxy Circular dated April
29, 2003 filed with the United States Securities and Exchange Commission on
Form 6-K on May 20, 2003 and as Exhibit 11.2 hereto and with the Securities
Commissions and other similar authorities in Canada.

Compensation of Supervisory Board Members

In 2002, members of the Supervisory Board who were not employees received
US$15,000 per year as a retainer fee and a fee of US$1,000 for each meeting of
the Supervisory Board attended by them in person and a fee of US$500 if such
participation was made by telephone.

In addition, members of the Supervisory Board normally receive, on an
annual basis, options having a capital-at-work of US$30,000, representing an
expected compensation value of US$15,000. Such options are normally granted on
common shares of Telesystem International Wireless Inc. (TIW) under its
Employees Stock Option Plan. However, in 2002, no options were granted to
members of the Supervisory Board. At the Meeting, Shareholders will be asked
to approve an amendment to the compensation of the Supervisory Board so as to
substitute the annual grant of options with an increase of US$15,000 in the
annual retainer for a total of US$30,000 in annual retainer. Such
modification, if approved by Shareholders, would become effective retroactively
as of January 2002. See Amendment to the Compensation of the Supervisory
Board.

Compensation of Named Executive Officers

The table below shows certain compensation information for Mr. Alexander
Tolstoy, the President and Chief Executive Officer of the Corporation, and the
four other most highly compensated executive officers of the Corporation and
its subsidiaries during the financial year ended December 31, 2002
(collectively, the Named Executive Officers). This information includes the
dollar value of base salaries, bonus awards and long-term incentive plan
payments, the number of options granted, and certain other compensation, if
any, whether paid or deferred.





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|                       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 
|---------------------- |  | -------------------------- | ---- | ---------------------------------- |  | ------ | ------- | --------- |  | ------------ | ------- | ---------- |  | ------------ | ------- | ------ |  | ---------------------- | --------- | ------ |  |  | ------ | --- |  | --------- | ----- |  |  |  | - | 
|                       |  | Summary Compensation Table
|                       |  |                           
|                       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  | Long-Term Compensation
|                       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                       
|                       |  | Annual Cash Compensation   |      | Securities Under Options/Units (#) |  |        |         |          
|                       |  |                            |      |                                    |  |        |         |          
|                       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  | Other Annual |         |        |  |                        |           | Clear- |  |  |        |     |  | All Other
|Name and Principal     |  |                            |      |                                    |  | Salary |         | Bonus(1)  |  | Compensation |         | TIW        |  | Wave         |         | TIW    |  | Compensation          
|Position               |  | Year                       |      | (Cdn$)                             |  | (Cdn$) |         | (Cdn$)(2) |  | Options(3)   |         | Options(4) |  | Units(5)     |         | (Cdn$)
|                       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |       
|Alexander Tolstoy      |  |                            | 2002 |                                    |  |        | 312,736 |           |  |              | 170,629 |            |  |              | 579,037 |        |  |                        | 6,134,083 |        |  |  |       |     |  |           |      |  |  |  |  | 
|President and Chief    |  |                            | 2001 |                                    |  |        | 298,555 |           |  |              | 222,125 |            |  |              | 709,913 |        |  |                        |          |        |  |  |       |     |  |           |      |  |  |  |  | 
|Executive Officer,     |  |                            | 2000 |                                    |  |        | 273,515 |           |  |              | 205,136 |            |  |              | 603,287 |        |  |                        | 11,382    |        |  |  | 77,814 |     |  |           |      |  |  |  |  | 
|ClearWave N.V.         |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 
|James J. Jackson(6)    |  |                            | 2002 |                                    |  |        | 202,209 |           |  |              | 81,136  |            |  |              | 332,113 |        |  |                        | 2,505,664 |        |  |  |       |     |  |           | 6,836 |  |  |  |  | 
|Chief Financial        |  |                            | 2001 |                                    |  |        | 115,170 |           |  |              | 68,756  |            |  |              | 238,477 |        |  |                        |          |        |  |  | 58,265 |     |  |           |      |  |  |  |  | 
|Officer, ClearWave     |  |                            | 2000 |                                    |  |        | 186,167 |           |  |              | 104,440 |            |  |              | 419,277 |        |  |                        | 16,667    | (7)    |  |  | 49,222 | (7) |  |           |      |  |  |  |  | 
|N.V.                   |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 
|Karla Stephens         |  |                            | 2002 |                                    |  |        | 184,927 |           |  |              | 102,773 |            |  |              | 324,815 |        |  |                        | 2,243,878 |        |  |  |       |     |  |           | 6,122 |  |  |  |  | 
|Chief Operating        |  |                            | 2001 |                                    |  |        | 173,636 |           |  |              | 86,384  |            |  |              | 346,602 |        |  |                        |          |        |  |  |       |     |  |           |      |  |  |  |  | 
|Officer,               |  |                            | 2000 |                                    |  |        | 162,155 |           |  |              | 80,064  |            |  |              | 264,463 |        |  |                        | 2,419     |        |  |  | 27,904 |     |  |           |      |  |  |  |  | 
|Cesky
Mobil a.s.       |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 
|Ted Lattimore(8)       |  |                            | 2002 |                                    |  |        | 185,773 |           |  |              | 59,355  |            |  |              | 310,052 |        |  |                        | 2,243,878 |        |  |  |       |     |  |           | 6,122 |  |  |  |  | 
|President and Chief    |  |                            | 2001 |                                    |  |        | 167,364 |           |  |              | 99,917  |            |  |              | 317,279 |        |  |                        |          |        |  |  |       |     |  |           |      |  |  |  |  | 
|Operating Officer,     |  |                            | 2000 |                                    |  |        | 138,526 |           |  |              | 78,960  |            |  |              | 232,794 |        |  |                        | 4,000     |        |  |  | 40,913 |     |  |           |      |  |  |  |  | 
|MobiFon S.A.           |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 
|Hrenchuk, Fred         |  |                            | 2002 |                                    |  |        | 134,545 |           |  |              | 35,493  |            |  |              | 207,332 |        |  |                        |          |        |  |  | 5,800  |     |  |           |      |  |  |  |  | 
|Vice-President, Sales, |  |                            | 2001 |                                    |  |        | 134,000 |           |  |              | 38,699  |            |  |              | 246,535 |        |  |                        |          |        |  |  | 4,824  |     |  |           |      |  |  |  |  | 
|IS/IT
& Customer       |  |                            | 2000 |                                    |  |        | 115,920 |           |  |              | 32,889  |            |  |              | 222,969 |        |  |                        |          |        |  |  | 4,168  |     |  |           |      |  |  |  |  | 
|Care,
Cesky Mobil a.s. |  |                            |      |                                    |  |        |         |           |  |              |         |            |  |              |         |        |  |                        |           |        |  |  |        |     |  |           |       |  |  |  |   | 



---

|(1) |  | Bonus awards are paid in cash in the year following the financial year
for which they are awarded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | Represents primarily premiums for services rendered outside of Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(4) |  | Represents the number of options granted under TIWs Employees Stock
Option Plan during the relevant financial year, including the November
2001 Option Grants, as defined. See Compensation of Named Executive
Officers  Option and Unit Grants in Last Financial Year.                                                                                                                                                                                                                                                                                       
|   
|(5) |  | Represents the number of options granted under the Corporations Senior
Executives and Key Employees Stock Option Plans during the relevant
financial year. However, in December 2002, such plans were terminated and
all options granted thereunder to the Named Executive Officers were
cancelled. In substitution for the cancelled options, a number of options
under TIWs Employees Stock Option Plan were granted to such individuals,
except to Mr. Hrenchuk, who received the same number of options under TIW
Czech N.V.s Employees Stock Option Plan.
|   
|(6) |  | Indicates the number of units granted under TIWs Performance Unit Plan
in 2002, including the November 2001 Unit Grants, as defined, net of the
number of units cancelled as the result of the grant of options under
TIWs Employees Stock Option Plan in 2002. See Compensation of Named
Executive Officers  Option and Unit Grants in Last Financial Year.                                                                                                                                                                                                 
|   
|(7) |  | Mr. Jackson left the Corporation on February 1, 2001 and returned on July
1, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(8) |  | These options were cancelled when Mr. Jackson left the Corporation as
described in note (6).                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(9) |  | Mr. Lattimore joined MobiFon S.A. as President and Chief Operating
Officer on February 7, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   





---



##### Table of Contents



Option and Unit Grants in Last Financial Year

The Named Executive Officers were granted options on notional shares of
the Corporation under its Senior Executives Stock Option Plan and its Key
Employees Stock Option Plan. The Named Executive Officers, except Mr.
Hrenchuk, were also granted options on common shares of TIW, a shareholder of
the Corporation, under its Employees Stock Option Plan (the TIW Option Plan).
However, in December 2002, the Corporations Senior Executive Stock Option
Plan and Key Employees Stock Option Plan were terminated and all options
granted thereunder were cancelled. In substitution for their cancelled
options, the Named Executives Officers, except Mr. Hrenchuk, were granted
additional options on common shares of TIW under the TIW Option Plan. Mr.
Hrenchuk was granted, in substitution for his cancelled options, the same
number of options but on notional shares of TIW Czech N.V., a subsidiary of the
Corporation (TIW Czech), under its Employees Stock Option Plan (the TIW
Czech Option Plan). See Report on Executive Compensation by the Supervisory
Board  Long-Term Incentive Compensation for a description of the TIW Czech
Option Plan. Furthermore, the Named Executive Officers, except Mr. Hrenchuk,
were granted units of TIW under a Performance Unit Plan (the TIW Performance
Unit Plan). For a description of the TIW Option Plan and the TIW Performance
Unit Plan, please refer to TIWs Management Proxy Circular for the 2003
shareholders annual and special meeting.

In 2002, a total of 58,881 options were granted to officers and employees
of the Corporation and its subsidiaries under its Senior Executives Stock
Option Plan and Key Employees Stock Option Plan. Such options were cancelled
in December 2002, after which time a total of 119,946 options were granted to
officers and employees of the Corporation and its subsidiaries under the TIW
Czech Option Plan.

Taking into consideration TIWs options granted on November 15, 2001
subject to the approval by TIWs shareholders of certain amendments to the TIW
Stock Option Plan presented at the annual shareholders meeting in May 2002,
(the November 2001 Option Grants), a total of 13,920,340 options of TIW were
granted to officers and employees of the Corporation and its subsidiaries under
the TIW Stock Option Plan in the last financial year.
In 2002, no units were granted under the TIW Performance Unit Plan.
However, on November 15, 2001, 4,517,500 units were granted to officers and
employees of the Corporation and its subsidiaries under such plan, subject to
TIWs shareholders approving the amendments to the TIW Stock Option Plan
presented at their annual meeting held in May 2002 (the November 2001 Unit
Grants). In accordance with the provisions of the TIW Performance Unit Plan,
most of these units were cancelled as a result of the grant of additional
options under the TIW Employees Stock Option Plan in 2002, leaving a net number
of 10,957 units granted in 2002.
The table below shows information regarding option and unit grants made to
the Named Executive Officers under the TIW Czech Option Plan, the TIW Option
Plan and the TIW Performance Unit Plan during the financial year ended December
31, 2002, taking into consideration the November 2001 Option Grants and the
November 2001 Unit Grants.

|                  |  |                  |  |                |  |                    |  |                    |  |                
|----------------- |  | ---------------- |  | -------------- |  | ------------------ |  | ------------------ |  | ---------------
|                  |  |                  |  |                |  |                    |  | Market Value of    |  |                
|                  |  |                  |  | Percentage of  |  |                    |  | Securities         |  |                
|                  |  |                  |  | Net Total of   |  |                    |  | Underlying         |  |                
|                  |  | Securities Under |  | Options/Units  |  | Exercise           |  | Options/Units      |  |                
|                  |  | Options/Units    |  | Granted in     |  | Price or Threshold |  | on the Date of     |  |                
|Name of Executive |  | Granted(1)       |  | Financial Year |  | Price              |  | Grant(2)           |  |                
|Officers          |  | (#)              |  | (%)            |  | (#/$)              |  | (#/$)              |  | EXPIRATION DATE
|                  |  |                  |  |                |  |                    |  |                    |  |                
|Alexander Tolstoy |  | 6,134,083/0      |  | 44.1%/0%       |  | 2,000,000/Cdn$1.90 |  | 2,000,000/Cdn$0.62 |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 1,900,000/Cdn$1.25 |  | 1,900,000/Cdn$0.62 |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 2,234,083/US$0.43  |  | 2,234,083/Cdn$0.60 |  | Nov. 11, 2007  
|                  |  |                  |  |                |  |                    |  |                    |  |                
|James J. Jackson  |  | 2,505,664/6,836  |  | 18.0%/32.6%    |  | 875,000/Cdn$1.90   |  | 875,000/Cdn$0.62   |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 800,000/Cdn$1.25   |  | 800,000/Cdn$0.62   |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 2,279/Cdn$1.67     |  | 2,279/Cdn$0.62     |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 2,279/Cdn$2.38     |  | 2,279/Cdn$0.62     |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 2,278/Cdn$3.09     |  | 2,278/Cdn$0.62     |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 830,664/US$0.43    |  | 830,664/Cdn$0.60   |  | Nov. 11, 2007  
|                  |  |                  |  |                |  |                    |  |                    |  |                
|Karla Stephens    |  | 2,243,878/6,122  |  | 16.1%/29.2%    |  | 800,000/Cdn$1.90   |  | 800,000/Cdn$0.62   |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 700,000/Cdn$1.25   |  | 700,000/Cdn$0.62   |  | Nov. 14, 2006  
|                  |  |                  |  |                |  | 2,041/Cdn$1.67     |  | 2,041/Cdn$0.62     |  | Nov. 14, 2006  
|                  |  |                  |  |                |  |                    |  | 2,041/Cdn$0.62     |  | Nov. 14, 2006  
|                  |  |                  |  |                |  |                    |  | 2,040/Cdn$0.62     |  |                





---



##### Table of Contents



|                  |  |                  |  |                |  |                    |  |                   |  |                      
|----------------- |  | ---------------- |  | -------------- |  | ------------------ |  | ----------------- |  | ---------------------
|                  |  |                  |  |                |  |                    |  | Market Value of   |  |                      
|                  |  |                  |  | Percentage of  |  |                    |  | Securities        |  |                      
|                  |  |                  |  | Net Total of   |  |                    |  | Underlying        |  |                      
|                  |  | Securities Under |  | Options/Units  |  | Exercise           |  | Options/Units     |  |                      
|                  |  | Options/Units    |  | Granted in     |  | Price or Threshold |  | on the Date of    |  |                      
|Name of Executive |  | Granted(1)       |  | Financial Year |  | Price              |  | Grant(2)          |  |                      
|Officers          |  | (#)              |  | (%)            |  | (#/$)              |  | (#/$)             |  | EXPIRATION DATE      
|                  |  |                  |  |                |  |                    |  |                   |  |                      
|                  |  |                  |  |                |  | 2,041/Cdn$2.38     |  | 743,878/Cdn$0.60  |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 2,040/Cdn$3.09     |  |                   |  | Nov. 11, 2007        
|                  |  |                  |  |                |  | 743,878/US$0.43    |  |                   |  |                      
|                  |  |                  |  |                |  |                    |  |                   |  |                      
|Ted Lattimore     |  | 2,243,878/6,122  |  | 16.1%/29.2%    |  | 800,000/Cdn$1.90   |  | 800,000/Cdn$0.62  |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 700,000/Cdn$1.25   |  | 700,000/Cdn$0.62  |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 2,041/Cdn$1.67     |  | 2,041/Cdn$0.62    |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 2,041/Cdn$2.38     |  | 2,041/Cdn$0.62    |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 2,040/Cdn$3.09     |  | 2,040/Cdn$0.62    |  | Nov. 14, 2006        
|                  |  |                  |  |                |  | 743,878/US$0.43    |  | 743,878/Cdn$0.60  |  | Nov. 11, 2007        
|                  |  |                  |  |                |  |                    |  |                   |  |                      
|Fred Hrenchuk     |  | 5,800(3)/0       |  | 4.8%/0.0%      |  | 5,800/US$20.00     |  | 5,800/US$20.00(4) |  | 1,500 on May 15, 2009
|                  |  |                  |  |                |  |                    |  |                   |  | 4,300 on Nov. 4, 2009



---

|(1) |  | The underlying securities to the options granted under the TIW Option
Plan are common shares of TIW.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The exercise price of options granted under the TIW Option Plan is
normally determined based on the closing price of the common shares of TIW
on the Toronto Stock Exchange (TSX) on the last trading day preceding
the grant date. However, for options granted on November 15, 2001, given
the volatility of the shares during this period, the TSX consented to the
grant of options at a price reflecting more adequately the market price of
the common shares in the weeks preceding the date of the grant.
Therefore, the market value of the common shares of TIW for the purpose of
this table is determined based on their closing price on November 8, 2001.
|   
|(3) |  | The underlying securities to the options granted under the TIW Czech
Option Plan are notional shares of TIW Czech.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(4) |  | The exercise price of options granted under the TIW Czech Option Plan is
determined based on the value of the notional shares of TIW Czech
determined by the TIW Czechs Supervisory Board for the purpose of the
plan on the day preceding the grant date.                                                                                                                                                                                                                                                                                                                                                                                                              

Aggregated Options and Units Exercised in Last Financial Year and Financial
Year End Option and Unit Values

The following tables summarize, for each of the Named Executive Officers,
the number of options and units, if any, exercised during the financial year
ended December 31, 2002, the aggregate value realized upon exercise and the
total number of unexercised options and units, if any, held at December 31,
2002. Value realized upon exercise is the difference between the market value
of the underlying shares on the exercise date and the exercise price or
threshold price of the option or unit. The value of unexercised in-the-money
options or units at financial year-end is the difference between its exercise
or threshold price and the market value of the underlying shares on December
31, 2002. These values, unlike the amounts set forth in the column Aggregate
Value Realized, have not been, and may never be, realized. The options and
units have not been, and may never be exercised, and actual gains, if any, on
exercise will depend on the value of the underlying shares on the date of
exercise. There can be no assurance that these values will be realized.
Unexercisable options are those which have been held for less than the time
required for vesting. Units are exercisable only upon a change of control of
TIW

|                  |  |            |   |           |  |                   |   |                                |  |                            |             |               |  |  |                 |  |  |                      |   |  |  |  |   |    
|----------------- |  | ---------- | - | --------- |  | ----------------- | - | ------------------------------ |  | -------------------------- | ----------- | ------------- |  |  | --------------- |  |  | -------------------- | - |  |  |  | - | ---
|                  |  |            |   |           |  |                   |   |                                |  |                            |             |               |  |  |                 |  |  | Value of Unexercised
|                  |  | Securities |   |           |  |                   |   | Unexercised Options/Units at   |  | In-the-Money Options and
|                  |  | Acquired   |   | Aggregate |  | December 31, 2002 |   | Units* at December 31, 2002(1)
|                  |  | on         |   | Value     |  |                   |   |                               
|Name of Executive |  | Exercise   |   | Realized  |  | Exercisable       |   | Unexercisable                  |  | Exercisable                |             | Unexercisable
|Officers          |  | (#)        |   | ($)       |  | (#)               |   | (#)                            |  | ($)                        |             | ($)          
|                  |  |            |   |           |  |                   |   |                                |  |                            |             |              
|Alexander Tolstoy |  |            |  |           |  |                   |  |                                |  |                            | 1,332,124/0 |               |  |  | 4,839,498/0     |  |  |                      |  |  |  |  |  |    
|James J. Jackson  |  |            |  |           |  |                   |  |                                |  |                            | 558,333/0   |               |  |  | 1,947,331/6,836 |  |  |                      |  |  |  |  |  |    
|Karla Stephens    |  |            |  |           |  |                   |  |                                |  |                            | 503,443/0   |               |  |  | 1,744,973/6,122 |  |  |                      |  |  |  |  |  |    
|Ted Lattimore     |  |            |  |           |  |                   |  |                                |  |                            | 501,000/0   |               |  |  | 1,746,878/6,122 |  |  |                      |  |  |  |  |  |    
|Fred Hrenchuk     |  |            |  |           |  |                   |  |                                |  |                            | 7,361/0     |               |  |  | 7,431/0         |  |  |                      |  |  |  |  |  | (2)



---

|(1) |  | The value of unexercised in-the-money options and units for options
and units granted under the TIW Option Plan and TIW Performance Unit Plan is
calculated using the closing price of the common shares of TIW on the TSX on
December 31, 2002, i.e. Cdn$0.50, less the exercise price of in-the-money
options.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---



##### Table of Contents



|(2) |  | The value of unexercised in-the-money options for options granted
under the TIW Czech Option Plan is calculated using the value of the notional
shares of TIW Czech on December 31, 2002 as determined by the TIW Czechs
Supervisory Board, i.e. US$20.00, less the exercise price of in-the-money
options.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|*   |  | In-the-money options or units are options or units for which the
market value of the underlying securities is higher than their exercise
price or threshold price.                                                                                                                                            

Retention Incentive

The Named Executive Officers are covered by the Corporations retention
incentive which, based on independent advice, is in line with industry
standards. The retention incentive provides for a payment, upon an involuntary
termination of employment for any reason other than performance or cause, of an
amount equal to between six months and 24 months of base salary, depending on
certain factors including seniority and functions filled, plus a portion of
target bonus and expatriate benefits for the same period. In the case of the
Named Executive Officers, the amounts payable under the retention incentive
range from nine to 24 months.

Executive Compensation Policy

The Corporations compensation policy aims to recognize and reward
individual contributions to the short-term and long-term success of the
Corporation and to ensure that the Corporation offers competitive compensation.

In accordance with such policy, executive compensation is based on three
major components: base salary, benefits and incentive compensation. The
Corporation seeks to provide base salaries and benefits targeted at a selected
market median level as well as incentive programs designed to bring executive
total compensation in the third quartile upon the achievement of superior
results. The Corporations compensation policy uses different scales for
employees of its operating subsidiaries who are local residents and for those
employees who are foreign residents (Expatriates). Incentive compensation is
awarded through plans and criteria approved by the Supervisory Board.

The key benefits currently being provided to Expatriates consist mainly of
relocation benefits, living conditions benefits such as housing allowance,
group insurance, home leave and tax planning. The Corporation does not provide
retirement or savings benefits to its executives.

Incentive compensation for Expatriates, which includes distinct short-term
and long-term components, is based on North American practices. It makes up a
significant portion of the total compensation of executives and is designed to
link executive remuneration and corporate performance, with a generally higher
emphasis on the long-term component. For the Named Executive Officers, the
short-term incentive opportunity represents approximately 15% of total
compensation and the long-term incentive opportunity ranges from 35% to 45% of
total compensation. Therefore, the at risk or incentive portion of their
total compensation ranges from 50% to 60%.

Short-Term Incentive Compensation

The short-term incentive plan offers bonuses tied to the achievement of
pre-determined corporate strategic objectives (e.g. financing plan),
quantitative operational objectives (e.g. number of subscribers, EBITDA and
revenues) and individual performance objectives supporting these business
objectives. The objectives, and the bonus payouts corresponding to their level
of achievement, are established on a yearly basis. The strategic and
operational objectives are presented to and approved by the Supervisory Board.

For the Named Executive Officers, bonuses range from 15% to 40% of base
salary when the strategic, operational and individual objectives are achieved.
When such objectives are exceeded, bonuses are higher; when they are not met,
the bonuses are lower and not paid at all when the objectives are met at less
than certain specified thresholds.

For financial year 2002, the Supervisory Board approved bonuses under the
short-term incentive plan that generally exceeded the
level of achievement of the strategic and operational objectives set at
the beginning of the financial year.





---



##### Table of Contents



Long-Term Incentive Compensation

The long-term incentive component is provided through the TIW Option Plan,
the TIW Performance Unit Plan and the TIW Czech Option Plan. The eligible
employees of the Corporation under the TIW Option Plan and the TIW Performance
Unit Plan are the Chief Executive Officer and the senior executives reporting
directly to the Chief Executive Officer and the Expatriate employees assigned
to the Corporation and its Romanian subsidiary, MobiFon s.a. A complete
description of the TIW Option Plan and the TIW Performance Unit Plan can be
found in TIWs Management Proxy Circular for the 2003 shareholders annual and
special meeting. Under the TIW Czech Option Plan, eligible participants are
management employees of Cesky Mobil a.s., a subsidiary of TIW Czech
(Cesky).

TIW
Czech Option Plan is designed to encourage employees of Cesky to work
towards and participate in the growth and development of Cesky. Under such
plan, options are granted on notional shares of TIW Czech until TIW Czech
completes an initial public offering or lists its shares on a recognized stock
exchange (IPO), after which time the options shall be granted on fully
participating equity shares of TIW Czech.

Prior to an IPO of TIW Czech, the exercise price of the options is based
on the value of the notional shares, as determined by the Supervisory Board of
TIW Czech at the time of the grant, using valuation principles it considers
appropriate for the purpose of the plan. After an IPO, the exercise price will
be established as a function of the closing price of the shares of TIW Czech on
the day prior to the grant. Furthermore, until TIW Czechs IPO, exercising the
options will entitle participants to receive, instead of shares of TIW Czech, a
cash payment equal to the increase in value of the notional shares, being the
difference between their value at the time of the exercise, as determined by
the Supervisory Board of TIW Czech, and the exercise price of the options.

The number of options granted is determined so as to deliver an intended
target annual compensation value expressed as a multiple of the base salary of
such persons. Under the current policy, the multiples range from 15% to 50% of
the annual base salary.

The vesting period for options issued under the TIW Czech Option Plan is
scaled according to the incentive objectives for different categories of
employees. For employees who are not Expatriates, a four-year vesting schedule
is established, to encourage continuity of employment. An initial 25% of the
option will vest on the second anniversary of the date of grant. A further 50%
of the option will vest at the end of the third year and 25% of the option at
the end of the fourth year. The vesting schedule for Expatriates will be
shorter: 33% of the option will vest six months after the date of the grant,
with a further 17% vesting after 12 months, an additional 25% vesting after 18
months, and the final 25% vesting after 24 months. Furthermore, upon the death
or disability of a participant or upon the occurrence of a change of control of
TIW Czech or of Cesky, the foregoing vesting periods shall be modified pursuant
to the TIW Czech Option Plan. No option under the TIW Czech Option Plan may be
exercised before the earlier of (a) the date falling 180 days from TIW Czechs
or Ceskýs IPO and (b) the date of occurrence of transactions that would result
in a change of control of TIW Czech or Cesky.

Special Cash Incentive Compensation

The Chief Executive Officer and the Chief Financial Officer of the
Corporation participate in the mid-term incentive plan called the Special Cash
Incentive Plan of TIW, established on November 12, 2002.

The Special Cash Incentive Plan rewards the achievement of pre-determined
corporate strategic objectives or milestones, including certain asset sales,
aimed at maximizing TIWs value in the medium term.

For such Named Executive Officers, the potential cash payouts range from
US$40,787 to US$461,856 depending on the objective. No payouts were made under
the Special Cash Incentive Plan during the financial year ended December 31,
2002. A complete description of the Special Cash Incentive Plan can be found
in TIWs Management Proxy Circular for the 2003 shareholders annual and
special meeting.

Indebtedness of Directors and Officers

We made no loans to members of the Supervisory Board or Management Board
and officers during the financial year ended December 31, 2002 and no loan was
outstanding as of that date.

Directors and Officers Liability Insurance





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##### Table of Contents



TIW maintains insurance protection against liability incurred by our
officers and directors as well as those of our subsidiaries in the performance
of their duties. The annual premium relating to insurance coverage for TIW and
its subsidiaries, amounting to approximately US$1.1 million in 2002, was paid
by TIW and part of this amount was recharged to its subsidiaries. The aggregate
limit of liability in respect of any and all claims is US$50 million for the
insured period of April 1, 2002 to April 1, 2003. The policy provides for the
indemnification of directors and officers in the case of claims for which TIW
has not indemnified or is not permitted by law to indemnify them, and for the
reimbursement of TIW, subject to a deductible of US$500,000, in the case of
claims for which it has indemnified or was permitted to indemnify the directors
or officers involved.

SHARE OWNERSHIP OF DIRECTORS AND OFFICERS

Ownership of Securities by Board Members and Senior Officers

As of May 1, 2003 none of the members of our supervisory board or of our
management board, none of our executive officers and none of their respective
associates and majority owned subsidiaries held any of our class A subordinate
voting shares or of our class B multiple voting shares. Certain of these
individuals however hold securities of TIW, which currently holds an 85.6%
equity interest in us.

EMPLOYEES

As at
December 31, 2002, we had approximately 3,050 employees, including
employees of our operating subsidiaries, compared to approximately
2,910 and 2,370 as at
December 31, 2001 and December 31, 2000 respectively. These numbers include
for 2002, 2001 and 2000, respectively, 1,700, 1,560 and 1,510 employees of
MobiFon and 1,350, 1,350, and 850 employees of Ceský Mobil. None of Ceský
Mobils or MobiFons employees and none of our employees are members of labor
unions. We believe that our subsidiaries and us enjoy good relationships with
our respective employees.




ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

The following table sets forth certain information regarding ownership of
our voting securities outstanding as of May 1, 2003, namely our class A
subordinate voting shares and class B multiple voting shares, for each person
who is known by us to be the beneficial owner of 5% or more of our outstanding
class A subordinate voting shares or of our outstanding class B multiple voting
shares, being our only classes of voting securities.

|                                                   |  |               |            |                 |  |               |      |                 |  |                 |            |               |  |                        |     |   |  |  |      |  
|-------------------------------------------------- |  | ------------- | ---------- | --------------- |  | ------------- | ---- | --------------- |  | --------------- | ---------- | ------------- |  | ---------------------- | --- | - |  |  | ---- | -
|                                                   |  |               |            |                 |  | Percentage of |      |                 |  |                 |            | Percentage of |  | Percentage of Voting  
|                                                   |  |               |            |                 |  | Voting Rights |      |                 |  |                 |            | Voting Rights |  | Rights Attached to all
|                                                   |  | Number of     |            | attached to all |  | Number of     |      | attached to all |  | Subordinate and
|                                                   |  | Subordinate   |            | Subordinate     |  | Multiple      |      | Multiple        |  | Multiple Voting
|Name of Shareholder                                |  | Voting Shares |            | Voting Shares   |  | Voting Shares |      | Voting Shares   |  | Shares         
|                                                   |  |               |            |                 |  |               |      |                 |  |                
|Telesystem International Wireless
Corporation N.V. |  |               |           |                 |  |               |     |                 |  |                 | 38,230,950 |               |  |                        | 100 | % |  |  | 80.7 | %
|Telesystem International Wireless Inc.             |  |               | 33,729,663 |                 |  |               | 73.5 | %               |  |                 |           |               |  |                        |    |   |  |  | 14.2 | %
|Canadian Depositary for Securities
Limited(1)      |  |               | 12,138,485 |                 |  |               | 26.5 |                 |  |                 |           |               |  |                        |    |   |  |  | 5.1  |  
|Total                                              |  |               |            |                 |  |               | 100  | %               |  |                 |            |               |  |                        | 100 | % |  |  | 100  | %
|                                                   |  |               |            |                 |  |               |      |                 |  |                 |            |               |  |                        |     |   |  |  |      |  



---

|(1) |  | To our knowledge, substantially all of our shares held publicly through
the Canadian Depositary for Securities are beneficially held by three or
four institutional holders. We do not know however the exact identity and
shareholding of each of these holders.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Prior to February 13, 2001, TIWC held 100% of our shares. On February 13,
2001, TIWC transferred 45,868,498 of our class A subordinate voting shares to
Montreal Trust Company of Canada in connection with the Units offering
completed by TIW on that date. In February 2002, TIW acquired 33,729,663 of
our class A subordinate voting shares in connection with its unit issuer bid
launched on December 11, 2001. In June 2002, the units of TIW expired and
12,138,485 of our class A subordinate voting shares detached from the units and
were distributed to holders of such units through a nominee of Canadian
Depositary for Securities
Limited.





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##### Table of Contents



Given that TIWC is a wholly owned subsidiary of TIW, TIW currently
controls 94.9% of the votes attached to our outstanding shares.

All of our outstanding shares are currently registered in the name of a
nominee of The Canadian Depositary for Securities, a Canadian entity, TIW, also
a Canadian entity and TIWC, a Netherlands entity. Consequently none of our
outstanding shares are currently held by registered holders in the United
States.

RELATED PARTY TRANSACTIONS

During the financial year ended December 31, 2001, neither we nor our
subsidiaries entered into any transaction with an insider or associate of ours,
with any proposed nominee as a supervisory board member or any associate or
affiliate of any such insider or proposed nominee, that has or would materially
affect us or any of our subsidiaries, except for transactions entered into
under the following agreements:



| | 1. |  | Technical Services Agreements between us, our operating subsidiaries
and TIW pursuant to which TIW provides services to our operating
subsidiaries in areas such as engineering, information technology,
marketing, human resources, finance and administration. For the
financial year ended December 31, 2002, an aggregate amount of $3.7
million was incurred by us and our subsidiaries under these agreements.
Part of this amount has not been paid to TIW and has been treated as
advances under certain loan agreements mentioned below;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Loan Agreements between us and TIWC, representing advances made by
TIWC to finance our development costs. As at March 31, 2003, an
aggregate amount of approximately $55 million in advances, consisting
mostly of demand notes at the corporate level of $54.1 million, were
made to us, bearing an annual interest rate of 14%. These advances are
convertible into our class A subordinate voting shares subject to
corporate and regulatory approvals and based on terms to be established
at the date of conversion.                        




ITEM 8  FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Our consolidated Financial Statements for the fiscal years ended December
31, 2000, 2001 and 2002 and the auditors report signed by Ernst & Young LLP
are presented at Item 18 of this report.

Legal Proceedings

We may be involved in litigation, along with our subsidiaries and
operating companies, from time to time in the ordinary course of our
businesses. In managements opinion, the litigation in which we or our
subsidiaries or operating companies are currently involved is not material to
our financial condition, results of operations or cash flow.

Dividend Policy

We have never declared or paid any cash dividends on our shares. However,
we may declare dividends in the future should our capital structure, liquidity
and applicable laws and regulations permit us to do so.

SIGNIFICANT CHANGES

There has been no significant change since the date of our annual
financial statements.




ITEM 9  THE OFFER AND LISTING

OFFER AND LISTING DETAILS

Not applicable.

PLAN OF DISTRIBUTION





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##### Table of Contents



Not applicable.

MARKETS

Class A Subordinate Voting Shares

In February 2001, TIW completed a units offering of $260.4 million. Each
unit was comprised of (1) one of our class A subordinate voting share and (2)
an option to purchase one fifth of one subordinate voting share of TIW by
surrendering the unit at any time from the issuance of the units until June 30,
2002. Our shares were non-detachable from the unit before June 30, 2002. On
that date, any option to purchase subordinate voting shares of TIW not
exercised detached from our share and expired. Our class A subordinate voting
shares included in the units were then delivered to the holders of these units.

The units were issued at a price of Cdn$9.05. As of December 31, 2001,
TIW had 45,868,498 units outstanding in which all of our 45,868,448 class A
subordinate voting shares were comprised. In February 2002, TIW completed an
issuer bid for its outstanding units in which it repurchased approximately 33.7
million units and the same number of underlying class A subordinate voting
shares. As of May 1, 2003 and given the expiration of the units on June 30,
2002, TIW held 33,730,013 of our class A subordinate voting shares and the
remaining 12,138,485 class A subordinate voting shares were publicly held.

The units were traded on The Toronto Stock Exchange under the symbol
TIW.UN. The following table sets forth, for the months and quarters
indicated, the range of high and low closing prices for the units as reported
on The Toronto Stock Exchange.

|              |  |                        |      |     |  |  |      | 
|------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|              |  | Toronto Stock Exchange
|              |  | Price Range (Cdn$)    
|              |  |                       
|              |  | High                   |      | Low
|              |  |                        |      |    
|January 2002  |  |                        | 6.05 |     |  |  | 4.50 | 
|February 2002 |  |                        | 7.00 |     |  |  | 5.25 | 
|March 2002    |  |                        | 8.50 |     |  |  | 5.50 | 
|April 2002    |  |                        | 7.75 |     |  |  | 6.75 | 
|May 2002      |  |                        | 7.00 |     |  |  | 6.00 | 
|June 2002     |  |                        | 6.00 |     |  |  | 5.00 | 

|               |  |                        |      |     |  |  |      | 
|-------------- |  | ---------------------- | ---- | --- |  |  | ---- | 
|               |  | Toronto Stock Exchange
|               |  | Price Range (Cdn$)    
|               |  |                       
|               |  | High                   |      | Low
|               |  |                        |      |    
|2001           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 9.45 |     |  |  | 6.25 | 
|Second quarter |  |                        | 7.50 |     |  |  | 4.50 | 
|Third quarter  |  |                        | 6.00 |     |  |  | 4.00 | 
|Fourth quarter |  |                        | 7.30 |     |  |  | 4.00 | 
|2002           |  |                        |      |     |  |  |      | 
|First quarter  |  |                        | 8.50 |     |  |  | 4.50 | 
|Second quarter |  |                        | 7.75 |     |  |  | 5.00 | 

There is currently no market on which to trade the class A subordinate
voting shares and there can be no assurance that an active market will ever
develop or be maintained for our shares.




ITEM 10  ADDITIONAL INFORMATION

SHARE CAPITAL

Not applicable.

MEMORANDUM AND ARTICLES OF ASSOCIATION





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##### Table of Contents



We were incorporated in The Netherlands under the name TIW Eastern Europe
N.V., on September 17, 1999 pursuant a deed of incorporation. On May 30, 2000,
we amended our Articles of Association to, among other things, change our name
to ClearWave N.V. On February 13, 2001, we filed amended and restated Articles
of Association to, among other things, effect certain changes to our share
capital.

The objects of the Company are described at Article 3 of our amended
articles and include among other things the participation, financing and
management of companies, and providing security for debts of other affiliated
companies. A description of certain rights and limitations attached to our
shares and certain procedures applicable at our meetings of shareholders as
well as other pertinent information may be found under captions Description of
Share Capital and Exchange Control and Limitations of post-effective
amendment no. 1 to our registration statement on Form F-1 filed with the
Securities Exchange Commission on February 8, 2001 incorporated herein by
reference.

MATERIAL CONTRACTS

The following is a list of each material contract, other than contracts
entered into in the ordinary course of business, to which we or our
subsidiaries are a party, for the two years preceding publication of this
document:



| | 1. |  | Loan Agreements between us and TIW, and between us and TIWC,
representing advances made by TIW and TIWC to finance our development
costs. As at March 31, 2003, an aggregate amount of $54.1 million in
advances were made to us, bearing an annual interest rate of 14% and
repayable on demand. These advances are convertible into our class A
subordinate voting shares subject to corporate and regulatory approvals
based on terms to be established at the date of conversion.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Exit Deed dated March 19, 2003 among EMP, TIW, TIWC and us providing
for certain exit rights granted to EMP in connection with their
investment in MobiFon.                                                                                                                                                                                                                                                                                                                          
|
| | 3. |  | License to establish and operate a public mobile telecommunication
network according to the GSM standard dated June 17, 2002;                                                                                                                                                                                                                                                                                                                                                        
|
| | 4. |  | License to establish and operate a public mobile telecommunication
network according to the VmTS standard dated June 20, 2002;                                                                                                                                                                                                                                                                                                                                                       
|
| | 5. |  | Loan Agreement between MobiFon S.A. and European Bank for
Reconstruction and Development dated August 27, 2002 (Incorporated by
reference to Form 6-K of ClearWave N.V., filed November 13, 2002).                                                                                                                                                                                                                                                                                   
|
| | 6. |  | Loan Agreement between MobiFon S.A. and Nordic Investment Bank dated
August 27, 2002 (Incorporated by reference to
Form 6-K of ClearWave N.V., filed November 13, 2002).                                                                                                                                                                                                                                                                                                             
|
| | 7. |  | Loan Agreement between MobiFon S.A. and Export Development Bank
Canada dated August 27, 2002 (Incorporated by reference to Form 6-K of
ClearWave N.V., filed November 13, 2002).                                                                                                                                                                                                                                                                                                     
|
| | 8. |  | Share Retention and Subordination Deed between MobiFon S.A., certain
of its direct and indirect shareholders, Export Development Canada,
Nordic Investment Bank and European Bank for Reconstruction and
Development dated August 27, 2002.                                                                                                                                                                                                                                          

EXCHANGE CONTROLS

There are currently no limitations, either under the laws of The
Netherlands or in our articles of association, on the rights of non-residents
of The Netherlands to hold or vote our class A subordinate voting shares other
than those that apply to holders that are resident in the Netherlands. Cash
distributions, if any, payable in Euros on class A subordinate voting shares
may be officially transferred from The Netherlands and converted into any other
currency without Dutch legal restrictions, except that, for statistical
purposes, any payments in excess of 50,000 must be reported by us to the Dutch
Central Bank. Cash distributions, if any, on our class A subordinate voting
shares will be paid in U.S. dollars converted at the rate of exchange at the
close of business on the date fixed for that purpose by the board of management
in accordance with our articles of association.

CERTAIN NETHERLANDS INCOME TAX CONSIDERATIONS





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##### Table of Contents



The following is a general description of Dutch tax law currently in
effect as applicable to ownership and disposition of class A subordinate voting
shares of ClearWave N.V. (hereinafter referred to as ClearWave Shares) held by
residents of Canada and the United States as defined below. These statements
should not be construed by holders of ClearWave Shares (hereinafter referred to
as Share Holders) as advice on their own tax position. As individual
circumstances may affect the general tax consequences as described in this
summary, Share Holders are strongly recommended to consult their professional
adviser with regard to their own tax position and tax consequences of owning
and disposing of the ClearWave Shares.

Dutch Taxation of Share Holders Who are Resident in Canada

This section Dutch Taxation of Share Holders Who are Resident in Canada
describes certain Dutch tax consequences for a Share Holder who is neither a
resident, nor deemed to be a resident in The Netherlands for purposes of Dutch
taxation but who is a resident of Canada as defined in the double taxation
convention in effect between The Netherlands and Canada (hereinafter referred
to as Canadian Resident Share Holder).

Withholding Tax

Dividends distributed by us to Canadian Resident Share Holders generally
are subject to a withholding tax imposed by The Netherlands at a rate of 25%.

The term dividends for this purpose includes, but is not limited to:



| |  |  | distributions in cash or in kind, deemed and constructive
distributions and repayments of paid-in capital not recognized as such
for Dutch dividend withholding tax purposes;                                                                                                                                                                                                                                                                   
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | liquidation proceeds, proceeds of redemption of shares or, generally,
consideration for repurchase of shares in excess of the average paid-in
capital recognized for Dutch dividend withholding tax purposes;                                                                                                                                                                                                                                   
|
| |  |  | the par value of shares issued or an increase of the par value of
existing shares, as the case may be, to the extent that it does not
appear that a contribution to capital, recognized for Dutch dividend
withholding tax purposes, was made or will be made; and                                                                                                                                                                              
|
| |  |  | partial repayment of paid-in capital, recognized for Dutch dividend
withholding tax purposes, if and to the extent that there are net
profits, within the meaning of the Dividend Withholding Tax Act, unless
the general meeting of our shareholders has previously resolved to make
such repayment and provided that the par value of the shares concerned
has been reduced by a corresponding amount by changing our Articles of
Association.

As a result of contributions in shares to the paid-in capital of ClearWave
N.V. (hereinafter referred to as ClearWave), a portion of such paid-in capital
may not be recognized for Dutch dividend withholding tax purposes.

Under the double taxation convention on income and capital gains in effect
between The Netherlands and Canada (the Canada/NL Income Tax Treaty),
dividends as defined in the Canada/NL Income Tax Treaty paid by ClearWave to a
Canadian Resident Share Holder who is the beneficial owner of the dividends are
generally eligible for a reduction of the 25% Dutch dividend withholding tax to
15%, or in the case of certain Canadian corporate shareholders owning directly
or indirectly at least 10% of the voting power of ClearWave or owning at least
25% of the capital of ClearWave, 5%, unless such resident carries on a business
in The Netherlands through a permanent establishment or performs independent
personal services from a fixed base situated in The Netherlands and the holding
of the ClearWave Shares forms part of the business property of such permanent
establishment or pertains to such fixed base.

Taxes on Income and Capital Gains

Under the Canada/NL Income Tax Treaty, capital gains realized by a
Canadian Resident Share Holder upon the disposition of ClearWave Shares, are,
with certain exceptions, generally exempt from Dutch tax on capital gains.

A Canadian Resident Share Holder will not be subject to any Dutch taxes on
income or capital gains in respect of dividends
distributed by ClearWave or in respect of capital gains realized on the
disposition of ClearWave Shares (other than the dividend withholding tax
described above), provided that:





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##### Table of Contents





| |  |  | such Canadian Resident Share Holder is neither resident nor deemed
resident in The Netherlands nor is an individual who has been resident
nor is deemed to have been resident in The Netherlands during a period
of six years preceding an alienation of the ClearWave Shares;                                         
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | such Canadian Resident Share Holder does not have a business or an
interest in a business that is, in whole or in part, carried on through
a permanent establishment or a permanent representative in The
Netherlands and to which business or part of a business, as the case may
be, the Shares are attributable; and
|
| |  |  | the ClearWave Shares owned by such Canadian Resident Share Holder do
not form part of a substantial interest or a deemed substantial
interest, as defined, in the share capital of ClearWave or if such
shares do form part of such a substantial interest, they form part of
the assets of a business; and            
|
| |  |  | such Canadian Resident Share Holder is not entitled to a share in the
profits of a business that is effectively managed in The Netherlands,
other than by way of securities or through an employment contract, the
ClearWave Shares being attributable to such business.                                               

Generally, a Canadian Resident Share Holder will not have a substantial
interest in ClearWave if he, his spouse, certain other relatives (including
foster children) or certain persons sharing his household, do not hold, alone
or together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing 5% or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of
ClearWave, or rights to acquire shares, whether or not already issued, that
represent at any time (and from time to time) 5% or more of the total issued
and outstanding capital (or the issued and outstanding capital of any class of
shares) of ClearWave or the ownership of certain profit participating
certificates that relate to 5%or more of the annual profit of ClearWave and/or
to 5% or more of the liquidation proceeds of ClearWave. A deemed substantial
interest generally exists if (part of) a substantial interest has been disposed
of or is deemed to have been disposed of without recognition of gain.

Under the Canada/NL Income Tax Treaty, dividends received from ClearWave
by a Canadian Resident Share Holder who has a substantial interest or a deemed
substantial interest, as defined, in the share capital of ClearWave and is the
beneficial owner of the dividends, are generally eligible for a reduction of
Netherlands income tax liability up to 15% or in the case of certain Canadian
corporate shareholders owning directly or indirectly at least 25% of the
capital of ClearWave or owning at least 10% of the voting power of ClearWave up
to 5%. Generally, a full credit for dividend withholding tax withheld on those
dividends is available against any Dutch income tax liability.

Dutch Taxation of Share Holders Who are Resident in the United States

This section Dutch Taxation of Share Holders Who are Resident in the
United States describes certain Dutch tax consequences for a Share Holder who
is neither a resident, nor deemed to be a resident in The Netherlands for
purposes of Dutch taxation but who is a resident of the United States as
defined in the double taxation convention in effect between The Netherlands and
the United States (hereinafter referred to as US Resident Share Holder).

Withholding Tax

Dividends distributed by us to US Resident Share Holders generally are
subject to a withholding tax imposed by The Netherlands at a rate of 25%.

The term dividends for this purpose includes, but is not limited to:



| |  |  | distributions in cash or in kind, deemed and constructive
distributions and repayments of paid-in capital not recognized as such
for Dutch dividend withholding tax purposes;                                
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | liquidation proceeds, proceeds of redemption of shares or, generally,
consideration for repurchase of shares in excess of the average paid-in
capital recognized for Dutch dividend withholding tax purposes;





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##### Table of Contents





| |  |  | the par value of shares issued or an increase of the par value of
existing shares, as the case may be, to the extent that it does not
appear that a contribution to capital, recognized for Dutch dividend
withholding tax purposes, was made or will be made; and                                                                                                                                                                              
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | partial repayment of paid-in capital, recognized for Dutch dividend
withholding tax purposes, if and to the extent that there are net
profits, within the meaning of the Dividend Withholding Tax Act, unless
the general meeting of our shareholders has previously resolved to make
such repayment and provided that the par value of the shares concerned
has been reduced by a corresponding amount by changing our Articles of
Association.

As a result of contributions in shares to the paid-in capital of
ClearWave, a portion of such paid-in capital may not be recognized for Dutch
dividend withholding tax purposes.

Under the double taxation convention on income and capital gains in effect
between The Netherlands and the United States (the US/NL Income Tax Treaty),
dividends as defined in the US/NL Income Tax Treaty paid by us to a US Resident
Share Holder (other than certain exempt organizations or exempt pension trusts)
who is the beneficial owner of the dividends are generally eligible for a
reduction of the 25% Dutch dividend withholding tax to 15%, or in the case of
certain U.S. corporate shareholders owning at least 10% of the voting power of
ClearWave, 5%, unless such resident carries on a business in The Netherlands
through a permanent establishment or performs independent personal services
from a fixed base situated in The Netherlands and the holding of ClearWave
Shares forms part of the business property of such permanent establishment or
pertains to such fixed base. The US/NL Income Tax Treaty provides for a
complete exemption for dividends received by certain exempt pension trusts and
exempt organizations, as defined therein. A Share Holder will not be eligible
for the benefits of the US/NL Income Tax Treaty if such Share Holder does not
satisfy one or more of the tests set forth in the limitation on benefits
provision of Article 26 of the US/NL Income Tax Treaty.

Taxes on Income and Capital Gains

Under the US/NL Income Tax Treaty, capital gains realized by a US Resident
Share Holder upon the disposition of ClearWave Shares, are, with certain
exceptions, generally exempt from Dutch tax on capital gains.

A US Resident Share Holder will not be subject to any Dutch taxes on
income or capital gains in respect of dividends distributed by ClearWave or in
respect of capital gains realized on the disposition of ClearWave Shares (other
than the dividend withholding tax described above), provided that:



| |  |  | such US Resident Share Holder does not have a business or an interest
in a business that is, in whole or in part, carried on through a
permanent establishment or a permanent representative in the Netherlands
and to which business or part of a business, as the case may be, the
ClearWave Shares are attributable; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the ClearWave Shares owned by such US Resident Share Holder do not
form part of a substantial interest or a deemed substantial interest, as
defined, in the share capital of ClearWave or if such ClearWave Shares
do form part of such a substantial interest, they form part of the
assets of a business.                

Furthermore, a US Resident Share Holder will not be subject to any Dutch
taxes on income or capital gains in respect of capital gains realized on the
disposition of ClearWave Shares provided that such US Resident Share Holder is
not an individual who has been resident or deemed to have been resident in the
Netherlands at any time during a period of five years preceding an alienation
of the ClearWave Shares and at the time of the alienation owns, either alone or
together with certain related individuals, at least 25 percent of any class of
shares of such company.

Generally, a US Resident Share Holder will not have a substantial interest
in ClearWave if he, his spouse, certain other relatives (including foster
children) or certain persons sharing his household, do not hold, alone or
together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing 5% or more of the total issued and outstanding
capital (or the issued and outstanding capital of any class of shares) of
ClearWave, or rights to acquire shares, whether or not already issued, that
represent at any time (and from time to time) 5% or more of the total issued
and outstanding capital (or the issued and outstanding capital of any class of
shares) of ClearWave or the ownership of certain profit participating
certificates that relate to 5%or more of the annual profit of ClearWave and/or
to 5% or more of the liquidation proceeds of ClearWave. A deemed substantial
interest generally exists
if (part of) a substantial interest has been disposed of or is deemed to
have been disposed of without recognition of gain.





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##### Table of Contents



Under the US/NL Income Tax Treaty, dividends received from ClearWave by a
US Resident Share Holder who has a substantial interest or a deemed substantial
interest, as defined, in the share capital of ClearWave and is the beneficial
owner of the dividends (other than certain exempt organizations or exempt
pension trusts), are generally eligible for a reduction of Netherlands income
tax liability to 15% or in the case of certain U.S. corporate shareholders
owning at least 10% of the voting power of ClearWave to 5%. Generally, a full
credit for dividend withholding tax withheld on those dividends is available
against any Dutch income tax liability. The US/NL Income Tax Treaty provides
for a complete exemption of Netherlands income tax for dividends received by
certain exempt pension trusts and exempt organizations, as defined in the US/NL
Income Tax Treaty.

As indicated above, a US Resident Share Holder will not be eligible for
the benefits of the US/NL Income Tax Treaty if such US Resident Share Holder
does not satisfy one or more of the tests set forth in the limitation on
benefits provision of Article 26 of the US/NL Income Tax Treaty.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the principal U.S. federal income tax
considerations applicable to an investment in class A subordinate voting shares
by U.S. holders who hold class A subordinate voting shares as capital assets
within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986,
as amended. For purposes of this discussion, the term U.S. holder means a
beneficial owner of class A subordinate voting shares that is, for U.S. federal
income tax purposes, (i) an individual who is a citizen or resident of the
United States, (ii) a corporation, or other entity treated as a corporation for
U.S. federal income tax purposes, created or organized in or under the laws of
the United States, any State or the District of Columbia, (iii) an estate, the
income of which is subject to U.S. federal income taxation regardless of
source, or (iv) a trust the administration of which is subject to the primary
supervision of a United States court and for which one or more U.S. persons
have the authority to control all substantial decisions. If a partnership holds
class A subordinate voting shares, the U.S. federal income tax treatment of a
partner generally depends upon the status of the partner and the activities of
the partnership. We based this summary on the Internal Revenue Code, Treasury
Regulations promulgated thereunder, and judicial and administrative
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, which change may be retroactive and may affect the tax
consequences described herein.

This summary is for general information only and does not take into
account the individual circumstances of any particular investor. Therefore,
investors who are U.S. holders are strongly urged to consult their own tax
advisors with respect to the tax consequences of an investment in the class A
subordinate voting shares based on their particular circumstances, including
any consequences of an investment in the class A subordinate voting shares
arising under state or local tax law or foreign tax laws of jurisdictions
outside of the United States, including The Netherlands.

Taxation of Dividends on Class A Subordinate Voting Shares

The gross amount of any dividend distributions to U.S. holders, including
any Netherlands withholding taxes paid by us with respect thereto, will be
taxable as ordinary income to the extent paid out of our current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes.
Distributions in excess of our current or accumulated earnings and profits will
be treated as a tax-free return of capital to the extent of your basis in such
class A subordinate voting shares and, to the extent in excess of basis, as
capital gain. Notwithstanding the foregoing, we do not intend to maintain
calculations of our current or accumulated earnings and profits, as determined
for U.S. federal income tax purposes. Any such distribution will not qualify
for the dividends-received deduction allowed to U.S. corporations.

Distributions paid in currency other than U.S. dollars, including any
withholding taxes paid by us with respect thereto in currency other than U.S.
dollars, will be included in the gross income of a U.S. holder in a U.S. dollar
amount calculated by reference to the exchange rate in effect on the day the
distributions are received by the U.S. holder, regardless of whether foreign
currency is converted into U.S. dollars at that time. If the foreign currency
is converted into U.S. dollars on the day received, U.S. holders generally
should not be required to recognize foreign currency exchange gain or loss.
U.S. holders should consult their own tax advisors regarding the treatment of
any foreign currency exchange gain or loss on any foreign currency that is not
converted into U.S. dollars on the day of receipt.

Dividends you receive will be treated as foreign-source income and will
generally constitute passive income (or, in some cases, financial services
income) for U.S. foreign tax credit purposes. You may be eligible, subject to
a number of complex
limitations, to claim a foreign tax credit in respect of Netherlands
withholding taxes withheld on a dividend paid on class A subordinate voting
shares. Alternatively, you may claim a deduction in respect of such
withholding taxes. The US/NL Income Tax





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Treaty generally provides for a maximum Netherlands withholding tax rate
of 15% with respect to dividends paid to U.S. holders that are entitled to the
benefits of the treaty. U.S. holders should consult their own tax advisors
concerning the application of the U.S. foreign tax credit rules to their
particular situations.

Sale or Exchange of Class A Subordinate Voting Shares

You will recognize capital gain or loss on the sale or exchange of class A
subordinate voting shares equal to the difference between the amount you
realize and your adjusted tax basis in such class A subordinate voting shares.
This gain or loss will be long-term if you have held the class A subordinate
voting shares for more than one year. Generally, for U.S. holders who are
individuals, long-term capital gains are subject to a preferential U.S. federal
income tax rate. The distinction between capital gain or loss and ordinary
income or loss is also important in other contexts; for example, for purposes
of the limitations on a U.S. holders ability to offset capital losses against
ordinary income. For foreign tax credit purposes, gain or loss recognized upon
such sale or exchange of class A subordinate voting shares generally will be
treated as from sources within the United States.

Passive Foreign Investment Company Considerations

The Code provides special anti-deferral rules regarding certain
distributions received by U.S. persons with respect to, and sales and other
dispositions (including pledges) of stock or options of, a passive foreign
investment company. A foreign corporation, such as ours, will be treated as a
passive foreign investment company if 75% or more of its gross income is
passive income for a taxable year or if the average percentage of its assets
(by value) that produce, or are held for the production of, passive income is
at least 50% for a taxable year. We believe that we were not a passive foreign
investment company for the taxable year ended December 31, 2002 and,
furthermore, we expect to conduct our affairs in such a manner so that we will
not meet the criteria to be considered a PFIC in the foreseeable future.

Backup Withholding Tax and Information Reporting Requirements

U.S. holders generally are subject to information reporting requirements
with respect to dividends paid in the United States and to the proceeds from
the disposition of class A subordinate voting shares, unless such holder is a
corporation or comes within certain other exempt categories and, when required,
demonstrates this fact. In general, if a non-corporate U.S. holder subject to
information reporting fails to furnish a correct taxpayer identification number
or otherwise fails to comply with applicable backup withholding requirements, a
30% backup withholding tax may apply to amounts paid to such U.S. holder. The
backup withholding tax is not an additional tax and may be credited against a
U.S. holders regular U.S. federal income tax liability or refunded by the U.S.
Internal Revenue Service, if applicable.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain Canadian federal income tax
considerations relating to the ownership and the disposition of class A
subordinate voting shares of the Company. The summary is only applicable to a
holder of class A subordinate voting shares who, for the purposes of the Income
Tax Act(Income Tax Act) and the Canada-Netherlands Income Tax Convention
(Convention), is resident in Canada and is not resident in the Netherlands or
any other jurisdiction, deals at arms length with the Company, holds the class
A subordinate voting shares as capital property and does not hold and is not
deemed to use or to hold the class A subordinate voting shares in carrying on a
business in the Netherlands (a Canadian Holder).

The class A subordinate voting shares of the Company will generally
constitute capital property to a Canadian Holder unless the Canadian Holder
holds such securities in the course of carrying on a business of trading or
dealing in securities or otherwise as part of a business of buying and selling
securities or has acquired such securities in a transaction or transactions
considered to be an adventure in the nature of trade.

This summary is based on the current provisions of the Convention and
accompanying protocols, the Income Tax Act, the regulations under the Income
Tax Act, specific proposals to amend the Income Tax Act or the regulations
thereunder announced by the Canadian Minister of Finance prior to the date of
this report and counsels understanding of the current administrative and
assessing practices of the Canada Customs and Revenue Agency (CCRA). This
summary does not otherwise take into account or anticipate any changes in law,
whether by legislative, governmental or judicial action, nor does it take into
account income tax laws or considerations of any province or territory of
Canada or any jurisdiction other than Canada.

The Income Tax Act contains certain provisions relating to securities held
by persons that are financial institutions for





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purposes of the Income Tax Act (the mark-to-market rules). This summary
does not take into account the mark-to-market rules and taxpayers who are
financial institutions for purposes of the Income Tax Act should consult
their own tax advisors. Nor does the summary take into account special rules
that may apply to Canadian Holders for which the Company is either a foreign
affiliate or a controlled foreign affiliate. Furthermore, this summary does
not discuss the proposed foreign investment entity rules.

This summary is for general information only and does not take into
account the individual circumstances of any particular Canadian Holder.
Therefore, Canadian Holders are urged to consult their own tax advisors with
respect to the tax consequences of holding the class A subordinate voting
shares of the Company, including any consequences of an investment in the class
A subordinate voting shares arising under state, local or provincial tax laws
of other jurisdictions.

Dividends on the Class A Subordinate Voting Shares of the Company

The gross amount of any dividend distributions to a Canadian Holder,
including any Netherlands withholding taxes paid by the Company with respect
thereto, will be fully taxable in Canada. A Canadian Holder may be eligible
for foreign tax credits or for a deduction from income depending on the
particular circumstances. Distributions paid in currency other than Canadian
dollars will be included in the income of the Canadian Holder in the Canadian
dollar amount calculated by reference to the exchange rate in effect on the day
the distributions are received by the Canadian Holder. Canadian Holders should
consult their own tax advisors concerning the application of the Canadian
foreign tax credit rules to their particular situations.

Disposition of the Class A Subordinate Voting Shares of the Company

On the disposition or deemed disposition of the class A subordinate voting
shares of the Company, the Canadian Holder will generally realize a capital
gain (or a capital loss) to the extent that the proceeds of disposition, net of
any costs of disposition, exceed (or are less than) the Canadian Holders
adjusted cost base of the class A subordinate voting shares of the Company.
Proceeds of disposition paid in currency other than Canadian dollars will be
calculated in Canadian dollars using the exchange rate in effect on the day the
proceeds of disposition are received.

In general, one-half of any capital gain realized by a Canadian Holder
will be included in the Canadian Holders income as a taxable capital gain and
one-half of any capital loss realized by a Canadian Holder may be deducted from
the Canadian Holders other taxable capital gains in accordance with the rules
in the Income Tax Act. Taxable capital gains realized by a Canadian-controlled
private corporation throughout the relevant taxation year, as defined by the
Income Tax Act, may be subject to an additional refundable tax of 6.67 percent.

Eligibility for Investment in Deferred Income Plans

The class A subordinate voting shares of the Company will not qualify as
eligible investments for trusts governed by registered retirement savings
plans, registered retirement income funds, deferred profit sharing plans and
registered education savings plans under the Income Tax Act unless the shares
are listed on the Toronto Stock Exchange or another stock exchange prescribed
by the Income Tax Act.

If a plan or fund purchases a non-eligible investment, the annuitant of
such plan will have to include in computing his or her income for the year an
amount equal to the fair market value of the class A subordinate voting shares
at the time the non eligible investment was acquired by the trust. If the
class A subordinate voting shares of the Company are listed on the Toronto
Stock Exchange or another stock exchange prescribed by the Income Tax Act, the
shares will become eligible investments for trusts governed by registered
retirement savings plans, registered retirement income funds, deferred profit
sharing plans and registered education savings plans under the Income Tax Act.
However, the class A subordinate voting shares of the Company will be foreign
property.

DIVIDENDS AND PAYING AGENTS

Not applicable.

STATEMENT BY EXPERTS

Not applicable.





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##### Table of Contents



DOCUMENTS ON DISPLAY

Any documents referred to in this Annual Report may be inspected at our
executive office at World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam,
The Netherlands. You may read and copy annual reports, current reports and
other information we file with the SEC at the SECs public reference room at
450 Fifth Street, NW, Washington, D.C., 20549. Please call the SEC at
1-800-SEC-0330 for further information concerning the public reference room.
We file our annual reports, current reports and other information
electronically with the SEC. You may access information about us on the SECs
website at www.sec.gov.




ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have used subordinate and multiple voting shares and bank and vendor
credit facilities to finance our operations. These on-balance sheet financial
instruments expose us to interest rate risk, foreign currency exchange rate
risk and market price risk. Additionally, we have commitments under supply
contracts, interest swaps, interest caps and currency swaps. These off-balance
sheet items also create foreign currency exchange rate risk exposure.

The carrying amounts of cash and cash equivalents, trade debtors, accounts
payable and accrued liabilities, taxes recoverable and payable approximate
their fair values due to the short-term nature of these instruments. Cash
equivalents consist of term deposits and highly liquid debt instruments
purchased with maturity of three months or less. The fair value of
distribution payable to non-controlling interest is not determinable because of
the uncertainty as to the timing of payment and the extent of participation of
non-controlling parties in the MobiFon share repurchase. The fair value of the
amount due to parent and affiliated companies is not determinable because it
cant be determined when it will be reimbursed or converted. The fair value of
the portion of the MobiFons secured senior credit facility for which the
interest rate has been fixed approximates $94.8 million. The fair value of the
sale and lease back financing in MobiFon is not determinable because of the
rarity of similar transaction in Romania. The carrying amounts of other
long-term debt approximate their fair values because their interest rates
fluctuate with market interest rates or are similar to interest rates currently
available to the Company.

As at December 31, 2002, most of our outstanding financial obligations, in
monetary terms, were of a variable-rate nature. However, MobiFon and Ceský
Mobil use interest swap agreements to hedge some interest rate exposure
associated with variable-rate on-balance sheet financial instruments. We have
not entered into any such arrangements for the purposes of trading or
speculation. We have entered into hedging arrangements in the Czech Republic
to systematically hedge against foreign currency exchange rate risks on
portions of long-term debt denominated in Euro. In certain circumstances, we
may decide to accept the inherent currency risk, principally because of the
relatively high cost of buying, or the inability to buy, forward cover in
currencies of the countries in which we operate. We do not anticipate any
near-term changes in the nature of our market risk exposures or in managements
objectives and strategies with respect to managing such exposures.
Additionally, we believe that, to some extent, the mix of currencies in which
we conduct our businesses and the geographic spread of our operations reduce
the overall sensitivity of our results of operations to specific exchange rate
fluctuations.

Foreign currency translation adjustments for subsidiaries domiciled in
non-highly inflationary countries are recorded to consolidated shareholders
equity specifically. In Romania, a highly inflationary country, we record
re-measurement gains and losses to the consolidated statements of income
(loss). For the year ended December 31, 2002, our subsidiary in Romania
recorded net foreign exchange losses of $1.9 million.

The following table provides information about our market risk exposure
associated with fluctuations in interest rates and foreign currency exchange
rates. The information in the table pertains to corporate and all fully
consolidated subsidiaries. The table presents principal cash flows and related
interest rates by year of maturity for our bank and vendor credit facilities in
effect as at December 31, 2002. The table excludes amounts related to
facilities that had not been drawn upon as at December 31, 2002. For the
interest rate swap agreements, the table presents notional amounts and the
related reference interest rates by year of maturity. Fair values included
herein, as at December 31, 2002, have been determined based on:



| |  |  | the carrying value for bank and vendor credit facilities                                  
| | - |  | ------------------------------------------------------------------------------------------
|
| |  |  | estimates obtained from dealers to settle interest rate and cross currency swap agreements





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Expected Maturities (in thousands of dollars)

|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |      |         |   | 
|------------------------------------------------ | ---------------------------------- | ---------------------------------- | ----------------------------------------------- | ------ | ------- | ---- | ------ | ------ | ------- | ---- | ------ | ------ | ------- | ---- | ------- | - | ----------- | - | -------- | - | -------- | - | ------- | - | ------ | - | ------ | - | ------ | - | ------- | - | ------- | - | ------- | ---- | ------- | - | 
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   | Total   |   | Fair   
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   | due at  |   | Value  
|                                                 |                                    |                                    |                                                 |        | 2003    |      | 2004   |        | 2005    |      | 2006   |        | 2007    |      | 2008    |   | There-after |   | maturity |   | 12/31/02
|                                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |         
|Interest Rate Exposure                           |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Long-Term Debt:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Fixed rate principal repayment                   |                                    |                                    |                                                |        |         |      | 9,350  |        |         |      | 14,025 |        |         |      | 18,700  |   |             |   | 23,375   |   |          |   | 28,050  |   |        |   |       |   |        |   | 93,500  |   |         |   | 94,818  |     
|Average interest rate on
loans outstanding       |                                    |                                    | 7.13                                            | %      |         |      | 7.13   | %      |         |      | 7.13   | %      |         |      | 7.13    | % |             |   | 7.13     | % |          |   | 7.13    | % |        |   |       |   |        |   |        |   |         |   |        |     
|Variable rate principal
repayment                |                                    |                                    |                                                |        |         |      | 30,119 |        |         |      | 79,745 |        |         |      | 105,729 |   |             |   | 144,250  |   |          |   | 170,886 |   |        |   | 73,872 |   |        |   | 604,601 |   |         |   | 604,601 |     
|Average interest rate on
loans outstanding       |                                    |                                    | 4.83                                            | %      |         |      | 4.83   | %      |         |      | 4.83   | %      |         |      | 4.84    | % |             |   | 4.85     | % |          |   | 4.88    | % |        |   | 5.33   | % |        |   |        |   |         |   |        |     
|Swaps and Options:                               |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Variable to Fixed Interest
Rate Swaps:           |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 228,603 |      |        |        | 215,603 |      |        |        | 196,103 |      |         |   | 71,500      |   |          |   | 39,000   |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (15,784 | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 6.05    | %    |        |        | 6.19    | %    |        |        | 6.45    | %    |         |   | 3.62        | % |          |   | 3.62     | % |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 2.81    | %    |        |        | 2.90    | %    |        |        | 3.05    | %    |         |   | 1.39        | % |          |   | 1.39     | % |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|EURIBOR to PRIBOR Cross-Currency
Swap and Caps:  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 | Notional principal amount          |                                    |                                                 | 75,287 |         |      |        | 75,287 |         |      |        | 75,287 |         |      |         |  |             |   |          |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         | (385 | )      
|                                                 |                                    |                                    | Average pay rate (based
on current PRIBOR)      |        |         | 4.43 | %      |        |         | 4.43 | %      |        |         | 4.43 | %       |   |             |  |          |   |          |  |         |   |        |  |        |   |        |  |         |   |         |  |         |      |         |  | 
|                                                 |                                    |                                    | Average receive rate
(based on current
EURIBOR) |        |         | 4.88 | %      |        |         | 4.88 | %      |        |         | 4.88 | %       |   |             |  |          |   |          |  |         |   |        |  |        |   |        |  |         |   |         |  |         |      |         |  | 
|                                                 | Cap on pay rate                    |                                    |                                                 | 9.84   | %       |      |        | 9.84   | %       |      |        | 9.84   | %       |      |         |  |             |   |          |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|                                                 | Fixed Euro to Koruna
Exchange Rate |                                    |                                                 | 33.95  |         |      |        | 33.95  |         |      |        | 33.95  |         |      |         |  |             |   |          |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|Cross Currency and Interest
Rate Swaps:          |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 121,989 |      |        |        | 121,989 |      |        |        | 121,989 |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (30,427 | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 9.59    | %    |        |        | 9.59    | %    |        |        | 9.59    | %    |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 4.88    | %    |        |        | 4.88    | %    |        |        | 4.88    | %    |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Fixed Euro to Koruna
Exchange Rate |                                                 |        | 34.54   |      |        |        | 34.54   |      |        |        | 34.54   |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|Koruna-denominated Interest
Rate Swaps and Caps: |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Notional principal amount          |                                                 |        | 23,280  |      |        |        | 23,280  |      |        |        | 23,280  |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | (155    | )
|                                                 |                                    | Average pay rate                   |                                                 |        | 4.76    | %    |        |        | 4.76    | %    |        |        | 4.76    | %    |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 |                                    | Average receive rate               |                                                 |        | 4.52    | %    |        |        | 4.52    | %    |        |        | 4.52    | %    |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 | Cap on pay rate                    |                                    |                                                 | 9.99   | %       |      |        | 9.99   | %       |      |        | 9.99   | %       |      |         |  |             |   |          |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|                                                 |                                    | Notional principal amount          |                                                 |        | 9,549   |      |        |        | 9,549   |      |        |        | 9,549   |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  
|                                                 | Interest rate cap                  |                                    |                                                 | 10.36  | %       |      |        | 10.36  | %       |      |        | 10.36  | %       |      |         |  |             |   |          |  |          |   |         |  |        |   |        |  |        |   |         |  |         |   |         |     |        
|Capital Leases:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Principal repayment                              |                                    |                                    |                                                |        |         |      | 12,700 |        |         |      |       |        |         |      |        |   |             |   |         |   |          |   |        |   |        |   |       |   |        |   | 12,700  |   |         |   |        |     
|Average fixed rate of
interest                   |                                    |                                    | 32.33                                           | %      |         |      | 32.33  | %      |         |      |       |        |         |      |        |   |             |   |         |   |          |   |        |   |        |   |       |   |        |   |        |   |         |   |        |     
|Foreign
Currency Exchange
Rate Exposure          |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Long-Term Debt:                                  |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Euro                                             |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Variable rate                      |                                                 |        |        |      |        |        | 9,689   |      |        |        | 38,509  |      |         |   | 50,931      |   |          |   | 72,049   |   |         |   | 80,891 |   |        |   | 24,255 |   |         |   | 276,324 |   |         |      | 276,324 |  
|                                                 |                                    | Average interest rate              |                                                 |        | 4.88    | %    |        |        | 4.88    | %    |        |        | 4.88    | %    |         |   | 4.89        | % |          |   | 4.91     | % |         |   | 4.96   | % |        |   | 5.33   | % |         |   |        |   |         |      |        |  
|Czech Koruna                                     |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Variable rate                      |                                                 |        |        |      |        |        | 4.280   |      |        |        | 17,011  |      |         |   | 22,498      |   |          |   | 31,827   |   |         |   | 41,545 |   |        |   | 49,617 |   |         |   | 166,778 |   |         |      | 166,778 |  
|                                                 |                                    | Average interest rate              |                                                 |        | 4.69    | %    |        |        | 4.69    | %    |        |        | 4.70    | %    |         |   | 4.72        | % |          |   | 4.75     | % |         |   | 4.83   | % |        |   | 5.02   | % |         |   |        |   |         |      |        |  
|Forward Exchange Contract:                       |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|Principal amount                                 |                                    |                                    |                                                 |        |         |      |        |        |         |      |        |        |         |      |         |   |             |   |          |   |          |   |         |   |        |   |        |   |        |   |         |   |         |   |         |     
|                                                 |                                    | Fixed Euro to Koruna               |                                                 |        | 62,948  |      |        |        |        |      |        |        |        |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      | 1,541   |  
|                                                 |                                    | Exchange Rate                      |                                                 |        | 30.80   |      |        |        |        |      |        |        |        |      |         |   |            |   |          |   |         |   |         |   |       |   |        |   |       |   |         |   |        |   |         |      |        |  





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ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.





---



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PART II




ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.





---



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

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

None.





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ITEM 15  CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure
that the information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the SECs rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), as appropriate, to allow timely decisions
regarding required disclosure.

Within the 90-day period prior to the filing of this annual report on Form
20-F, an evaluation was carried out by our management, under the supervision,
and with the participation, of our CEO and CFO, of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14). Based on that evaluation, the CEO and CFO concluded that such
disclosure controls and procedures were adequate and effective and designed to
ensure that material information relating to us and our consolidated
subsidiaries would be made known to them by others within those entities.

There have been no significant changes in our internal controls or other
factors which could significantly affect internal controls subsequent to the
date of the evaluation, including any significant deficiencies or material
weaknesses of internal controls that would require corrective action.





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ITEM 16 [RESERVED]

Not applicable.





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PART III




ITEM 17  FINANCIAL STATEMENTS

Not applicable.





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ITEM 18  FINANCIAL STATEMENTS

Financial Statements

The audited Consolidated Financial Statements of the Company, including the
notes thereto, as of December 31, 2002 and 2001 and for the years ended
December 31, 2002, 2001 and 2000, together with the auditors report thereon,
contained in the Companys 2002 Annual Report to Shareholders filed with the
United States Securities and Exchange Commission on Form 6-K and attached
hereto as Exhibit 11.1 and with the securities commissions and other similar
authorities in Canada, are incorporated herein by reference and are an integral
part of this Form 20-F.

|                                                           |  |      |    | 
|---------------------------------------------------------- |  | ---- | -- | 
|                                                           |  | Page
|                                                           |  |     
|Schedules to Financial Statements                          |  |      | 79 | 
|                                                          
|Schedule I - Condensed Financial Information of Registrant |  |      |    | 
|                                                          
|Schedule II - Valuation and Qualifying Accounts            |  |      |    | 





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ITEM 19  EXHIBITS

EXHIBITS

The following documents are filed as exhibits to this Form 20-F:

|        |  |                                                                                                                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                            
|Number  |  | Description                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                            
|1.1     |  | Articles of Association of TIW Eastern Europe N.V.
dated September 17, 1999. (Incorporated by
reference to Exhibit 3.1 to Form F-1, filed July
20, 2000, File No. 333-12218).                                                              
|        |  |                                                                                                                                                                                                                                            
|1.2     |  | Amendments to Articles of Association of TIW
Eastern Europe N.V. dated May 30, 2000.
(Incorporated by reference to Exhibit 3.2 to Form
F-1, filed July 20, 2000, File No. 333-12218).                                                      
|        |  |                                                                                                                                                                                                                                            
|1.3     |  | Amendment to Articles of Association of TIW
Eastern Europe N.V. dated February 13, 2001.
(Incorporated by reference to Exhibit 3.3 to Form
F-1, filed January 16, 2001, File No. 333-12218).                                               
|        |  |                                                                                                                                                                                                                                            
|4.1     |  | Loan Agreements between the Registrant and TIW,
and the Registrant and TIWC, (Incorporated by
reference to Exhibit 4.2 to Form 20-F filed May
17, 2002).                                                                                   
|        |  |                                                                                                                                                                                                                                            
|4.2     |  | Exit Deed dated March 19, 2003 among an affiliate of Emerging
Market Partnership, ClearWave N.V., Telesystem International
Wireless Corporation N.V. and Telesystem International Wireless
Inc.                                            
|        |  |                                                                                                                                                                                                                                            
|4.3     |  | English translation summary of License awarded to Ceský Mobil to
establish and operate a public mobile telecommunication network
according to the GSM standard dated June 17, 2002.                                                        
|        |  |                                                                                                                                                                                                                                            
|4.4     |  | English translation summary of License awarded to Ceský Mobil to
establish and operate a public mobile telecommunication network
according to the VmTS standard dated June 20, 2002.                                                       
|        |  |                                                                                                                                                                                                                                            
|4.5     |  | Loan Agreement between MobiFon S.A. and European Bank for
Reconstruction and Development dated August 27, 2002 (Incorporated
by reference to Form 6-K of ClearWave N.V., filed November 13,
2002).                                         
|        |  |                                                                                                                                                                                                                                            
|4.6     |  | Loan Agreement between MobiFon S.A. and Nordic Investment Bank
dated August 27, 2002 (Incorporated by reference to Form 6-K of
ClearWave N.V., filed November 13, 2002).                                                                   
|        |  |                                                                                                                                                                                                                                            
|4.7     |  | Loan Agreement between MobiFon S.A. and Export Development Bank
Canada dated August 27, 2002 (Incorporated by reference to Form
6-K of ClearWave N.V., filed November 13, 2002).                                                           
|        |  |                                                                                                                                                                                                                                            
|4.8     |  | Share Retention and Subordination Deed between MobiFon S.A.,
certain of its direct and indirect shareholders, Export
Development Canada, Nordic Investment Bank and European Bank for
Reconstruction and Development dated August 27, 2002.
|        |  |                                                                                                                                                                                                                                            
|4.9     |  | Technical Services Agreement, dated July 1, 2000,
between Fitlace Ltd. and Ceský Mobil a.s.
(Incorporated by reference to Exhibit 10.10 to
Form F-1, filed July 20, 2000, File No.
333-12218).                                             
|        |  |                                                                                                                                                                                                                                            
|4.10    |  | Technical Services Agreement between Ceský Mobil
a.s., and Telesystem International Wireless Inc.
dated August 13, 1999. (Incorporated by reference
to Exhibit 4.29 to Form 20-F, filed May 17, 2002).                                     
|        |  |                                                                                                                                                                                                                                            
|4.11    |  | Technical Services Agreement between Ceský Mobil
a.s., and ClearWave                                                                                                                                                                       





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|        |  |                                                                                                                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                             
|Number  |  | Description                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                             
|        |  | Services (Mauritius) Ltd.
dated July 1, 2000. (Incorporated by reference to
Exhibit 4.30 to Form 20-F, filed May 17, 2002).                                                                                                 
|        |  |                                                                                                                                                                                                                             
|4.18    |  | Technical Services Agreement between Ceský Mobil
a.s., and Baretip Limited dated January 3, 2000.
(Incorporated by reference to Exhibit 4.31 to Form
20-F, filed May 17, 2002).                                             
|        |  |                                                                                                                                                                                                                             
|4.19    |  | Technical Services Agreements dated November 29,
1996 between MobiFon, AirTouch and Telesystem
International Wireless Inc. (Incorporated by
reference to Exhibit 10.8 to Form F-1, filed June
29, 2000, File No. 333-12218).
|        |  |                                                                                                                                                                                                                             
|4.20    |  | Management Services Agreement between TIW Eastern
Europe N.V. and Telesystem International Wireless
Inc. dated October 1, 1999. (Incorporated by
reference to Exhibit 4.37 to Form 20-F filed May
17, 2002).                
|        |  |                                                                                                                                                                                                                             
|8       |  | List of Subsidiaries of ClearWave N.V.                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                             
|11.1    |  | ClearWave N.V.s 2002 Annual Report to
Shareholders. (Incorporated by reference to Form
6-K, filed May 20, 2003).                                                                                                           
|        |  |                                                                                                                                                                                                                             
|11.2    |  | Notice of Annual Meeting of Shareholders and
Management Proxy Circular of ClearWave N.V. dated
April 29, 2003. (Incorporated by reference to Form
6-K, filed May 20, 2003).                                                 
|        |  |                                                                                                                                                                                                                             
|11.3    |  | Certification pursuant to 18 U.S.C. section 1350
as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                      





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|            |  |                                              
|----------- |  | ---------------------------------------------
|SCHEDULE I  |  | CONDENSED FINANCIAL INFORMATION OF
REGISTRANT
|            |  |                                              
|SCHEDULE II |  | VALUATION AND QUALIFYING ACCOUNTS            

CLEARWAVE N.V.

December 31, 2002 and 2001





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AUDITORS REPORT

To the Board of Management ofClearWave N.V.

We have audited the consolidated financial statements of ClearWave N.V., as of
December 31, 2002 and 2001 and for each of the years in the three-year period
ended December 31, 2002, and have issued our report thereon dated February 25,
2003 (except for note 4a as to which the date is March 19, 2003). Our audits
also included Schedules I and II of item 19 of the Companys Form 20-F to be
filed with the Securities and Exchange Commission for the year ended December
31, 2002. These schedules are the responsibility of the Companys management.
Our responsibility is to express an opinion based on our audits.

In our opinion, these schedules referred to above, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.

|                               |  |                       | 
|------------------------------ |  | --------------------- | 
|                               |  | -s- Ernst & Young LLP
|                               |  |                       | 
|                               |  |                       | 
|Montréal, Canada               |  |                      
|February 25, 2003              |  | Ernst & Young LLP    
|(except for Note 4 as to which |  | Chartered Accountants
|the date is March 19, 2003)    |  |                      





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CLEARWAVE N.V.
Schedule 1  Condensed Financial Information of Registrant

CONDENSED BALANCE SHEETS

(in thousands of U.S. dollars)

|                                                                                      |                                                      |   |         |        |      |  |         |        |  
|------------------------------------------------------------------------------------- | ---------------------------------------------------- | - | ------- | ------ | ---- |  | ------- | ------ | -
|                                                                                      |                                                      |   | 2002    |        | 2001
|As at December 31,                                                                    |                                                      | $ |         | $     
|                                                                                      |                                                      |   |         |       
|ASSETS                                                                                |                                                      |   |         |        |      |  |         |       
|Cash and cash equivalents                                                             |                                                      |   | 536     |        |      |  | 75      |       
|Prepaid expenses                                                                      |                                                      |   | 233     |        |      |  | -       |       
|Capital assets                                                                        |                                                      |   | 1       |        |      |  | 3       |       
|Investments in subsidiaries [Note 2]                                                  |                                                      |   | 237,924 |        |      |  | 235,003 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       
|                                                                                      |                                                      |   | 238,694 |        |      |  | 235,081 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       
|LIABILITIES AND SHAREHOLDERS EQUITY                                                  |                                                      |   |         |        |      |  |         |       
|Accounts payable and accrued liabilities                                              |                                                      |   | 212     |        |      |  | 303     |       
|Amounts due to parent company, including accrued interest [Note1]                     |                                                      |   | 89,730  |        |      |  | 100,736 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       
|Total liabilities                                                                     |                                                      |   | 89,942  |        |      |  | 101,039 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       
|Shareholders equity                                                                  |                                                      |   |         |        |      |  |         |       
|Share capital                                                                         |                                                      |   | 21,467  |        |      |  | 21,467  |       
|Share premium                                                                         |                                                      |   | 163,865 |        |      |  | 163,865 |       
|Deficit                                                                               |                                                      |   | (32,221 | )      |      |  | (45,508 | )     
|Accumulated other comprehensive income (loss)
Foreign currency translation adjustment |                                                      |   | 5,038   |        |      |  | 979     |       
|                                                                                      | Fair value of interest rate and cross currency swaps |   |         | (9,397 | )    |  |         | (6,761 | )
|                                                                                      |                                                      |   |         |        |      |  |         |       
|Total shareholders equity                                                            |                                                      |   | 148,752 |        |      |  | 134,042 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       
|                                                                                      |                                                      |   | 238,694 |        |      |  | 235,081 |       
|                                                                                      |                                                      |   |         |        |      |  |         |       

See accompanying notes





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CLEARWAVE N.V.
Schedule 1  Condensed Financial Information of Registrant

CONDENSED STATEMENTS
OF INCOME (LOSS) AND DEFICIT

(in thousands of U.S. dollars)

|                                             |  |      |         |      |  |      |         |   |  |  |         |  
|-------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                             |  | 2002 |         | 2001 |  | 2000
|Years ended December 31,                     |  | $    |         | $    |  | $   
|                                             |  |      |         |      |  |     
|Income (loss) from subsidiaries [Note 2]     |  |      | 29,780  |      |  |      | 20,641  |   |  |  | (11,225 | )
|Selling, general and administrative expenses |  |      | (2,123  | )    |  |      | (3,273  | ) |  |  | (7,246  | )
|Interest expense                             |  |      | (14,375 | )    |  |      | (10,041 | ) |  |  | (648    | )
|Foreign exchange gain                        |  |      | 5       |      |  |      | 8       |   |  |  | 17      |  
|                                             |  |      |         |      |  |      |         |   |  |  |         |  
|Net income (loss)                            |  |      | 13,287  |      |  |      | 7,335   |   |  |  | (19,102 | )
|Deficit, beginning of year                   |  |      | (45,508 | )    |  |      | (52,843 | ) |  |  | (33,741 | )
|                                             |  |      |         |      |  |      |         |   |  |  |         |  
|Deficit, end of year                         |  |      | (32,221 | )    |  |      | (45,508 | ) |  |  | (52,843 | )
|                                             |  |      |         |      |  |      |         |   |  |  |         |  

See accompanying notes





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CLEARWAVE N.V.
Schedule 1  Condensed Financial Information of Registrant

CONDENSED STATEMENTS
OF CASH FLOWS

(in thousands of U.S. dollars)

|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                    |  | 2002 |         | 2001 |  | 2000
|Years ended December 31,                                            |  | $    |         | $    |  | $   
|                                                                    |  |      |         |      |  |     
|OPERATING ACTIVITIES                                                |  |      |         |      |  |      |         |   |  |  |         |  
|Net income (loss)                                                   |  |      | 13,287  |      |  |      | 7,335   |   |  |  | (19,102 | )
|Loss (income) from subsidiaries                                     |  |      | (29,780 | )    |  |      | (20,641 | ) |  |  | 11,225  |  
|Accreted interest on advances from parent company                   |  |      | 1,417   |      |  |      | 10,043  |   |  |  | 265     |  
|Changes in other current assets and liabilities                     |  |      | 5       |      |  |      | 2,197   |   |  |  | 1,585   |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Cash used in operating activities                                   |  |      | (15,071 | )    |  |      | (1,066  | ) |  |  | (6,027  | )
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|INVESTING ACTIVITIES                                                |  |      |         |      |  |      |         |   |  |  |         |  
|Investments in subsidiaries                                         |  |      | (13,803 | )    |  |      | (35,607 | ) |  |  | (61,737 | )
|Reimbursement of loan to subsidiary                                 |  |      | 42,085  |      |  |      |        |   |  |  |        |  
|Acquisition of capital assets                                       |  |      |        |      |  |      |        |   |  |  | (3      | )
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Cash provided by (used in) investing activities                     |  |      | 28,282  |      |  |      | (35,607 | ) |  |  | (61,740 | )
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|FINANCING ACTIVITIES                                                |  |      |         |      |  |      |         |   |  |  |         |  
|Advances from parent company                                        |  |      | 7,055   |      |  |      | 43,739  |   |  |  | 19,792  |  
|Reimbursement of advances from parent company                       |  |      | (19,805 | )    |  |      | (8,132  | ) |  |  |        |  
|Invested capital and other cash contributions of
the parent company |  |      |        |      |  |      |        |   |  |  | 49,096  |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Cash provided by (used in) financing activities                     |  |      | (12,750 | )    |  |      | 35,607  |   |  |  | 68,888  |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Increase (decrease) in cash and cash equivalents
for the year       |  |      | 461     |      |  |      | (1,066  | ) |  |  | 1,121   |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Cash and cash equivalents, beginning of year                        |  |      | 75      |      |  |      | 1,141   |   |  |  | 20      |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  
|Cash and cash equivalents, end of year                              |  |      | 536     |      |  |      | 75      |   |  |  | 1,141   |  
|                                                                    |  |      |         |      |  |      |         |   |  |  |         |  

See accompanying notes





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---

NOTES TO CONDENSED FINANCIAL INFORMATION

December 31, 2002

1.     BASIS OF PRESENTATION

This Condensed Financial Information has been prepared by management on the
basis of accounting principles generally accepted in the United States in
connection with the Companys Form 20-F to be filed with the Securities and
Exchange Commission. Investments over which the Company has control are
accounted for using the equity method. These condensed financial statements
should be read in conjunction with the Companys consolidated financial
statements.

As at December 31, 2002, the Companys total indebtedness to TIW and its
affiliates amounted to $89.7 million consisting of accounts payable of $1.6
million and advances in the form of demand notes of $88.1 million. The demand
notes are convertible into shares of the Company at the option of TIW and Its
affiliates subject to certain conditions and based on terms to be established
at the date of conversion. The Company intends to use available cash surplus
at the corporate level, after considering potential funding requirements in TIW
Czech N.V. and corporate expenses that are expected to be generated from
transactions on MobiFons shares described in note 4 to the consolidated
financial statements to reimburse part of these advances. TIW reports a going
concern uncertainty in its financial statements. In the event that TIWs
creditors enforce their claims, uncertainty may arise regarding the timing for
repayment of these demand notes.

2.     INVESTMENTS IN SUBSIDIARIESChanges in investments in subsidiaries are summarized as follows:

|                                                                 |  |      |         |      |  |  |         |  
|---------------------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | -
|                                                                 |  | 2002 |         | 2001
|                                                                 |  | $    |         | $   
|                                                                 |  |      |         |     
|Balance, beginning of the year                                   |  |      | 235,003 |      |  |  | 164,153 |  
|Additions, including non-cash additions of
$17.3 million in 2001 |  |      | 13,803  |      |  |  | 52,904  |  
|Reimbursement of loan                                            |  |      | (42,085 | )    |  |  |        |  
|Income (loss) from subsidiaries                                  |  |      | 29,780  |      |  |  | 20,641  |  
|Other comprehensive income (loss)                                |  |      | 1,423   |      |  |  | (2,695  | )
|                                                                 |  |      |         |      |  |  |         |  
|Balance, end of the year                                         |  |      | 237,924 |      |  |  | 235,003 |  
|                                                                 |  |      |         |      |  |  |         |  

Investments in subsidiaries consist of the following:

|                                            |                            |  |         |          |      |  |         |         | 
|------------------------------------------- | -------------------------- |  | ------- | -------- | ---- |  | ------- | ------- | 
|                                            |                            |  | 2002    |          | 2001
|                                            |                            |  | $       |          | $   
|                                            |                            |  |         |          |     
|TIW Czech N.V., 24.2%, shares at equity     |                            |  | 14,901  |          |      |  | 19,394  |        
|                                            |                            |  |         |          |      |  |         |        
|ClearWave Holding B.V., 100%, at equity:    |                            |  |         |          |      |  |         |        
|                                            | Loan, and accrued interest |  |         | 668,109  |      |  |         |        | 
|                                            | Shares                     |  |         | (445,086 | )    |  |         |        | 
|                                            |                            |  |         |          |      |  |         |        
|                                            |                            |  | 223,023 |          |      |  |        |        
|                                            |                            |  |         |          |      |  |         |        
|TIW Holding (Cyprus) Ltd., 100%, at equity: |                            |  |         |          |      |  |         |        
|                                            | Loan                       |  |         |         |      |  |         | 57,629  | 
|                                            | Shares                     |  |         |         |      |  |         | 157,980 | 
|                                            |                            |  |         |          |      |  |         |        
|                                            |                            |  |        |          |      |  | 215,609 |        
|                                            |                            |  |         |          |      |  |         |        
|                                            |                            |  | 237,924 |          |      |  | 235,003 |        
|                                            |                            |  |         |          |      |  |         |        





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NOTES TO CONDENSED FINANCIAL INFORMATION

December 31, 2002

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2.     INVESTMENTS IN SUBSIDIARIES [CONTD]
The Companys equity investment in MobiFon was held by TIW Holding (Cyprus)
Ltd., until March 2002. Thereafter the ownership was transferred to ClearWave
Holding B.V., for a consideration of a 7% bearing loan of $675 million. The
excess of the nominal value of the loan over the carrying value of the assets
transferred amounts to $447.6 million and has been allocated to the value of
the shares of ClearWave Holding B.V.

In 2002, income (loss) from subsidiaries includes interest of $35.2 million on
the loan that was offset by a corresponding expense in the subsidiary. As
permitted by Dutch law, the Company will file a consolidated tax return with
ClearWave Holding B.V., and as a result, no income tax will be payable on the
interest on the loan. This interest is analogous to dividends between Dutch
Companies and is considered as a permanent difference.

3.     CASH DIVIDENDS
During the three-year period ended December 31, 2002, the Company did not
receive any dividends from its subsidiaries. However, one of the Companys
wholly-owned subsidiaries received dividends totalling $17.4 million and other
cash distributions amounting to $24.6 million from its subsidiary during 2002.
The entire amount of funds which this subsidiary received was paid to the
Company as a reimbursement of advances and are reflected in the financial
statements as a reduction in Investment in subsidiaries.

4.     COMMITMENTS
As part of the creation of Ceský Mobil, a minority shareholder was given a put
option and, as a result, TIW Czech N.V., a company controlled by ClearWave, may
be required to purchase the Ceský Mobil shares owned by this minority
shareholder for an amount equal to the amount paid, in Czech Koruna, for such
shares by the minority shareholder plus interest of 7.0% per annum. This put
option is exercisable during a period of two years beginning in October 2001.
The Companys share of this commitment, if exercised, is $4.6 million as at
December 31, 2002.

In the event there has not been an initial public offering of the shares of
MobiFon by October 1, 2004, certain minority shareholders of MobiFon, having a
15.9% interest in MobiFon (increasing to a 21.7% interest following the sale on
March 19, 2003 of a portion of the Companys shareholding in MobiFon), may
require the Company or TIW, at TIWs option, to make an offer to acquire the
minority shareholders shares. The purchase price of such shares will be
their fair market value as determined by an independent evaluator and shall be
payable in cash or, at TIWs option, shares of TIW.





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VALUATION AND QUALIFYING ACCOUNTS

(in thousands of U.S. dollars)

|                                                             |  |      |        |      |  |      |         |   |  |  |        |  
|------------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------- | - |  |  | ------ | -
|                                                             |  | 2002 |        | 2001 |  | 2000
|                                                             |  | $    |        | $    |  | $   
|                                                             |  |      |        |      |  |     
|Allowance for doubtful accounts:                             |  |      |        |      |  |      |         |   |  |  |        |  
|Balance, beginning of year                                   |  |      | 8,510  |      |  |      | 8,888   |   |  |  | 4,963  |  
|Addition: bad debt expenses                                  |  |      | 7,368  |      |  |      | 10,495  |   |  |  | 10,267 |  
|Deduction: uncollectible accounts
write-off, net of recovery |  |      | (8,375 | )    |  |      | (10,873 | ) |  |  | (6,342 | )
|                                                             |  |      |        |      |  |      |         |   |  |  |        |  
|Balance, end of year                                         |  |      | 7,503  |      |  |      | 8,510   |   |  |  | 8,888  |  
|                                                             |  |      |        |      |  |      |         |   |  |  |        |  





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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

| |  |                               
| |  | ------------------------------
| |  | CLEARWAVE N.V.                
| |  |                               
| |  |                               
| |  | By: /s/ James J. Jackson      
| |  | Name: James J. Jackson        
| |  | Title: Chief Financial Officer

Dated: May 20, 2002





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CERTIFICATIONS

I, Alexander Tolstoy, Chief Executive Officer of ClearWave N.V., certify
that:

1.     I have reviewed this annual report on Form 20-F of ClearWave N.V.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

May 20, 2003

/s/ Alexander Tolstoy
Alexander Tolstoy
Chief Executive Officer
ClearWave N.V.

* * *





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I, James J. Jackson, Chief Financial Officer of ClearWave N.V., certify
that:

1.     I have reviewed this annual report on Form 20-F of ClearWave N.V.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

May 20, 2003

/s/ James J. Jackson
James J. Jackson
Chief Financial Officer
ClearWave N.V.

* * *