---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 
WASHINGTON, 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, 2004 
>     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 0-29738

TELESYSTEM INTERNATIONAL WIRELESS INC./ 
TÉLÉSYSTÈME MOBILES INTERNATIONAL INC.

(Translation of Registrant's name into English)

CANADA (Jurisdiction of incorporation or organization)

1250 René-Lévesque Blvd. West, 38th Floor, Montreal,
Québec, Canada, H3B 4W8(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 registeredNone
      None


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

Common Shares without par value(Title of Class)

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

None(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.

169,193,153 Common Shares without par value

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.

[X] Yes
      [ ] No


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

[ ] Item 17
      [X] Item 18


- 1 -

---



TABLE OF CONTENTS

|                                                                                             |   
|-------------------------------------------------------------------------------------------- | --
|ITEM 1  IDENTITY OF DIRECTORS, SENIOR
    MANAGEMENT AND ADVISERS                           | 7 
|ITEM 2  OFFER STATISTICS AND EXPECTED
    TIMETABLE                                         | 7 
|ITEM 3  KEY INFORMATION                                                                     | 8 
|ITEM 4  INFORMATION ON THE COMPANY                                                          | 22
|ITEM 5  OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS                                    | 46
|ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES                                      | 47
|ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS                               | 64
|ITEM 8  FINANCIAL INFORMATION                                                               | 67
|ITEM 9  THE OFFER AND LISTING                                                               | 69
|ITEM 10  ADDITIONAL INFORMATION                                                             | 71
|ITEM 11 - QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK                     | 77
|ITEM 12  DESCRIPTION OF SECURITIES OTHER
    THAN EQUITY SECURITIES                         | 78
|ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND
    DELINQUENCIES                               | 79
|ITEM 14  MATERIAL MODIFICATIONS TO THE
    RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS79
|ITEM 15  CONTROLS AND PROCEDURES                                                            | 80
|ITEM 16A  AUDIT COMMITTEE FINANCIAL EXPERT                                                  | 81
|ITEM 16B  CODE OF ETHICS                                                                    | 81
|ITEM 16C  PRINCIPAL ACCOUNTANT FEES AND
    SERVICES                                        | 81
|ITEM 16D  EXEMPTIONS FROM LISTING STANDARDS
    FOR AUDIT COMMITTEES                        | 82
|ITEM 16E  PURCHASES OF EQUITY SECURITIES BY
    THE ISSUER AND AFFILIATED PURCHASERS        | 82
|ITEM 17  FINANCIAL STATEMENTS                                                               | 83
|ITEM 18  FINANCIAL STATEMENTS                                                               | 84
|ITEM 19  EXHIBITS                                                                           | 85

- 2 -

---



EXPLANATORY NOTES

References herein to the "Company", the "Corporation", "we",
"us", "our" or "TIW" are references to Telesystem International Wireless Inc., a
Canadian corporation, and, where the context requires, its subsidiaries and
operating companies. References herein to "MobiFon" are references to MobiFon
S.A., our Romanian operating subsidiary and references to "Oskar Mobil" are
references to Oskar Mobil a.s., formerly Cesky Mobil a.s., our Czech operating
subsidiary. TIW's website address is www.tiw.ca.
The information provided on this website does not form part of this document.
Unless otherwise indicated, all dollar amounts in this document are expressed in
U.S. dollars. The word "dollar" and the symbols "$" or "U.S.$" refer to the
lawful currency of the United States of America, the symbol "Cdn$" refers to the
lawful currency of Canada, the word "Euro" and the symbol "" refer to the
lawful single currency of the European Monetary Union, the words "Leu" and the
plural "Lei" refer to the lawful currency of Romania and the words "Czech
Koruna" and the symbol "CZK" refer to the lawful currency of the Czech Republic.

PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
Accounting Principles

We present our financial statements in U.S. dollars and
prepare them in conformity with Canadian generally accepted accounting
principles, or Canadian GAAP, which may differ from United States generally
accepted accounting principles, or U.S. GAAP. For a discussion of the principal
differences between Canadian GAAP and U.S. GAAP and a reconciliation of Canadian
GAAP to U.S. GAAP, see note 17 to our consolidated financial statements.

We use the term operating income before depreciation and
amortization, or OIBDA, and average revenue per user, or ARPU, which may not be
comparable to similarly titled measures reported by other companies. We believe
that OIBDA, referred to by some other telecommunication operators as EBITDA,
provides useful information to investors because it is an indicator of the
strength and performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital expenditures and other
investments and our ability to incur and service debt. While depreciation and
amortization are considered operating costs under generally accepted accounting
principles, these expenses primarily represent the non-cash current period
allocation of costs associated with long-lived assets acquired or constructed in
prior periods. Our OIBDA calculation is commonly used as one of the bases for
investors, analysts and credit rating agencies to evaluate and compare the
periodic and future operating performance and value of companies within the
wireless telecommunications industry. OIBDA has limitations as an analytical
tool, and you should not consider it in isolation from, or as a substitute for,
analysis of our results of operations, including our cash flows, as reported
under GAAP. Some of the limitations of OIBDA as a measure are:

- 

We believe that ARPU provides useful information concerning
the appeal of our rate plans and service offerings and our performance in
attracting and retaining high value customers. ARPU excludes equipment revenues,
revenues from other wireless networks' customers roaming on our network and
miscellaneous revenues. OIBDA and ARPU should not be considered in isolation or
as alternative measures of performance under GAAP. For the reconciliation of
OIBDA to net income and for the reconciliation between service revenues and ARPU
refer to the non GAAP measures and operating data section of "Selected
Consolidated Financial Information".

Exchange Rate Information

The following tables set forth the exchange rates for one
U.S. dollar in effect at the end of the periods noted, the highest and lowest
exchange rates during such periods and the average of the exchange rates of such
periods, calculated by using the average of the exchange rates on the last day
of each month during such periods. The exchange rates expressed in Canadian
dollars and Euro are based on the noon buying rate as reported by the Federal
Reserve Bank of New York; the exchange rates expressed in 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

- 3 -

---



based on the daily fixing rate as reported by the Czech National Bank. As of
March 29, 2005, such exchange rates were Cdn$ 1.2135 = $1.00; 0.7744 = $1.00;
Lei 28,169 = $1.00, CZK 23.353 = $1.00.

|Canadian dollar | Year ended December 31, |        |       
|--------------- | ----------------------- | ------ | ------
|                |                         | High   | Low   
|                |                         |        |       
|                | 2004                    | 1.3970 | 1.1775
|                | 2003                    | 1.5750 | 1.2923
|                | 2002                    | 1.6128 | 1.5108
|                | 2001                    | 1.6023 | 1.4933
|                | 2000                    | 1.5600 | 1.4350
|                |                         |        |       
|Euro            | Year ended December 31, |        |       
|                |                         | High   | Low   
|                |                         |        |       
|                | 2004                    | 0.8474 | 0.7339
|                | 2003                    | 0.9652 | 0.7938
|                | 2002                    | 1.1636 | 0.9537
|                | 2001                    | 1.1947 | 1.0488
|                | 2000                    | 1.2092 | 0.9676
|                |                         |        |       
|Leu             | Year ended December 31, |        |       
|                |                         | High   | Low   
|                |                         |        |       
|                | 2004                    | 34,337 | 28,274
|                | 2003                    | 34,788 | 31,802
|                | 2002                    | 33,830 | 31,735
|                | 2001                    | 31,777 | 25,944
|                | 2000                    | 25,926 | 18,275
|                |                         |        |       
|Czech Koruna    | Year ended December 31, |        |       
|                |                         | High   | Low   
|                |                         |        |       
|                | 2004                    | 27.655 | 22.344
|                | 2003                    | 30.348 | 25.654
|                | 2002                    | 37.163 | 29.118
|                | 2001                    | 40.287 | 34.836
|                | 2000                    | 42.127 | 34.879

The following table sets forth the highest and lowest exchange rates for one
U.S. dollar for each month during the last six months.

|Six months ended |        |           |         |          |          |        
|---------------- | ------ | --------- | ------- | -------- | -------- | -------
|                 | August | September | October | November | December | January
|Canadian dollar  |        |           |         |          |          |        
|High             | 1.3323 | 1.3071    | 1.2726  | 1.2263   | 1.2401   | 1.2422 
|Low              | 1.2964 | 1.2648    | 1.2194  | 1.1775   | 1.1856   | 1.1982 
|Euro             |        |           |         |          |          |        
|High             | 0.8316 | 0.8297    | 0.8149  | 0.7872   | 0.7562   | 0.7720 
|Low              | 0.8085 | 0.8053    | 0.7823  | 0.7526   | 0.7339   | 0.7421 
|Leu              |        |           |         |          |          |        
|High             | 34,232 | 33,965    | 33,457  | 32,013   | 29,679   | 29,686 
|Low              | 33,100 | 33,321    | 32,057  | 29,013   | 28,274   | 28,587 
|Czech Koruna     |        |           |         |          |          |        
|High             | 26.523 | 26.370    | 25.653  | 24.764   | 23.402   | 23.478 
|Low              | 25.499 | 25.512    | 24.675  | 23.307   | 22.344   | 22.484 

- 4 -

---

Industry and Market DataIn this document, we rely on and refer to information
regarding our business and the markets in which we operate and compete. We have
obtained this information from various third party sources and our own internal
estimates. We have obtained market and industry data relating to our business
from providers of industry data, including EMC World Cellular Database. We have
obtained subscriber information and other data relating to other wireless
operators from publicly available sources including press releases published by
such operators. These data, such as financial information and key performance
indicators, have in some instances been reported using accounting and other
internal management policies that are dissimilar to our own. We have not
adjusted or harmonized any data for such differences or any comparisons based on
such data included in this document. As a result, such data and comparisons may
not accurately reflect the competitive positions of the wireless operators being
referenced.
Industry publications, surveys and forecasts generally state
that the information contained therein has been obtained from sources believed
to be reliable. We believe that these industry publications, surveys and
forecasts are reliable but have not independently verified them and cannot
guarantee their accuracy or completeness.
In addition, in many cases, we have made statements in this
document regarding our industry and our position in the industry based on our
experience and our own investigation of market conditions. We cannot assure you
that any of these assumptions are accurate or correctly reflect our position in
the industry, and none of our internal surveys or information has been verified
by any independent sources. Statistical information contained in this document
concerning the Romanian and Czech economies is derived from data published by
the governments of each country and various publications including, among
others, reports by The Economist Intelligence Unit, and, although we do not know
such statistical information to be inaccurate, we do not accept responsibility
for the accuracy of such statistical information.
The subscriber data included in this document, including
penetration rates, ARPU, market shares and churn rates, are derived from
management estimates, are not part of our financial statements and have not been
audited or otherwise reviewed by outside auditors, consultants or experts.
We count as subscribers individuals and businesses that pay
us in advance of providing services and refer to them as prepaid customers and
others that pay us each month after we provide service, and refer to them as
postpaid customers. The rates at which these prepaid and postpaid customers are
disconnected from our network, or are removed from our subscriber count due to
inactivity, are referred to as our churn rates. The churn rates we provide in
this document are monthly average churn rates, which we calculate by dividing
the number of customers we remove from our subscriber base during a month by our
balance of subscribers at the beginning of the month. A wireless operator's
measurement of churn activity affects various key performance indicators,
including total subscriber amounts and ARPU levels. A tightening, or shortening,
of a churn policy may result in a one time reduction of total subscriber
amounts, a one time increase in churn rate and higher ARPU levels. As a result,
such data and any related comparisons of us and other operators included in this
document may not accurately reflect our competitive position and the competitive
positions of such other operators.
Unless otherwise indicated, all operating data presented herein are as of
December 31, 2004.
- 5 -FORWARD-LOOKING STATEMENTSThis document and the documents incorporated herein by
reference contain certain forward-looking statements concerning our future
operations, economic performance, 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",
"should", "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 analysis 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 herein.
Consequently, all of the forward-looking statements made in this document and
the documents incorporated herein by reference are qualified by these cautionary
statements, and there can be no assurance that the 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. We undertake no obligation and do not intend to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under
applicable law. For all of these forward-looking statements, we claim the
protection of the safe harbour for forward-looking statements contained in the
U.S. Private Securities Litigation Reform Act of 1995.
- 6 -

---

PART I
ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.
- 7 -ITEM 3  KEY INFORMATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth certain consolidated financial
information derived from our Consolidated Financial Statements for the fiscal
years ended December 31, 2004, 2003, 2002, 2001 and 2000, which have been
audited by Ernst & Young LLP. The information set forth below should be read in
conjunction with our Operating and Financial Review and Prospects and
Consolidated Financial Statements, and the notes thereto incorporated by
reference in this document. Our Consolidated Financial Statements have been
prepared in accordance with Canadian GAAP. For a discussion of the principal
differences between Canadian GAAP and U.S. GAAP and a reconciliation of our
Consolidated Financial Statements to U.S. GAAP, see note 17 to our Consolidated
Financial Statements.
Year Ended December 31,2004
    2003
    2002
    2001
    2000(in thousands of US$, except per share data)Statement of Income (Loss) Data:Revenues
    1,275,562
    967,085
    694,454
    526,225
    354,052Operating income (loss)
    254,279
    169,878
    87,586
    (441)
    (85,022)Income (loss) from continuingoperations
    55,206
    20,696
    61,959
    162,389
    (19,672)Net income (loss)(1)
    55,206
    11,885
    (127,174)
    (253,714)
    (355,356)Basic earnings (loss) per share fromcontinuing operations
    0.39
    0.21
    0.66
    38.59
    (14.13)Diluted earnings (loss) per share fromcontinuing operations
    0.38
    0.20
    0.66
    20.21
    (14.13)Basic earnings (loss) per share
    0.39
    0.12
    (1.42)
    (81.39)
    (121.89)Diluted earnings (loss) per share
    0.38
    0.11
    (1.42)
    (31.31)
    (121.89)Income (loss) from continuing operations(U.S. GAAP)
    55,206
    61,687
    344,743
    54,183
    (41,770)Net income (loss) (U.S. GAAP)(1)
    55,206
    52,876
    113,627
    (319,937)
    (377,454)Basic earnings (loss) per share fromcontinuing operations (U.S. GAAP)
    0.39
    0.61
    3.80
    15.60
    (13.42)Diluted earnings (loss) per share fromcontinuing operations
    (U.S. GAAP)
    0.38
    0.60
    3.80
    10.45
    (13.42)Basic earnings (loss) per share (U.S.GAAP)
    0.39
    0.52
    1.26
    (92.30)
    (121.29)Diluted earnings (loss) per share (U.S.GAAP)
    0.38
    0.51
    1.26
    (35.96)
    (121.29)As at December 31,2004
    2003
    2002
    2001
    2000(in thousands
    of US$ except share data)Balance Sheet Data:Total Assets
    2,340,709
    1,667,588
    1,441,628
    1,906,666
    3,294,165Share Capital and additional Paid-InCapital
    1,926,511
    1,327,574
    1,301,470
    696,954
    684,639Shareholders' Equity
    748,481
    91,773
    51,537
    169,057
    76,389Total Assets (U.S. GAAP)
    2,342,605
    1,663,436
    1,435,621
    1,431,488
    2,665,620Share Capital and additional Paid-InCapital (U.S. GAAP)
    1,761,208
    1,162,271
    1,136,167
    775,609
    763,294Shareholders' Equity/(Deficiency)U.S. GAAP
    745,013
    85,155
    1,771
    (570,986)
    (314,210)Common Shares Issued andOutstanding (2)
    169,193,153
    105,035,187
    100,434,370
    3,265,432
    3,156,116(1)
    Includes net loss from
    discontinued operations for the years ended December 31, 2003, 2002, 2001,
    and 2000 of $8.8 million, $189.1 million, $416.1 million and $335.7 million,
    respectively under Canadian GAAP and $8.8 million, $231.1 million, $374.1
    million and $335.7 million, respectively, under U.S. GAAP.(2)
    Adjusted to reflect the February
    5, 2002 conversion of all multiple voting shares issued and outstanding into
    common shares on a one for one basis, the May 17, 2002 redesignation of all
    subordinate voting shares as common shares, the March 25, 2004, conversion
    of all issued and outstanding preferred shares into common shares on a five
    preferred for one common share basis and the June 23, 2003 and June 23,
    2001consolidations of the company's common shares, each on the basis of one
    post-consolidated for five pre-consolidated shares.- 8 -CAPITALIZATION AND INDEBTEDNESSNot applicable.REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.RISK FACTORS
Risks Relating to the Proposed Sale of our Interest in ClearWave to Vodafone

The closing of the sale of our interest in ClearWave to Vodafone may not
result in our shareholders receiving all of the intended proceeds from the sale.On March 15, 2005, we entered into a framework agreement and
a share sale and purchase agreement with Vodafone International Holdings B.V., a
wholly-owned subsidiary of Vodafone Group Plc, or Vodafone, for the sale of all
of our interest in ClearWave N.V., or ClearWave, for a cash consideration of
approximately $3.5 billion. ClearWave owns all of our interest in Oskar Mobil
and MobiFon through its 100% ownership of Oskar Holdings and MobiFon Holdings.
The consideration is payable in cash upon closing of the sale. At closing, net
proceeds from the sale along with our net assets, which consist primarily of
cash and cash equivalents, are expected to equate to $16 per fully-diluted share
and are intended to be distributed to shareholders pursuant to a court
supervised plan of arrangement. The agreements with Vodafone provide for
adjustments in certain circumstances but do not guarantee a minimum distribution
to our shareholders. Pursuant to the agreements with Vodafone and the
arrangement, our shareholders will receive a maximum of $16 per share (plus
investment income). To the extent that assumptions as to the amount of inter
alia (i) transaction and liquidation costs, (ii) net cash position at closing,
and (iii) the absence of unidentified claims are different than expected, our
shareholders may receive less than US$16 per share. Accordingly, we can give no
assurances as to the total amount and timing of distributions to our
shareholders.Our agreement with Vodafone contains various conditions. We cannot assure you
that these conditions will be met, or that we will be able to close the sale of
our interest in ClearWave.Pursuant to the terms of the framework agreement and the
share sale and purchase agreement, closing of the sale of our interest in
ClearWave is subject to (i) court approval pursuant to the plan of arrangement,
(ii) shareholders' approval on a basis to be determined by the court, and (iii)
customary conditions, including the receipt of all necessary regulatory
approvals under relevant competition legislations.
Despite the framework agreement and the share sale and
purchase agreement, there can be no assurance that these conditions will be met,
or that the sale will actually close. Therefore, although the maximum amount
that our shareholders could receive represents a premium to the trading prices
of our equity securities in the months before the agreements with Vodafone were
announced, you should not assume that you will receive this premium. If the sale
does not occur, the trading prices of our common stock may decline, and we may
continue to be subject to any or all of the risks described elsewhere in this
section.The closing of the sale of our interest in ClearWave to Vodafone may result
in us becoming a "passive foreign investment company".If the sale of ClearWave to Vodafone occurs in 2005, we may
become a "passive foreign investment company" for U.S. federal income tax
purposes in 2005. This may result in adverse tax consequences to U.S. persons.
See "Certain U.S. Federal Income Tax Considerations  Passive Foreign Investment
Company Considerations."Risks Relating to our Business

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:
- 9 -

---

contractual rights in favor of our co-shareholders including rights of
  first refusal (see '' Arrangements among shareholders of MobiFon could make
  it harder for us to engage in transactions that could benefit our
  shareholders'');
  provisions in our licenses and local governmental regulations that, in
  certain cases, may restrict or prohibit the transfer of our ownership
  interests in such operating companies; and
  change of control provisions in our subsidiaries' senior debt instruments
  may restrict or prohibit the transfer of our ownership interests in such
  subsidiaries.Moreover, we have been required to pledge our equity
interests in MobiFon and Oskar Mobil to secure senior debt obtained by those
operating companies, and we may be prohibited from or restricted in transferring
or otherwise disposing of such pledged equity interests unless the debt is
repaid concurrently with the disposition. In addition, our operating companies
currently have no publicly traded equity securities, and there can be no
assurance that there will in the future be either a public or private market for
the equity 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.Arrangements among shareholders of MobiFon could make it harder for us to
engage in transactions that could benefit our shareholders.Under MobiFon's contract of association, which forms part of
its constitutive documents, rights of first refusal exist in favour of all
shareholders on transfers of shares in MobiFon. These rights of first refusal
may also apply to indirect sales of shares of MobiFon, such as a sale of shares
of MobiFon Holdings and of ClearWave, in the event that the shares of MobiFon
held by these companies represent more than 25% of the fair market value of
these companies' assets. These indirect rights of first refusal entitle
shareholders of MobiFon to purchase a proportionate number of shares of MobiFon
held by us upon a sale of equity shares of certain of our subsidiaries at
comparable value. ClearWave obtained from Vodafone a conditional waiver of its
right of first refusal in the case of certain transactions affecting the equity
shares of ClearWave. In consideration of the waiver, we agreed with Vodafone
that, among other things, Vodafone will have the right, in the event of a change
of voting control of ClearWave, to purchase from us that number of shares in
MobiFon necessary to increase Vodafone's equity interest in MobiFon to 50.1%.

These rights of first refusal may impede our ability to dispose of our
interests in MobiFon, ClearWave or MobiFon Holdings on commercially acceptable
terms.

We account for the rights of the minority shareholders in our operating
subsidiaries and their lenders when we make management decisions.

Although we may have voting control over our operating
subsidiaries, we may have to take into account the rights of their minority
shareholders when making management decisions. For instance, we have an
agreement with Vodafone Europe B.V which provides that major business, financial
and technical decisions concerning MobiFon, including making distributions to
shareholders, require consensus between us and Vodafone, with both parties using
their best efforts to achieve consensus. Accordingly, we may need to continue
taking into account the views of, or compromise with, Vodafone in reaching
decisions on fundamental business and strategic matters with respect to MobiFon.
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 our operating companies.

In addition, the lenders under MobiFon's and Oskar Mobil's
senior 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 operate in a highly competitive market.

The wireless telecommunications industry is highly competitive. In
particular, the Czech Republic is one of the most developed wireless
telecommunications markets in Central and Eastern Europe. By some estimates the
current market penetration rate for

- 10 -

---



wireless services in the Czech Republic is as high as 105%.
Accordingly, in order to grow our business in that market, we must attract
current subscribers away from our competitors, rather than rely only on offering
our services to new customers in the market. The same is true for our
competitors and, as a result, competition in the wireless telecommunications
markets where we operate is very intense. Actions taken by our competitors, as
well as actions taken by us to maintain our competitiveness and reputation, have
placed and will continue to place pressure on our pricing and service
strategies, margins and profitability.

Within this environment, we compete with companies that have
substantially greater financial and other resources, research and development
staffs, and technical and marketing capabilities than we have, and we face
significant competition from established competitors.

Competition in the Czech wireless telecommunications market
will be further affected if and when the Czech government completes its intended
privatization of Český Telecom. In December 2004, the Czech government approved a
plan to sell Český Telecom and its subsidiary Eurotel. If Český Telecom is sold to
a large international telecommunications company, Eurotel could gain an
additional competitive advantage and may further increase its financial and
other resources. As a result, the privatization of Český Telecom and Eurotel
could increase the competitive pressures on us.

In Romania, fierce competition exists between us and our
principal competitor, Orange Romania S.A., or Orange, a subsidiary of France
Telecom. Together we hold approximately 96% of the wireless market, split almost
equally between us. We intensely compete to maintain this market share.
Competition in the Romanian wireless telecommunications market could also
intensify if and when OTE, the Greek telecommunications company that controls
Romtelecom, relaunches Romtelecom's wireless subsidiary operator, Cosmorom. If
the Romanian government approves the proposal submitted by OTE to relaunch
Cosmorom, which currently has only a minimal presence in the market, under the
management of Cosmote, OTE's mobile operator in Greece, Cosmorom could develop a
substantial competitive advantage and become a significant competitor in the
Romanian wireless market.

The success of our operations will depend on our ability to retain customers.

Historically, the average monthly churn rates of our
operating companies have been relatively low, but we can give no assurances that
this will remain the case.

Our aggressive pricing strategy in the Czech Republic, and
the future response to that strategy by our competitors, as well as future
aggressive pricing strategies of our competitors in Romania, could lead to
increased, or more volatile, churn rates as well as lower ARPU. The growth of
consumer awareness, additional service offerings from competitors and our
competitors' increased focus on our target customer groups may increase our
churn rates and reduce ARPU.

In the Czech Republic, as part of our strategy to
differentiate ourselves from our competitors and to gain market share in the
postpaid subscriber market, we do not require our consumer postpaid customers to
enter into fixed term service contracts. These customers can terminate their
service relationship with us and switch to one of our competitors at any time.
Of our individual postpaid subscribers that do enter into fixed term service
contracts, the majority may cancel their contracts with limited advance notice,
and without a significant penalty. In addition, we do not have fixed-term
contractual relationships with our prepaid customers in both Romania and the
Czech Republic. Accordingly, we do not have the fixed portion of guaranteed
monthly revenue associated with contract payments that some of the other mobile
operators receive. This exposes us to volatility in our customers' short-term
usage plans. Any significant loss of existing subscribers would have a
significant adverse effect on our revenues, results of operations and financial
condition.

- 11 -

---



Rapid technological changes or the effect of the adoption of new standards
for mobile telecommunications could render our services obsolete or
noncompetitive.

The industry in which we operate is subject to rapid and
significant changes in technology and is characterized by the continuous
introduction of new products and services. The wireless telecommunications
industry is experiencing significant technological change, as evidenced by the
introduction in recent years of new standards for mobile communications, such as
EDGE and UMTS, ongoing improvements in the capacity and quality of digital
technology, shorter development cycles for new products, and enhancements and
changes in customer requirements and preferences.

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

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 in Romania, where the use of credit reporting
agencies is less common. 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
significant number of customers that are unable to pay their bills on time, if
at all.

We rely on third parties for the operation, provision and maintenance of some
of our services.

The operation, provision and maintenance of our wireless telecommunications
services is dependent on our ability to obtain adequate supplies of a number of
items on a timely basis. These include:

- 

We purchase our network equipment and related software from
leading international telecommunications systems equipment suppliers and rely
upon our suppliers' ability to deliver dependable technical support. We cannot
be certain that we will be able to obtain mobile network equipment from
alternative suppliers on a timely basis if our current suppliers are unable to
satisfy our equipment requirements, particularly if the growth in demand for
mobile network equipment exceeds our suppliers' ability to meet such demands. We
also may be unable to attract new customers unless we are able to offer them
their preferred mobile handset models and we have in the past been unable to
procure the most current models of mobile handsets. In our experience,
suppliers, from time to time, extend delivery times, limit supplies and increase
the price of our supplies due to their supply limitations and other factors. In
particular, we may encounter difficulties with the supply, timely delivery, or
performance of third generation, or 3G, handsets provided by equipment vendors.
Our results of operations could be adversely affected if any mobile equipment,
including handsets that support our future service offerings based on UMTS or
EDGE technologies, are not available in a timely manner or are not reliable or
if the price of our required supplies rises significantly or if any one of our
suppliers fails to provide us with dependable maintenance support in a timely
manner.

In addition, we are dependent upon third parties for the
distribution of SIM cards in Romania and the distribution and resale of prepaid
airtime cards in both Romania and the Czech Republic. Our results of operations
could be adversely affected if the prices charged by these distributors rise
significantly or if any one of our distributors fails to provide us with
adequate service in a timely manner.

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

For the success of our wireless services, we rely to a
certain extent on services provided by other telecommunications providers, some
of which are our competitors. Our network must interconnect with other
telecommunications networks in order for us to be able to offer our services to
customers. In addition, we lease lines from various companies to connect the
elements of our network. We generally enter into interconnection agreements with
other telephone operators to enable our wireless systems to connect with
landline and other wireless telephone systems, and we may require the use of
other microwave or fiber optic networks to link our wireless systems with other
telephone systems. Although we have entered into interconnection agreements or
have other satisfactory

- 12 -

---



interconnection arrangements in place with all relevant
parties, 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 us
could have a material adverse effect on our operations. Moreover, a material
increase in interconnection charges could result in reduced margins for us or in
our ability to offer wireless telecommunications services at competitive prices.

We are subject to competition regulation, which could restrict our business.

Our operating companies in Romania and the Czech Republic are
subject to oversight by competition regulatory authorities, which regulate
companies deemed to be a dominant force in, or a monopolist of, a market, and
also prohibit anti-competitive practices by all parties in the market place.
Regulatory measures may include the imposition of tariffs or restrictions on
acquisitions or on other activities, such as contracts with suppliers and
distributors, and imposition of penalties for anti-competitive conduct. Because
competition laws in Romania and the Czech Republic do not clearly define
"market" in terms of either services provided or geographic area of activity, it
is difficult to determine under what circumstances we could be subject to these
or similar measures. We cannot exclude the possibility, however, that our
current subscriber market share in the licensed regions could trigger close
scrutiny by competition regulatory authorities of the pricing and other terms of
our services. We expect to become subject to stricter oversight by competition
authorities in the future that could adversely affect our business.

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 and which may address 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 construction and 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, under certain circumstances,
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. 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 markets of Central and Eastern Europe
will exist only for a limited time. 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 our operating
companies' licenses and may preclude us from competing for such additional
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.

Our network equipment and systems may be subject to disruption and failure,
which could cause us to lose subscribers and violate the terms of our licenses.

Our business depends on providing subscribers with
reliability, capacity and security. As mobile phones increase in technological
capacity, they may become increasingly subject to technological disruptions. The
services we provide may be subject to disruptions resulting from numerous
factors, including:

- 

- 13 -

---



- 

hardware and
  software defects;

capacity
  limitations;

fire, earthquake,
  flood and other natural disasters;

sabotage, acts of
  terrorism and vandalism;



unauthorized use by
  third parties of our network and internet service provider facilities to
  conduct fraudulent or other illegal activities.

Problems with our
switches, base station controllers, network backbone or at one or more of our
base stations, whether or not within our control, could result in service
interruptions or significant damage to our network. Although we have back-up
capacity for our network management operations and maintenance systems,
automatic transfer to our back-up capacity is not seamless, and may cause
network service interruptions. Any interruption of services could harm our
business reputation and reduce the confidence of our subscribers and
consequently impair our ability to obtain and retain subscribers and could lead
to a violation of the terms of our licenses, each of which could adversely
affect our business.

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.

The international nature of our operations may make the outcome of
litigation, bankruptcy proceedings or enforcement of your rights difficult to
predict.

We are incorporated under the laws of Canada and our
subsidiaries are incorporated under the laws of various jurisdictions, including
Romania, the Czech Republic and The Netherlands, and conduct operations in
different countries. Consequently, there can be no assurance that the laws and
regulations of Canada, Romania, the Czech Republic and The Netherlands or one or
more countries in which our subsidiaries are organized or operate could apply to
litigation or bankruptcy proceedings, which could make the outcome of
litigation, bankruptcy proceedings or enforcement of your rights difficult to
predict.

It may be difficult to enforce judgments against us in U.S. courts.

We are a corporation organized under the laws of Canada, and
most of our assets are located in Romania, the Czech Republic and the
Netherlands. Furthermore, most of our directors and officers reside outside the
United States. As a result, investors may not be able to effect service of
process within the United States upon us or our directors or officers or to
enforce against us or them in U.S. courts judgments predicated upon the civil
liability provisions of U.S. federal securities law. There is doubt as to the
enforceability in original actions in Canadian, Romanian, Czech and Dutch courts
of civil liabilities predicated solely upon U.S. federal securities laws, and
the enforceability in Canadian, Romanian, Czech and Dutch courts of judgments
entered by U.S. courts predicated upon the civil liability provisions of U.S.
federal securities law will be subject to compliance with procedural
requirements under applicable local law, including the condition that the
judgment does not violate the public policy of the applicable jurisdiction.

Litigation regarding the ownership of our disposed Brazilian operations has
been settled but could recommence.

On March 26, 2003, we indirectly disposed of our entire
interest in Telpart Participaçoes S.A., or Telpart, and settled or terminated
the considerable litigation which related to such interest. Although such
litigation has now been settled or terminated as part of the sale of our
interest in Telpart, the parties may recommence the litigation should such sale
be unwound for any reason. In addition, we may be subject to investigations or
proceedings in relation to our past equity participation in Telpart.

- 14 -

---



We will incur increased costs as a result of recently enacted laws and
regulations relating to corporate governance matters and public disclosure.

Recently enacted and proposed changes in the laws and
regulations affecting public companies, including the provisions of the
Sarbanes-Oxley Act of 2002, rules adopted or proposed by the SEC and by the
NASDAQ National Market and new accounting pronouncements will result in
increased costs to us as we evaluate the implications of these laws, regulations
and standards and respond to their requirements. To maintain high standards of
corporate governance and public disclosure, we intend to invest substantial
resources to comply with evolving standards. This investment will result in
increased general and administrative expenses within Fiscal year 2005 and a
diversion of management time and attention from strategic revenue generating and
cost management activities. In addition, these new laws and regulations could
make it more difficult or more costly for us to obtain certain types of
insurance, including director and officer liability insurance, and we may be
forced to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. The impact of these events
could also make it more difficult for us to attract and retain qualified persons
to serve on our board of directors, on our board committees or as executive
officers. We are taking steps to comply with the recently enacted laws and
regulations in accordance with the deadlines, by which compliance is required,
but we cannot predict or estimate the amount or timing of additional costs that
we may incur to respond to their requirement and cannot be certain that we will
be able to fully comply with the provisions of Section 404 of the Sarbanes-Oxley
Act regarding compliance with certain assessments and auditor attestations
regarding internal control structure reporting.

If we do not comply with the U.S. Foreign Corrupt Practices Act, we and our
board of management may become subject to monetary or criminal penalties.

We are subject to the U.S. Foreign Corrupt Practices Act and
comparable legislation in other jurisdictions, which generally prohibits
companies and their intermediaries from bribing foreign officials for the
purpose of obtaining or keeping business. We have in the past and will continue
in the future to take precautions to comply with such legislation, including
maintenance of formal compliance policies. However, these precautions may not
protect us against liability under such legislation, 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 such legislation even though we may have
limited or no ability to control such persons.

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.

There have been allegations that the use of certain portable
wireless telecommunications devices may cause serious health risks. Any actual
or perceived health risks of wireless telecommunications devices could diminish
subscriber growth, reduce network usage per subscriber, restrict our ability to
obtain sites for base stations, spark product liability lawsuits for which we
may not be able to obtain sufficient insurance on commercially reasonable terms,
or limit available financing. Each of these possibilities has the potential to
cause adverse consequences for us and for the entire wireless telecommunications
industry.

Risks Relating to our Financial Condition

Our holding company structure may make it difficult to access cash flow from
our 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 our indirectly held operating companies, MobiFon and Oskar
Mobil. Our cash flow depends upon the ability of our subsidiaries to pay
dividends or otherwise make distributions to us. Our subsidiaries and operating
companies are separate and distinct legal entities and, except for intercompany
loans owed to us, will have no obligation, contingent or otherwise, to pay any
dividends or make any other distributions to us. Any right we may have to
receive assets of our subsidiaries or operating companies upon their liquidation
or reorganization will be structurally subordinated to the prior claims of such
subsidiaries' and operating companies' respective creditors, including, without
limitation, tax authorities, trade creditors and lenders.

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

- 15 -

---



- such entities are currently or may become parties to credit
  or other borrowing agreements that restrict or prohibit the payment of
  dividends and distributions, and such entities are likely to continue to be
  subject to such restrictions and prohibitions for the foreseeable future; and
- it can be expected that Oskar Mobil will generally reinvest all of its
  free cash flow after debt servicing in its business for the foreseeable future
  and that MobiFon may reinvest part of its free cash flow after debt servicing
  in its business for the foreseeable future.

Our quarterly revenues and operating results are volatile.

Our quarterly revenues and operating results are volatile and
difficult to predict. It is possible that our future quarterly operating results
will be below the expectations of public market analysts or investors. Our
quarterly operating results have varied in the past and are likely to vary
significantly from quarter to quarter in the future. As a result, we believe
that period-to-period comparisons of our results of operations may not be a good
indication of our future performance. Our quarterly results may fluctuate as a
result of a variety of factors, including:

- 



Our revenues are unpredictable, and our revenue sources are short-term in
nature.

Future revenues from our prepaid and postpaid subscribers,
our two primary sources of revenue, are unpredictable. For instance, we do not
require our prepaid subscribers and, in the Czech Republic, some of our postpaid
subscribers, to enter into service contracts and cannot be certain that they
will continue to use our services in the future. Although we require certain of
our postpaid subscribers to enter into service contracts, many of our service
contracts can be cancelled by the subscriber with limited advance notice and
without significant penalty. Because we incur costs based on our expectations of
future revenues, our failure to accurately predict revenues could have an
adverse effect on our results of operations or financial condition.

We have substantial consolidated indebtedness, and we will require a
significant amount of cash to service our indebtedness.

As of December 31, 2004, our total consolidated indebtedness
was $1.1 billion, of which $1.0 million was debt of TIW, $223.4 million of
MobiFon Holdings B.V., net of unamortized discount and purchase price fair value
adjustment, $270.0 million of MobiFon and $652.6 million of Oskar Mobil.
MobiFon's and Oskar Mobil's total debt position in accordance with U.S. GAAP,
including long term unrealized losses associated with derivative financial
instrument positions was $270.2 million and $688.1 million, respectively.

The level and the terms of our indebtedness could have important
consequences, including that:

- 16 -

---



- the debt service requirements may become so high that we would have
  difficulty making debt service payments on our outstanding indebtedness or
  satisfying our obligations with respect to such indebtedness;
- our ability to pay dividends will be limited by our ability to repatriate,
  at the corporate level, cash flows from our operations under the restrictive
  covenants contained in the debt instruments of our subsidiaries and operating
  companies;
- our ability to obtain additional debt financing may be limited;
- our ability to pay interest on our debt and finance our
  activities may be limited by cash sweep provisions requiring us to repay the
  principal outstanding on our indebtedness from excess cash flow from
  operations, cash raised from financing activities, asset sales and certain
  distributions from our affiliates; and
- our flexibility in reacting to changes in our business and market
  conditions may be reduced.

Any failure to pay such indebtedness or other liabilities
when due could have a material adverse effect on us. To date, assets of our
operating companies have secured certain of the debt financing obtained by the
operating companies, and it is likely that any debt financing our operating
companies obtain in the foreseeable future will also be secured. The pledge of
assets to secure existing debt may make it substantially more difficult to
obtain additional financing from other sources.

Despite current indebtedness levels, we may still be able to incur
substantially more debt. This could further exacerbate the risks associated with
our substantial leverage.

We may be able to incur substantial additional indebtedness
in the future. At the corporate level, we are not contractually limited or
prohibited from incurring indebtedness. Under the terms of their current debt
instruments, our subsidiaries and operating companies are not fully prohibited
from incurring additional indebtedness. As of December 31, 2004, our operating
companies were entitled to draw additional borrowings of approximately $32.2
million ($20.0 million and 9.0 million) under their working capital facilities,
100.0 million ($136,2 million) under their senior credit facilities. If new
debt is added to our current debt levels, the related risks that we now face
could intensify.

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

The business of our operations is capital-intensive. Our
operating companies expect to have significant future capital requirements,
particularly in relation to the expansion of their wireless operations, the
acquisition of licenses, the introduction of new technologies such as Universal
Mobile Telecommunication System, or UMTS, and Enhanced Data Global Evolution, or
EDGE, and new services based on these technologies, as well as 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 and through other externally generated funds such as
disposition of assets, the sale of debt and equity securities, 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 be no assurance that our operating
companies will be able to obtain the financing required to meet debt service
requirements, 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.

The terms of our indebtedness require us to meet various covenants and limit
our ability to engage in various transactions, which may adversely affect us.

Certain of our subsidiaries and our operating companies are
required to maintain financial ratios and satisfy financial condition tests
pursuant to the terms of their indebtedness. These restrictions could limit our
ability to plan for or react to market conditions or meet extraordinary capital
needs or otherwise restrict corporate activities. In addition, such indebtedness
contains a number of provisions that limit their ability to:

- incur additional indebtedness;

- 17 -

---



- pay dividends or distributions on or repurchase their capital stock;
- repay intercompany debt;
- issue preferred stock of subsidiaries;
- make certain investments;
- create liens to secure debt;
- enter into transactions with affiliates;
- merge or consolidate with another company; and
- transfer and sell assets.

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. A breach under any of the covenants in our debt instruments may result
in a default or a cross-default under other debt instruments, which may cause
our debts to become immediately due at a time when we are unable to pay them.

In addition, our operating companies have uncommitted working
capital facilities that the lenders may terminate at any time, and the lenders
may refuse any request 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.

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

We have sustained significant losses since inception. As of
December 31, 2004, we had an accumulated deficit of $1.2 billion. Although we
generated income from continuing operations before non-controlling interest and
income taxes of $159.2 million, $102.7 million and $67.3 million in 2004, 2003
and 2002, respectively, these 2003 and 2002 results include net non-recurring
gains on investments and financing activities of $19.4 million and $81.6
million, respectively. Our net income was $55.2 million and $11.9 million for
2004 and 2003 versus net losses of $(127.2) million and $(253.7) million for the
years ended December 31, 2002 and 2001. While we have achieved operating
profitability in 2004 and 2003 with respect to our continuing operations, there
can be no assurance that we will be able to sustain or improve operating
profitability in the future. Failure to sustain or improve operating
profitability would adversely affect our ability to service our indebtedness.

While MobiFon and Oskar Mobil currently generate positive
cash flow from operations, they have generated negative cash flow from
operations in the past and Oskar Mobil continues to generate net losses. There
can be no assurance that our operations can 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 other
factors, the outcome of which cannot be predicted.

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

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 in identifying and assessing the value,
strengths and weaknesses of development and acquisition opportunities, in
evaluating the costs and uncertain returns of building and expanding our
networks and to integrating and managing the operations of additional networks.
Our 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:

- 

- 18 -

---



> deploy or improve our networks following the acquisition of new licenses,
>   or successfully manage any businesses we may acquire; or

- we will not incur significant unanticipated expenses.

Risks Relating to Romania and the Czech Republic

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 countries in which we currently
operate or in which we may operate in the future may have 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. Inflation and rapid
fluctuations in interest rates may have negative effects on the economies and
securities markets of certain of these countries, which in turn may have adverse
effects on our operations, including the ability to obtain financing, the
ability of subscribers to pay for services provided by our operating companies
or the ability to support the growth of such operations.

Revenues generated by operating companies 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, in
Euro 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. For
instance, the value of our investment in Oskar 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, Oskar Mobil reports its results of operations in Czech Koruna, and
accordingly, our results of operations will be affected by changes in currency
exchange rates between the Czech Koruna and the U.S. dollar. Some of Oskar
Mobil's borrowings are in Czech Koruna and some in Euro. We have entered into
hedging arrangements in the Czech Republic to systematically hedge against
foreign currency exchange rate risks on 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.

Prior to June 30, 2003, Romania was defined for accounting
purposes as a highly inflationary economy and the U.S. dollar, our functional
currency, was used as MobiFon's measurement currency. Each fiscal quarter, we
make an assessment as to whether Romania is still defined as a highly
inflationary economy, in order to determine whether a further assessment is
needed as to which currency should be MobiFon's functional currency for
subsequent fiscal quarters. As of June 30, 2003, the cumulative inflation in
Romania for the last three years was below 100% and consequently Romania ceased
to be defined for accounting purposes as a highly inflationary economy. An
assessment as to which currency is MobiFon's functional currency was made based
on the collective economic factors of the environment in which it operates and
the U.S. dollar has been determined to continue to be MobiFon's functional
currency for the year 2005. MobiFon's borrowings are in U.S. dollars and tariffs
are set in U.S. dollars. Consequently, exchange fluctuations have not had a
material effect on our consolidated results in the past. However, Romania is
expected to join the European Union in 2007 and it is foreseeable that the Euro
will gain prominence in Romania in the future. Consequently, depending on the
progression of Romania towards the Euro, MobiFon's functional currency may
change and 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.

Romania is an emerging market with macroeconomic conditions that could
negatively impact our financial results or our ability to obtain required
financing.

Our financial results are affected by the health of the
Romanian economy. Romania is emerging from a centrally planned economy to a
free-market economy and remains subject to significant macroeconomic risks as a
result. The government of Romania is tackling problems relating to the creation
of the institutions of a functioning market economy and is in the process of
privatizing selected formerly state-owned companies, which may lead to
significant corporate restructuring, labor dislocation or social unrest.

- 19 -

---



Due to continued 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 business. Political, economic, social or other
developments in Romania may cause us to change the way we conduct our business.
For instance, a monetary development which is anticipated to have an impact on
the Romanian economic environment will be the redenomination of the Romanian
currency and the introduction of the so-called "new leu" on July 1, 2005. The
redenomination entails the dropping of four zeroes. The redenomination poses
many practical problems for commercial banks in Romania, as well as for the
billing system, operation systems and various other applications we use in
providing telecommunication services, including rendering invoices and
processing customer orders. The failure of commercial banks, or other service
providers to upgrade their systems or our own failure to upgrade our systems, to
account for the redenomination of the leu, could have material adverse effect on
our operations.

Romania's 2004 estimated gross domestic product per capita of
$9.075 on a purchasing power parity basis was among the lowest in Europe, and
Romania has experienced substantial, and in some periods extremely high, rates
of inflation and resulting high interest rates for many years. The growth of our
business depends in part on the growth of Romania's economy and the disposable
income of businesses and individuals in Romania. Low or negative economic growth
rates, inflation and rapid fluctuations in interest rates have had and may
continue to have negative effects on the economy and the securities market which
in turn may have adverse effects on our financial results, including the ability
to obtain financing, the ability of subscribers to pay for services or the
ability to support the growth of MobiFon.

Meeting the requirements of the European Union for Romania's
planned accession in January 2007 may require strict economic and financial
reforms, potentially leading to economic dislocation or political or social
unrest. Failure to successfully join the European Union may negatively impact
Romania.

Since negotiations for admittance to the EU began in 1999,
Romania has undertaken significant reforms to its political, judicial and
economic systems. Romania completed EU accession negotiations at the end of 2004
and is to sign an accession treaty in April 2005. However, before it can join
the EU in January 2007, Romania must undergo further major political and
economic reforms as well as implement the

If the Czech economy performs poorly, our business will be impacted
negatively.

Our financial results are affected by the health of the
economy of the Czech Republic. The Czech Republic has undergone dramatic reform
of its economy since 1989. Public discussion continues as to the need for
restructuring certain sectors of the economy. Although the reforms undertaken to
date have improved economic performance, such reforms may not continue and the
level of economic performance attained over the past few years may not be
sustained. In addition, the Czech Republic has experienced growing public
finance deficits, which could potentially increase inflation, destabilize the
Czech Koruna against foreign currencies and adversely impact our ability to
finance foreign currency based expenditures.

Changes in economic, regulatory, administrative or other
policies of the Czech government, as well as political or economic developments
in the Czech Republic over which we have no control, could have a significant
effect on the Czech economy, which in turn could have a significant effect on
our business, prospects, financial condition, results of operations, or our
ability to execute our business plan.

- 20 -

---

Pending legislation in the Czech Republic may significantly alter the
regulatory regime applicable to Oskar Mobil, which could adversely affect our
competitive position and profitability.

Following the Czech Republic's accession to the EU on May 1,
2004, the Czech cabinet adopted draft telecommunications legislation in order to
implement the EU's new electronic communications regulatory framework and the
related universal services directive, access directive, authorization directive
and data protection directive. The new act was approved and is expected to come
into force on 1st May, 2005. Among other significant changes, the new
act is expected to replace the current individual licensing scheme with a system
of general authorizations, including general authorizations to provide wireless
telephony services and operate electronic communications networks. Under these
authorizations, any entity that satisfies certain requirements can enter the
market and provide various levels of service. These levels may range from
providing a mobile virtual network to operating a full network infrastructure.
The new act could also impose pricing and service restrictions on entities
deemed to have "significant market power" in any market in which they operate.
The new act provides for a number of general conditions applicable to all
providers of electronic communications services, some of which are not contained
in our present licenses or in the current Telecommunications Act and may result
in higher costs to us. These include environmental protection, restrictions on
the transmission of illegal content and protection against harmful emissions
from electronic communications networks.

In addition, other provisions of relevant laws and
regulations may be reviewed as the new EU framework is implemented, and the new
act may change significantly before it is finally enacted into law. We cannot
predict the final form of this legislation. Changes implemented by the new act
could have a material adverse effect on our business, prospects, results of
operations and financial condition.

- 21 -

---

ITEM 4  INFORMATION ON THE COMPANY

We provide wireless voice and data services in countries of
Central and Eastern Europe. Our networks provide subscribers with voice and
high-speed packet data services, including mobile access to the internet and
internet based, time sensitive information such as e-mail, digital image
transmission, two-way short messaging service, or SMS, and multimedia messaging
service, or MMS. We operate in Romania through MobiFon S.A. under the brand name
Connex and in the Czech Republic through Oskar Mobil a.s. under the brand name
Oskar. As of December 31, 2004, we had approximately 6.7 million subscribers.
Based on our percentage ownership in these operations as of December 31, 2004,
this represents approximately 4.4 million equity subscribers and after giving
effect to the acquisition, on January 12, 2005, of the 72.9% equity interest in
Oskar Holdings that we did not already own, approximately 5.7 million equity
subscribers.

We were incorporated under the Canada Business Corporations
Act on September 9, 1996 under the name 3293505 Canada Inc. On March 12, 1997,
we changed our name from 3293505 Canada Inc. to Telesystem International
Wireless Inc. In May 1997, we completed our initial public offering.

Our head office and principal place of business are located
at 1250 René-Lévesque West, 38th floor, Montreal Québec, H3B 4W8, Canada. Our
telephone number is (514) 673-8497. CT Corporation System, 111 Eighth Avenue,
New York, NY 10011, (212) 894-8500, acts as our agent for service in the United
States.

The following table sets forth, by segment, the progression since 2000 in the
number of subscribers and equity subscribers excluding discontinued operations,
rounded to the nearest hundred.

|                        | Years ended December 31
|----------------------- | -----------------------
|                        |                        
|                        | 2004                   
|Romania                 |                        
|Subscribers             | 4,910,300              
|                        |                        
|Equity Ownership        | 79.0%                  
|                        |                        
|Equity Subscribers(1)   | 3,879,100              
|                        |                        
|Czech Republic          |                        
|                        |                        
|Subscribers             | 1,831,100              
|                        |                        
|Equity Ownership(2)     | 27.1%                  
|                        |                        
|Equity Subscribers(1)   | 496,200                
|                        |                        
|Total                   |                        
|Subscribers             | 6,741,400              
|                        |                        
|Equity Subscribers(1).. | 4,375,400              
|                        |                        

|    |                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Equity subscribers represent our ultimate proportionate ownership in
    subscribers figures of our operations, based on our equity ownership
    percentage in such operations as of December 31 of each year.
|(2) | Subsequent to year end, we increased our equity ownership in Oskar Holdings,
    the holding company of Oskar Mobil, our Czech operator, to 100%.                                                              

RECENT DEVELOPMENT

On March 15, 2005, we entered into a framework agreement and
a share sale and purchase agreement with Vodafone for the sale of all of our
interest in ClearWave for a cash consideration of approximately $3.5 billion.
Closing of the sale is subject to (i) court approval pursuant to the plan of
arrangement, (ii) shareholder approval on a basis to be determined by the court,
and (iii) customary conditions, including the receipt of all necessary
regulatory approvals under relevant competition legislation. Closing of the sale
will take place as soon as practicable after receipt of such regulatory
approvals, which is expected to occur in the third quarter of 2005.

- 22 -

---



Certain of our shareholders (namely certain affiliates of
J.P. Morgan Partners, LLC, Capital d'Amérique CDPQ Inc., an affiliate of Caisse
de dépôt et placement du Québec, and certain affiliates of AIG Emerging Europe
Infrastructure Fund L.P.) representing in total approximately 33.6% of our
outstanding share capital have agreed to support and vote their shares in favor
of the transaction and not to solicit any competing transaction.

Our board of directors has approved the sale transaction and
has recommended that our shareholders vote in favor of the sale transaction. Our
board has received opinions from Lazard Frères & Co. LLC (our financial advisor)
and Lehman Brothers Inc. (financial advisor to the board of directors) as to the
fairness, from a financial point of view, to our selling subsidiaries of the
sale consideration to be paid to such subsidiaries.

The framework agreement between us and Vodafone contains
customary provisions prohibiting us from soliciting any other acquisition
proposal but allowing termination in certain circumstances, including receipt by
us of an unsolicited proposal from a third party that our board of directors, in
the exercise of its fiduciary duties, finds to be superior to the proposed
transaction, subject to a termination fee to Vodafone of US$110 million,
representing approximately 2.5% of the transaction value. The shareholder
undertakings referred to above would also terminate in such circumstances. In
addition, Vodafone has agreed to a standstill provision.

The arrangement is intended to provide for a shareholder
vote, the distribution of the proceeds of the sale to our shareholders and our
eventual liquidation. Upon shareholder approval, we will as soon as practicable
thereafter seek an order from the court approving the arrangement. Concurrently
with the approval of the arrangement, we will seek court authorization to
initiate a creditor claims process.

It is expected that, pursuant to the arrangement, the distribution to our
shareholders will be completed in stages up to a maximum amount of $16 per
common share, plus investment income, if any, earned following closing:

- upon closing of the sale, we intend to distribute the amount permitted by
  the Court.
- upon completion of the creditor claims process, we intend to distribute
  all remaining cash, except for appropriate reserves.
- upon our liquidation, it is intended that shareholders will receive any
  residual value to the extent of $16 per share (plus investment income), and
  any excess shall be returned to Vodafone as an adjustment to the
  consideration.

- 23 -

---



ORGANIZATIONAL STRUCTURE

The following chart summarizes the equity interests we hold,
directly and indirectly, in each of our operating companies as at December 31,
2004 and March 1, 2005 respectively. Changes in our holding structure that
occurred between December 31, 2004 and March 1, 2005 are described under the
section entitled "Significant Changes" in item 8 of this Form 20-F. Percentages
in brackets represent the voting interests we hold where they differ from the
equity interests we hold. This chart is a simplification of our corporate
structure and omits certain intermediate holding companies.



OPERATIONS

The following table sets forth our operations and interests and certain
information related thereto, as of December 31, 2004, unless otherwise
specified.

|                   | Start-up   | Licensed      |                |           |                
|------------------ | ---------- | ------------- | -------------- | --------- | ---------------
|                   | date of    | Population    | Total          | Equity    | Equity         
|                   | operations | Coverage      | Subscribers(1) | Ownership | Subscribers (2)
|                   |            | (in millions) |                | (%)       |                
|                   |            |               |                |           |                
|Romania            | Q2 1997    | 21.7          | 4,910,312      | 79.0      | 3,879,146      
|Czech Republic ... | Q1 2000    | 10.2          | 1,831,116      | 27.1 (3)  | 496,232 (3)    
|Total              |            | 31.9          | 6,741,428      |           | 4,375,378      

|    |                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of December 31, 2004. Figures
    include our 4,178,451 prepaid subscribers.                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                  
|(2) | Proportional operational data
    represent the combination of our ultimate proportionate ownership in each of
    its subsidiaries and are not intended to represent any measure of
    performance in accordance with generally accepted accounting principles.
|    |                                                                                                                                                                                                                                                                  
|(3) | Subsequent to year end, we
    increased our equity ownership in Oskar Holdings, the holding company of
    Oskar Mobil, our Czech operator, to 100%.                                                                                                            

Romania. MobiFon was the first GSM operator to launch services in Romania.
MobiFon received its 900 MHz national license in November 1996 and launched
commercial service in April 1997. In November 2004, MobiFon was advised by the
Romanian

- 24 -

---



government that it was successful in its application for the
acquisition of a UMTS license following a bid process. MobiFon received its UMTS
license on March 31, 2005. MobiFon operates in Romania under the highly
recognized brand name Connex. MobiFon serves its customers on its
state-of-the-art network, which covers approximately 95% of the population in
Romania. During the twelve months ended December 31, 2004, MobiFon added
1,453,270 net subscribers, an increase of 42% from December 31, 2003. MobiFon
grew its number of subscribers at an average rate of 3.5% per month in 2004 and
had 4,910,312 subscribers at December 31, 2004, up from 3,457,042 at the end of
2003. Our internal reports as well as publicly released information of our
competitors indicate that this represents a 48% market share. Since launching
service in April 1997, MobiFon has developed a strong track record both in terms
of subscriber growth and financial performance. MobiFon achieved positive
operating income before depreciation and amortization, or OIBDA, referred to
previously in our public filings as EBITDA, and described in our Operating and
Financial Review and Prospects incorporated by reference in this document, in
June of 1998, 14 months after commercial launch of services. It recorded
operating income of $230.5 million and OIBDA of $345 million in 2004.

Czech Republic. Oskar Mobil is the third national GSM
operator in the Czech Republic. Oskar Mobil was awarded a dual band 900/1800 MHz
national license in October 1999 and launched commercial service in the Czech
Republic in March 2000 under the brand name Oskar. In February 2005, Oskar Mobil
was awarded a UMTS license. With the addition of 284,365 net subscribers in
2004, Oskar Mobil continues to be one of the fastest growing start-up wireless
operators in Central and Eastern Europe. It reached 1,831,116 subscribers as at
December 31, 2004, representing an estimated 17.0% subscriber market share. Of
our subscribers, 47.9% are postpaid, the highest reported proportion of postpaid
subscribers to total subscribers of any wireless operator in the Czech Republic.
This achievement is consistent with our strategic focus on high value
subscribers. For the twelve-month period ended December 31, 2004, Oskar Mobil
generated average revenue per user, or ARPU, of CZK640 ($25.02), the highest
reported ARPU in the Czech market, resulting in an estimated market share based
on service revenues of 20.1%. Oskar Mobil achieved positive OIBDA in February
2002, less than two years after commercial launch of services. It recorded
operating income of $48 million and OIBDA of $162 million in 2004.

25

---

Market OpportunitiesCentral and Eastern EuropeEurope represents one of the world's largest wireless
telecommunications markets, with, according to EMC World Cellular Database,
approximately 34% of the 1.7 billion wireless telecommunications subscribers
worldwide as of December 2004. Since 1996, the European wireless
telecommunications market has grown, according to EMC World Cellular Database,
at a compounded annual growth rate of 40%, from 39 million subscribers in 1996
to 572 million in 2004. As a result of this rapid growth, the European market is
now almost three times larger than the combined wireless telecommunications
markets of the United States and Canada, 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 prepaid 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 telecommunications market in Bosnia and Herzegovina,
Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and
Montenegro, the Slovak Republic and Slovenia, which are referred to collectively
in this document as Central and Eastern Europe, grew at a compounded annual
growth rate of 68%, from approximately 1.1 million subscribers in 1996 to
approximately 70.6 million in 2004. Individually, Romania and the Czech Republic
grew at a compounded annual growth rate of 119% and 65% respectively over the
same period. During 2004, according to EMC World Cellular Database, wireless
markets in Central and Eastern Europe added 13 million subscribers, representing
an annual growth rate of nearly 23%. In comparison, the wireless market in
European Union member countries that are not part of Central and Eastern Europe,
referred to in this document as countries of Western Europe, grew at a rate of
less than 9% in 2004. 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, 2004 of 32% inBosnia and Herzegovina to 105%
in the Czech Republic in Central and Eastern Europe and of 70% in France to 127%
in Luxembourg in Western Europe. It should be noted that there is a growing
trend in certain countries for wireless handset users to subscribe to services
from more than one operator for the same region through the use of a single or
multiple handsets with different subscriber identity module cards, commonly
referred to as "SIM cards". This trend has resulted in penetration rates based
on SIM cards that exceed the 100% mark since penetration is calculated based on
number of subscriptions to wireless services rather than number of persons using
wireless services. As at December 31, 2004, the penetration rates based on SIM
cards in Romania and the Czech Republic were respectively 47% and 105%. However,
in a study published in August 2004, the Czech Statistical Office estimated that
only approximately 66% of people over the age of 15 in the Czech Republic have a
wireless handset. We believe this further highlights the growth potential of
Central and Eastern Europe.

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 second generation and
third generation technologies such as general packet radio service, commonly
known as GPRS, enhanced data GSM environment, commonly known as EDGE and UMTS.

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:

- the region typically has relatively less developed
  fixed-line telecommunications systems than Western European countries. For
  example, as at December 31, 2004, Romania had fixed-line penetration of
  approximately 20% according to the fixed-line operator in Romania, and the
  Czech Republic had fixed-line penetration of 33.2%, compared to a penetration
  of 59% in the United Kingdom;
- the cost to consumers of wireless service is becoming
  increasingly competitive with fixed-line rates. For example, during peak
  hours, MobiFon's 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.

26

---

RomaniaRomania is located in Central and Eastern Europe, north of
the Balkan Peninsula. Neighboring countries are Hungary, Ukraine, Moldova,
Bulgaria and Serbia and Montenegro. Geographically, Romania is the second
largest country in the Central and Eastern Europe region and covers an area of
approximately 238,000 square kilometers, with a population of 21.7 million
people. Bucharest, the capital city, has a population of over two million
people. Approximately 53% of Romania's total population lives in urban areas.
Major industries in the country include manufacturing, agriculture,
transportation, construction and tourism. The population density of Romania is
approximately 91.2 people per square kilometer.
Romania had a communist government until 1989, and is now
governed as a parliamentary republic, with a popularly-elected bicameral
parliament and president. Since the collapse of the communist regime, the
Romanian government has undertaken steps to privatize former state-run
industries and to institute other economic reforms. The government has also
liberalized prices, reduced government subsidies, returned agricultural land to
former owners, and modernized the tax system. National elections were held in
November 2004 and a new four-party coalition government was sworn in at the end
of December. The new government has indicated its intention to pursue more
business-friendly policies such as the introduction of the flat-rate 16% income
and profit tax and the reform of the labour code.
In 1993, Romania signed an Association Agreement with the EU,
with a goal of joining the EU by January 2007. The European Commission's annual
report on Romania's progress towards accession, which was published in October
2004, recognized that Romania had a functioning market economy, which was a
prerequisite for closing accession negotiations. Romania completed EU accession
negotiations by the end of 2004 and is to sign an accession treaty in April
2005.
Trade with the EU has grown significantly since Romania
signed the Association Agreement, and the EU is Romania's largest trade partner.
Trade with the EU accounted for approximately 73.2% of Romania's exports and
approximately 65.2% of its imports in 2004. Italy remained Romania's largest
market, taking 21.3% of exports, followed by Germany, with 15%. Italy was the
largest supplier, providing 17.4% of total imports, followed by Germany with
15%.
Romania has taken a number of other steps to integrate its
economy into world trade. In March 2003, Romania signed an accession protocol to
the North Atlantic Treaty Organization. Ratification by the existing member
states and Romania's parliament was completed in February 2004. Also in 1993,
Romania concluded a free trade agreement with the European Free Trade
Association member countries. In January 1995, the country became a member of
the World Trade Organization, and has undertaken tariff and customs reforms to
meet its commitments in these agreements. Romania's economic progress has also
led to upgrades in its credit ratings from Standard & Poor's, Moody's and Fitch.
The following table shows selected information regarding Romania and its
economy for the years indicated.
Indicator
    2004 (e)
    2003
    2002
    2001
    2000Population (in millions)
    21.7
    21.7
    21.7
    22.4
    22.4Nominal GDP
    (U.S.$ in billions)
    $72.4
    $57.0
    $45.7
    $40.2
    $37.1Increase
    (decrease) in real GDP
    8.0%
    4.9%
    4.9%
    5.7%
    2.1%GDP per capita
    (U.S.$)
    $3,336
    $2,627
    $2,106
    $1,795
    $1,656Average annual
    consumer priceinflation
    9.3%
    15.3%
    22.5%
    34.5%
    45.7%Foreign direct
    investment(U.S.$ in
    billions)
    $4.0
    $1.6
    $1.1
    $1.2
    $1.0

|                      |      |      |      |      |     
|--------------------- | ---- | ---- | ---- | ---- | ----
|                      |      |      |      |      |     
|Credit ratings        | 2004 | 2003 | 2002 | 2001 | 2000
|Standard & Poor's ... | BB+  | BB   | B+   | B    | B-  
|Moody's (1)           | Ba3  | Ba3  | B1   | B2   | B3  
|Fitch                 | BBB- | BB   | BB-  | B    | B   

________
Sources: Economist Intelligence Unit, Romanian National Institute of
Statistics (INS) and Bloomberg. 
(e) estimates 
(1) as of March 2, 2005, the Moody's credit rating was changed to BA1

Czech Republic

The Czech Republic is situated in Central and Eastern Europe,
sharing borders with Germany, Poland, the Slovak Republic and Austria. The Czech
Republic covers an area of approximately 78,866 square kilometers, with a
population of 10.2 million people. Prague, the capital city, has a population of
approximately 1.2 million people. Approximately 75% of the Czech Republic's
population lives in urban areas. The population density of the Czech Republic is
approximately 129.3 people per square kilometer.

27

---

Since the "Velvet" Revolution in 1989, the Czech Republic has
transformed itself into a western-oriented market economy with more than 80
percent of enterprises in private hands. The average annual inflation is
estimated to have risen to 2.8% in 2004, from 0.1% in 2003. With an open
economy, the Czech Republic is vulnerable to an economic downturn in its
principal export market, the other EU countries.
In December 2004, the government approved a two-prong method
for selling its 51% stake in Cesky Telecom, the first attempt to do so since
2002, when a planned sale to Deutsche Bank and TDC failed. In the first stage of
the plan, the finance ministry invited strategic investors to submit bids and
established a timetable for a tender that began on January 7, 2005. Final
binding bids were due on March 29, 2005. At the same time, the ministry laid the
groundwork for a capital market sale should the tender fail. The government has
not revealed how much it expects to receive from the sale. The Czech Republic's
principal imports include telecommunications equipment, specialized metalworking
machinery, non-ferrous metals, plastics, chemicals and transport equipment.
The Czech Republic and the EU signed the Treaty of Accession
in April 2003. The Czech Republic became a member on May 1, 2004. The Czech
Republic benefits from duty free access to EU markets for most industrial
products as a member of the EU. Harmonization of Czech laws and standards with
those of the EU continues as the country integrates into the EU. The Czech
Republic's customs union with Slovakia and membership in the Central European
Free Trade Association (CEFTA) have been superseded by EU membership.

|Indicator                           | 2004 (e) | 2003   | 2002   | 2001   | 2000  
|----------------------------------- | -------- | ------ | ------ | ------ | ------
|Population (in millions)            | 10.2     | 10.2   | 10.2   | 10.2   | 10.3  
|Nominal GDP (U.S.$ in billions)     | $104.7   | $89.8  | $73.8  | $60.9  | $55.7 
|Increase in real GDP                | 3.8%     | 3.1%   | 1.5%   | 2.6%   | 3.9%  
|GDP per capita (U.S.$)              | $10,265  | $8,804 | $7,235 | $5,971 | $5,408
|Average annual consumer price       |          |        |        |        |       
|inflation                           | 2.8%     | 0.1%   | 1.8%   | 4.7%   | 3.9%  
|Foreign direct investment (U.S.$ in |          |        |        |        |       
|billions)                           | $3.4     | $4.5   | $8.2   | $5.5   | $4.9  
|                                    |          |        |        |        |       
|                                    |          |        |        |        |       

|Credit ratings        | 2004 | 2003 | 2002 | 2001 | 2000
|--------------------- | ---- | ---- | ---- | ---- | ----
|Standard & Poor's ... | A-   | A-   | A-   | A-   | A-  
|Moody's               | A1   | A1   | A1   | BAA1 | BAA1
|Fitch                 | A-   | A-   | A-   | A-   | A-  

Sources: Economist Intelligence Unit, US Commercial Service, Columbus
World Travel Group, Czech Statistical Office, Commerzbank and Bloomberg. 
(e)estimates

Products and Services

Voice Telephony

We provide basic voice services for wireless
telecommunications over GSM networks. As with the rest of Europe, we follow the
"calling party pays" model of charging our customers only for calls that they
initiate. 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, international roaming and complementary
call management capabilities such as call forwarding, call waiting, call hold,
call barring, conference calls and caller identification.

Advanced Wireless Services

The ongoing development of wireless data transmission
technologies has led developers of wireless devices, such as phone handsets and
other hand-held devices, to create more sophisticated products with increasingly
advanced capabilities. These include access to e-mail and other information
services, including news, sports, financial information and services, shopping
services and other functions. We believe that the introduction of such new
applications will drive the growth for data transmission services. As a result,
we continue to upgrade our existing digital networks to be able to offer the
data transmission capabilities required by these new applications, including
wireless application protocol commonly referred to as WAP, GPRS, MMS, and basic
data and fax transmission.

In both Romania and the Czech Republic, we offer our customers the ability to
send text messages to other wireless users using SMS. We also have developed a
wide range of entertainment services based on SMS. We provide, among other
things, the ability to

28

---



chat, to play games and to download logos, ring tones and
icons. MMS, which enables users to send and receive digital images, sounds and
animations in addition to text, is being deployed throughout Europe. MobiFon
launched MMS service in the fourth quarter of 2003 and now counts over 117,000
activated subscribers. We introduced MMS in the Czech Republic in September 2003
and the service has attracted over 310,400 activated subscribers as of December
2004.

WAP-enabling technologies permit the deployment of data
applications, including the ability to access e-mail and the Internet. WAP
allows us to offer utility services as well as games and other entertainment
services. 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 on GPRS include remote high-speed internet and local area network,
or LAN, access, high quality audio clips and still-image capabilities.

In Romania, we launched WAP services, based on circuit switch
data, or CSD technology, on August 1, 2000. At the end of 2001, we implemented
GPRS technology, allowing us to extend WAP-based services as well as provide
internet access, data transfer and LAN access, predominantly for the business
segment, which is the market segment where we have identified the highest level
of subscriber interest and the greatest potential for vertical applications
implementation. We offer a flexible selection of GPRS based packages in order to
address our customers' needs and to remain competitive in the market. In the
consumer segment, GPRS-supported services include internet access and
infotainment services, mainly MMS. MobiFon currently offers GPRS roaming
services with 53 operations in 32 countries. The total number of customers for
mobile data services (based on either CSD or GPRS technology) in Romania has
exceeded 150,000.

In the Czech Republic, we launched WAP services in October
2000 and at the end of 2004, we had more than 389,000 activated WAP subscribers.
We launched GPRS for our postpaid customers in February 2002 and for prepaid
subscribers in January 2003. We had 299,000 activated GPRS subscribers as of
December 31, 2004. In February 2003, we launched "Oskar GPRS Connect", a
platform that enables our business subscribers to access their corporate
networks over mobile handsets or other wireless devices via a secure GPRS
connection.

With WAP, GPRS, MMS and also SMS, we are able to offer our
customers a variety of content services enabling them to gather information such
as weather reports, traffic reports, daily horoscopes, lottery results and news
headlines, as well as providing them with access to entertainment applications (ringtones,
logos, picture messages, Java games, MMS to postcard), and allowing them to
perform banking transactions from a handset. These services are typically
offered in partnership with third party content providers on a revenue-sharing
basis. We earn revenues on these services by charging for access to these
services and for the content that they provide. In addition, subscribers can use
the wireless connectivity we provide for a variety of applications, using
devices such as notebook computers, personal digital assistants, or PDAs, and
advanced mobile phones. Internet access is available via WAP, via special
Internet browsers embedded in newer generation handsets, or through PDAs or
laptops connected to mobile phones.

Internet and Data Access Services

In Romania, we offer dial-up Internet access nationally and
are currently the largest Internet service provider in the country, with
approximately 230,000 dial-up customers. For individual users, we also offer
prepaid dial-up services, domain-name registration, and various services
delivered and included within our "myX Portal" package. Our consumer internet
and data offerings are closely integrated with our wireless telephony offerings.
Through the myX Portal, wireless users can access up-to-date data on their
Connex accounts, and download ringtones, games and other applications. Wireless
users earn special promotional rates and other internet service offers through
continued use of their Connex services. We also offer dedicated internet access
and data access and transport services to corporate customers, and we have more
than 5,080 dedicated access and virtual private network ports. We also offer
customers the ability to access the internet on their portable computer in
certain hotels in Romania using WiFi enabled technologies. WiFi, or Wireless
Fidelity, is a technology used to transmit and receive data over the unlicensed
2.4 GHz wireless spectrum, providing mobile access to a wired LAN or a wireline
broadband connection in its coverage area. With deregulation in 2003, we now
directly provide international telecommunications services. We also provide a
fixed wireless product offering that competes with Romtelecom, the national
fixed line operator, in the business segment for high-speed internet, data
transfer, mobile virtual private network, or MVPN and voice services.

Roaming

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 charged by us.

29

---

Future Service OfferingsWe plan to remain competitive in the area of advanced data
services and ensure the long term sustainability and competitiveness of our
business. We will do so by relying on a variety of technologies, applied in a
manner that suits customer needs and revenue opportunities. Our core GSM
technology can migrate to provide advanced wireless data services, either by
deploying further enhancements to GPRS, such as faster coding schemes, or by
using EDGE, a technological enhancement to the GSM standard. Our high speed data
strategy in both Romania and the Czech Republic includes the use of GPRS-based
technology. In the Czech Republic, we deployed EDGE in March 2005. In addition,
in both Romania and the Czech Republic, we intend to offer services based on 3G
technology to meet our customers needs.
In November 2004, we were advised by the Romanian government
that we were successful in our application to acquire a UMTS license as the
result of a bid process and on March 31, 2005, we received our UMTS license. In
February 2005, we were awarded a UMTS license by the Czech government. As
incumbent GSM operators in the Romanian and Czech wireless markets, we believe
we have both the subscribers and networks to facilitate the deployment of UMTS.
With the introduction of UMTS, we will be able to provide our customers with a
broader variety of services such as video calling, video streaming,
infotainment, such as sports and weather updates, music download capability and
3G enabled high speed data and internet access. Data transfer speeds are
significantly increased in the 3G environment at a theoretical 384 Kbps compared
to 56 Kbps in the GPRS environment.HandsetsWe sell a broad selection of high-quality handsets. We
currently offer multi-mode handsets from many manufacturers including
Sony-Ericsson, Motorola, Nokia, Samsung and Siemens. We offer dual-mode and
tri-mode handsets that can operate on the GSM 900, GSM 1800 and GSM 1900
networks. These multi-mode handsets allow us to offer our customers roaming
across GSM networks globally. The handsets have many advanced features,
including colour screens, and are generally enabled for advanced data services
to help us introduce new value-added services to our subscribers such as access
to the internet, enlarged key pads for ease of use for e-mail access or sending
or responding to an SMS and photo imaging.
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, by attracting
customers who select us for the quality of our service rather than for the
purpose of obtaining subsidized handsets and then disconnecting from our
network. In addition, the lack of a complete handset subsidy decreases the cost
of subscriber acquisition and thereby accelerates our per subscriber payback
period. Over the last three years, the cost of subscriber acquisition in both
Romania and the Czech Republic has averaged approximately three months of ARPU.
Furthermore, we believe that offering plans with a non-subsidized handset
reduces the likelihood of bad debt because, in our experience, users who can
cover the full cost of a handset are also more likely to cover the cost of their
plans.
We intend to continue, where feasible, our practice of
minimally subsidizing handsets. Currently, we do not subsidize handsets to
acquire prepaid consumers. However, we may subsidize handset costs in some of
our postpaid service packages as part of our initiative to promote new
technologies and gain market share. In Romania, we may have to match any future
introduction of increased handset subsidies by our three competitors, which
could affect our subscriber payback period and increase our subscriber
acquisition cost. In addition, with the launch of UMTS services, we will be
selling more expensive 3G handsets that may require higher handset subsidies to
attract customers. 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 PricingWe tailor our service packages to be competitive and simple
to understand and to allow each subscriber to choose a package that suits his or
her usage requirements. We bill customers for postpaid 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.
Subscribers can also choose to subscribe to our service under prepaid packages,
whereby a customer purchases 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.Postpaid and Prepaid Service PackagesWe offer a number of postpaid 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. As of
December 31, 2004, postpaid subscribers accounted for 34.3% and 47.9% of our
Romanian and Czech30

---



subscriber bases, respectively. Postpaid customers accounted for 27.0% and
77.1% of net added subscribers in Romania and the Czech Republic respectively
during the twelve-month period from January 1, 2004 to December 31, 2004.

We offer prepaid service packages to subscribers who prefer a
pre-payment option or whose credit profiles do not qualify for postpaid service.
Prepaid service requires no contract and no monthly fee. The customer can easily
access further airtime by purchasing additional airtime cards or adding value to
a rechargeable card. As of December 31, 2004, prepaid subscribers accounted for
65.7% and 52.1% of our Romanian and Czech subscriber bases, respectively.
Prepaid customers accounted for 73.0% of the net added subscribers in Romania
and 22.9% of net added subscribers in the Czech Republic, during the
twelve-month period from January 1, 2004 to December 31, 2004. We began offering
prepaid service in the Czech Republic on April 19, 2000 and in Romania on
November 7, 1997.

In line with our strategy of offering diversity and
flexibility to our customers, we introduced the first innovative airtime
recharging mechanism for voice and data prepaid customers in Romania in 2002.
This service is available at point of sale and at automated teller machines of
the largest bank in Romania. Oskar Mobil also has a recharging system available
at numerous automated teller machines in the Czech Republic. The main benefits
of this system are the wide range of the recharge values, its 24-hour
availability and the reduction of the costs associated with production and
distribution of physical recharging cards.

Romania.We currently offer several consumer postpaid
plans and four basic business packages. The consumer subscription-based
portfolio is designed to respond to a large variety of communication needs.
Starting with a basic package with no inclusive minutes, the offer allows
customers to obtain more value by adding options at special tariffs: favorite
time, favorite numbers, all networks, intensive calling. A total of four plans
and six add-on options offer a large flexibility for all customers. Heavier
users' needs are accommodated by five packages with progressively higher volumes
of inclusive minutes (from 50 to 800). Non-voice communication needs are covered
by messaging options (SMS and MMS) which can be added on all voice packages. The
complexity of the business segment communication needs is addressed by a broad
portfolio. Four basic packages, designed for customers who prefer to "pay as
they talk", offer better rates for increasing volumes of calling, or the
flexibility to choose amongst a flat or a network-based tariff. Users with high
on-company calling needs are offered a special tariff for this type of call. The
feature is combined with variable volumes of inclusive minutes provided at user
or company level. Finally, special offers are tailored to very large or
integrated services accounts.

We also offer the prepaid product, "Cartela Connex" which
provides four alternative choices built around either favorite timebands,
numbers, destination network (for which special tariffs apply), or flat
tariffing. The customers have the freedom to select the package that best suits
their communication needs.

Czech Republic. We currently offer six consumer postpaid
plans and two business postpaid plans. The consumer postpaid plans are adapted
to the general mobile needs and usage profile. The subscriber chooses between
bundled minutes packages including 50, 150, or 300 minutes of usage to all
networks. These plans include SMS on all networks at one CZK per message,
roll-over of unused minutes from one month to another, and free voicemail. We
also offer the "Write Me" and "Between Us" tariff plans that currently offer the
best rates on the Czech market for both voice and SMS between subscribers of the
same mobile network. Since December 31, 2003 these two plans have replaced the
mandatory tariffs imposed by the Czech regulators when Oskar Mobil launched its
operations in 2000. The business plans offer minimal monthly fee, low calling
rates, no bundled minutes and volume based discounts as a standard fee feature.
They include SMS on the Oskar network at one CZK per message, and free
voicemail. We also offer the "Oskarta" prepaid plan with call rates on Oskar's
network beginning at three CZK per minute and at two CZK per SMS, whether on
Oskar's network or any other national network. There is an automatic threshold
discount if the monthly usage exceeds 700 CZK per month.

Pricing

We believe that our pricing structures compare favorably to the prices
offered both by our Romanian and Czech wireless competitors.

Romania. Our initial launch strategy emphasized
feature-rich service offerings that appealed to corporations, governmental
agencies and other high-end consumer 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. For postpaid plans, we introduced low-end
programs, with affordable monthly fees and flexible per minute rates,
stimulating usage during non-peak hours, weekends and/or for certain
destinations. Our services are also priced to be competitive with the fixed line
services of Romtelecom, the national fixed line phone company. For some postpaid
programs, our rates for making in-country long distance calls historically have
been less expensive than Romtelecom's fixed line rates at certain times of the
day, which encourages customers to use wireless

31

---

instead of fixed line phone service. The postpaid plans we
currently offer charge the same rates for calling Romtelecom's fixed line
network as for making calls within MobiFon's network, thus encouraging the users
to make calls to the large customer base of the fixed line operator.Czech Republic.
As the third GSM market entrant in
the Czech Republic, we initially differentiated ourselves from our competitors
by aggressively pricing our service plans. Since then, we have focused our
marketing efforts and product offerings on two customer groups that represent
the greatest potential in terms of subscriber, revenue and profit growth:
consumer postpaid and small and medium sized businesses. These two key customer
groups represent the majority of our revenues and a significant portion of our
customer base. We have therefore developed and introduced innovative pricing
plans that are aimed at the specific needs and demands of these two customer
groups. For consumer postpaid, we offer a service model that is unique and
innovative. As such, we have introduced new pricing plans that combine the cost
control benefits of prepaid services with the better value of postpaid plans,
and were the first operator in the Czech Republic to offer the same calling
rates across all networks. We offer small and medium sized businesses the
advantage of low rates and more spending control, along with a dedicated call
center team and sales force. 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 and fixed term contract for postpaid
consumer plans.

Marketing, Distribution, Customer Care and Billing

Marketing

Romania.

A consumer survey we commissioned in November 2004 showed
that Connex achieved a brand awareness level of 97.4% in Romania. The survey
revealed that the top-of-mind brand awareness was 53.1% for Connex, versus 44.3%
for Orange, our principal competitor. We accomplished such brand recognition
through an extensive advertising campaign that focused on brand visibility
through television, billboard and magazine advertisements. Having achieved
significant brand awareness in Romania, we are now building on our brand image
through various programs and campaigns to ensure brand loyalty. A number of our
advertising campaigns have won international awards in specialized forums. In
2002, the GSM Association nominated "Connex Play" for its "Best Marketing
Campaign" award; in 2001, at the Portoroz Festival, Connex was awarded a Golden
Drum award for television advertising in the Telecommunications category and in
2002, at the Cannes 3GSM Conference, the advertising campaign for Connex Play
was among the nominees for best marketing campaigns. The "Chirp Chirp" TV
Commercial won "The best TV Commercial in telecommunication" award at Ad'Or
Festival (May 2003). The same commercial won the "Silver Drumstick" award at
Golden Drum Advertising Festival at Portoroz, Slovenia, (October 2003) and was
ranked 86th in the top 100 ads worldwide of the year in The Gunn Report and
Showreel of The Year (November 2003). In March 2005, the Information, Technology
and Communication Industry, under the patronage of Romanian President Triain
Basescu, awarded Connex the Best Communication Service award for 2004. This is
the second year running that we were honored with this award.

During the first quarter of 2004, we implemented a loyalty
points program. Postpaid customers are awarded points, based on their monthly
bill and tenure with the network, which can be redeemed for handsets or airtime.
The program has contributed to churn reduction of our postpaid customers.

Czech Republic.

32

---

Over the past two years, we have positioned ourselves as an
agent of innovation in the Czech wireless market and leveraged this into one of
the most recognized brands in the country. Having launched with a mass-market
brand and tagline of "Everybody, Everyday", we have since repositioned our brand
to appeal to mid and high value subscribers and the small business market. Our
current marketing includes both brand building and product information for
postpaid products.
Our Oskar brand strategy aims to blend strong Czech insights,
integrated consistent messaging, relevant creativity and highly effective media
planning to develop a world class brand. Since our market entry, we have
utilized most forms of advertising, including television, outdoor, newspaper and
magazines. In addition, we use interactive marketing and direct marketing
communication. We use multiple domestic and international advertisement agencies
and are among the ten largest media buyers in the Czech Republic. However, the
amount we spend on these media is consistently less than that of our
competitors, Eurotel and T-Mobile. We have won over 40 domestic and
international awards for marketing and communication. We have been nominated in
the World Communication Awards for best branding campaign once and for best EMEA
mobile operator three times.
In November 2004, we implemented a loyalty points program, aimed at our
business customers with fixed-term contract. Points awarded under the program
can be redeemed toward the purchase of handsets.Distribution Channels

Romania.We distribute postpaid, prepaid and data products to consumer and business
markets. The business market is reached via four channels: a direct sales force,
serving the top 6,000 business accounts, and a combination of direct sales,
dealers' sales force and telesales team, addressing the small and medium
business markets. Information technology suppliers are partnering as well with
us to sell bundled communication services and associated systems, for a limited
number of large volume projects.

The consumer market is reached via our own corporate stores,
of which we had 17 as of December 31, 2004 or through postpaid dealers, of which
most are exclusive, covering 780 points of sale. Dealers are commissioned on a
volume-based scheme, which includes elements of performance, loyalty and
regional objectives (performance bonuses and commission claw-back mechanisms for
early subscription cancellation).

Our prepaid products are widely distributed in a network of
about 10,000 points of sale, belonging either to the postpaid dealers,
distribution networks or other retailers, including gas stations and the
Romanian Post offices. Recharge of the prepaid cards can be performed via the
traditional plastic voucher, through the above mentioned network, or by
electronic means including online recharge at approximately 2,700 outlets in our
distribution network or at automated teller machines. We also offer the ability
to recharge prepaid cards by invoicing directly an existing postpaid subscriber.

In Romania, we pay commissions to our dealers for each
postpaid customer acquired. In order to promote careful selection of customers
and avoid bad debt exposure, our dealers are required to contribute an amount to
the subsidies we provide for handsets, and commissions are paid to dealers in
installments over a period of months, with a debit to the dealer's account if
customers churn within specified time periods. We believe our commission
structure and practice are consistent with market practices in Romania. We pay a
specified commission to each dealer for its sale of prepaid SIM cards and a
lower commission each time the dealer sells an airtime recharge on a prepaid SIM
card.

Czech Republic.

We operate our own retail sales channel through our 48
corporate stores and two vans operating as "mobile stores". Our larger retail
stores are located in the urban centers of the Czech Republic, while the smaller
retail stores provide a physical presence in shopping centers and secondary
cities. We lease our store locations. They are staffed by Oskar Mobil employees
trained to deliver to customers an experience consistent with the Oskar brand.
We view this retail channel as a key distribution mechanism and aim to increase
our retail footprint. Our two "mobile stores" sell in predominantly rural areas,
in combination with local promotion activities and other local events. Customers
can also order service packages and handsets over the phone from a fully
dedicated telesales team or via our website. Delivery to our customers' offices
and homes is free, via the Czech Post within 48 hours. Our distribution strategy
also includes a team of dedicated sales representatives for targeted business
accounts as well as an e-shop on the Internet, where consumers can purchase our
products and services, as well as obtain help and advice. In addition to the
above direct channels, we have contracted with several third party distributors
who purchase prepaid airtime cards from us and resell them to retailers for



---

distribution at more than 10,000 points across the country.
In the Czech Republic, we do not use dealers to sell SIM
cards or handsets. However, we pay a specified commission to the sellers of
prepaid airtime cards and a smaller commission to banks for recharging prepaid
accounts through their automated teller machines.Customer CareWe view customer care as an essential element of our strategy
and we seek to promote our customer focus to minimize churn. As part of our
approach, we provide differentiated service according to customer segments.
Customers who subscribe to more expensive services receive more personalized
live customer service, while customers who subscribe to more economical packages
are served primarily through self-care, although live customer care is available
for all customers, if and when needed. We have established toll-free customer
care call center telephone lines staffed by trained employees to answer
inquiries by existing and potential subscribers. We strive to decrease the
number of calls to our call centers by simplifying how we deal with customers
and by developing sophisticated but easy to use self-care solutions. Tools such
as interactive voice response, or IVR, USSD codes  a very user-friendly way to
retrieve, via a short series of characters through the handset, a variety of
information such as credit balances, recharge airtime balances and last invoice
date, allows customers access to their information in a quick and efficient
manner. Customers can also access their account via the web.
The focus on self-care solutions allows us to both serve a
constantly and significantly increasing number of customers without adding
corresponding staff. We closely monitor customer care calls and use information
gathered from these calls to customize marketing strategies, pricing and
promotional plans. Through constant refining of internal processes, we have
reached high levels of productivity in our call centers in both Romania and the
Czech Republic and we make an ongoing effort to control the number of calls per
customer, even in a market like Romania, where the need for education regarding
wireless service is still high.
We consistently strive to be one of the top providers in terms of customer
care in our markets, by providing a very accessible service, sustained through
reliable and easy to use systems and through well trained and highly dedicated
employees.BillingBilling is governed by the nature of the subscriber's service
package. Our billing and customer care systems are integrated in a single
system, providing our staff with a comprehensive view of a subscriber's account.
We use an automated collections process, making use of SMS, IVR and voice mail.Romania.Our billing system which has been in place since September 2003 is a
best-in-class product that provides maximum flexibility, allows for rapid
configuration of new products and services and supports innovative discounting
and packaging concepts. In addition to its GSM/data convergence which has
already been implemented, our billing system will provide over time
prepaid/postpaid convergence, allowing us to offer bundled services and
cross-product discounting in a consistent manner across all product lines and
payment channels. A preliminary assessment of our billing system's capabilities
concluded that it will allow for rating and billing of UMTS service offerings. A
more detailed assessment will be performed when MobiFon's specific UMTS service
offerings will have been developed and we expect some changes to the billing
system to be implemented in order to enable these capabilities.

Czech Republic.

Credit Management and Churn

Credit Management

To manage bad debt risk associated with postpaid customers,
we generate customer profiles that provide us with the ability to set credit
limits and monitor daily usage patterns for customers with a high risk profile.
We also work actively to identify potential fraud. The internal fraud
departments of our operating companies review usage reports to monitor potential
fraud or credit abuse.



---



Romania.Romania
does not currently have a comprehensive credit bureau or credit-reporting
agency. However, two credit reporting agencies are currently under development.
The first started as an organization serving only the banking sector with plans
to expand to more comprehensive reporting. The second was launched to address
other sectors such as utilities, insurance and retail. We, together with the
other GSM operators in Romania, have been using, for the last six years, a
shared database of subscribers who have been removed from their networks for
nonpayment, fraudulent behavior or bad payment history, to assist in identifying
customers who pose a credit risk. We use a detailed credit-scoring model,
applied to our new subscribers, based on demographic factors such as age,
occupation and address, which we use to manage our credit exposure and to
recommend appropriate service packages to potential customers. Based on the
estimated risk of each subscriber, calculated with the credit scoring model and
information from the shared database, we establish a credit limit for each
customer. In addition, we require some of our subscribers to pay a deposit or a
prepayment in the range of $50 to $500 before activating their accounts.

Our subscriber credit ratings are continuously evaluated,
using a behavior scoring model, which is based primarily on the payment behavior
that the customer exhibits over a period of time. Credit extension and
collection treatment are adjusted according to the updated scores. Customers
late on their payments are prevented from making outgoing calls after 35 days
and are permanently disconnected after 90 days from the issue date of the first
unpaid invoice. In 2004, actual bad debt expense represented approximately 1.4%
of MobiFon's billable service revenues down from 2.6% in 2003.

Czech Republic. To
assist us in managing and reducing both bad debt and churn levels, we have
implemented an initial mandatory deposit and an account spending limit for any
postpaid activation. Normally, new customers provide a CZK 1,000 ($45) deposit,
representing their account spending limit. As well, if new customers want to use
international roaming upon activation, they are required to provide a CZK 3,000
($134) deposit. This amount is returned to the customer after six months of good
payment history in the form of a credit to their postpaid account. The
customer's deposit can be refunded upon request if that customer terminates its
service with us prior to the expiration of six months.

With the account spending limit, customers are notified when
they reach 50% and 75% of their spending limit. At 100%, the customers are "hotlined",
which prevents them from making outgoing calls until their account balance
returns below their spending limit. As a subscriber's creditworthiness is proven
by making prompt and timely payments, we proactively increase that subscriber's
credit limit (similar to the model applied by credit card companies) to allow
for increased spending and, therefore, higher ARPU. Postpaid subscribers who do
not pay their invoice are prevented from making outgoing calls five days after
the invoice due date and are removed from our subscriber base and disconnected
from our network between 30 and 60 days after the due date of their invoice. The
account spending limit has enabled us to limit bad debt levels by reducing
indebtedness of non-paying customers. Actual bad debt expense represented
approximately 1.7% of Oskar Mobil's billable service revenues in 2004 up
slightly
from 1.1% in 2003.

Churn

Churn can occur for a number of reasons. In the case of
voluntary churn, the customer may decide that he or she cannot afford the
service, move out of the coverage area or decide to subscribe to a competing
service. In the case of involuntary churn, postpaid 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 prepaid subscribers
whose services we terminated after several months have lapsed since they last
placed or received a call. MobiFon adjusts the number of months of permitted
inactivity based on market practice and currently churns prepaid subscribers who
have been customers for at least 14 months after three months of inactivity.
MobiFon's average monthly churn rate was 2.12% in 2000, 1.68% in 2001, 1.85% in
2002, 1.97% in 2003 and 1.90% in 2004. In December 2002, we revised our churn
policy in the Czech Republic in order to remove prepaid customers from our
subscriber base after six months of inactivity, as measured by zero incoming or
outgoing revenue. Under our previous policy, we removed prepaid customers from
our subscriber base after 13 months elapsed following such customers' last
account replenishment. This change in our policy resulted in a one time
reduction in our subscriber base of 93,600 subscribers, or 7.4% of our total
subscriber base at the time. Oskar Mobil's average monthly churn rate, whose
figures include a one time-adjustment for 2002 and, for 2003 and 2004,
subscribers who have had no activity in their account for more than 6 months,
was 1.32% in 2000, 1.86% in 2001, 2.40% in 2002, 2.10% in 2003 and 1.89% in
2004. We have undertaken several initiatives to address opportunities to improve
customer satisfaction and thereby reduce voluntary churn including the
following:

- 

Wireless operators in Romania and the Czech Republic compete aggressively for
new customers and each other's customers.

35

---

Continued competition for customers, along with the expected
launch of mobile number portability in both markets in late 2005 or 2006, which
will require wireless operators to allow subscribers of a given wireless network
to keep the same mobile number when subscribing to the services of a different
operator, suggest that churn in these wireless markets may increase in the
future. We expect mobile number portability to have a significant impact on
wireless operators in our markets. Technical implementation to enable mobile
number portability may require new equipment, depending on the technical
solution imposed or chosen. Furthermore, retention and acquisition strategies
may have to be reconsidered in the mobile number portability environment, when
losing a number will no longer be an issue to be considered by a customer in
choosing between operators. In addition, pricing strategy can be affected as a
result of the difficulties in providing and communicating the advantages of low
rates for calls made to users of the same network.Spectrum and NetworkSpectrumRomania.
We hold one of three licenses issued
to provide nationwide GSM-based wireless telecommunications services throughout
Romania. We 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,
we must pay a recurring annual fee of approximately 8.4 million Euro ($11
million) for 12.4 MHz of spectrum or 62 channels allocated in the 900 MHz
frequency range under its frequency license. We also purchased 3.6 MHz of
spectrum or 18 additional national channels in the 1800 MHz frequency range at
an annual price per channel of 85,000 Euro ($110,000).

In November 2004, we were advised by the Romania government
that we were successful in our application to acquire a UMTS license following a
bid process. The license, issued on March 31, 2005, consists of three channels
of 5 MHz, for a total of 15 MHz paired spectrum and one channel of 5 MHz
unpaired spectrum. The total cost for the license is $35 million, payable in six
installments. The first payment, in the amount of $10.5 million, was paid on
March 22, 2005. The balance, in five equal installments in the amount of $4.9
million, is due on January 30 of each year beginning in 2006. The annual
spectrum fee is Euro 1.2 million ($1.6 million) per channel of paired spectrum
and Euro 0.6 million ($0.8 million) per channel of unpaired spectrum. We
anticipate using one channel of paired spectrum, or 5 MHz in 2005. In December
2004, we requested and were awarded a temporary UMTS license for technical
tests, valid until the end of March 2005.

Czech Republic.

In February 2005, we were awarded by the Czech government a
UMTS license. The license consists of four channels of 5 MHz, for a total of 20
MHz paired spectrum and one channel of 5 MHz unpaired spectrum. The cost for the
license is CZK 2 billion ($89.4 million) payable in annual installments from
December 2005 through December 2009.

Networks

We chose major cellular equipment vendors such as Ericsson
and Siemens 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 acquire 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. We monitor traffic-related activities in order 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 interest.

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



---

adding more radio equipment at existing sites, adding
additional sites and employing sectorization and cell splitting techniques.
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 and premicells. 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.Romania.We began the development of our GSM-based wireless network, using 900 MHz
frequencies, in December 1996. By March 1, 1997, our 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, 2004, our
state-of-the-art network covered approximately 95% of the population of Romania.
Use of asynchronous transfer mode technology, or ATM, led to significant
increase in network efficiency while preserving a high quality level. We carry
most of our communication traffic on our owned backbone (microwave and fiber
optic cable) assets, rather than relying on Romtelecom, thereby reducing
operating costs. We ensure direct international traffic interconnection with
five carriers. We have also strategically sourced our network backbone capacity
from several sources, including leased capacity from other third party carriers.
We lease two pairs of dark fiber optic strands over high voltage poles and
technical space for network capacity expansion and network redundancy. The
national optical fiber network is split in two national rings. The Western ring
has been operational since January 2003 and the Eastern ring was completed in
November 2004. A portion of this usable capacity is leased back to the lessor
under the terms of the leasing agreement. The leasing agreement, commencing in
2002, is for a period of 17 years or thru the end of our GSM license, whichever
is shorter. The lease payments and receipts, which individually are estimated to
be $7 million in 2005, are expected to offset one another such that minimal cash
payments, if any, will be made by either party. In addition we have leased
additional fiber optic strands over a seven year period, commencing in 2004, for
an estimated $2.3 million in 2005.

We anticipate a technical deployment and commercial launch of
UMTS in the first half of 2005. Deployment will be phased over a period of time
with Bucharest, the next largest seven cities and the road between Bucharest and
Brasov covered in the initial roll out in 2005. We intend to add UMTS technology
to 330 of our existing 2,137 sites by the end of the second quarter of 2005.

Czech Republic

Operations and Maintenance

We have designed, in consultation with our technology 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.

The blocked call and dropped call rates of our Romanian and Czech networks
were less than 1% and 2% respectively, in 2004, mainly as a result of the
following monitoring and maintenance measures:

- 

to ensure peak
  network reliability and service quality, our maintenance plans feature
  preventive and corrective maintenance programs. For instance, we set
  appropriate alarm threshold levels for detection of equipment problems such as
  low batteries, equipment or circuit outages and security violations and we
  constantly refine maintenance procedures and documentation to improve the
  restoration process for problems that directly affect subscribers. We also
  establish routine maintenance and testing of all switching, radio equipment,
  systems running value added services and interconnect facilities;

we safeguard our
  networks against disaster by using, at various locations, back-up transmission
  systems, back-up system components, battery back-ups, generators and fire
  suppression systems. In addition, regional centers maintain replacement

37

---



> parts for critical components in the event of switching
>   center or other system failures. We have also defined a Business Continuity
>   Plan at MobiFon and an Operational Recovery Plan at Oskar Mobil which covers
>   the main services and includes specific procedures and guidelines to reduce
>   the impact of various disaster situations.

Competition

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 and may
have significantly greater financial resources than those available to us.
However, we believe that our brand recognition and pricing strategies will
enable us to compete effectively in these markets. Although we currently face
competition from other forms of telecommunications technologies, we believe that
our GSM-based wireless networks combined with an appropriate high-speed data
strategy should allow us to remain competitive by offering cost and
accessibility advantages over these other technologies.

Romania.

Orange, majority owned by France Telecom and operated
initially under the name Dialog, acquired its 900 MHz license at the same time
as MobiFon in November 1996 and launched its services in June 1997. Dialog
re-branded its services under the Orange brand on April 5, 2002. Orange was
granted a UMTS license at the same time and under similar terms as MobiFon in
November 2004. In addition Orange launched EDGE as their technological solution
for high-speed mobile data in the fall of 2004.

Romtelecom, the national fixed-line phone company, in which
the partly-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.
Currently, Cosmorom has only a minimal presence in the market. OTE stated that a
proposal to relaunch Cosmorom under the management of Cosmote, OTE's mobile
operation in Greece, has been submitted to the Romanian government. A decision
related to Cosmorom's future is expected in the coming months.

Telemobil won its analog NMT license in March 1992 and
launched operations in May 1993 but did not succeed 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 S.A.) is now the main shareholder of Telemobil. Telemobil is the
first European mobile operator to use CDMA 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.

The following table presents a summary of the relevant information for each
wireless operator in Romania, including estimated market share based on publicly
released data of the operators as of December 31, 2004:

|Operator        | Brand Name    | Technology    | License Award | Start of Operations | Market Share
|--------------- | ------------- | ------------- | ------------- | ------------------- | ------------
|1) MobiFon      | Connex        | GSM 900/1800  | November 1996 | April 1997          | 48.0%       
|                |               | UMTS          | March 2005    |                    |             
|2) Orange       | Dialog/Orange | GSM 900/1800  | November 1996 | June 1997           | 48.3%       
|                |               | UMTS          | November 2004 |                    |             
|3) Telemobil .. | Zapp          | CDMA 2000/NMT | March 1992    | May 1993            | 2.8%        
|4) Romtelecom   | Cosmorom      | GSM 1800      | November 1998 | June 2000           | 0.9%        

Czech Republic

Eurotel acquired its NMT 450 license in November 1990 and
launched commercial analog service operations in September 1991. The entry of
GSM services reversed Eurotel's earlier NMT subscriber growth. Eurotel 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. Český
Telecom, the national fixed line operator, became the sole shareholder of
Eurotel in November 2003. In December 2004, the government approved a two-prong
method for selling its 51% stake in Český Telecom, the first attempt to do so
since 2002, when a planned sale to Deutsche Bank and TDC failed. In the first
stage of the plan, the finance ministry invited strategic investors to submit
bids and established a timetable for a tender that began on January 7, 2005.
Final binding bids were due on March 29, 2005. At the same time, the ministry
laid the groundwork for a capital market sale should the tender fail. The
government has not revealed how much it expects to receive from the sale.

Radiomobil acquired 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 majority shareholder
is Deutsche



---

Telekom AG. In April 2002 Radiomobil rebranded its services to the T-Mobile
brand name, and has since changed its name to T-Mobile Czech Republic.
T-Mobile and Eurotel were granted UMTS licenses in December
2001 for approximately CZK3.9 billion ($142.9 million) and CZK3.5 billion
($131.0 million) respectively. The recipients were required to pay CZK1 billion
(or $26.0 million) upon the issuance of the licenses and the balance of the
purchase price in 2004. The operators were also required, as a unique deployment
condition, to achieve 90% coverage of Prague, with their commercial UMTS
services by January 1, 2006.
The following table presents a summary of the relevant information for each
wireless operator in the Czech Republic including estimated market share based
on publicly released data of the operators as of December 31, 2004:Operator
    Brand Name
    Technology
    License Award
    Start of Operations
    Market ShareEurotel
    Eurotel/Go
    GSM 900/1800
    March 1996
    July 1996
    42.6%Eurotel
    NMT 450
    November 1990
    
    UMTS
    December 2001
    T-Mobile/Radiomobil
    T-Mobile/Paegas/Twist
    GSM 900/1800
    March 1996
    September 1996
    40.4%
  
    UMTS
    December 2001
    Oskar Mobil
    Oskar
    GSM 1800/900 
    (1)
    October 1999
    March 2000
    17.0%
  UMTS
    February 2005
    ____________
(1) Used outside of Prague

39

---

Licenses and Regulatory EnvironmentLicensing and Frequency AllocationRomania.The Romanian government has adopted a policy of harmonizing Romanian
telecommunications regulations with EU norms. In this respect, Romanian
telecommunications legislation was significantly modified during 2002 to reflect
the EU directives, and a new regulatory authority, the Romanian
Telecommunication National Agency for Regulation in Communications Sector, known
by its Romanian acronym ANRC, was established. Its main purpose is the
implementation of a national policy in the telecommunications sector. The ANRC
now exercises a portion of the authority formerly held by the Ministry of
Communications and Information Technology, or MCIT. Under the new
telecommunications regulations, a communications operator needs to obtain three
authorizations and licenses: a General Authorization for network services issued
by the ANRC, a Numbering License issued by the ANRC and a Frequency Spectrum
License issued by the General Inspectorate of Communications and Information
Technology, or IGCTI. The ANRC is responsible for granting to all fixed line and
wireless operators a Numbering License for allocation of numbers based on the
national numbering plan. The IGCIT is responsible for managing and issuing the
transmission frequencies used by all wireless operators in Romania, as well as
the frequencies used by radio, television and other communications media.

The General Authorization sets forth the requirements that a
potential operator must meet in order to provide telecommunications services. As
required by the telecommunications law and ANRC's Decision No. 1333 dated
November 5, 2003, MobiFon filed a notification with the ANRC and was issued the
certification registered under no. 19156/August 8, 2004, confirming that MobiFon
complies with the requirements of the General Authorization and may engage in
provision of telecommunications services. If we fail to comply with the
authorization to provide electronic communications networks, the regulatory
authority may apply administrative fines up to 2% of revenue. Breaches that are
subject to administrative fines include the following: (1) breach of the
obligations regarding the general authorization, (2) using a radio frequency
without having a license, (3) using numbering resources without having a license
and (4) not complying with the frequency and numbering licenses' terms and
obligations.

In March 2005, the ANRC issued to us numbering License no.
1.6, valid until February 14, 2013. The license confirmed our right to use the
numbers previously allocated under our former GSM license and allocated to us
additional numbers. Although the ANRC may include in the Numbering License the
obligation of the operators to pay tax for the use of the allocated numbering
resources, our Numbering License does not include such an obligation. However,
we are subject to a monitoring fee payable to the ANRC of a maximum of up to
0.5% of revenue. In 2004, we paid $1.3 million (0.2% of 2003 revenue) as a
monitoring fee.

MobiFon GSM License

On June 30, 2003, the MCIT issued a GSM Frequency License to
us. This license expires on December 31, 2011 and may be renewed by IGCTI upon a
request by us made before June 30, 2011. The license gives us the exclusive
right to use 62 channels in the GSM 900 MHz range and 18 channels in the 1800
MHz range in Bucharest. In January 2005, the IGCIT issued a decision converting
the 18 channels in 1800 MHz to national from Bucharest only. At our request, the
IGCTI might supplement or reduce the allocated number of channels and radio
frequencies allocated in the GSM 900 and GSM 1800 bands. The GSM Frequency
Licenses contain provisions regarding coverage and quality obligations. The
coverage requirements include having: (1) at a minimum, one base station
installed and maintained in use in each county capital; (2) coverage area of a
minimum of 50% of the territory; and (3) service availability minimum of 50%
population coverage. In terms of quality obligations, we have to provide the
service 24 hours per day, 7 days per week and the call blocks and call drops
over the radio path must not exceed 2% at peak hours. The IGCTI may suspend or
withdraw the GSM Frequency License in cases of serious breach of our obligations
under the license or under applicable regulations.

MobiFon UMTS License

In November 2004, we were advised by the Romanian government
that we were successful in our application for a UMTS license for three channels
of 15 MHz paired spectrum and one channel of 5 MHz unpaired spectrum. We
received our UMTS license on March 31, 2005. We anticipate a technical
deployment and commercial launch of UMTS in the first half of 2005. Deployment
will be phased over a period of time. The first phase will cover Bucharest, the
next seven largest cities and the road between Bucharest and Brasov to be
completed by the end of 2005. The second phase will add an additional 48 cities
and some roads covered by the end of 2011.

Czech Republic.

40

---

CTU decision 8951/2002-610, granting us a telecommunications
license to provide public telephone service through our wireless
telecommunication network. These decisions became effective on November 13,
2002, and are valid and effective through November 2020.Oskar Mobil GSM LicensePursuant to these licenses and the Telecommunications Act, we
are entitled to provide our wireless services throughout the entire territory of
the Czech Republic and to conclude agreements with foreign operators in order to
provide international telecommunications services from other countries to the
Czech Republic and from the Czech Republic to other countries.
In operating our network and providing our services, we are
obliged (1) to adhere to the provisions of the Telecommunications Act and other
generally applicable legal regulations, measures and price decisions issued by
the CTU, and the numbering plans and Czech national standards that apply to the
assignment and use of telephone numbers; (2) to provide services in compliance
with technical parameters corresponding to international recommendations and the
standards of the European Telecommunications Standards Institute, (3) to
maintain the coverage of our wireless network to 98.1% of the population of the
Czech Republic; and (4) to comply with specific parameters of signal quality
defined by our licenses. The CTU is entitled to restrict, suspend or terminate
our licenses if we cease to fulfill any of the conditions upon which the
licenses were granted, or if we materially breach the provisions of the
licenses. We would breach the provisions of our licenses if we, among other
things, fail to meet the coverage and technical requirements set forth in our
licenses, fail to meet the requirements set forth by the Telecommunications Act
(including those relating to interconnection and universal service), fail to pay
the necessary fees for using the frequencies allocated to us, or engage in
telecommunications activities that are not permitted under our licenses. In
these circumstances, the CTU may terminate our licenses only if we do not remedy
the breach within 30 days of receiving notice of the breach from the CTU.
Pursuant to the current Telecommunications Act, frequencies and numbers are to
be allocated, upon request, on a non-discriminatory basis. We are required to
pay the CTU a symbolic one-time fee for each block of numbers or new frequency
allocated to us, as well as additional annual usage fees for both spectrum and
numbers. Frequency and number allocations are non-transferable and there is no
secondary market for allocations.
When we received our initial Authorization in October 1999,
we entered into an agreement with the Ministry of Transport and Communications
under which we agreed to, among other things, construct the technological
infrastructure necessary for the provision of Internet access to more than
13,000 schools and libraries throughout the Czech Republic and to build a
research and technology center focused on developing new wireless multimedia
applications, in each case at our own expense. In January 2001, we satisfied our
obligations with respect to the research center. In February 2002, we provided
the Ministry of Transport and Communications with a proposal for the
construction of the Internet-in-schools infrastructure. However, the Ministry of
Education subsequently awarded a contract for the same project to another Czech
telecommunications operator. We believe we have complied with our obligations
under this agreement, which expired in October 2004.Oskar Mobil UMTS LicenseOn December 15, 2004, the Czech government issued a directive
mandating the CTU to organize a tender for the issuance of the last of three
UMTS licenses. Pursuant to this directive, the CTU was to first offer the
license exclusively to us, at a price of CZK 2 billion ($89.4 million), under
terms to be negotiated. On February 2, 2005, we submitted our request for the
third UMTS license to the CTU and were awarded the license on February 23, 2005.
The license has a 20 year term and requires us to launch commercial services and
achieve 90% coverage of Prague by January 1, 2008.Universal service obligationUniversal service can be defined as a minimum, basic bundle
of telecommunications services of a sufficient quality that are available to all
consumers in the entire territory of one given market, at a reasonable price
determined by the telecommunications regulator. Universal service usually
includes, among other things, public telephone service, operator services, free
and continuous access of all users to emergency numbers, the publication of
telephone books, pay phone services, and discounts to persons with disabilities.
The telecommunications regulator of a given market has the authority and the
responsibility to impose an obligation to provide universal service upon one or
more operators to ensure that universal service is available in the entire
territory. The EU has adopted the Universal Service Directive which provides the
terms under which universal service shall be provided in member countries.
Romania and the Czech Republic have also adopted legislations to impose
universal service obligations, or USO, on telecommunications providers in their
markets.Romania. Based on the
USO implementation strategy issued by the MCTI, the ANRC has begun
implementation in three specific areas: tele-centers providing telecommunication
access at certain fixed points in rural areas, public pay phones, and subsidies
for

41

---

access to a public network based on family income. In
November 2004, the ANRC designated Romtelecom and some smaller fixed-line
operators as USO providers for subsidies to low income families. In November
2004, the ANRC issued a list of 50 eligible tele-center locations that were
submitted for auction. Only one operator, Orange Romania S.A. participated in
the bid and was designated as USO provider in five rural locations. After the
poor results of the first auction organized by the ANRC, a consultation process
has been opened in order to decide on the most suitable way of implementing the
tele-centers in the future.
Providers of universal service are entitled to compensation
for their demonstrable losses incurred as a result of providing the universal
service. Such compensation is paid from the universal service fund, which the
ANRC administers. All telecommunications license holders provide contributions
to the fund. In 2004, the amount of contribution was calculated as 0.8% of each
operator's turnover for 2003, less interconnection and "in roaming" revenues for
that same year. In 2005, the contribution will be reduced to 0.5% of turnover,
less interconnection and "in roaming" revenues capped at a maximum of Euro 2
million. Our contribution to the fund in 2004 was $3.4 million.Czech Republic.
In the case of fixed line operators, the CTU may impose USO upon any operator
that has a significant market share and, in the case of wireless operators, the
CTU may impose USO upon any operator that has applied for it. Presently, CČeský
Telecom is the only provider of universal service in the Czech Republic.

Providers of universal service are entitled to compensation
for their demonstrable losses incurred as a result of providing the universal
service. Such compensation is paid from the universal service fund, which the
CTU administers. All telecommunications license holders provide contributions to
the fund and the amounts of such contributions are determined by the CTU on an
annual basis and are based upon accounting evidence submitted by universal
service providers to reflect the cost of USO and resulting losses. Each license
holder has the right to review how the proceeds of the fund are used, and to
request from the CTU an explanation of how their contribution to the fund was
used or accounted for. In addition, the CTU must publish a statement annually
that explains the use of the proceeds of the fund. On August 6, 2004, the CTU
asked us to contribute CZK 35.5 million to the USO for 2003. We challenged this
decision and the proceeding is now pending. The amount expected to be issued by
CTU for us to pay this year for the year 2004 is CZK 55 million.

Pending Legislation in the Czech Republic

Following the country's accession to the EU on May 1, 2004,
the Czech Republic is obliged to implement the EU's new electronic
communications regulatory framework, or the 2003 EU Framework, which became
effective July 25, 2003. The Czech cabinet has submitted to the Czech Parliament
a draft Act on Electronic Communications designed to implement the 2003 EU
Framework and replace the current Telecommunications Act. The new act was
approved and is expected to come into force on May 1st, 2005.

The 2003 EU Framework comprises several directives
addressing, among other things, (i) access to and the interconnection of
electronic communications networks, (ii) universal service obligations, (iii)
authorization and licensing regimes and (iv) telecommunications data protection.
In addition, consistent with the mandate set forth in the 2003 EU Framework, the
current draft new act requires, among other things, that mobile number
portability be implemented within six months of enactment of the measure
regulating mobile number portability. CTU is obliged to adopt this measure
within two months after the new act comes into force. Mobile number portability
is expected to result in more aggressive competition for customers among Czech
wireless operators and increased churn as well. To some extent, these changes
may increase our growth opportunities due to our size differential and pricing
advantage compared to the competition.

We expect that the new act will further evolve provisions and
conditions regarding universal service. As with the current Telecommunications
Act, it sets forth conditions of a tender for a universal service provider and
conditions for financing the provision of universal service by a selected
provider. It is possible that, in the future, a portion of the funds to finance
the universal service would be funded from the state budget and the rest from a
universal service fund that would be financed by contributions from other
providers of public electronic communications services, provided that the CTU
would determine the manner and amount of such contributions for each provider.
We expect that the new act will provide for improved transparency in cost
accounting by the universal service provider and will provide more opportunity
for contributors to the universal service fund to review proper cost allocation.

We also expect that the new act will set forth a new
framework applicable to service providers with significant market power, in
accordance with competition law principles set forth in the 2003 EU Framework.
Under the new act, the CTU will have additional authority to examine market
concentration and provide regulatory guidance and remedies with respect to
potential anti competitive behavior. The CTU may also require, in the event of
insufficient competition in any relevant market, that operators who have
significant market power in that market grant access to their network and
capacity to third parties. This includes access to network interfaces, key
technologies required for the interoperability of services or virtual network
services, physical co-location or other



---

forms of infrastructure sharing, and operational support systems.Roaming AgreementsMobiFon and Oskar Mobil are signatories of the GSM Memorandum
of Understanding and accordingly are members of a group known as the GSM
Association. This association establishes common technology standards
facilitating worldwide roaming. The roaming agreements allow our subscribers to
use their own handsets wherever GSM wireless service is provided, or to roam in
such locations with a handset that is compatible with the local network. Roaming
agreements are typically bilateral, open-ended agreements consistent with the
contract structure established by the GSM Association. Roaming agreements can be
terminated with 60 days written notice from either partner, but in practice,
once established, they are typically maintained in perpetuity.
Each member of the GSM Association establishes standard inter
operator tariffs for each country or region of possible connection. Inter
operator tariff rates are maintained on the GSM Association website, updated for
pricing adjustments and freely available to roaming partners of that operator.
Typically, members of the GSM Association deviate from their standard rates only
if a "preferred" roaming agreement is entered into with that partner. Our
objective is to provide a fair price to as many destinations as possible for our
roaming customersRomania.
As of March 2005, we had negotiated
roaming agreements with 261 operators in 116 countries and are continuing to
negotiate additional roaming agreements. Our main objective is currently to
increase the number of new roaming destinations for our subscribers, with a
special emphasis on remote holiday destinations and Latin American countries.
Also, in order to maximize roaming revenues, we have entered into arrangements
with wireless operators in order to offer prepaid roaming to our subscribers.
The prepaid roaming agreements allow our Cartela prepaid subscribers to use
their own handsets and prepaid cards wherever the prepaid roaming service is
available. As of March 2005, we were offering our prepaid customers the ability
to roam in 43 networks covering 25 countries. We are the first mobile operator
in Romania to offer GPRS roaming services to our subscribers. As of March 2005,
we were offering our postpaid subscribers GPRS roaming services in 53 networks
covering 33 countries.

Czech Republic.

Interconnection Agreements

Romania.

Given the obligation to interconnect and the new regulated
environment, we have renewed the interconnection agreement with our traditional
mobile partners Orange, Cosmorom and Zapp with a bilateral (or symmetrical)
interconnection termination rate at the level of the maximum rate imposed to
MobiFon by the ANRC. Given the same obligation to interconnect, we have directly
or indirectly interconnected with all the major new fixed line operators on the
market including Astral Telecom, Romanian Data System, SNR, Atlas Telecom with
the termination rate applicable to us at the maximum level set by ANRC and the
fixed line operators termination rate negotiated around the level of Romtelecom
termination rate.

In 1997, we signed an interconnection agreement with
Romtelecom, which was amended several times. In the current form, the agreement
regulates only the national traffic generated by both parties. The international
traffic exchanged between the parties is subject to another agreement signed in
2003. Under the national interconnection agreement, the interconnection rates
are the maximum rates set by the ANRC, being $0.10 per minute for calls
terminating on our network and Euro 0.0214 per minute for peak time and Euro
0.0197 per minute for off peak time, for calls terminating on Romtelecom's
network. Other terms of the current national interconnection agreement include a
standard settlement procedure, terms of payment and penalties. The agreement is
for a



---

one year period, automatically renewed if the parties do not
terminate it with a three month notice. Although the interconnection agreement
is currently in force, we and Romtelecom have been trying, since 2003, to
negotiate a new interconnection agreement. Negotiations for the new contract are
on hold pending the resolution of a dispute we initiated regarding the charges
imposed for the leased lines used for interconnection between the two networks.
We addressed the dispute for arbitration to the ANRC who issued a preliminary
decision in our favor, which was appealed by Romtelecom back to the ANRC.
International interconnection contracts have been concluded with major
international carriers which include Telecom Italia, Belgacom, Telekom Austria,
BT Ignite and Romtelecom.Czech Republic.
Pursuant to the Telecommunications Act, all individually licensed network
operators are obliged to interconnect upon request. We are thus directly or
indirectly interconnected with all major operators in the Czech
telecommunications market. The list of our directly interconnected parties
includes Český Telecom, Aliatel, GTS, Contactel, Pragonet, eské Radiokomunikace,
Czech On Line, Tele 2 and Etel, all of which provide fixed line services in the
Czech markets, and Eurotel and T-Mobile, our two competitors in the wireless
market. The principal term of these agreements is the interconnection rate
charged to each party, and this rate is based upon regulatory decisions issued
by the CTU.

Absent any commercial agreement with interconnected parties,
both the requirements and the terms of interconnection are mandated by the CTU.
As a result, all of the interconnection agreements in the Czech Republic
basically reflect the various regulatory decisions issued by the regulator,
where equal and symmetrical interconnection rates are used by all fixed line
operators, while another rate is used by all wireless operators.

Since 2001, we have been actively lobbying the CTU to bring
traditionally high interconnection rates closer to the true costs of providing
wireless call termination services. On November 27, 2001, the CTU issued a price
decision that established a fully allocated cost-based methodology, which set
interconnection rates for calls terminating in wireless networks based on
historical cost data, and a maximum rate of CZK3.66 ($0.16) per minutea 43%
decrease from the previous rate. On March 18, 2004, the CTU issued price
decision that established a maximum rate of CZK 3.19 ($0.14) per minute and on
March 29, 2005, the CTU issued an additional price decision that established as
of April 1st, 2005, a new maximum rate of CZK3.11 per minute for
wireless mobile termination. As we have been traditionally a net payer of
interconnection payments to our competitors, these rate reductions have had a
significant positive impact on our net position on interconnection payments to
other wireless networks. In the future, we believe that bringing interconnection
rates closer to the costs of providing call termination services will remove
economic distortions in the competitive framework, and allow additional pricing
flexibility and innovation, in each case to our ultimate benefit.

In September 2002, the CTU issued a price decision that
established interconnection rates for calls terminating in fixed networks based
on a version of the long-run average incremental cost model which determines
incremental costs on a forward looking basis. This resulted in a 22% decrease in
interconnection rates. Furthermore, on January 8, 2004, the CTU issued a price
decision that reduced by 20% interconnection rates in the fixed network.
Although this new methodology has not yet been implemented in wireless networks,
we expect that, because the new EU regulatory framework recommends forward
looking cost allocation models, the CTU will adopt a similar costing method in
the near future, which may lead to additional decreases in the level of wireless
interconnection rates.

Co-shareholders

Romania.

Czech Republic.

Arrangements with co-shareholders

We have an agreement with Vodafone that provides that major
business, financial and technical decisions concerning MobiFon require consensus
between Vodafone and us, with both parties to use their best efforts to achieve
such consensus. As a result, we may need to take into account the views of or
compromise with Vodafone in reaching decisions on fundamental business and
strategic



---

matters with respect to MobiFon. We also have the right to
appoint the chief executive officer of MobiFon, who is responsible for the
overall management of the affairs of MobiFon, and Vodafone has the right to
appoint the chief technology officer. We believe that we have the ability to
control the day-to-day affairs of MobiFon in the normal course of business.
In addition, all of MobiFon's shareholders have entered into
a contract of association, part of MobiFon's constitutive documents. MobiFon's
contract of association provides for certain basic agreements among all
shareholders, including co-sale rights on MobiFon shares, preemptive rights and
an agreement not to compete with MobiFon in Romania or solicit its employees.
In particular, the contract of association prohibits
transfers of shares of MobiFon other than in accordance with its terms.
Transfers to wholly owned affiliates are permitted. Transfers to a
telecommunication operator, a telecommunications equipment manufacturer or to a
transferee who is not of equivalent financial strength as the transferor
requires our consent and that of Vodafone. In most other circumstances, if a
MobiFon shareholder accepts a bona fide written offer from a third party to sell
its shares, that shareholder must provide the non-transferring shareholders with
the right to purchase all of the MobiFon shares being transferred to the third
party on those terms contained in the bona fide offer.
Under the contract of association, the term "transfer" is
also defined to include the sale of an equity interest in an entity that
directly or indirectly owns shares in MobiFon where over 25% of the fair market
value of the assets held by such entity directly or indirectly consists of
MobiFon shares. Any such indirect transfer will trigger a right of first refusal
on a proportionate percentage of shares in MobiFon. The shares in MobiFon which
are held by MobiFon Holdings constitute more than 25% of the fair market value
of MobiFon Holdings' total assets. As a result, under MobiFon's contract of
association, sales of equity shares of MobiFon Holdings would trigger the right
of the non-transferring shareholders of MobiFon to purchase a proportionate
percentage of MobiFon Holdings' shares in MobiFon, at comparable value. These
rights may also apply upon a sale of equity shares of MobiFon Holdings's parent
company, ClearWave. ClearWave has obtained a conditional waiver of the right of
first refusal by Vodafone over certain transactions affecting its equity shares,
such as future primary issues of its shares made for bona fide, ordinary course
financing purposes or to satisfy certain contractual rights existing at the
time, and subsequent re-sales of these shares.
In consideration for the waiver, we agreed with Vodafone,
among other things, that for so long as Vodafone continues to hold at least 10%
of the outstanding equity of MobiFon, in the event of a change of voting control
of ClearWave, we 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: (i) the number of MobiFon shares determined by the contract of association
to be covered; and (ii) 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.EnvironmentWe 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 back-up power supply, investigation and cleanup of
contaminated properties on which our towers are located, and emissions of, and
human exposure to, radio frequency emissions.PropertyHead Office.We
sublease approximately 810 square meters of office space in Montreal from
Telesystem Ltd. for an annual rent of approximately Cdn$538,080, including
furniture.

Romania.

Czech Republic

45

---

ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTSIncorporated by reference in this document is our Operating
and Financial Review and Prospects filed with the United States Securities and
Exchange Commission as Exhibit 99.1 to our Form 6-K dated March 31, 2005 and
with securities commissions and other similar authorities in Canada.46ITEM 6  DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
DIRECTORS AND EXECUTIVE
OFFICERS
TIWBoard of DirectorsThe following table and notes thereto set out as at March 1, 2005:
(1) the name of each individual serving as a director until
  the next annual meeting or until the office is otherwise vacated;
  (2) all other positions and offices with us now held by each
  such individual, if any;
  (3) the principal occupation or employment of each director;
  and
  (4) their respective periods of service as a director.
All of the directors listed below were elected at our annual and
special meeting of shareholders held on May 4, 2004 with the exception of
Thierry Baudon who was appointed on May 6, 2004, François Laurin on May 6, 2004
and Bruno Ducharme on July 29, 2004, all by our board of directors subsequent to
the meeting in accordance with our by-laws. We have no service contracts with
the directors. Certain members of our board of directors were appointed pursuant
to an investors rights agreement that we describe in more details under the
caption "Material Contracts" in Item 10 of this document.

|Name and Position or Office with TIW | Principal Occupation or Employment            | Director Since
|------------------------------------ | --------------------------------------------- | --------------
|BRUNO DUCHARME                       | Chief Executive Officer, Telesystem           | July 2004     
|Director and Chairman of the Board   | International Wireless Inc.                   |               
|                                     |                                               |               
|THIERRY BAUDON                       | Chief Executive Officer of Emerging Markets   | May 2004      
|Director (2)                         | Partnership (Europe) Ltd. and Managing        |               
|                                     | Director of Emerging Markets Partnership (an  |               
|                                     | international private equity firm)            |               
|                                     |                                               |               
|JACQUES A. DROUIN (2) (3)            | Managing Director, Lazard & Co., Limited      | March 1997    
|Director                             | (an investment bank) and Canada Country       |               
|                                     | Head based in London, U.K.                    |               
|                                     |                                               |               
|MICHAEL R. HANNON (1)                | Partner, J. P. Morgan Partners, LLC           | March 2002 (4)
|Director                             | (a private equity organization)               |               
|                                     |                                               |               
|C. KENT JESPERSEN (1) (3)            | Chairman of the Board, La Jolla Resources     | March 1999    
|Lead Director                        | International Ltd. (an international advisory |               
|                                     | and investment company)                       |               
|                                     |                                               |               
|FRANCOIS LAURIN (1)                  | Vice-President Investments, Medias &          | May 2004 (5)  
|Director                             | Telecommunications, Private Equity Group of   |               
|                                     | Caisse de dépôt et placement du Québec (a     |               
|                                     | fund manager)                                 |               
|                                     |                                               |               
|JONATHAN CHARLES C. MEGGS (2)        | Partner, J. P. Morgan Partners Europe Ltd.    | March 2002    
|Director                             | (a private equity organization)               |               

|    |                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Member of our audit committee.                                                                                                                           
|(2) | Member of our human resources and compensation committee.                                                                                                
|(3) | Member of our nominating and corporate governance committee.                                                                                             
|(4) | Mr.
    Hannon had been a member of our Board of Directors from May 2000 until his
    resignation on August 13, 2001. He was re-appointed in March 2002.
|(5) | Mr.
    Laurin had been a member of our Board of Directors from April 2003 to
    September 2003. He was re-appointed in May 2004.                       
|    |                                                                                                                                                          

47

---



Thierry Baudon

Jacques A. Drouin

Bruno Ducharme

Michael R. Hannon

C. Kent Jespersen

Francois Laurin

Jonathan Charles Carter Meggs

Board Independence

Marketplace Rule 4350(c) of the NASD Manual requires that a
majority of our board of directors be comprised of independent directors as
defined in Rule 4200(a)(15). This rule also requires us to disclose those
directors that the board of directors has determined to be independent under
Rule 4200(a)(15). As foreign private issuer, these requirements will become
applicable to us as of July 31, 2005. Despite this fact, our board of directors
has determined, in accordance with Rule 4350(c), that all board members,



---



with the exception of Bruno Ducharme, are independent under Rule 4200(a)(15).

In addition, Marketplace Rule 4350(d) of the NASD Manual
requires that our audit committee be composed of at least three members, each of
whom must not only be independent under Rule 4200(a)(15) but also meet the
additional independence criteria set forth in Rule 10A-3(b)(1) of the Securities
Exchange Act of 1934. As foreign private issuer, we will become subject to Rule
10A-3(b)(1) as of July 31, 2005. However, in compliance with Marketplace Rule
4350A (the transitional Rule currently applicable to us), our audit committee is
composed of at least three members, all of whom are independent under both the
transitional definition of independence found in Rule 4200A(a)(14) but also the
new definition of independence found in Rule 4200(a)(15).

Board Practices

Audit Committee

The purpose of the audit committee is set forth in its
written charter. This charter documents certain of our practices that are now
reflected in new or proposed U.S. and Canadian corporate governance initiatives.
The complete audit committee charter is available in the Governance section of
TIW's website at www.tiw.ca.

Under its charter, the audit committee assists the board in the oversight of:

- 

This report tells you how the audit committee is managed and our process for
complying with applicable laws and regulations.

About the audit committee

The audit committee is made up of three unrelated and
independent directors: Messrs. Hannon, Jespersen (Chair) and Laurin. The audit
committee communicates regularly and directly with management and the internal
and external auditors. The audit committee met six times in 2004, including
without management.

The audit committee continued to focus on three key areas in 2004:

- 



overseeing all
  aspects of the internal and external audit functions.

Since we have securities registered in the United States, we
are subject to certain provisions of the United States Sarbanes-Oxley Act of
2002 (Sarbanes-Oxley Act) and related rules and regulations of the U.S.
Securities and Exchange Commission (SEC) (related SEC rules). In addition, since
TIW's common shares are listed on the NASDAQ, we are subject to certain NASDAQ
corporate governance rules that were finalized in November 2003 (NASDAQ rules).
In January 2004, the Canadian Securities Administrators also issued final rules
relating to audit committees and certification of financial information
(Canadian rules).

Under the Sarbanes-Oxley Act and related SEC rules, we are
required to disclose whether our audit committee includes at least one financial
expert, as defined by these rules. In addition, the NASDAQ rules require that
all audit committee members be financially literate. Our board of directors has
recently determined that all audit committee members are financially literate
and that the audit committee includes at least one audit committee financial
expert, Mr. François Laurin who is a chartered accountant.

Financial reporting

The audit committee reviews the following documents with management and the
external auditors and recommends them to the board for approval:

- 

49

---



- 

The purpose of this review is to provide reasonable assurance that:

- 



critical disclosures are adequate.

The audit committee also reviews new applicable legal and regulatory
initiatives as well as the adoption and disclosure of new accounting
pronouncements. It assesses the potential impact of choosing certain
alternatives, when appropriate.

Under the Sarbane-Oxley Act and related SEC rules, and under
the Canadian rules, we are required to design and maintain controls and
procedures to ensure that the information we publicly disclose is recorded,
processed, summarized and reported on a timely basis. We have adopted a
disclosure policy, as well as an internal certification and disclosure controls
and procedures policy to ensure compliance with these requirements.

As part of our disclosure controls and procedures, we have
established a comprehensive process to support the annual certifications
required under the Sarbanes-Oxley Act and related SEC rules, and to support the
annual and quarterly certifications required under the Canadian rules and
includes an internal certification process by members of our disclosure
committee. Among other things, these certifications by the President and Chief
Executive Officer and the Chief Financial Officer state that:

- 

Internal control over financial reporting

The audit committee has the overall responsibility to provide reasonable
assurance that our internal control systems are adequate and effective. It
reviews the policies in place, monitors compliance and approves recommendations
for changes.

The audit committee also ensures that our processes for
identifying and managing risks are adequate and that we comply with our business
ethics policies, including the conflict of interest policy for officers. The
Sarbanes-Oxley Act and related SEC rules require, as part of the annual
certifications discussed above, that the President and Chief Executive Officer
and the Chief Financial Officer certify that they have disclosed to our external
auditors and to the audit committee:

- 

any fraud involving management or other
  employees who have a significant role in our internal control over financial
  reporting.

The audit committee also oversees the requirements of the
Sarbanes-Oxley Act and related SEC rules relating to certification of our
internal control over financial reporting. These rules come into effect for our
2006 annual report that will be filed in 2007. They require a management
internal control report that contains:

- 

a description of the framework used to
  evaluate, and management's assessment of, the effectiveness of our internal
  control over financial reporting;

a statement that the external auditors have
  issued an attestation report on management's assessment;

we have undertaken the following initiatives in 2004 to meet
these requirements:

- 

50

---



> monitor the progress of our operations' initiatives towards
>   compliance with these new requirements;

- 

we have acquired
  tracking software to facilitate the documentation, testing and monitoring of
  our entities progress towards becoming compliant with these requirements;

we have made
  available the necessary financial resources needed to comply with the
  requirements.

We are on schedule to comply with these rules when they come
into effect.

External auditors

The current external auditors are Ernst & Young LLP.

The audit committee is responsible for recommending to the
board the appointment of the external auditors and committee is directly
responsible for:

- 

assessing the
  adequacy of the auditor independence policy and approving recommendations for
  changes to, and monitoring compliance with, the policy, including the process
  for approving audit and other services in advance.

Auditors independence

The audit committee charter and the audit committee
pre-approval policy for audit and non-audit services are comprehensive
guidelines governing all aspects of our relationship with the external auditors,
including:

- 

identifying the
  services that the external auditors may and may not provide to TIW and its
  subsidiaries;

pre-approving
  all services to be provided by the external auditors of TIW and its
  subsidiaries;

establishing
  guidelines for engaging former employees of the external auditors;

In particular, the pre-approval policy for audit and
non-audit services specifies that:

- 

for all (audit
  or non-audit) services falling within the permitted services category (such as
  prospectus work, due diligence and non-statutory audits), a request for
  approval must be submitted to the audit committee by the Chief Accounting
  Officer prior to engaging the auditors;

specific
  permitted services however are pre-approved quarterly by the audit committee
  and consequently only require approval by the Chief Accounting Officer prior
  to engaging the external auditors;

at each
  regularly scheduled audit committee meeting, a consolidated summary of all
  fees paid to the external auditors by service type is presented. This summary
  includes a breakout of fees incurred within the pre-approved amounts.

Ernst & Young LLP has complied with the partner rotation
requirements and on an annual basis formerly reports on their independence to
the audit committee.

Internal auditor

The audit committee also oversees the internal audit
functions. This includes:

- overseeing internal audit plans, staffing and budgets;
- evaluating the responsibilities and performance of the
  internal auditor;
- reviewing periodic internal audit reports and corrective
  actions being taken.

The internal auditor reports directly to the Chairman of the
audit committee.

51

---

Complaint proceduresBefore it was even required under the Sarbanes-Oxley Act and
related SEC rules, and under the Canadian rules, TIW implemented a policy
detailing procedures for:the
  receipt, retention and treatment of complaints received by TIW or any of its
  subsidiaries regarding accounting, internal accounting controls, auditing
  matters or evidence of an activity that may constitute corporate fraud,
  violation of federal or provincial laws or misappropriation of TIW's or any of
  its subsidiary's property;

the confidential
  and anonymous submission by employees of TIW or of our subsidiaries of
  concerns regarding questionable accounting or auditing matters.

TIW's complete complaint procedures for accounting and
auditing matters is available on TIW's website at www.tiw.ca

Other

The audit committee reports regularly to the board on its
activities.

Human resources committee

The purpose of our human resources committee is set forth in
its written charter. The charter was amended in 2004 to document, among other
things, certain practices that are reflected in new and proposed U.S. and
Canadian corporate governance initiatives.

Under its charter, our human resources committee assists the
board in the oversight of, amongst other things, these duties and
responsibilities:

- 

to advise the
  board on the appointment, remuneration and working conditions of any officer
  position within TIW and any of its subsidiaries or affiliates;

to make
  recommendations to the board with respect to the human resources, succession
  or organizational plans;

to establish job
  accountabilities and set performance objectives for the chief executive
  officer and chief operating officers on an annual basis, review their
  performance annually and recommend their compensation based on performance to
  the Board.

In order to fulfill this mandate with the appropriate
independence, the committee analyses the information and recommendations
received, taking into consideration management's perspectives and shareholders'
interests, and to this end we work directly with internal and external advisors,
as appropriate, and we review applicable practices of widely held companies in
Canada, the United States and Europe, as well as in our industry. The committee
also schedules time without management present at every meeting, should we
consider this necessary based on the subject matters discussed or as
appropriate.

The information below outlines how the human resources
committee fulfills its mandate and discusses our compensation policies and their
application.

About the human resources committee

Our human resources committee consists of four unrelated and
independent directors: Messrs. Baudon, Drouin (Chair), Meggs and one vacancy,
created by the resignation of Mr. Christian Salbaing from the board on February
15, 2005. Our human resources committee met six times during 2004, including
without management as appropriate.

In fulfilling its mandate during 2004, our human resources
committee reviewed and reported, or made recommendations, on a number of items,
including:

- 



the
  determination of bonuses under the short-term incentive plan, in line with the
  level of achievement of the strategic and operational objectives;

52

---



- 

the design and
  competitiveness of our total compensation policy, components and plans, based
  on external surveys conducted by two recognized external advisors;

the
  implementation of a mid-term incentive plan consisting of restricted share
  units ("RSUs");

the grant of
  options and RSUs;

the integration
  of the management employees of our operating subsidiaries in our mid-term and
  long-term incentive plans;

the review of
  the officer talent pool and retention and succession plans.

Executive Officers

The following table sets out information concerning our
executive officers, including name and position with us.

|Name                    | Position                                                
|----------------------- | --------------------------------------------------------
|Bruno Ducharme          | Chairman of the Board and Chief
    Executive Officer   
|Terry Enepekides        | Vice-President,
    Corporate Finance and Chief         
|                        | Accounting
    Officer                                  
|André Gauthier          | Executive
    Vice-President and Chief Financial Officer
|James J. Jackson        | Senior
    Vice-President, Corporate Affairs            
|Jacques P.
    Langevin | Senior Human
    Resources Officer                      
|Alexander Tolstoy       | President and
    Chief Operating Officer               
|Margriet Zwarts         | General Counsel
    and Secretary                       

Bruno Ducharme

Terry Enepekides

André Gauthier

James J. Jackson

Jacques Langevin

Alexander Tolstoy

53

---

Officer of Oskar Mobil a.s., TIW's operating subsidiary in
the Czech Republic and was, between 1999 and July 2004, President and Chief
Executive Officer of ClearWave. Mr. Tolstoy also managed the establishment of
TIW's GSM companies in India and China from 1995 until November 1996. From 1987
to 1994, Mr. Tolstoy was Vice President, Western Canadian Region for Bell
Mobility Cellular. From 1970 to 1987, he held various management positions at
Bell Canada and Bell Canada International. Mr. Tolstoy served on the board of
directors for Nortel Mobility and is a non-executive director of Karneval Media,
a cable television operator in the Czech Republic. Mr. Tolstoy is married to
Karla Stephens, the Vice-Chairman of the board of directors of Oskar Mobil and
Oskar Mobil's Chief Operating Officer.

Margriet Zwartsis our General Counsel and Secretary. 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 Bachelors degrees in Civil Law and in Common Law from McGill
University. Mrs. Zwarts is a member of the board of directors of Export
Development Canada and she is a member of the Quebec Bar and the Law Society of
Upper Canada.

COMPENSATION OF DIRECTORS AND OFFICERS

Compensation policy and objectives

Our compensation policy is based on a strong "pay-forperformance" culture,
where rewards are directly linked to strategic and operational results and to
our share price appreciation. Its objectives are to:

- 



taking into
  account that we are a relatively small-sized telecom company, which operates
  globally but is headquartered in Canada.Total compensation componentsOur total compensation program has five components: base salary, annual cash
incentives, equity-based mid-term and long-term incentives, and benefits.54
The following table summarizes each component:

|                     |             |                 | Perform.      |                                
|-------------------- | ----------- | --------------- | ------------- | -------------------------------
|Component            | Form        | Applies To      | Period        | Determination                  
|                     |             |                 |               |                                
|                     |             |                 |               | Based on market (*), individual
|Base Salary          | Cash        | All employees   | 1 year        | performance and internal equity
|                     |             |                 |               |                                
|                     |             |                 |               | Target award based on market   
|                     |             | All             |               | (*); actual award based on     
|                     |             | employees,      |               | achievement of strategic,      
|Short-Term Incentive | Cash        | except clerical | 1 year        | operational and individual     
|                     |             | and support     |               | objectives                     
|                     |             |                 |               |                                
|                     |             |                 |               | Annual award based on market   
|                     |             | Management      |               | (*)and individual performance; 
|Mid-Term Incentive   | RSUs        | employees       | Up to 3 years | final payout value based on    
|                     |             |                 |               | share price                    
|                     |             |                 |               |                                
|                     |             |                 |               | Annual award based on market   
|                     | Stock       | Management      |               | (*) and individual performance;
|Long-Term Incentive  | Options     | employees       | Up to 5 years | final payout value based on    
|                     |             |                 |               | share price                    
|                     |             |                 |               |                                
|                     |             | Group           |               |                                
|                     | Group       | insurance: all  |               |                                
|                     | insurance   | employees       |               |                                
|Benefits             | and fixed   | Perquisites :   | Ongoing       | Based on market (*)            
|                     | amount of   | Canada-based    |               |                                
|                     | perquisites | management      |               |                                
|                     |             | employees       |               |                                
|                     |             |                 |               |                                
|Pension Plan         | None        | n.a.            | n.a.          | n.a.                           

(*) To determine market practices, external surveys are usually conducted
every two years by recognized external advisors. External surveys were conducted
in 2004 for all five components of our compensation program.

Our expatriates assigned to our operating subsidiaries also receive
appropriate and competitive expatriate benefits and allowances.

Pay mix

Although a competitive base salary remains a key component of
our pay mix, incentive compensation, which includes distinct short, mid and
long-term elements, represents the most important portion of our executive
compensation policy, with a higher emphasis on the mid and long term components.

According to policy, for senior officers, the short-term
incentive opportunity ranges from 10% to 13% of total compensation and the
mid-term and long-term incentive opportunities range from 50% to 70% of total
compensation. Therefore, the "at risk" or incentive portion of their total
compensation ranges from 63% to 80%.

Peer groups and market positioning

We are a global company headquartered in Canada. Market
competitiveness of our compensation program, and each of its elements, is
assessed relative to an appropriate group of peer companies with comparable
size, scope and geographic spread of operations.

The peer group for Canada-based employees consists of
Canadian companies in the telecommunication, communication and technology
industries and other Canadian companies having global operations. For the
incentive compensation of our senior executives and for our expatriates assigned
to our operating subsidiaries abroad, the peer group consists of US companies in
the telecom and communication industries. The peer group for locally-based
employees of our operating subsidiaries consists of subsidiaries of North
American companies operating in the same geographic area.

55

---



We aim to provide base salaries and benefits targeted at the median of the
relevant peer group as well as incentives designed to bring total compensation
in the third quartile upon the achievement of superior results.

Base salary

Our human resources committee reviews and approves the salary ranges and
individual salary increases for all officers. It also reviews and approves the
salary ranges and aggregate salary increases for all other employees.

Base salaries are determined relative to salaries for comparable roles in the
appropriate peer group, the individual's performance in the role and internal
equity.

Short-term incentive plan

Our short-term incentive plan, the annual bonus plan,
provides our employees, except for support and clerical employees, with an
opportunity to earn cash incentives based on the achievement of pre-established
strategic, operational and individual performance objectives.

A target bonus opportunity is determined for each eligible employee based on
the competitiveness with target bonus opportunities for comparable roles in the
appropriate peer group.

The target awards and weights for the 2004 annual bonus plan as approved by
our board are as follows:

|                      | Target (1)    |               | Weight          |               
|--------------------- | ------------- | ------------- | --------------- | --------------
|Level                 | (% of Salary) | Strategic (2) | Operational (3) | Individual (4)
|                      |               |               |                 |               
|CEO, TIW              | 50%           | 40%           | 60%             | 0%            
|                      |               |               |                 |               
|COO, TIW              | 45%           | 30%           | 70%             | 0%            
|                      |               |               |                 |               
|CFO, TIW              | 40%           | 30%           | 50%             | 20%           
|                      |               |               |                 |               
|Senior Officers, TIW. | 35%           | 30%           | 50%             | 20%           
|                      |               |               |                 |               
|Officers, TIW.        | 25-30%        | 25%           | 50%             | 25%           
|                      |               |               |                 |               
|Sr Officers, MobiFon  |               |               |                 |               
|& Oskar               | 35%           | 0%            | 80%             | 20%           
|                      |               |               |                 |               
|Officers, MobiFon &   |               |               |                 |               
|Oskar                 | 15%           | 0%            | 75%             | 25%           

|    |                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Reflects market practices at
    comparable job levels in peer group companies and represents the expected
    payout for meeting objectives. The maximum payout for exceeding objectives
    is 200% of target.
|(2) | Corporate strategic objectives
    determined by the board, such as completing a re-financing, buying-out
    minority shareholders, or acquisitions.                                                           
|(3) | Operational objectives, such as
    number of subscribers, operating income before depreciation and
    amortization, free cash flow and revenues.                                                              
|(4) | Individual performance
    objectives, in support of the strategic and operational objectives.                                                                                                                  

On a yearly basis, our human resources committee recommends the objectives to
the board for the coming year, assesses their level of achievement for the year
and approves the corresponding bonus payouts.

Mid-term and long-term incentive plans

Our mid-term and long-term incentive plans are designed to:

56

---



- 

align their
  interests with our shareholders over the long-term, creating long-term
  shareholder value;

enable them to
  participate in our long-term growth and financial success.

As mentioned
earlier, mid-term and long-term incentives are granted annually and represent
the most important portion of our executive compensation as we want to attract
entrepreneurial individuals, prepared to work for a relatively small-sized
telecom company that operates globally. In addition, given that up to recently
our company was in a precarious financial condition, we had to put an even
greater emphasis on mid-term and long-term incentives to retain our management
team and ensure a successful turnaround.

In February 2004, the board approved a proposal to amend our
long-term incentive compensation by introducing RSUs as a midterm incentive. The
RSU plan was approved by our shareholders on May 4, 2004. RSUs are granted on an
annual basis in lieu of a portion of stock options, which would otherwise have
been granted under our employee stock option plan. As a result, stock option
utilization in 2004 declined to approximately 0.1% of total outstanding common
shares.

A range of incentive awards is determined for each eligible employee based on
the competitiveness with awards for comparable roles in the appropriate peer
group and based on individual performance.

In determining the expected value of stock options and RSUs to be granted,
for the purposes of our total compensation policy, we utilize the probabilistic
Black-Scholes model.

Our human resources committee reviews and approves all awards
under the mid-term and long-term incentive plans and decides on the appropriate
mix of RSUs and stock options to be awarded, for recommendation to the board.
This review is typically conducted in December of each year for the forth coming
year, although in 2003 and 2004, the board deferred its decision regarding
certain senior executives until the first quarter of the ensuing year. These
deferred awards are presented in the relevant compensation tables as though they
had been effected in the year to which they apply.

Restricted share unit plan (mid-term incentive)

The restricted share unit plan provides for the issuance of
RSUs to designated directors, officers, management employees and consultants.
RSUs are "phantom" shares that rise and fall in value based on the value of our
common shares and are redeemed for actual common shares on the vesting dates.
Restricted share units typically vest over three years as to one-third in each
year. They vest after one year for directors. Under the terms of the plan,
accelerated vesting occurs on, involuntary termination, death, permanent
disability or a change of control.

Under the terms of the plan, the board, however, has the
discretion to use a different vesting schedule. The board has, for example,
recently designed a vesting schedule for certain restricted share units to be
used as a performance incentive. These units vest on a "cliff" basis in three
years and then only if pre-determined share price appreciation targets are met
at the time of vesting. Such share appreciation targets range from 20% to 44%.
If, at the relevant vesting date, such targets have not been reached, the
applicable RSUs are forfeited.

The total number of restricted share units currently issuable under the plan
is 6,250,000 of which a total of 4,237,879 have been issued as at March 31, 2005
and 3,958,738 are outstanding.

The 2004 activity under the plan can be summarized as follows:

|                      | 2004 Grants     | 2004 Total | Outstanding on   
|--------------------- | --------------- | ---------- | -----------------
|                      | to Officers (1) | Grants (1) | Dec. 31, 2004 (1)
|                      |                 |            |                  
|# of RSUs             | 3,197,728       | 3,277,895  | 3,758,071        
|% of outstanding      |                 |            |                  
|common shares on Dec. | 1.49%           | 1.52%      | 1.75%            
|31, 2004 (2)          |                 |            |                  

57

---



|(1) | Not including the RSUs granted
    at the beginning of 2004, on a deferred basis from 2003, as was previously
    reported in last year's Proxy Circular but including the RSUs granted to
    certain senior executives at the beginning of 2005 on a deferred basis from
    2004, of which 2,043,000 are performance related and will only vest if share
    price appreciation targets are met.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Pro forma the issuance of shares
    in January 2005 upon the acquisition of all the shares of Oskar Holdings N.V.
    not already owned by TIW.                                                                                                                                                                                                                                                   

As noted above, for certain senior executives, the board
determined to defer the 2004 annual grant until we could complete the strategic
assessment of future objectives, which had been initiated in November 2004. In
February 2005, the board determined to issue 845,000 RSUs to this senior
management group by way of basic grant, as well as 2,043,000 RSUs by way of
performance incentive. These latter units vest on December 1, 2007 or earlier,
in accordance with the terms of the restricted share unit plan. Vesting is
contingent on targeted appreciation in our share price from a reference price of
US$12.53 (determined as a trailing average and representing a 12% premium over
the US$11.19 closing price of our share as of December 31, 2004) to the date of
vesting. Accordingly, 583,714 RSUs will vest if, on the vesting date, our share
price has appreciated by 20% over the reference price; an additional 291,857
RSUs will vest for each incremental 4% of share price appreciation, up to the
total of 2,043,000 RSUs granted by way of performance incentive if our share
price has appreciated by 44% or more over the reference price. If the share
appreciation targets are not met on the date of vesting, the restricted share
units will be forfeited. The weighted average of the targeted share price is
US$16.70. If the share appreciation targets are not met on the date of vesting,
the restricted share units will be forfeited.

Employee stock option plan (long-term incentive)

The employee stock option plan was introduced in May 1997 when we became
public. It provides for the issuance of options to directors, officers,
management employees and consultants to purchase common shares.

The board determines the exercise price of the options based
on the then trading price of our common shares at the time of granting the
options, as required under the rules of all stock exchanges on which the common
shares are listed and with all relevant securities legislation.

Optionholders may exercise their options within a maximum
period of five years following the date of grant. Options typically vest over
three years as to one-third in each year. Accelerated vesting occurs on
involuntary termination, death, permanent disability or a change of control. The
board may, however, use a different vesting schedule and/or option term in
special circumstances.

The total number of options currently issuable under the plan is 10,000,000
of which 9,360,264 have been issued and 4,816,811 are outstanding and as at
March 31, 2005.

The 2004 activity under the plan can be summarized as follows:

|                  | 2004 Grants | 2004 Total | Outstanding on
|----------------- | ----------- | ---------- | --------------
|                  | to Officers | Grants     | Dec. 31, 2004 
|                  |             |            |               
|# of options      | 140,400     | 221,400    | 4,821,685     
|% of outstanding  |             |            |               
|common shares on  | 0.07%       | 0.10%      | 2.24%         
|Dec. 31, 2004 (*) |             |            |               

(*) Pro forma the issuance of shares in January 2005 upon the acquisition of
all the shares of Oskar Holdings N.V. not already owned by TIW.

In 2004, no stock options were granted to directors as our board believes
that options should no longer be granted to directors because of the fiduciary
capacity in which they act.

Benefits

We offer group life and health insurance benefits to all of our employees,
which are considered to be comparable with those of our peer group companies.

An annual flexible perquisites account (in lieu of company-car, club
memberships, etc.) is provided to Canada-based management employees, ranging
from $12,000 to $30,000.

Our expatriates assigned to our operating subsidiaries abroad also receive
competitive expatriate benefits, including relocation benefits, foreign service
premiums, living conditions benefits (such as car or housing allowance), home
leave and tax planning.

58

---



Pension plan

We do not provide pension benefits to any of our employees.
Instead, we prefer to be more performance-driven and, therefore, more aggressive
on long-term incentive compensation. We believe that stock options and RSUs
provide a proper balance and a better alignment with the interests of our
shareholders than pension benefits.

Retention incentive

Given the relatively small size of our management team, retention has always
been and continues to be a critical objective of our compensation program.

Our Canada-based employees, including our chief executive
officer, and our expatriate employees who are officers, have a retention
incentive which, based on independent advice, is in line with industry
standards. The retention incentive provides for the payment, upon involuntary
termination of employment for any reason other than performance or cause, of an
amount equal to between 3 and 36 months of base salary, depending on whether the
termination is a result of a change of control or not and certain other factors
including seniority and role, plus a portion of target bonus for the same
period. In addition, depending on whether a change of control has occurred or
not and certain other factors including seniority and role, our officers can
trigger the payment of 50%, 75% or 100%, as applicable, of the retention
incentive upon voluntary termination.

Share ownership guidelines

We have adopted share ownership guidelines for non-employee
directors, executive officers and other key members of management. We believe
these guidelines further enhance shareholder value by materially aligning the
interests of directors and management with those of our shareholders.

The guidelines require members of senior management to own a
number of our common shares that represents a multiple of their base salary,
ranging from five times base salary in the case of our chief executive officer
to two times base salary in the case of other senior executive officers. The
guidelines further require ownership by other key members of management at a
level commensurate with their level of income. Each of our non-employee
directors must also own common shares having a value equal to five times his or
her annual cash retainer, which retainer is currently US$35,000 for our Lead
director and US$20,000 for our other directors.

These ownership levels will be calculated and reviewed
annually in March of each year, with the first review in March 2006. Executive
officers, key members of management and non-employee directors are expected to
meet these minimum levels of ownership thresholds in annual increments within
the scheduled period of time provided.

In addition, the guidelines include retention requirements
for stock option exercises or redemptions of restricted share units under which
executives who do not satisfy the ownership requirement as and when calculated,
must retain certain shares of common stock acquired or vested until required
thresholds are satisfied. Likewise, non-employee directors are subject to a
retention policy upon redemption of their restricted share units.

It should be noted that, as a result of share ownership requirements, our
chief executive officer currently owns 292,145 common shares while our chief
operating officer currently owns 54,861 common shares.

Board of directors' compensation

Our board of directors' compensation program is designed to attract and
retain highly talented and experienced non-employee directors, leading to our
long-term success. This requires that they be adequately and competitively
compensated.

In response to evolving trends and the increased demands and
time commitments required for directors to fulfill their responsibilities, we
conducted a compensation review in 2004. After considering the analysis and
taking into account the advice of a recognized external advisor, our board
approved:

- 

59

---

Only non-employee directors and directors who are not employees or
consultants of our principal shareholders are compensated for board service.
Our directors compensation policy is now made up of the following components:
Annual retainer
    (in US $)Lead director
    $ 35,000Non-lead director
    $ 20,000Per board meeting fee (1) , (2)
    $ 1,500Per committee meeting fee (1) , (2)
    $ 1,500Committee chair retainerAudit committee
    US$ 12,000Other committees
    US$ 7,500Travel fee (3)
    US$ 1,500Equity incentive  value ofannual RSU grant (4)Lead director
    US$ 45,000Non-lead director
    US$ 25,000

|(1) | Half of the
    indicated amount if attended by telephone                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Where board and
    committee meetings are held on the same day and in the same location, only
    one fee is paid.                       
|(3) | If the director
    has to travel more than three hours to attend a meeting in person.                                                    
|(4) | RSUs are granted
    under the restricted share units plan applicable to employees; there is no
    separate incentive plan for directors.

In 2004, a total of 6,500 RSUs were granted to non-employee
directors in accordance to policy. A special grant of 20,000 RSUs, in aggregate,
was made in early 2005 to the two directors who are neither employee nor
employees or consultants of our principal shareholders in recognition of the
additional services that such directors are asked to provide to us.

No stock options were granted in 2004 to non-employee directors and our board
continues to believe, for the reasons previously stated, that no stock options
should be granted to non-employee directors.

60

---



Summary Compensation Table

The following table summarizes the compensation paid to the Named Executive
Officers, specifically our Chairman and Chief Executive Officer, Chief Financial
Officer and the three other most highly compensated executive officers for
services rendered in all capacities to the Company and its subsidiaries during
the financial periods ended December 31, 2004, December 31, 2003 and December
31, 2002.

|                    | Annual Cash Compensation | Mid-Term and Long-Term Compensation |         
|------------------- | ------------------------ | ----------------------------------- | --------
|                    |                          |                                     |         
|                    |                          |                                     |         
|                    |                          |                                     |         
|Name and Principal  |                          | Salary                              | Bonus(1)
|Position            | Year                     | (Cdn$)                              | (Cdn$)  
|Bruno Ducharme      | 2004                     | 500,000                             | 500,000 
|Chairman of the     | 2003                     | 500,000                             | 584,375 
|Board and Chief     | 2002                     | 500,000                             | 350,000 
|Executive Officer   |                          |                                     |         
|                    |                          |                                     |         
|André Gauthier      | 2004                     | 257,750                             | 191,471 
|Executive Vice      | 2003                     | 252,500                             | 170,564 
|President and Chief | 2002                     | 233,254                             | 99,763  
|Financial Officer   |                          |                                     |         
|                    |                          |                                     |         
|James J. Jackson    | 2004                     | 269,184                             | 128,691 
|Chief Financial     | 2003                     | 269,184                             | 120,290 
|Officer, MobiFon    | 2002                     | 202,209                             | 81,136  
|S.A.                |                          |                                     |         
|                    |                          |                                     |         
|Karla Stephens      | 2004                     | 261,818                             | 135,736 
|Chief Operating     | 2003                     | 246,179                             | 112,512 
|Officer, Oskar      | 2002                     | 184,927                             | 102,773 
|                    |                          |                                     |         
|Alexander Tolstoy   | 2004                     | 416,314                             | 273,748 
|President and Chief | 2003                     | 416,314                             | 250,652 
|Operating Officer   | 2002                     | 312,736                             | 170,629 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Bonus awards are paid in cash in
    the year following the financial year for which they are awarded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(2) | For Messrs. Ducharme and
    Gauthier, represents the flexible perquisites account (in lieu of
    company-car, club memberships, etc.). For Messrs. Jackson and Tolstoy and
    Ms. Stephens, represents primarily premiums for services rendered outside of
    Canada, including foreign currency conversions from Canadian to U.S.
    dollars.                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(3) | For financial year 2003, includes
    the RSUs granted at the beginning of 2004 on a deferred basis from 2003, as
    previously reported in last year's Proxy Circular. For financial year 2004,
    includes the RSUs granted at the beginning of 2005 on a deferred basis from
    2004. Of these numbers, Mr. Gauthier received 42,542 RSUs in 2004, while Mr.
    Jackson received 8,000 and Ms. Stephens received 13, 306 in 2004.                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(4) | For financial year 2004, up to
    700,000, 215,000, 140,000, 175,000 and 350,000 were granted to Mr. Ducharme,
    Mr. Gauthier, Mr. Jackson, Ms. Stephens and Mr. Tolstoy, respectively, as
    performance incentives and are thus contingent on meeting pre-determined
    share appreciation targets. See "Compensation policyMid-term and long-term
    incentive plan-Restricted
    share unit plan (mid-term incentive)"
    More specifically, at an appreciation target of 20%, the respective number
    of RSUs would be 200,000, 61,429, 40,000, 50,000 and 100,000 with additional
    RSUs at share appreciation targets of 24%, 28%, 32%, 36% and 44%. The
    respective number of RSUs vested at 44% are 700,000, 215,000, 140,000,
    175,000 and 350,000.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(5) | Includes the value realized on
    the exercise of options and redemption of RSUs. For financial year 2003,
    also includes cash payouts made under a special cash incentive plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(6) | Out of these options grants, the
    following numbers of options were forfeited in 2003 in the case of each of
    the following individuals: Mr. Ducharme, 840,000 options forfeited; Mr.
    Gauthier, 175,000 options forfeited; Mr. Jackson, 175,000 options forfeited;
    Ms. Stephens, 160,000 options forfeited; Mr. Tolstoy, 400,000 options
    forfeited.                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(7) | In 2004, Mr. Tolstoy forfeited
    333,334 options in exchange for 120,000 RSUs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

61

---

Option and RSU grants in last financial year

|                  |                  | Percentage of Net     |                   |                      |                
|----------------- | ---------------- | --------------------- | ----------------- | -------------------- | ---------------
|                  |                  | Total of              |                   | Market Value of      |                
|                  | Securities Under | Options/RSUs          |                   | Securities           |                
|                  | Options/RSUs (1) | Granted in/for        | Exercise Price of | Underlying Options   |                
|                  | Granted          | Financial Year (1)(2) | Options           | on the Date of Grant | Expiration Date
|Name              | (#)              | (%)                   | (#/US$)           | (#/US$)              | of Options     
|Bruno Ducharme    | 0 / 1,000,000    | 0% / 30.5%            | n.a.              | n.a.                 | n.a.           
|André Gauthier    | 0 / 347,542      | 0% / 10.6%            | n.a.              | n.a.                 | n.a.           
|James J. Jackson  | 0 / 208,000      | 0% / 6.3%             | n.a.              | n.a.                 | n.a.           
|Karla Stephens    | 0 / 263,306      | 0% / 8.0%             | n.a.              | n.a.                 | n.a.           
|Alexander Tolstoy | 0 / 500,000      | 0% / 15.3%            | n.a.              | n.a.                 | n.a.           

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Not
    including the RSUs granted at the beginning of 2004 on a deferred basis from
    2003, as previously reported in last year's Proxy Circular but including the RSUs granted at the beginning of 2005 on a deferred basis from 2004. Of
    these numbers, Mr. Gauthier received 42,542 RSUs in 2004, while Mr. Jackson
    received 8,000 and Ms. Stephens received 13, 306 in 2004.                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(2) | Of
    those RSUs, up to 700,000, 215,000, 140,000, 175,000 and 350,000 were
    granted to Mr. Ducharme, Mr. Gauthier, Mr. Jackson, Ms. Stephens and Mr.
    Tolstoy, respectively, as performance incentives and are thus contingent on
    meeting pre-determined share appreciation targets. See "Compensation
    policyMid-term and long-term incentive plan-Restricted
    share unit plan (mid-term incentive)".
    More specifically, at an appreciation target of 20%, the respective number
    of RSUs would be 200,000, 61,429, 40,000, 50,000 and 100,000 with additional
    RSUs at share appreciation targets of 24%, 28%, 32%, 36% and 44%. The
    respective number of RSUs vested at 44% are 700,000, 215,000, 140,000,
    175,000 and 350,000.

Aggregated options and RSUs exercised or redeemed in last financial year and
financial year end option and RSU values

|                  |                 |            | Unexercised Options        | Value of Unexercised "In-the-   
|----------------- | --------------- | ---------- | -------------------------- | --------------------------------
|                  | Securities      |            | /Unvested RSUs             | Money"(2)Options / Unvested RSUs
|                  | Acquired        | Aggregate  | as at December 31, 2004(1) | at December 31, 2004(3)         
|                  | on Exercise     | Value      | Exercisable                | Unexercisable                   
|                  | / Redemption    | Realized   | / Vested                   | / Unvested                      
|Name              | (#)             | (Cdn$)     | (#)                        | (#)                             
|Bruno Ducharme    | 921,694/166,667 | 12,455,049 | 466,667/0                  | 732,231/1,333,333               
|André Gauthier    | 109,500/3,996   | 1,145,051  | 132,922/0                  | 140,710/355,534                 
|James J. Jackson  | 137,043/2,497   | 1,481,015  | 26,667/0                   | 273,710/212,995                 
|Karla Stephens    | 96,257/2,248    | 1,099,138  | 24,000/0                   | 247,592/267,801                 
|Alexander Tolstoy | 13,000/40,267   | 690,910    | 313,715/0                  | 444,494/647,733                 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the RSUs granted at the beginning of 2005 on a deferred basis from
    2004. Of those RSUs, up to 700,000, 215,000, 140,000, 175,000 and 350,000
    were granted to Mr. Ducharme, Mr. Gauthier, Mr. Jackson, Ms. Stephens and
    Mr. Tolstoy, respectively, as performance incentives and are thus contingent
    on meeting pre-determined share appreciation targets. See "Compensation
    policyMid-term and long-term incentive plan-Restricted
    share unit plan (mid-term incentive)".
    More specifically, at an appreciation target of 20%, the respective number
    of RSUs would be 200,000, 61,429, 40,000, 50,000 and 100,000 with additional
    RSUs at share appreciation targets of 24%, 28%, 32%, 36% and 44%. The
    respective number of RSUs vested at 44% are 700,000, 215,000, 140,000,
    175,000 and 350,000..
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | "In-the-money" options are options for which the market value of the
    underlying securities is higher than their exercise price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | The
    value of unexercised "in-the-money" options and unvested RSUs is calculated
    using the closing price of the underlying securities, our common shares, on
    the TSX on December 31, 2004, i.e. Cdn$13.45. Since the pre-determined share
    appreciation targets were not met at the price on December 31, 2004, no
    value has been attributed to the RSUs granted as performance incentives (see
    note (1) above).                                                                                                                                                                                                                                                                                                                                                                                                                    

SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Ownership of Securities by Directors and Executive Officers

The table below sets forth as of March 1, 2005 the common shares, restricted
share units and stock options to acquire common shares held by each of our
directors and executive officers.

- 62-

---



|                          |         |                |           
|------------------------- | ------- | -------------- | ----------
|                          | Common  | Restricted     |           
|                          | Shares  | Share Units(1) | Options(2)
|                          | #       |                | #         
|Directors                 |         |                |           
|Thierry Baudon            |        |               |          
|Jacques A. Drouin         | 480     | 12,300         | 16,001    
|Bruno Ducharme            | 292,145 | 1,333,333      | 1,198,898 
|Michael R. Hannon         |        |               |          
|C. Kent Jespersen         | 449     | 16,167         | 37,594    
|François Laurin           |        |               |          
|Jonathan Charles C. Meggs |        |               |          
|                          |         |                |           
|Officers                  |         |                |           
|Terry Enepekides          | 1,249   | 42,797         | 83,809    
|André Gauthier            | 4,582   | 355,534        | 273,633   
|James J. Jackson          | 4,992   | 212,995        | 300,378   
|Jacques Langevin          | 6,743   | 181,416        | 131,265   
|Alexander Tolstoy         | 54,861  | 647,733        | 758,210   
|Margriet Zwarts           | 4,000   | 226,707        | 347,087   

|    |                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These restricted share units
    convert into common shares on pre-determined dates. In addition, with
    respect to certain performance based restricted share units, their
    conversion into common shares only occurs upon a certain level of
    appreciation in our share price. See "Compensation of Directors and
    Officers".
|    |                                                                                                                                                                                                                                                                                                                                           
|(2) | These options vest and expire
    on pre-determined dates and are exercisable at prices ranging between
    US$2.15 and Cdn$662.50.                                                                                                                                                                                                       

EMPLOYEES

As of December 31, 2004, we had 19 employees at the corporate
level excluding expatriate employees assigned to foreign operations, compared to
approximately 25 and 27 as at December 31, 2003 and December 31, 2002
respectively. These numbers exclude for 2004, 2003 and 2002, respectively,
2,044, 1,855 and 1,707 employees of MobiFon and 1,687, 1,453 and 1,350 employees
of Oskar Mobil. Those numbers do not include employees of our discontinued or
disposed of operations. None of these employees are members of labor unions. We
believe that our subsidiaries and we enjoy good relationships with our
respective employees.

- 63-

---



ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

TIW

Major Shareholders

The following table and notes thereto set forth as at March 1, 2005 certain
information regarding ownership of our common shares being our only class of
voting securities, for the following persons:

(1) each person who is known by us to be the beneficial owner of 5% or more
of our outstanding common shares; and

(2) all other stakeholders as a group.

|Name of Beneficial Owner     | Common Shares  | % Ownership (1)
|---------------------------- | -------------- | ---------------
|J.P. Morgan Partners, LLC(2) | 42,957,635 (3) | 19.96%         
|U.F. Investments (Barbados)  |                |                
|Ltd. (4)                     | 12,372,653     | 5.75%          
|Emerging Markets Partnership |                |                
|(Europe) Limited (5)         | 18,640,843     | 8.66%          
|Caisse de dépôt et placement |                |                
|du Québec (6)                | 10,633,002     | 4.94%          
|Other Holders                | 130,593,146    | 60.69%         
|Total                        | 215,197,279    | 100%           

|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on a total of 215,197,279
    common shares outstanding.                                                                                                                                                                                                                                                                 
|(2) | Represents securities held by
    affiliates of J.P. Morgan Partners, LLC., referred to in this document as
    J.P. Morgan Partners.                                                                                                                                                                                          
|(3) | J.P. Morgan Partners' equity
    interest in us increased from 15.2% as of March 2004 to 19.96% as of
    February 2005, with the issuance of an aggregate of approximately 24.3
    million common shares of TIW in consideration for equity interest held by
    J.P. Morgan Partners in MobiFon S.A. and Oskar Holdings N.V.
|(4) | U.F. Investments (Barbados) Ltd.
    is an affiliate of Hutchison Whampoa Ltd.                                                                                                                                                                                                                                                 
|(5) | Represents shares held by funds
    managed by Emerging Markets Partnership (Europe) Limited, referred to in
    this document as EMP.                                                                                                                                                                                         
|(6) | Represents securities held by
    Caisse de dépôt et placement du Québec and Capital Communications CDPQ Inc.                                                                                                                                                                                                                  

Related Party Transactions

Since January 1, 2004, we have entered into the following
agreements with third parties that may be considered to be related to us under
certain standards of disclosure. We believe that the transactions described
herein were negotiated on terms that, on the whole, were no less favorable to us
than those that would have been available from unrelated parties.

1. Share Purchase Agreements dated February 10, 2004 between
  us and EEIF Melville B.V., EEIF Czech N.V. and Emerging Europe Infrastructure
  Fund C.V., relating to the issuance of 14,621,714 common shares of TIW in
  exchange for approximately 5.9% equity interest in MobiFon and 2.9% equity
  interest in Oskar Holdings held by these affiliates of EMP. As a result of
  this transaction, EMP became a party to an amended and restated investor
  rights agreement dated March 17, 2004 (subsequently amended as of May 6, 2004)
  entered into among us and certain of our major shareholders, pursuant to which
  such major shareholders agreed to vote in favour of one nominee of EEIF on our
  board of directors. In addition, EMP entered into an amended and restated
  registration rights agreements dated March 17, 2004 (subsequently amended as
  of May 6, 2004) among us and certain of our major shareholders.
2. Underwriting Agreement dated March 18, 2004 between us, BMO
  Nesbitt Burns Inc., J.P. Morgan Securities Inc., Lazard Frères & Co. LLC, UBS
  Securities Canada Inc., TD Securities Inc., Telesystem Ltd., 9111-1369 Québec
  Inc., U.F. Investments (Barbados) Ltd., JPMP TIW EH, LP, J.P. Morgan Partners
  (BHCA), L.P., AOF Investment N.V., CAIP Investment N.V., CEA Investment N.V.,
  EEIF Melville B.V., EEIF Czech N.V., and Emerging Europe Infrastructure Fund
  C.V. providing for the sale of 21 million common shares of TIW. J.P. Morgan
  Securities Inc. is an affiliate of J.P. Morgan Partners, one of our
  significant shareholders. One of our board members is managing director of
  Lazard & Co., Limited, an affiliate of Lazard Frères & Co. LLC. In connection
  with this transaction, we paid fees and commissions of approximately $970,000
  and $500,000 to J.P. Morgan Securities Inc. and Lazard Frères & Co.,
  respectively.

- 64-

---



1. Share Transfer
  Agreement dated July 22, 2004 between us, Deraso Holdings B.V., Devaynes
  Holdings Limited, Upson Enterprises Limited, Emporiki Venture Capital Emerging
  Markets Limited and shareholders of Deraso Holdings B.V., relating to the
  acquisition by us of a 15.46% equity interest in MobiFon S.A. in exchange for
  28,358,499 common shares of TIW and $36.6 million in cash. JP Morgan Partners
  (BHCA), L.P., one of our significant shareholders, was a shareholder in Deraso
  Holdings Limited and received, as a result of this transaction, approximately
  6.9 million common shares of TIW plus cash.
2. Purchase Agreement dated October 6, 2004 between Oskar
  Mobil a.s., Oskar Holdings N.V., Oskar Finance B.V., J.P. Morgan Securities
  Inc., ABN AMRO Bank N.V., UBS Limited and West LB AG providing for the
  issuance and sale by Oskar Mobil of 325 million in 7.50% First Priority
  Senior Secured Notes due 2011. J.P. Morgan Securities Inc. is an affiliate of
  JP Morgan Partners, one of our significant shareholders. In connection with
  this transaction, we and our subsidiaries paid an aggregate of approximately
  4.9 million ($6.0 million) in fees and commissions to J.P. Morgan Securities
  Inc.
3. Senior Credit Agreement dated July 19, 2000, as amended,
  between Oskar Mobil a.s. and, inter alia, J.P.
  Morgan Europe Limited, as facility agent, and JP Morgan Chase Bank, as a
  lender. These JP Morgan companies are affiliates of JP Morgan Partners, one of
  our significant shareholders and they received interest and fees of
  approximately $1.9 million, $1.4 million and $1.5 million in 2002, 2003 and
  2004, respectively, under this agreement. JP Morgan Chase Bank held
  approximately 12% of the principal amount committed under the loan in 2004.
  The syndicated credit facility was composed of two tranches. Tranche A was in
  the form of a committed revolving credit facility converting on January 19,
  2004 to a term loan of up to 269.1 million and CZK3.8 billion, (totalling
  $486.6 million) carrying interest at a rate of EURIBOR plus 1.25% for Euro
  drawings and PRIBOR plus 1.25% for CZK drawings, reimbursable by installments
  determined as a percentage of amounts drawn under the facility starting in
  June 2004 until final maturity in December 2008. Tranche B consisted of a term
  loan of up to 26.6 million and CZK1.7 billion, (totalling $100.6 million)
  carrying interest at EURIBOR plus 1.50% for Euro drawings and PRIBOR plus
  1.50% for CZK drawings, reimbursable by installments starting in December 2008
  until final maturity in December 2009. The facility was fully drawn at October
  13, 2004 when it was reimbursed in full. The facility was collateralized by a
  pledge of Oskar Holdings's shares in Oskar Mobil and of substantially all of
  the assets of Oskar Mobil.
4. Senior Credit Agreement dated October 6, 2004 between Oskar
  Mobil a.s., Oskar Holdings N.V., Oskar Finance B.V. and, 
  inter alia,
  J.P. Morgan plc, as a mandated lead arranger, J.P. Morgan Europe Limited, as
  facility agent and joint security agent, J.P. Morgan Chase International
  Financing Limited, as a lender, ABN AMRO Bank N.V., as mandated lead arranger
  and a principal lender. The foregoing JP Morgan companies are affiliates of JP
  Morgan Partners, one of our significant shareholders. Fees of 3.0 million
  ($3.7 million) were paid to these JP Morgan affiliates prior to any
  re-allocation of fees to credit facility syndicate members. The senior credit
  facility consists of a CZK5,033.6 million and 40.0 million (approximately
  200 million in aggregate) five year amortizing tranche A maturing in 2009,
  and amortizing from March 2007, and a CZK1,573 million (approximately 50
  million) six year tranche B repayable in full at maturity. J.P. Morgan Chase
  International Financing Limited provided a 15 million ($20.4) commitment
  under Tranche A of the facility. The senior credit facility is available for
  drawing, on a revolving basis, over the next 24 months. As of December 31,
  2004, CZK3,963 million and 24 million (approximately $209.9 million) was
  drawn under the facility. The senior credit facility is guaranteed on a senior
  secured basis by Oskar Holdings N.V. and Oskar Finance B.V. The obligations of
  Oskar Mobil, Oskar Holdings and Oskar Finance and the guarantees are secured
  by substantially all of their respective assets.
5. Share Transfer Agreement dated December 21, 2004 between us
  and shareholders of Oskar Holdings relating to the acquisition by us of the
  72.9% equity interest in Oskar Holdings that we did not already own in
  exchange for 46,001,139 common shares of TIW. JP Morgan Partners and EMP, two
  of our significant shareholders received, as shareholders of Oskar Holdings,
  approximately 17.4 million and 7.0 million common shares of TIW as a result of
  this transaction.
6. Interest rate and cross currency swap agreements between
  Oskar Mobil and, inter alia,
  an affiliate of JP Morgan Partners, one of our significant shareholders and
  ABN AMRO Bank N.V., having nominal principal amounts of CZK2.47 billion and
  270 million for the interest rate and cross currency arrangements,
  respectively. Such agreements were terminated in the last quarter of 2004 and
  approximately 13.1 million ($16.1) was paid to an affiliate of JP Morgan
  Partners in connection with the settlement of these agreements. In addition,
  an aggregate amount of $5.0 million was paid in 2004 ($7.5 million in 2003 and
  $4.5 million in 2002) under these agreements to such JP Morgan partners'
  affiliate.
7. Cross currency swap agreements entered into on October 13,
  2004 between Oskar Mobil, J.P. Morgan Chase International Financing Limited
  and ABN AMRO Bank N.V. for a notional principal amount of 325 million
  maturing in April 2009 which establish a fixed exchange rate of CZK 31.625 to
  one Euro and a fixed interest rate of 8.52%. The counterparty for 162.5
  million of notional principal amount of those swap agreements is an affiliate
  of J.P. Morgan Partner, one of our significant shareholders.

- 65-

---



1. Engagement letters dated February 7, 2003, July 7, 2003,
  September 5, 2003, October 16, 2003 and November 22, 2004 between us and
  Lazard Frères & Co. LLC and Lazard & Co. Limited pursuant to which these
  entities provided us with financial advisory and investment banking services.
  One of our board members is managing director of Lazard & Co. Limited, which
  is affiliated to Lazard Frères & Co. LLC. Pursuant to these engagement
  letters, we paid an aggregate of approximately $2.2 million and $5.6 million
  to Lazard Frères & Co. LLC and Lazard & Co. Limited in 2003 and 2004
  respectively.

- 66-

---



ITEM 8  FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Our audited comparative annual Consolidated Financial
Statements, including the Notes thereto, as at December 31, 2004 and 2003 and
for each of the years in the three-year period ended December 31, 2004, together
with the auditors' report thereon signed by Ernst & Young LLP are presented at
Item 18 of this document.

LEGAL PROCEEDINGS

We are 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.

SIGNIFICANT CHANGES

Acquisition of Non-controlling Interests in Oskar Holdings

In November 2004, the Company entered into an agreement in
principal to acquire from non-controlling shareholders 72.9% of Oskar Holdings
in exchange for the issuance of 46.0 million common shares of the Company's
treasury stock having an aggregate value of $521.9 million including costs of
which $6.0 million was paid to an affiliate of the employer of a board member.
Closing occurred on January 12, 2005 and the Company increased its indirect
ownership in Oskar Holdings and Oskar Mobil to 100.0% and 99.87%, respectively.
Two of the Company's significant shareholders are shareholders of Oskar Holdings
and received 17.4 million and 7.0 million common shares, respectively. The
acquisition will be accounted for using the purchase method.

Performance RSUs

In February 2005, the Board of Directors of the Company
authorized the grant of 2,043,000 performance based RSUs. The performance based
RSUs will vest in three years from the date of their grant. However, the number
of RSUs that will vest is dependent upon the Company's future stock price
appreciation from the date of grant. The stock prices at which performance RSUs
will vest range from $15 to $18 and the weighted average of such prices is
$16.70. The expected aggregate fair value of the grant will be amortized as
stock-based compensation expense over the vesting period of the performance RSUs.
The aggregate fair value of the RSUs consists of the fair value of each RSU, on
the date of grant, times the expected number of performance RSUs that will vest
determined using a binomial model and assumptions consistent with those used to
determine the fair value of the Company's stock option grants. The expected
number of performance RSUs that will vest will be re-estimated at each future
reporting period.

UMTS License in Czech Republic

On February 23, 2005, the Czech Telecommunications Offices
awarded a UMTS license to Oskar Mobil. The UMTS license was awarded for a term
of 20 years and requires Oskar to honour certain license conditions, including
minimum coverage requirements. The CZK 2 billion ($89.4 million) agreed upon
price is payable in annual instalments from December 2005 through December 2009.

- 67-

---



Sale of Operations to Vodafone

On March 15, 2005, the Company entered into definitive
agreements with Vodafone International Holdings B.V., a wholly-owned subsidiary
of Vodafone Group Plc, for the sale of all of its interests in ClearWave for a
cash consideration of approximately $3.5 billion. ClearWave owns all of the
Company's interest in Oskar Mobil and MobiFon through its 100% ownership of
Oskar Holdings and MobiFon Holdings. The consideration is payable in cash upon
closing of the sale. At closing, net proceeds from the sale along with net
assets at the Company level, which consist primarily of cash and cash
equivalents, are expected to equate to $16 per fully-diluted share and are
intended to be distributed to shareholders pursuant to a court supervised plan
of arrangement.

Closing of the sale is subject to (i) court approval pursuant
to the plan of arrangement, (ii) shareholders' approval on a basis to be
determined by the court (expected to be 66 2/3% of the votes), and (iii)
customary conditions, including the receipt of all necessary regulatory
approvals under relevant competition legislations. Closing of the sale will take
place as soon as practicable after receipt of such regulatory approvals, which
is expected to occur in the third quarter of 2005.

The Board of Directors of the Company has approved the sale
transaction and has recommended that the shareholders of the Company vote in
favor of the sale transaction, which will be included in the plan of arrangement
which will also address distributions to shareholders and liquidation of the
Company.

- 68-

---



ITEM 9  THE OFFER AND LISTING

OFFER AND LISTING DETAILS

Not applicable.

PLAN OF DISTRIBUTION

Not applicable.

MARKETS

Common Shares

Our common shares are listed for trading on the TSX under the
symbol "TIW" and on the Nasdaq National Market under the symbol "TIWI". Our
subordinate voting shares began trading on the TSX on May 9, 1997, prior to
which there was no public market for such shares, and on the Nasdaq National
Market on June 8, 1998. On June 23, 2001, we consolidated our subordinate voting
shares on a 5 for 1 basis. On June 27, 2001, our subordinate voting shares
started trading on the TSX and Nasdaq on a consolidated basis. On May 7, 2002,
the listing of our subordinate voting shares was transferred from the Nasdaq
National Market to the Nasdaq SmallCap Market. On May 17, 2002,
contemporaneously with the elimination of multiple voting shares from our share
capital, we redesignated our subordinate voting shares as common shares.
Following shareholders' approval of a share consolidation at our May 2, 2003
shareholders' meeting, our share capital was consolidated for a second time on a
5 for 1 basis on June 23, 2003 and started trading on a consolidated basis on
June 30, 2003. On April 28, 2004, the listing of our common shares was moved up
from the Nasdaq SmallCap Market to the Nasdaq National Market. The CUSIP number
for our common shares is 879946-60-6. The following tables set forth, for the
years, calendar quarters and months indicated, the range of high and low closing
sale prices for our common shares as reported on the TSX and Nasdaq. All data
has been adjusted to give effect to the 5 for 1 consolidations:

|                  | Toronto Stock
    Exchange | Nasdaq     
|----------------- | -------------------------- | -----------
|                  | Price Range                | Price Range
|                  | (Cdn$)                     | (Cdn$)     
|                  | High                       | Low        
|2003              |                            |            
|First quarter     | 3.10                       | 1.20       
|Second quarter... | 5.30                       | 1.78       
|Third quarter     | 7.33                       | 4.85       
|Fourth quarter    | 11.95                      | 5.85       
|2004              |                            |            
|First quarter     | 20.10                      | 11.25      
|Second quarter... | 16.85                      | 11.46      
|Third quarter     | 14.12                      | 11.02      
|Fourth quarter    | 14.70                      | 11.84      
|                  |                            |            
|                  |                            |            
|                  | Toronto Stock
    Exchange |            
|                  |                            | Price Range
|                  | (Cdn$)                     | (Cdn$)     
|                  | High                       | Low        
|2000              | 1762.50                    | 141.25     
|2001              | 216.25                     | 2.10       
|2002              | 9.40                       | 1.15       
|2003              | 11.95                      | 1.20       
|2004              | 20.10                      | 11.20      

- 69-

---



|               | Toronto Stock
    Exchange | Nasdaq     
|-------------- | -------------------------- | -----------
|               | Price Range                | Price Range
|               |                            |            
|               | (Cdn$)                     | (Cdn$)     
|               | High                       | Low        
|               |                            |            
|September 2004 | 12.80                      | 11.61      
|October 2004   | 14.00                      | 11.84      
|November 2004  | 14.35                      | 12.95      
|December 2004  | 14.70                      | 13.10      
|January 2005   | 17.60                      | 13.16      
|February 2005  | 19.40                      | 17.20      

7.00% Equity Subordinated Debentures

As at December 31, 2004, we had outstanding Cdn$1,236,500 of
7.00% equity subordinated debentures due December 30, 2006. These 7.00%
debentures were part of an original issue of Cdn$150,000,000 of 7.00% equity
subordinated debentures due February 15, 2002.

On February 5, 2002, we repurchased Cdn$145,056,000 of 7.00%
debentures in exchange for a combination of cash, subordinate voting shares and
warrants. On February 5, 2002, we also amended the terms of the indenture to,
among other things, postpone the maturity to December 30, 2006 and reduce the
principal amount at maturity of each Cdn$1000 of 7.00% debenture to Cdn$250.
Following the amendments the 7.00% coupon is now payable on the revised
principal and is payable semi-annually beginning on June 30, 2002. Each
outstanding 7.00% debenture will be convertible on maturity, at the option of
the holder, into our common shares. The amended 7.00% debentures are listed on
the TSX under the symbol "TIW.db.a". The pre-amendment 7.00% debentures were
listed on the TSX under the symbol "TIW.db". The current CUSIP number for the
7.00% debenture is 879946-AJ-O. Despite their continued listing on the TSX,
since the amendment of the debentures and the repurchase of 97% of the
outstanding debentures, there has been no regular trading activity on the
debentures.

EXEMPTIONS UNDER NASD MARKETPLACE RULES

In connection with our proposed issuance of 28,358,499 common
shares in exchange for 5.9% equity interest in MobiFon and 2.9% in Oskar
Holdings completed in March 2004, we requested from Nasdaq an exemption from the
shareholders approval requirement of Marketplace Rule 4350(i)(1)(C). Such
exemption was necessary as the proposed issuance of shares represented, at the
time, an issuance of 20.2% of our outstanding share capital, being more than the
threshold of 20% set forth in Rule 4350(i)(1)(C). By letter dated August 19,
2004, Nasdaq granted the requested exemption to Marketplace Rule 4350(i)(1)(C)
pursuant to Marketplace Rule 4350(a).

In connection with our issuance of 46,001,139 common shares
in exchange for the 72.9% equity interest in Oskar Holdings that we did not
already own completed in January 2005, we requested from Nasdaq an exemption
from the requirements of Marketplace Rule 4350(i)(6) setting forth the manner in
which shareholders approval is to be sought in the context of transactions
requiring shareholder consent. The share issuance, representing at the time
27.7% of our outstanding share capital, required shareholder consent both under
the rules and policies of the TSX and Nasdaq. In accordance with its practices,
the TSX accepted, in satisfaction of the shareholders consent requirement, the
written consent of shareholders representing a majority of our outstanding share
capital. By letter dated December 28, 2004, we were exempted from the
requirement of Marketplace Rule 4350(i)(6) to follow certain state and federal
law and rules, which we believe are not applicable to us as a foreign private
issuer, including the distribution of a proxy statement when seeking written
consent of shareholders in lieu of a meeting pursuant to Marketplace Rule
4350(a).

- 70-

---



ITEM 10  ADDITIONAL INFORMATION

SHARE CAPITAL

Our authorized share capital consists of an unlimited number
of common shares without par value and an unlimited number of preferred shares
without par value, issuable in series. Our common shares are listed for trading
on the TSX under the symbol "TIW" and on the Nasdaq National Market under the
symbol "TIWI". Our subordinate voting shares began trading on the TSX on May 9,
1997, prior to which there was no public market for such shares, and on the
Nasdaq National Market on June 8, 1998. On June 23, 2001, we consolidated our
subordinate voting shares on a 5 for 1 basis. On June 27, 2001, our subordinate
voting shares started trading on the TSX and Nasdaq on a consolidated basis. On
May 7, 2002, the listing of our subordinate voting shares was transferred from
the Nasdaq National Market to the Nasdaq SmallCap Market. On May 17, 2002,
contemporaneously with the elimination of multiple voting shares from our share
capital, we redesignated our subordinate voting shares as common shares.
Following shareholders' approval of a share consolidation at our May 2, 2003
shareholders' meeting, our share capital was consolidated for a second time on a
5 for 1 basis on June 23, 2003 and started trading on a consolidated basis on
June 30, 2003. On April 28, 2004, the listing of our common shares was moved up
from the Nasdaq SmallCap Market to the Nasdaq National Market.

The following is a brief description of the attributes of our relevant
convertible securities and share capital.

Common Shares

The common shares may rank junior to the preferred shares
with respect to the payment of dividends, return of capital and distribution of
assets in the event of liquidation, dissolution or any distribution of our
assets for the purpose of winding up our affairs. The holders of common shares
are entitled to receive dividends on a share-for-share basis out of the assets
legally available therefore at such times and in such amounts as our board of
directors may determine.

The common shares carry one vote per share. The holders of
common shares are entitled to receive notice of any meeting of our shareholders
and to attend and vote thereat as a single class on all matters to be voted on
by our shareholders, except at meetings where the holders of shares of one class
or of a particular series of shares are entitled to vote separately pursuant to
the Canada Business Corporations Act or our articles.

The common shares are not redeemable or retractable. Upon our
liquidation, dissolution or any distribution of our assets for the purpose of
winding up our affairs, the holders of common shares shall be entitled to
participate equally, on a share-for-share basis, in our remaining property and
assets available for distribution to such holders.

As at December 31, 2004 we had 169,193,153 common shares outstanding. As at
March 1, 2005, we had 215,197,279 common shares outstanding.

Preferred Shares

The preferred shares are issuable, from time to time, in one
or more series, as determined by our board of directors and carry rights and
privileges fixed by our board of directors. Any series of preferred shares, if
issued, may rank prior to common shares with respect to the payment of dividends
and the distribution of assets. In such a case, in the event of our dissolution,
the distribution of our assets upon our liquidation or the distribution of all
or part of our assets among our shareholders, holders of preferred shares would
be entitled to receive, in cash or in property, an amount equal to the value of
the consideration paid in respect of such outstanding shares, as credited to our
issued and paid-up capital account, plus such amount equal to accrued and unpaid
dividends, or declared and unpaid dividends and, if any, any amount specified in
our articles.

Non-Voting Preferred Shares

On March 6, 2002, we created a first series of non-voting
preferred shares. This series of non-voting preferred shares ranked pari passu
on a share for share basis with the common shares but did not carry any voting
rights. 55,000,000 non-voting preferred shares were authorized for issuance. On
March 13, 2002, we issued 35,000,000 non-voting preferred shares.

- 71-

---



On March 25, 2004, JPMP TIW EH, LP, the sole holder of all of
the outstanding non-voting preferred shares, converted all of the 35,000,000
non-voting preferred shares into 7,000,000 common shares in accordance with
their terms. There are currently no preferred shares outstanding.

7.00% Equity Subordinated Debentures due 2002

We issued on February 15, 1999, Cdn$150,000,000 principal
amount of 7.00% equity subordinated debentures pursuant to an indenture entered
into between Montreal Trust Company of Canada, as trustee, and us. On November
29, 2001, we launched the 7.00% equity subordinated debentures purchase offer
with the intent of repurchasing the 7.00% equity subordinated debentures and
amending the terms of the indenture governing them. On February 5, 2002, we
repurchased an aggregate of Cdn$145,054,000 in principal amount of 7.00% equity
subordinated debentures and executed a supplemental indenture pursuant to the
7.00% equity subordinated debentures purchase offer. The following is a
description of some of the terms of the indenture governing the 7.00% equity
subordinated debentures, as amended by the supplemental indenture we entered
into on February 5, 2002. We refer to the indenture, as amended, as the amended
7.00% equity subordinated debenture indenture.

Pursuant to the amended 7.00% equity subordinated debenture
indenture, the 7.00% equity subordinated debentures mature on December 31, 2006
and have a principal amount at maturity of Cdn$250 each, rather than Cdn$1,000
as per the original 7.00% equity subordinated debenture indenture. The 7.00%
equity subordinated debentures bear interest at the rate of 7.00% per annum,
calculated on the basis of a principal amount of Cdn$250, payable semi-annually
in arrears on June 30 and December 31 in each year commencing June 30, 2002,
with the first interest coupon under the amended 7.00% equity subordinated
debenture indenture being calculated from February 5, 2002. We have the option,
in lieu of paying the principal amount of the 7.00% equity subordinated
debentures in cash at maturity, to deliver that number of freely tradable common
shares obtained by dividing the principal amount of the 7.00% equity
subordinated debentures by the greater of Cdn$1.00 or 95% of the then current
market price of the common shares, provided no event of default, as defined in
the amended 7.00% equity subordinated debenture indenture, shall have occurred
and be continuing. Each 7.00% equity subordinated debenture is convertible at
maturity at the option of the holder into that number of common shares equal to
the conversion number, as defined in the amended 7.00% equity subordinated
debenture indenture. The conversion number will be calculated as of the date of
conversion as:

> (a) the conversion value, as defined in the supplemental 7.00% equity
>   subordinated debenture indenture, as of such date, being the subordinate
>   voting share value, divided by
>   (b) 95% of the then current market price of the common shares.

The subordinate voting share value will be equal to 11.363636
(subject to applicable adjustments)  the subordinate voting share rate 
multiplied by the current market price of the common shares on the date of
conversion. We have the option, in lieu of delivering common shares on
conversion, to pay the conversion value in cash for 7.00% equity subordinated
debentures tendered for conversion. The conversion number is subject to
adjustment upon the occurrence of certain events. The 7.00% equity subordinated
debentures will be convertible at the option of the holder prior to maturity
upon the occurrence of an offer, as defined in the amended 7.00% equity
subordinated debenture indenture, or an event of default.

MEMORANDUM AND ARTICLES OF ASSOCIATION

We were incorporated in Canada on September 9, 1996 under the
name 3293505 Canada Inc. On March 11, 1997 we amended our articles of
incorporation to, among other things, change our name to Telesystem
International Wireless Inc. On May 1, 1997, we again amended our articles of
incorporation to, among other things, effect certain changes to our share
capital. Our articles of association were again amended on June 22, 2001 to
effect a share consolidation on a five-for-one basis and on March 6, 2002 to
create a series of non-voting preferred shares. On May 17, 2002, the articles
were amended to delete multiple voting shares from our share capital and to
redesignate subordinate shares to common shares. On June 23, 2003, our articles
were again amended to effect a second share consolidation on a five-for-one
basis. 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 "ITEM 10 - Additional
Information - Share Capital".

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:

- 72-

---



1. Third Amended and Restated Investors Rights Agreement dated May 6, 2004
  among us, U.F. Investments (Barbados) Ltd., J.P. Morgan Partners (BHCA) LP,
  JPMP TIW EH, L.P., AOF Investment N.V., CEA Investment N.V., CAIP Investment
  N.V., Caisse de dépôt et placement du Québec, Capital Communications CDPQ
  Inc., EEIF Melville B.V., Emerging Europe Infrastructure Fund C.V., EEIF Czech
  N.V., Telesystem Ltd. and 9111-1369 Québec Inc. This agreement provides for
  minority and majority representation rights on our board of directors and sets
  out certain principles of corporate governance. This agreement amends and
  supplements previous Investors Rights Agreement, dated November 29, 2001,
  January 24, 2002 and March 17, 2004;
2. Third Amended and Restated Registration Rights Agreement dated May 6, 2004
  among us, U.F. Investments (Barbados) Ltd., J.P. Morgan Partners (BHCA) L.P.,
  JPMP TIW EH, L.P., AOF Investment N.V., CEA Investment N.V., CAIP Investment
  N.V., Caisse de dépôt et placement du Québec, Capital Communications CDPQ
  Inc., EEIF Melville B.V., Emerging Europe Infrastructure Fund C.V., EEIF Czech
  N.V., Telesystem Ltd. and 9111-1369 Québec Inc. This agreement provides for
  certain rights of the parties to have their shares in us registered or
  qualified pursuant to registration statements or prospectuses. This agreement
  amends and supplements previous Registration Rights Agreements dated December
  14, 2001 and March 17, 2004;
3. Mutual Release dated March 26, 2003 between us, certain of our
  subsidiaries and Highlake International Business Company Ltd., Opportunity
  Fund and CVC/Opportunity Equity Partners L.P. providing for the settlement of
  certain outstanding litigation and certain potential claims between the
  parties;
4. License awarded to Oskar Mobil to establish and operate a public mobile
  telecommunication network according to the GSM standard dated June 17, 2002;
5. License awarded to Oskar Mobil to establish and operate a public mobile
  telecommunication network according to the VmTS standard dated June 20, 2002;
6. License for the use of radio-electric frequencies by providers of public
  electronic communications networks and services awarded to MobiFon S.A. on
  June 30, 2003;
7. License for the use of the numbering resources awarded to MobiFon S.A. on
  March 18, 2005;
8. Standard Authorization of electronic communications networks and services
  providers awarded to MobiFon S.A. on December 24, 2002;
9. Telecommunication License to establish and operate public mobile
  telecommunication network under the UMTS standard awarded to Oskar Mobil a.s.
  on February 23, 2005;

- 73-

---



> Investment N.V., CEA Investment N.V., EEIF Melville B.V.,
>   EEIF Czech N.V., and Emerging Europe Infrastructure Fund C.V. providing for
>   the sale of 21 million common shares by TIW and certain of its shareholders;

1. Share Exchange Agreement dated October 20, 2003 between us
  and Amaranth L.L.C. providing for the purchase by us of

Share Transfer
  Agreement dated February 10, 2004, between us, EEIF Melville B.V. and MobiFon
  Holdings B.V. relating to the acquisition by us of 5.9% equity interest in
  MobiFon S.A. in exchange for 12,971,119 common shares of TIW;

Share Transfer
  Agreement dated February 10, 2004, between us, ClearWave N.V., EEIF Czech N.V.
  and Emerging Europe Infrastructure Fund C.V. relating to the acquisition by us
  of 2.9% equity interest in Oskar Holdings N.V. in exchange for 1,650,595
  common shares of TIW;

Share Exchange Agreement dated March 4, 2004 between us and
  Highfields Capital I LP, Highfields Capital II LP and Highfields Capital Ltd.,
  Perry Partners L.P., Perry Partners International Inc. together with an
  amendment thereto dated March 18, 2004 relating to the acquisition by us of
  13% equity interest in ClearWave N.V. in exchange for 10.9 million common
  shares of TIW and $35.7 million in cash;

Share Transfer Agreement dated July 22, 2004 between us,
  Deraso Holdings B.V., Devaynes Holdings Limited, Upson Enterprises Limited,
  Emporiki Venture Capital Emerging Markets Limited and shareholders of Deraso
  Holdings B.V., relating to the acquisition by us of 15.46% equity interest in
  MobiFon S.A. in exchange for 28,358,499 common shares of TIW and $36.6 million
  in cash;

Share Transfer
  Agreement dated December 21, 2004 between us and shareholders of Oskar
  Holdings, which include funds advised or managed by JP Morgan Partners,
  Emerging Markets Partnership (Europe) Ltd., ABN AMRO Capital, Advent
  International Corporation, AlpInvest Partners, the European Bank for
  Reconstruction and Development, Mediatel Capital and Part'Com, relating to the
  acquisition by us of 72.9% equity interest in Oskar Holdings in exchange for
  46,001,139 common shares of TIW.

Share purchase
  agreement and framework agreement both dated March 15, 2005, between us and
  Vodafone International Holdings B.V. providing for the sale of Clearwave N.V.
  for a cash consideration of approximately US$3.5 billion.

EXCHANGE CONTROLS

There are currently no laws, decrees, regulations or other
legislation in Canada that restricts the export or import of capital, or affects
the remittance of dividends, interest or other payments to non-resident holders
of the Company's securities, other than withholding tax requirements.

There is no limitation imposed by Canadian law or by the
Articles of Incorporation or other charter documents of the Company on the right
of a non-resident to hold voting shares of the Company, other than as provided
by the Investment Canada Act, as amended (the "Act"), as amended by the
North American Free Trade Agreement Implementation Act(Canada), and the
World Trade Organization (WTO) Agreement Implementation Act. The Act
requires notification and, in certain cases, advance review and approval by the
Government of Canada of the acquisition by a "non-Canadian" of "control of a
Canadian business," all as defined in the Act. Generally, the threshold for
review will be higher in monetary terms for a member of the WTO or NAFTA.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain Canadian federal income
tax considerations relating to an investment in common shares.

The summary is only applicable to a holder of common shares
who, for the purposes of the Income Tax Act(Canada) (also referred to as
the Income Tax Act) and the Canada-United States Tax Convention (1980)
(also referred to as the Convention), is resident in the United States and not
resident in Canada, deals at arm's length with TIW, holds common shares as
capital property and does not use or hold and is not deemed to use or hold
common shares in carrying on business in Canada (also referred to as the U.S.
Holder).

The summary is for general information only and does not take
into account the individual circumstances of any particular investor. Therefore,
investors are urged to consult their own tax advisors with respect to the tax
consequences of an investment in the common shares based on their specific
circumstances, including any consequences of an investment in the common shares
arising under state, local or provincial tax laws of other jurisdictions,
including the United States.

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

- 74-

---



practices of the Canada Revenue Agency. 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.

Special rules, which are not discussed in this summary, may apply to
financial institutions (as defined by the Income Tax Act) and to non-resident
insurers carrying on an insurance business in Canada and elsewhere.

The Common Shares

Capital gains realized on the disposition of common shares by a U.S. Holder
will not be subject to tax under the Income Tax Act unless such common shares
constitute taxable Canadian property.

Common shares will generally not be taxable Canadian property
of a U.S. Holder unless, at any time during the five-year period immediately
preceding a disposition, the U.S. Holder, persons with whom the U.S. Holder did
not deal at arm's length or the U.S. Holder and persons with whom the U.S.
Holder did not deal at arm's length owned 25% or more of the issued shares of
any class or series of shares of the capital stock of the Company. Even if
common shares constitute taxable Canadian property to a particular U.S. Holder,
an exemption from tax under the Income Tax Act may be available under the
provisions of the Convention.

Dividends, including deemed dividends and stock dividends,
paid or credited to a U.S. Holder on common shares are subject to Canadian
withholding tax under the Income Tax Act. The Convention generally reduces the
rate of withholding tax to 15% of the gross amount of the dividend where the
beneficial owner is not a company that owns at least 10% of the voting stock of
TIW. In the case of a company which owns at least 10% of the voting stock of TIW,
the rate of withholding tax is reduced to 5%. Moreover, under the Convention,
dividends paid to certain religious, scientific, literary, educational or
charitable organizations and certain pension organizations that are resident in,
and generally exempt from tax in, the United States, are exempt from Canadian
non-resident withholding tax. Provided that certain administrative procedures
are observed by such an organization, the Company would not be required to
withhold such tax from dividends paid or credited to such organization. It
should be noted that this summary does not address the tax treatment of U.S.
Holders that are corporations owning 10% or more of the voting stock of the
Company.

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 common shares by U.S.
holders who hold common shares as capital assets within the meaning 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 common 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 includable in gross income for U.S. federal income tax
purposes regardless of its source, or (iv) a trust the administration of which
is subject to the primary supervision of a court in the United States and for
which one or more U.S. persons have the authority to control all substantial
decisions. If a partnership, or other entity or arrangement treated as a
partnership for U.S. federal income tax purposes, holds common shares, the U.S.
federal income tax treatment of a partner generally will depend 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 or
special tax rules that may be applicable to certain holders. 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 common shares
based on their particular circumstances, including any consequences of an
investment in common shares arising under state or local tax law or foreign tax
laws of jurisdictions outside of the United States.

The Common Shares

Distributions paid to U.S. holders in respect of common
shares, inclusive of any withholding taxes paid by the Company, will be taxable
as ordinary dividend income to the extent paid out of the Company's current or
accumulated earnings and profits as determined for U.S. federal income tax
purposes, and as tax-free return of capital or capital gain to the extent of any
excess. Notwithstanding the foregoing, the Company does not intend to maintain
calculations of its earnings and profits as determined for U.S. federal income
tax purposes, and, consequently, any distributions generally must be reported as
dividend income for U.S. information reporting purposes. See "Backup Withholding
and Information Reporting" below. Dividends received by a U.S. holder will be
treated as foreign-source income for U.S. federal income tax purposes and,
subject to complex limitations, a U.S. holder may be eligible for a foreign tax
credit

- 75-

---



or deduction for withholding taxes paid in respect of the dividends.

For taxable years beginning before January 1, 2009, dividends
received from a "qualified foreign corporation" by an individual U.S. holder are
eligible for preferential U.S. federal income tax rates, subject to certain
minimum holding period requirements and other limitations. The Company must make
a determination as to whether a dividend is eligible for the preferential rates
at the time the dividend is paid and report to you the amount of dividends, if
any, that so qualify.

Distributions paid in Canadian dollars, inclusive of any
Canadian withholding taxes, 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 a U.S. holder, regardless of
whether the Canadian dollars are converted into U.S. dollars at that time. If
Canadian dollars are converted into U.S. dollars on the day they are received, a
U.S. holder generally should not be required to recognize foreign currency
exchange gain or loss.

Upon the sale or other taxable disposition of common shares
to a person other than the Company, a U.S. holder will recognize capital gain or
loss equal to the difference between the amount realized and the U.S. holder's
adjusted tax basis in such common shares. Such gain or loss generally will be
long-term capital gain or loss if the common shares have been held for more than
one year. Generally, for individual U.S. holders, long-term capital gains are
subject to U.S. federal income tax at preferential rates. For foreign tax credit
purposes, such gain or loss will generally be U.S.-source. The deductibility of
capital losses is subject to limitations.

Passive Foreign Investment Company Considerations

The Internal Revenue 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 of a passive
foreign investment company ("PFIC"). A foreign corporation, such as the Company,
will be treated as a PFIC 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. The PFIC rules generally result in adverse U.S. federal income tax
consequences to U.S. persons. However, a U.S. person may, in certain
circumstances, make a "QEF election" or a "mark-to-market" election, which can
mitigate the generally adverse consequences of owning stock in a PFIC.

The Company believes that it was not a PFIC for the taxable
year ended December 31, 2004. If the sale of ClearWave to Vodafone occurs in
2005, the Company may become a PFIC in 2005. The Company expects to provide
further information regarding PFIC considerations in connection with the
solicitation of votes to approve the plan of arrangement. In addition, should
the Company become a PFIC in 2005, the Company intends to provide its U.S.
holders with the necessary information for making a QEF election. U.S. holders
should consult their tax advisors regarding the U.S. federal income tax
consequences should the Company become a PFIC in 2005, including mitigating
elections which may be available to a U.S. holder.

Backup Withholding and Information Reporting

A U.S. holder generally is subject to information reporting
requirements with respect to payments on common shares made in the United States
and to the proceeds from the sale or other disposition of common 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, federal backup withholding tax at the applicable rate
may apply to amounts paid to such 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 Internal Revenue Service, as applicable.

DOCUMENTS ON DISPLAY

Any documents referred to in this Form 20-F may be inspected
at our corporate offices which are located at 1250 René-Lévesque West, 38th
floor, Montreal, Québec, Canada, H3B 4W8. 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 or on the Canadian
System for Electronic Document Analysis and Retrieval at www.sedar.com.

- 76-

---



ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

We have used shares, senior notes, 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 interest swaps and currency swaps.
These off-balance sheet items also create foreign currency exchange rate risk
and market price risk exposure.

The carrying amounts of cash and cash equivalents, short-term
investments, trade debtors, amounts receivable from and payable to
non-controlling interests, accounts payable, accrued liabilities, including
accrued interest payable and accrued dealers' commissions, income and value
added taxes payable approximate their fair values due to the short-term nature
of these instruments. Cash equivalents and short-term investments consist of
term deposits and highly liquid debt instruments purchased with maturity of six
months or less. The fair value of the Company's 12.5% senior notes was
approximately $262.8 million and the fair value of Oskar Mobil's 7.5% notes was
$478.1 million. The fair value of the portion of the MobiFon's secured senior
credit facility for which the interest rate has been fixed approximates $90.4
million. 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, 2004, most of our outstanding financial
obligations, other than those referred to above, in monetary terms, were of a
variable-rate nature. However, MobiFon and Oskar 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 substantially all of Oskar Mobil's
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.

Romania had a highly inflationary economy until June 30, 2003
and accordingly, the financial statements of MobiFon for periods prior to June
30, 2003 were re-measured using the U.S. dollar as the functional currency. U.S.
dollar transactions are shown at their historical value. As of June 30, 2003,
the cumulative inflation in Romania for the last three years was below 100% and
consequently, Romania ceased to be defined for accounting purposes as a highly
inflationary economy. An assessment as to which currency is MobiFon's functional
currency was made based on the collective economic factors of the environment in
which it operates and the U.S. dollar has been determined to continue to be its
functional currency. 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 future
re-assessments of MobiFon's functional currency 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. For the year ended December 31,
2004, our subsidiary in Romania recorded net foreign exchange losses of $0.8
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 facilities in effect as
at December 31, 2004. The table excludes amounts related to facilities that had
not been drawn upon as at December 31, 2004. For the currency and interest rates
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, 2004, have been determined based on:

- quoted market prices for MobiFon Holding's 12.5% and Oskar
  Mobil's 7.5% notes
- the carrying value for variable rate portions of bank
  credit facilities
- estimates obtained from dealers to settle interest rate and
  cross currency swap agreements

- 77-

---



Expected Maturities (in thousands of dollars)

|                                           |         |         |         |         |         |         | There-  | Total of all | Fair Value
|------------------------------------------ | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------------ | ----------
|                                           | 2005    | 2006    | 2007    | 2008    | 2009    | 2010    | After   | maturities   | 12/31/04  
|Interest Rate Exposure                     |         |         |         |         |         |         |         |              |           
|                                           |         |         |         |         |         |         |         |              |           
|Long-Term Debt:                            |         |         |         |         |         |         |         |              |           
|Fixed rate principal                       |         |         |         |         |         |         |         |              |           
|repayment                                  | 14,905  | 20,902  | 24,842  | 29,810  | -       | 222,750 | 442,709 | 755,918      | 832,329   
|Average interest rate on                   |         |         |         |         |         |         |         |              |           
|loans outstanding                          | 8.92%   | 8.98%   | 9.06%   | 9.17%   | 9.17%   | 7.50%   | -       | -            | -         
|Variable rate principal                    |         |         |         |         |         |         |         |              |           
|repayment                                  | 30,095  | 40,127  | 78,113  | 116,101 | 83,866  | 42,200  | -       | 390,502      | 390,502   
|Average interest rate on                   |         |         |         |         |         |         |         |              |           
|loans outstanding                          | 4.73%   | 4.69%   | 4.65%   | 4.53%   | 4.69%   | 4.69%   | -       | -            | -         
|                                           |         |         |         |         |         |         |         |              |           
|Swaps:                                     |         |         |         |         |         |         |         |              |           
|Variable to Fixed Interest Rate
    Swaps: |         |         |         |         |         |         |         |             
|Notional principal                         |         |         |         |         |         |         |         |              |           
|outstanding                                | 203,000 | 177,000 | 133,950 | 109,334 | -       | -       |         | -            | -         
|Notional principal amount                  |         |         |         |         |         |         |         |              |           
|maturing                                   | 19,500  | 26,000  | 43,050  | 24,616  | 109,334 | -       | -       | 222,500      | (1,918)   
|Average pay rate                           | 3.73%   | 3.75%   | 3.77%   | 3.76%   | 3.76%   | -       | -       | -            | -         
|Average receive rate                       | 2.39%   | 2.43%   | 2.51%   | 2.46%   | 2.46%   | -       | -       | -            | -         
|                                           |         |         |         |         |         |         |         |              |           
|                                           |         |         |         |         |         |         |         |              |           
|Cross Currency Swaps:                      |         |         |         |         |         |         |         |              |           
|Notional principal                         |         |         |         |         |         |         |         |              |           
|outstanding                                | 442,709 | 442,709 | 442,709 | 442,709 | -       | -       | -       | -            | -         
|Notional principal amount                  |         |         |         |         |         |         |         |              |           
|maturing                                   | -       | -       | -       | -       | 442,709 | -       | -       | 442,709      | (33,725)  
|Pay rate                                   | 8.52%   | 8.52%   | 8.52%   | 8.52%   | 8.52%   | -       | -       | -            | -         
|Receive rate                               | 7.50%   | 7.50%   | 7.50%   | 7.50%   | 7.50%   | -       | -       | -            | -         
|Fixed Euro to Koruna                       |         |         |         |         |         |         |         |              |           
|Exchange
    Rate                          | 31.625  | 31.625  | 31.625  | 31.625  | -       | -       | -       | -            | -         
|                                           |         |         |         |         |         |         |         |              |           
|Foreign Currency                           |         |         |         |         |         |         |         |              |           
|Exchange Rate Exposure                     |         |         |         |         |         |         |         |              |           
|                                           |         |         |         |         |         |         |         |              |           
|Long-Term Debt:                            |         |         |         |         |         |         |         |              |           
|Euro                                       |         |         |         |         |         |         |         |              |           
|Variable rate principal                    |         |         |         |         |         |         |         |              |           
|repayment                                  | -       | -       | 5,449   | 10,898  | 16,345  | -       | -       | 32,692       | -         
|Variable rate outstanding                  | 32,692  | 32,692  | 27,243  | 16,345  | -       | -       | -       | -            | 32,692    
|Average interest rate                      | 4.00%   | 4.00%   | 4.00%   | 4.00%   | -       | -       | -       | -            | -         
|                                           |         |         |         |         |         |         |         |              |           
|Euro                                       |         |         |         |         |         |         |         |              |           
|Fixed rate principal                       |         |         |         |         |         |         |         |              |           
|repayments                                 | -       | -       | -       | -       | -       | -       | 442,709 | 442,709      | -         
|Fixed rate outstanding                     | 442,709 | 442,709 | 442,709 | 442,709 | 442,709 | 442,709 | -       | -            | 478,100   
|Interest rate                              | 7.50%   | 7.50%   | 7.50%   | 7.50%   | 7.50%   | 7.50%   | 7.50%   | -            | -         
|                                           |         |         |         |         |         |         |         |              |           
|Czech Koruna                               |         |         |         |         |         |         |         |              |           
|Variable rate repayment                    | -       | -       | 22,510  | 45,017  | 67,515  | 42,200  | -       | 177,242      | -         
|Variable rate outstanding                  | 177,242 | 177,242 | 154,732 | 109,715 | 42,200  | -       | -       | -            | 177,242   
|Average interest rate                      | 4.59%   | 4.59%   | 4.60%   | 4.61%   | 4.69%   | -       | -       | -            | -         

ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

78

---



PART II

ITEM 13  DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.

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

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

On March 25, 2004, all 35,000,000 non-voting convertible preferred shares
outstanding were converted into 7,000,000 common shares.

- 79-

---

ITEM 15  CONTROLS AND PROCEDURES

As of the end of the period covered by this Annual Report on
Form 20-F, we conducted an evaluation (under the supervision and with the
participation of our management, including the chief executive officer and chief
financial officer), pursuant to Rule 13a-15 promulgated under the Exchange Act,
of the effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our chief executive officer and chief
financial officer concluded that as of the evaluation date, such disclosure
controls and procedures were effective in ensuring that the information required
to be disclosed by us in reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission.- 80-ITEM 16A  AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Francois Laurin, a
member of the audit committee of our Board of Directors, is an audit committee
financial expert as defined by the SEC for purposes of this Item 16A. Pursuant
to the definition of "independence" found under Marketplace Rule 4200(a)(15) and
Rule 4200A(a)(14) of the NASD Manual, François Laurin is independent.
ITEM 16B  CODE OF ETHICS

We have adopted a code of ethics that applies to all of our
employees, including our Chief Executive Officer, our Chief Financial Officer
and our Chief Accounting Officer. The full text of our code of ethics has been
filed with the SEC on Form 6-K on May 3, 2004 and incorporated by reference as
Exhibit 11.1 to this Form 20-F. As of the date hereof, there has not been any
amendment or waiver of any provision of the code of ethics.
ITEM 16C  PRINCIPAL ACCOUNTANT FEES AND SERVICES

On a consolidated basis, aggregate audit fees, audit-related fees, tax fees
and the aggregate of all other fees, including expenses, paid to Ernst & Young
LLP and affiliate offices in the last two fiscal years amounted to the
following:

|                   | Year ended        | Year ended       
|------------------ | ----------------- | -----------------
|                   | December 31, 2004 | December 31, 2003
|                   | $                 | $                
|Audit Fees         | 789,000           | 748,100          
|Audit-Related Fees | 697,600           | 511,900          
|Tax Fees           | 1,040,000         | 1,070,500        
|Other Fees         | 56,100            | 164,100          
|Total              | 2,582,700         | 2,494,600        

Audit fees

Fees for audit services include fees associated with the
annual audit, the reviews of TIW's quarterly reports and statutory audits
required internationally.

Audit-related fees

Fees for audit-related services principally
include fees for audit and review work in connection with proposed or
consummated financings or public registration documents, and consultations
concerning financial accounting and reporting standards including those rendered
in connection with the Sarbanes-Oxley 404 certification process.

Tax fees

Fees for tax services include fees for tax compliance, tax
planning and tax advice services (including expatriate services).

All other fees

Fees for other services include fees for incidental advisory
and translation services rendered.

Pre-approval policy summary

The audit committee charter and the audit committee
pre-approval policy for audit and non-audit services are comprehensive
guidelines governing all aspects of our relationship with the external auditors,
including:

- 

identifying the services that the external
  auditors may and may not provide to us and our subsidiaries;

pre-approving all services to be provided by
  our external auditors;

establishing guidelines for engaging former
  employees of the external auditors.

- 81-

---



In particular, the pre-approval policy for audit and
non-audit services specifies that:

- 

for all (audit
  or non-audit) services falling within the permitted services category (such as
  prospectus work, due diligence and non-statutory audits), a request for
  approval must be submitted to the audit committee by the Chief Accounting
  Officer prior to engaging the auditors;

specific
  permitted services however are pre-approved quarterly by the audit committee
  and consequently only require approval by the Chief Accounting Officer prior
  to engaging the external auditors;

at each
  regularly scheduled audit committee meeting, a consolidated summary of all
  fees paid to the external auditors by service type is presented. This summary
  includes a breakout of fees incurred within the pre-approved amounts.

All audit and non-audit services set forth in the table above
have been pre-approved by the audit committee.

ITEM 16D  EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT
COMMITTEES

Not applicable.

ITEM 16E  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS

None.

- 82-

---



PART III

ITEM 17  FINANCIAL STATEMENTS

Not applicable.

- 83-

---



ITEM 18  FINANCIAL STATEMENTS

Financial Statements

The audited comparative annual Consolidated Financial
Statements of TIW, including the notes thereto, as of December 31, 2004 and 2003
and for the three year period ended December 31, 2004, together with the
auditors' report thereon, filed with the United States Securities and Exchange
Commission as Exhibit 99.2 to our Form 6-K dated March 31, 2005 and attached
hereto as Exhibit 14.2 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.

Schedules to Financial Statements

See attached schedules to this Form 20-F:

- 

- 84-

---



ITEM 19  EXHIBITS

EXHIBITS

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

|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|1.1     | Certificate of Incorporation and Restated Articles of
    Incorporation of Telesystem International Wireless Inc. (Incorporated by
    reference to Exhibit 3.1 to Form F-4, filed on March 4, 2002 and Exhibit 3.1
    to Form 8-A/A, filed on January 17, 2003).                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|1.2     | Code of General By-Laws of
    Telesystem International Wireless Inc. (Incorporated by reference to Exhibit
    3.2 to Form F-4, dated February 5, 1998, File No. 333-8294).                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.1     | Indenture dated February 15,
    1999 between us and Montreal Trust Company of Canada providing for the
    issuance of Cdn$150 million in 7.00% Equity Subordinated Debentures due 2002
    as amended by a Suppplemental Indenture dated February 5, 2002 between us,
    Montreal Trust Company of Canada and Computershare Trust Company of Canada.                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.2     | Indenture dated June 27, 2003,
    between MobiFon Holdings B.V. and the Bank of Nova Scotia Trust Company of
    New York providing for the issuance of $225 million in 12.50% Senior Notes
    due July 31, 2010. (Incorporated by reference to Form 6-K of ClearWave N.V.
    filed on August 4, 2003)                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.3     | Equity Agreement dated June 27,
    2003 between Telesystem International Wireless Inc., Telesystem
    International Wireless Corporation N.V., ClearWave N.V. and Goldman, Sachs &
    Co. and Lazard Frères & Co. LLC (incorporated by reference as Exhibit 2.2 to
    Form 20-F of MobiFon Holdings B.V. filed on May 19, 2004).                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.4     | Indenture dated October 13, 2004
    between Oskar Mobil a.s., Oskar Holdings N.V., Oskar Finance B.V., JP Morgan
    Chase Bank, J.P. Morgan Bank Luxembourg S.A., J.P. Morgan Europe Limited and
    Dexia Banque Internationale à Luxembourg, providing for the issuance of 325
    million in 7.50% First Priority Senior Secured Notes due 2011.                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.1     | Third Amended and Restated
    Investors Rights Agreement dated May 6, 2004 among us, U.F. Investments
    (Barbados) Ltd., J.P. Morgan Partners (BHCA) LP, JPMP TIW EH, L.P., AOF
    Investment N.V., CEA Investment N.V., CAIP Investment N.V., Caisse de dépôt
    et placement du Québec, Capital Communications CDPQ Inc., EEIF Melville B.V.,
    Emerging Europe Infrastructure Fund C.V., EEIF Czech N.V., Telesystem Ltd.
    and 9111-1369 Québec Inc.     
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.2     | Third Amended and Restated
    Registration Rights Agreement dated May 6, 2004 among us, U.F. Investments
    (Barbados) Ltd., J.P. Morgan Partners (BHCA) L.P., JPMP TIW EH, L.P., AOF
    Investment N.V., CEA Investment N.V., CAIP Investment N.V., Caisse de dépôt
    et placement du Québec, Capital Communications CDPQ Inc., EEIF Melville B.V.,
    Emerging Europe Infrastructure Fund C.V., EEIF Czech N.V., Telesystem Ltd.
    and 9111-1369 Québec Inc.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.1     | Contract of Association of
    MobiFon S.A. and accompanying Statutes. (Incorporated by reference as
    Exhibit 10.1 to Form F-4 of MobiFon Holdings B.V. filed on September 17,
    2003).                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.2     | Romania GSM Cooperation
    Agreement between Telesystem International Wireless Corporation N.V. and
    AirTouch Europe B.V. dated November 29, 1996, as supplemented and amended.
    (Incorporated by reference as Exhibit 10.2 to Form F-4 of MobiFon Holdings
    B.V. filed on September 17, 2003).                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.3     | Waiver Letter Agreement, dated
    December 12, 2000, between Vodafone Europe B.V. and ClearWave N.V.
    (Incorporated by reference as Exhibit 10.3 to Form F-4 of MobiFon Holdings
    B.V. filed on September 17, 2003).                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.4     | Mutual Release dated March 26,
    2003 by and among Telesystem International Wireless Inc. and certain of its
    subsidiaries, Opportunity Fund, CVC/Opportunity Equity Partners L.P. and                                                                                                                                                                                                                                                                           

- 85-

---



|     | Highlake
    International Business Company. (Incorporated by reference as Exhibit 4.1 to
    our Form 20-F filed May 21, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.5  | English
    translation summary of License awarded to Oskar Mobil to establish and
    operate a public mobile telecommunication network according to the GSM
    standard dated June 17, 2002. (Incorporated by reference as Exhibit 4.3 to
    Form 20-F of ClearWave N.V. filed May 20, 2003).                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.6  | English
    translation summary of License awarded to Oskar Mobil to establish and
    operate a public mobile telecommunication network according to the VmTS
    standard dated June 20, 2002. (Incorporated by reference as Exhibit 4.4 to
    Form 20-F of ClearWave N.V. filed May 20, 2003).                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.7  | English
    translation of License for the use of radio-electric frequencies by
    providers of public electronic communications networks and services awarded
    to MobiFon S.A. on June 30, 2003. (Incorporated by reference as Exhibit
    10.13 to Form F-4 of MobiFon Holdings B.V. filed on September 17, 2003).                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.8  | English
    translation of License for the use of the numbering resources awarded to
    MobiFon S.A. on March 18, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.9  | English
    translation of Standard Authorization of electronic communications networks
    and service providers awarded to MobiFon S.A. on December 24, 2002.
    (Incorporated by reference as Exhibit 10.15 to Form F-4 of MobiFon Holdings
    B.V. filed on September 17, 2003).                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.10 | English
    translation of Telecommunication License to establish and operate public
    mobile telecommunication network under the UMTS standard awarded to Oskar
    Mobil a.s. on February 23, 2005;                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.11 | 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).                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.12 | 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).                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.13 | 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).                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.14 | 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.
    (Incorporated by reference as Exhibit 4.8 to Form 20-F of ClearWave N.V.
    filed May 20, 2003).                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.15 | Senior Credit
    Agreement dated October 6, 2004 between Oskar Mobil a.s., Oskar Holdings N.V.,
    Oskar Finance B.V., arranged by ABN AMRO Bank N.V., J.P. Morgan plc and UBS
    Limited providing for loans in the amounts of CZK6,606,600,000 and 40
    million                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.16 | English
    translation summary of an underwriting agreement dated September 11, 2003
    between us, Capital Communications CDPQ Inc. and BMO Nesbitt Burns Inc.
    providing for the sale of 12,960,128 common shares of TIW held by Capital
    Communications CDPQ Inc. and certain of its affiliates. (Incorporated by
    reference as Exhibit 4.9 to our Form 20-F filed on May 19, 2004.)                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.17 | Underwriting
    Agreement dated March 18, 2004 between us, BMO Nesbitt Burns Inc., JP Morgan
    Securities Inc., Lazard Frères & Co. LLC, UBS Securities Canada Inc., TD
    Securities Inc., Telesystem Ltd., 9111-1369 Québec Inc., U.F. Investments
    (Barbados) Ltd., JPMP TIW EH, LP, J.P. Morgan Partners (BHCA), L.P., AOF
    Investment N.V., CAIP Investment N.V., CEA Investment N.V., EEIF Melville
    B.V., EEIF Czech N.V., and Emerging Europe Infrastructure Fund C.V.
    (Incorporated by reference as Exhibit 99.1 to our Form 6-K, filed on March
    19, 2004).
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.18 | Share Exchange
    Agreement dated October 20, 2003, between us and Amaranth L.L.C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

- 86-

---



|     | (Incorporated by reference as Exhibit 4.5 to our Form F-10 filed on March 5,
    2004).                                                                                                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.19 | Share Transfer Agreement dated February 10, 2004, between us, EEIF Melville
    B.V. and MobiFon Holdings B.V. (Incorporated by reference as Exhibit 4.6 to
    our Form F-10 filed on March 5, 2004).                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.20 | Share Transfer Agreement dated February 10, 2004, between us, ClearWave N.V.,
    EEIF Czech N.V. and Emerging Europe Infrastructure Fund C.V. (Incorporated
    by reference as Exhibit 4.7 to our Form F-10 filed on March 5, 2004).                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.21 | Share Exchange Agreement, dated March 4, 2004 between us and Highfields
    Capital I LP, Highfields Capital II LP and Highfields Capital Ltd., Perry
    Partners L.P., Perry Partners International Inc. together with an amendment
    thereto dated March 18, 2004. (Incorporated by reference as Exhibit 4.9 to
    our Form F-10/A filed on March 18, 2004).                    
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.22 | Share Transfer Agreement dated July 22, 2004 between us, Deraso Holdings B.V.,
    Devaynes Holdings Limited, Upson Enterprises Limited, Emporiki Venture
    Capital Emerging Markets Limited and shareholders of Deraso Holdings B.V.                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.23 | Share Transfer Agreement dated December 21, 2004 between us and shareholders
    of Oskar Holdings, which include funds advised or managed by JP Morgan
    Partners, Emerging Markets Partnership (Europe) Ltd., ABN AMRO Capital,
    Advent International Corporation, AlpInvest Partners, the European Bank for
    Reconstruction and Development, Mediatel Capital and Part'Com.
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.24 | Purchase Agreement dated June 25, 2003 between MobiFon Holdings B.V.,
    Goldman, Sachs & Co. and Lazard Frères & Co. LLC providing for the issuance
    and sale by MobiFon Holdings B.V. of $225 million in 12.50% Senior Notes due
    July 31, 2010.                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.25 | Purchase Agreement dated October 6, 2004 between Oskar Mobil a.s., Oskar
    Holdings N.V., Oskar Finance B.V., J.P. Morgan Securities Inc., ABN AMRO
    Bank N.V., UBS Limited and West LB AG providing for the issuance and sale by
    Oskar Mobil of 325 million in 7.50% First Priority Senior Secured Notes due
    2011.                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|4.26 | Share purchase agreement and framework agreement both dated March 15, 2005,
    between us and Vodafone International Holdings B.V. providing for the sale
    of Clearwave N.V. for a cash consideration of approximately US$3.5 billion.
    (Incorporated by reference to our Form 6-K filed on March 15, 2005)                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|8    | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|11.1 | Code
    of Business Conduct of the Registrant (Incorporated by reference as Exhibit
    99.1 to Form 6-K of the Registrant filed May 3, 2004).                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|12.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (17
    CFR 240.13a-14(a)).                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|12.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)
    (17CFR 240.13a-14(a)).                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|13.1 | Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to
    section 906 of the                                                                                                                                                                                                                                                                                        
|     | Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|14.1 | Operating and Financial Review and Prospects of the Registrants at December
    31, 2004 and 2003 and for each of the years in the three-year period ended
    December 31, 2004 (incorporated by reference as exhibit 99.1 to our Form 6-K
    filed on March 31, 2005).                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                       
|14.2 | Audited Comparative Annual Consolidated Financial Statements of the
    Registrant, including the Notes thereto, as at December 31, 2004 and 2003
    and for each of the years in the three-year period ended December 31, 2004,
    together with the auditors' reports thereon (incorporated by reference as
    exhibit 99.2 to our Form 6-K filed March 31, 2005).               

- 87-

---



|SCHEDULE 1 | CONDENSED FINANCIAL          
|---------- | -----------------------------
|           | INFORMATION OF
    REGISTRANT





TELESYSTEM
      INTERNATIONAL WIRELESS INC.December 31, 2004 and 2003






---

AUDITORS' REPORTTo the Board of Directors of Telesystem International Wireless Inc.
We have audited the consolidated financial statements of Telesystem International Wireless Inc. as of December 31, 2004 and 2003 and
for each of the years in the three-year period ended December 31, 2004, and have
issued our report thereon dated February 22, 2005 (except for Note 18, which is
as of March 15, 2005). Our audits also included Schedule I of item 18 of the
Company's Form 20-F to be filed with the Securities and Exchange Commission for
the year ended December 31, 2004. This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits.
In our opinion, this schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

|                                                      
|------------------------------------------------------
|Chartered Accountants                                 
|Montréal, Canada                                      
|February 22, 2005                                     
|(except for Note 7, which is as of March
    15, 2005)



---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                        
|--------------------------------------------------------------
|Schedule 1 - Condensed Financial
    Information of Registrant
|                                                              
|CONDENSED BALANCE SHEETS                                      
|                                                              
|(in thousands of U.S. dollars)                                

|                                                             |             |            
|------------------------------------------------------------ | ----------- | -----------
|Years ended
    December 31,                                 | 2004        | 2003       
|                                                             | $           | $          
|                                                             |             |            
|ASSETS                                                       |             |            
|Current assets                                               |             |            
|Cash and cash equivalents                                    | 1,663       | 1,806      
|Receivable from subsidaries and investees                    | 1,577       | 1,622      
|Other current
    assets                                     | 237         | 112        
|Total current assets                                         | 3,477       | 3,540      
|                                                             |             |            
|Investments in subsidaries at equity, loans and other assets | 746,382     | 90,911     
|Property, plant and equipment                                | 98          | 135        
|Deferred financing and other costs                           | 1,085       | -          
|                                                             | 751,042     | 94,586     
|LIABILITIES AND SHAREHOLDERS'
    EQUITY                     |             |            
|Accounts payable and accrued liabilities                     | 1,499       | 1,077      
|Payable to subidiaries                                       | 33          | 253        
|Total current liabilities                                    | 1,532       | 1,330      
|Long-term debt [Note 2]                                      | 1,029       | 1,483      
|SHAREHOLDERS' EQUITY [Note 6]                                |             |            
|Share capital                                                | 1,670,166   | 1,081,077  
|Additional paid-in-capital                                   | 256,345     | 246,497    
|Deficit                                                      | (1,188,358) | (1,243,564)
|Cumulative translation adjustment                            | 10,328      | 7,763      
|Total shareholders' equity                                   | 748,481     | 91,773     
|                                                             | 751,042     | 94,586     
|                                                             |             |            
|                                                             |             |            
|See accompanying
    notes                                   |             |            

|1
|-

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                        
|--------------------------------------------------------------
|Schedule 1 - Condensed Financial
    Information of Registrant
|                                                              
|CONDENSED STATEMENTS OF INCOME (LOSS)                         
|                                                              
|(in thousands of U.S. dollars)                                

|Years ended December
    31,                            | 2004     | 2003     | 2002     
|------------------------------------------------------- | -------- | -------- | ---------
|                                                        | $        | $        | $        
|                                                        |          |          |          
|Revenues                                                |          |          |          
|Services and interest
    revenue from subsidiaries     |          |          |          
|and investees [Note 3]                                  | 7,713    | 21,791   | 22,393   
|Other interest revenue                                  | 110      | 95       | 159      
|                                                        | 7,823    | 21,886   | 22,552   
|Operating expenses                                      | 20,590   | 15,118   | 13,184   
|Income from continuing operations
    before            |          |          |          
|undernoted items                                        | (12,767) | 6,768    | 9,368    
|Depreciation and
    amortization                       | (38)     | (67)     | (162)    
|Earnings of
    subsidiaries from continuing operations | 68,038   | 35,167   | 10,512   
|Interest expense                                        | (173)    | (17,691) | (48,816) 
|Foreign exchange gain
    (loss)                        | 146      | (177)    | (70)     
|Gain (loss) on
    recapitalization, Units exchange and |          |          |          
|expiry
    and on sale of investments                   | -        | (454)    | 91,127   
|Income before taxes from continuing                     |          |          |          
|operations                                              | 55,206   | 23,546   | 61,959   
|Income taxes [Note 4]                                   | -        | 2,850    | -        
|Income from continuing operations                       |          |          |          
|discontinued operations                                 | 55,206   | 20,696   | 61,959   
|Loss from discontinued operations                       | -        | (8,811)  | (189,133)
|Net Income (loss)                                       | 55,206   | 11,885   | (127,174)
|                                                        |          |          |          
|                                                        |          |          |          
|See accompanying
    notes                              |          |          |          

|2
|-

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                        
|--------------------------------------------------------------
|Schedule 1 - Condensed Financial
    Information of Registrant
|                                                              
|CONDENSED STATEMENT OF CASH FLOWS                             
|                                                              
|(in thousands of U.S. dollars)                                

|                                                                                          |          |           |         
|----------------------------------------------------------------------------------------- | -------- | --------- | --------
|Years ended December
    31,                                                              | 2004     | 2003      | 2002    
|                                                                                          | $        | $         |         
|                                                                                          |          |           |         
|                                                                                          |          |           |         
|OPERATING
    ACTIVITIES                                                                  |          |           |         
|Income
    from continuing operations                                                     | 55,206   | 20,696    | 61,959  
|Reconciling items:                                                                        |          |           |         
|Depreciation and amortization                                                             | 38       | 67        | 162     
|Amortization of deferred financing costs                                                  | -        | 3,083     | 2,962   
|Non cash financial expenses                                                               | 34       | (3,266)   | 20,481  
|Earnings of subsidiaries from continuing operations                                       | (68,038) | (35,167)  | (10,512)
|Gain (loss) on recapitalization, Units exchange and expiry and on sale of
    investments | -        | 454       | (91,127)
|Other non cash items                                                                      | 12,721   | -         | -       
|Change
    in operating assets and liabilities                                            | (1,267)  | (9,735)   | (14,663)
|Cash used in operating activities                                                         | (1,306)  | (23,868)  | (30,738)
|                                                                                          |          |           |         
|INVESTING
    ACTIVITIES                                                                  |          |           |         
|Investment in subsidiaries, loans and other assets, net                                   | (76,390) | 163,208   | 7,724   
|Dividends [Note 4]                                                                        | -        | 54,153    | -       
|Acquisitions of property, plant and equipment                                             | -        | -         | (62)    
|Cash (used in) provided by
    investing activities                                       | (76,390) | 217,361   | 7,662   
|                                                                                          |          |           |         
|FINANCING
    ACTIVITIES                                                                  |          |           |         
|Decrease in short-term loan [Note 2]                                                      | -        | (47,407)  | (36,093)
|Proceeds from issuance of common shares                                                   | 78,083   | 9,498     | -       
|Proceeds from recapitalization, net of costs                                              | -        | -         | 41,202  
|Repayment of long-term debt [Note 2]                                                      | (530)    | (220,602) | -       
|Cash provided by (used in)
    financing activities                                       | 77,553   | (258,511) | 5,109   
|                                                                                          |          |           |         
|Cash (used in)
    continuing operations                                                  | (143)    | (65,018)  | (17,967)
|Cash provided by (used for)
    discontinued operations                                   | -        | 64,731    | (7,063) 
|Decrease in cash and cash
    equivalents for the year                                    | (143)    | (287)     | (25,030)
|Cash
    and cash equivalents, beginning of year                                          | 1,806    | 2,093     | 27,123  
|Cash and cash equivalents, end of
    year                                                | 1,663    | 1,806     | 2,093   
|                                                                                          |          |           |         
|                                                                                          |          |           |         
|See accompanying
    notes                                                                |          |           |         

|3
|-

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                                               
|-------------------------------------------------------------------------------------
|                                                                                     
|NOTES TO CONDENSED FINANCIAL INFORMATION                                             
|                                                                                     
|December 31, 2004 and 2003                                                           
|[All tabular amounts are in thousands
    of U.S. dollars unless otherwise indicated]

1-

This Condensed Financial Information has been prepared by
management on the basis of accounting principles generally accepted in Canada 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.

Significant differences between Canadian and United States
generally accepted accounting principles affecting the determination of
shareholders' equity at December 31, 2004 and 2003, and the determination of
income ( loss) and cash flows for each of the years in the three-year period
ended December 31, 2004 are summarized in Note 17 of the consolidated financial
statements of the Company.

2-     FINANCING ARRANGEMENTS

Corporate Credit Facility

The Company's corporate credit facility, which amounted to
$47.4 million as at December 31, 2002, has been fully reimbursed during 2003.
The lending syndicate included affiliates of several of the Company's then
significant shareholders.

14% Senior Guaranteed Notes

Prior to June 30, 2003, the Company redeemed an aggregate of
$72.4 million in principal plus accrued interest of $3.8 million of 14% Senior
Guaranteed Notes due December 30, 2003 (''14% Notes''). Accordingly, the Company
did not proceed with the issuance of $10 million in additional 14% Notes which
it would have otherwise been required to issue on June 30, 2003 pursuant to the
provisions of this indenture. This resulted in the reversal of $7 million of
contingent payments which was accrued as additional interest throughout the term
of the 14% Notes. Furthermore, as a result of the distribution of proceeds from
the issuance of the Notes by MobiFon Holdings, described in Notes 4 and 6 of the
Company's consolidated financial statements, the Company redeemed the remaining
$148.2 million in principal plus accrued interest of 14% Notes in August of
2003.

Long-term debt consists of the following:

|As at December 31,                    | 2004  | 2003 
|------------------------------------- | ----- | -----
|Series B 131⁄4% - Senior Discount Notes |      | 530  
|Amended ESD's 2006                    | 1,029 | 953  
|                                      | 1,029 | 1,483

3-     RELATED PARTY TRANSACTIONS

In addition to the related party transactions described
elsewhere in the Company's consolidated financial statements, the Company
entered into several transactions with its subsidiaries and investees. These
transactions were accounted for at their exchange value and consisted of the
following for the years ended December 31,

|                                                     | 2004  | 2003   | 2002  
|---------------------------------------------------- | ----- | ------ | ------
|                                                     | $     | $      | $     
|                                                     |       |        |       
|Service charges to
    subsidiaries and investees    | 7,713 | 21,791 | 22,335
|Interest revenue from subsidiaries and
    investees |      |       | 58    
|                                                     | 7,713 | 21,791 | 22,393

| 
|-
| 
|4

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                                               
|-------------------------------------------------------------------------------------
|                                                                                     
|NOTES TO CONDENSED FINANCIAL INFORMATION                                             
|                                                                                     
|December 31, 2004 and 2003                                                           
|[All tabular amounts are in thousands
    of U.S. dollars unless otherwise indicated]

4-     CASH DIVIDENDS AND OTHER LOANS AND ADVANCES

During 2003, the Company received a dividend of $57.0 million
from a subsidiary which is reflected in the financial statements as a reduction
in investment in subsidiaries. In connection with the dividend, the Company paid
a tax of $2.9 million during the year which is reflected as income tax expense
in the financial statements. Furthermore, as a result of the sale of a 5.9%
interest in MobiFon and the issuance of the Notes by MobiFon Holdings described
in Notes 4 and 6 to the consolidated financial statements respectively, an
additional $163.2 million was received by the Company by way of loan repayments.
In addition, the Company received $70 million from the disposition of its
Brazilian cellular operations described in Note 16 to the consolidated financial
statements.

5-     COMMITMENTS

The future minimum lease payments for the next 2 years for operating leases
are as follows:

$2005
      4532006
      752007 and thereafter
      Total
      528


6-     RECAPITALIZATION, CONVERTIBLE DEBENTURES AND UNITS

Between December 15, 2001 and March 13, 2002, the Company
completed several transactions contemplated by an agreement between Telesystem
Ltd., then the Company's largest shareholder and certain of the Company's other
stakeholders (the "Recapitalization").

7% Equity Subordinate Debentures

On February 5, 2002, the Company repurchased substantially all of its 7.00%
Equity Subordinate Debentures ["ESD"] and amended the terms of these remaining
outstanding.

A total of Cdn$150.0 million [$98.6 million] of ESD due
February 15, 2002 were originally issued on February 15, 1999 for net cash
proceeds of $95.8 million. The debentures bore interest at the rate of 7% per
annum payable semi-annually, in August and February of each year. Each debenture
was convertible on maturity into Common Shares of the Company.

Pursuant to a purchase offer and consent request, the Company
paid Cdn$6.8 million, issued 0.5 million warrants, each entitling the holder to
purchase one Common Share at a price of Cdn$8.05 at any time before March 31,
2003, which expired unexercised, issued approximately 7.5 million Common Shares
and approximately 0.7 million warrants, each entitling the holder to purchase
one Common Share at a price of Cdn$8.05 at any time before September 30, 2002,
which also expired unexercised, in exchange for substantially all of the EDSs.
The difference in the carrying value of the ESDs acquired of $97.8 million and
the fair value of the Common Shares [$30.2 million], Warrants [$0.4 million],
and cash [$5.7 million] given totaling $36.3 million including expenses of $1.4
million, has been proportionately reflected as additional paid-in capital of
$60.0 million and as a $1.5 million gain on redemption.

The Company amended the terms of the ESDs to, among other
things, extend the maturity of the ESDs to December 2006, reduce the principal
amount of each ESD from Cdn$1,000 to Cdn$250, provide for the right of the
Company to convert the ESDs at maturity into Common Shares at a price equal to
the greater of Cdn$5.00 and the then current market price of the Common Shares
and provide for the optional conversion at maturity by holders of the ESDs into
Common Shares at a price of Cdn$22.00. Consequently, the Company has amended and
reduced the remaining outstanding principal of an aggregate of approximately
Cdn$5.0 million in principal amount of ESDs to an aggregate of approximately
Cdn$1.2 million [$1.0 million] in principal amount.

| 
|-
|5

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                                               
|-------------------------------------------------------------------------------------
|                                                                                     
|NOTES TO CONDENSED FINANCIAL INFORMATION                                             
|                                                                                     
|December 31, 2004 and 2003                                                           
|[All tabular amounts are in thousands
    of U.S. dollars unless otherwise indicated]

6-     RECAPITALIZATION, CONVERTIBLE DEBENTURES AND UNITS [CONT'D]

7.75% Convertible Debentures

On March 8, 2000, the Company issued $300.0 million of 7.75%
Convertible Debentures ("CDs") for net cash proceeds of $291.0 million. The CDs
bore interest at the rate of 7.75% per annum payable semi-annually, commencing
on September 9, 2000, at the option of the Company, in cash or securities
including the repayment of principal at maturity.

On February 5, 2002, the Company converted all of the CDs and
the accrued and unpaid interest of $11.6 million due September 2001, for 30.9
million Common Shares. The Company has also issued warrants to certain holders
to purchase up to a total of 3 million Common Shares at $5.00 per share on or
before September 30, 2002 which expired unexercised. The difference in value
assigned to both the share issuance of $123.8 million and the fair value of
warrants issued of $0.7 million and the carrying value of the CDs as at February
5, 2002, of $309.9 million, was recognized as additional paid-in-capital of
$183.9 million, net of expenses of $2.5 million.

Units and Equity Financing

On February 14, 2001, the Company issued 43.8 million Units,
including 16.8 million to Telesystem Ltd, for proceeds of Cdn$396.5 million
[$260.4 million] before issue costs of Cdn$18.2 million [$11.9 million] pursuant
to an offer for sale under a rights issue to holders of the Company's Multiple
Voting and Common Shares.

Each Unit consisted of one Class A Subordinate Voting Share
of ClearWave, and twenty five Units entitled the holder to acquire one Common
Share of the Company for no additional consideration by tendering twenty five
Units back to the Company at anytime on or prior to June 30, 2002 [the exchange
option]. Holders of the Units were to be deemed to have exercised their exchange
option if less than $100 million of the Units, based on the issuance price, had
not been exercised [the "Deemed Conversion"]. On February 15, 2001, the Company
issued 2.1 million additional Units in connection with the acquisition of shares
of MobiFon, held by minority shareholders. The Units were accounted for
initially as equity under Canadian GAAP as a result of the existence of the
contingency as to the ultimate method of settlement, which was outside of the
control of both the Company and the individual holders of such Units as a result
of the existence of the Deemed Conversion.

In December 2001 through February 2002, the Company initiated
an exchange offer to the holders of Units in advance of their expiration. The
offer originally consisted of 1.092 Common Shares [5.46 pre share consolidation]
of the Company for each Unit. Certain Unit holders' objected to the exchange
offer due to the fact that certain significant Unit holders' had agreed to
tender their Units into the offer such that Unit holders not tendering would
likely be subject to the Deemed Conversion on the expiry of the Units in June
2002. As a result, a court judgement was issued on February 4, 2002 which
resulted in the Units no longer being subject to the Deemed Conversion and the
offer being amended to extend to Unit holders the right to tender one Unit for
1.092 Common Shares and the right to subscribe to shares and warrants on the
same terms as those offered to other shareholders who made financing commitments
under the Recapitalization. Accordingly, the offer was amended to provide Unit
holders the right to exchange a Unit for 1.092 Common Shares and to subscribe,
for additional consideration of Cdn$1.4857, to 0.305 Common Shares and 0.186 of
a warrant, entitling the holder thereof to purchase one Common Share per 5
warrants at a price of Cdn$7.95 [Cnd$ 1.59 prior to the share consolidation].

On March 13, 2002, the Company converted all outstanding Special Warrants
issued in connection with the Recapitalization into 35 million Series 1
Preferred Shares for no additional consideration.

|6
|-

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                                               
|-------------------------------------------------------------------------------------
|                                                                                     
|NOTES TO CONDENSED FINANCIAL INFORMATION                                             
|                                                                                     
|December 31, 2004 and 2003                                                           
|[All tabular amounts are in thousands
    of U.S. dollars unless otherwise indicated]

6.     RECAPITALIZATION, CONVERTIBLE DEBENTURES AND UNITS [CONT'D]

Units and Equity Financing [Cont'd]

In connection with the Company's above described exchange
offer to the holders of its outstanding Units and the financing commitments
under the Recapitalization, the Company reacquired 33.7 million Units and raised
$51.7 million in gross proceeds of which $42.4 million was received in
connection with the Units exchange offer. This new financing is in addition to
the December 14, 2001 issuance of 4.9 million Special Warrants for net proceeds
of $14.5 million. In consideration for this new financing and the payments of
Units tendered under the exchange offer, the Company has issued (a) an
additional 53.8 million in aggregate of Common Shares and Special Warrants (b)
0.9 million warrants, each allowing the holder to purchase one Common Share at a
price $5.00 on or before March 31, 2003, which expired unexercised, and (c) 1.7
million warrants, each allowing the holder to purchase one Common Share at a
price Cdn$7.95 on or before March 31, 2003, which expired unexercised.

From the date of the court judgment, the Unit holders had the
unilateral right to exercise their option to tender a Unit for an asset of the
Company, being the ClearWave shares included within the Units and accordingly
the Units were treated as debt under Canadian GAAP. U.S. GAAP also treated the
Units as a liability due to their hybrid nature.

As a result of the Unit exchange offer and financing
commitments under the Recapitalization, the Company realized a gain on exchange
of Units, having a carrying value of $191.8 million, of $46.1 million net of
expenses of $5.3 million and issued Common Shares, Preferred Shares and Warrants
having a carrying value of $184.3 million, $21.4 million and $1.1 million,
respectively. This Unit exchange resulted in an increase in the Company's equity
interest and voting rights in ClearWave from 45.5% and 80.7% respectively, to
85.6% and 94.9% respectively.

From February 4, 2002, the remaining Units were presented
within current liabilities until their expiry on June 30, 2002 at which date
they were accounted for as non-controlling interests and a gain on disposal of
the ClearWave shares contained in the expired Units of $44.0 million was
recognized being the difference between the carrying value of the Units and the
related ClearWave shares.

In connection with these transactions, Telesystem Ltd.,
contributed $20.9 million under the equity financing and tendered 16.8 million
Units under the Units exchange offer for an aggregate of approximately 25.2
million common shares and 0.8 million warrants which expired unexercised in
March 2003.

7.     SUBSEQUENT EVENTS

Acquisition of Non-controlling Interests in Oskar Holdings

In November 2004, the Company entered into an agreement in
principal to acquire from non-controlling shareholders 72.9% of Oskar Holdings
in exchange for the issuance of 46.0 million Common Shares of the Company's
treasury stock having an aggregate value of $521.9 million including costs of
which $6.0 million was paid to an affiliate of the employer of a board member.
Closing occurred on January 12, 2005 and the Company increased its indirect
ownership in Oskar Holdings and Oskar Mobil to 100.0% and 99.87%, respectively.
Two of the Company's significant shareholders are shareholders of Oskar Holdings
and received 17.4 million and 7.0 million Common Shares, respectively. The
acquisition will be accounted for using the purchase method.

|7
|-

---



|TELESYSTEM INTERNATIONAL WIRELESS INC.                                               
|-------------------------------------------------------------------------------------
|                                                                                     
|NOTES TO CONDENSED FINANCIAL INFORMATION                                             
|                                                                                     
|December 31, 2004 and 2003                                                           
|[All tabular amounts are in thousands
    of U.S. dollars unless otherwise indicated]

7.     SUBSEQUENT EVENTS [CONT'D]

Performance RSUs

In February 2005, the Board of Directors of the Company
authorized the grant of 2,043,000 performance based RSUs. The performance based
RSUs will vest in three years from the date of their grant. However, the number
of RSUs that will vest is dependent upon the Company's future stock price
appreciation from the date of grant. The stock prices at which performance RSUs
will vest range from $15 to $18 and the weighted average of such prices is
$16.70. The expected aggregate fair value of the grant will be amortized as
stock-based compensation expense over the vesting period of the performance RSUs.
The aggregate fair value of the RSUs consists of the fair value of each RSU, on
the date of grant, times the expected number of performance RSUs that will vest
determined using a binomial model and assumptions consistent with those used to
determine the fair value of the Company's stock option grants. The expected
number of performance RSUs that will vest will be re-estimated at each future
reporting period.

Sale of Operations to Vodafone

On March 15, 2005, the Company entered into definitive
agreements with Vodafone International Holdings B.V., a wholly-owned subsidiary
of Vodafone Group Plc, ("Vodafone") for the sale of all of its interests in
ClearWave for a cash consideration of approximately $3.5 billion. ClearWave owns
all of the Company's interest in Oskar Mobil and MobiFon through its 100%
ownership of Oskar Holdings and MobiFon Holdings. The consideration is payable
in cash upon closing of the sale. At closing, net proceeds from the sale along
with net assets at the Company level, which consist primarily of cash and cash
equivalents, are expected to equate to $16 per fully-diluted share and are
intended to be distributed to shareholders pursuant to a court supervised plan
of arrangement.

Closing of the sale is subject to (i) court approval pursuant
to the plan of arrangement, (ii) shareholders' approval on a basis to be
determined by the court (expected to be 66 2/3% of the votes), and (iii)
customary conditions, including the receipt of all necessary regulatory
approvals under relevant competition legislations. Closing of the sale will take
place as soon as practicable after receipt of such regulatory approvals, which
is expected to occur in the third quarter of 2005.

The Board of Directors of the Company has approved the sale
transaction and has recommended that the shareholders of the Company vote in
favor of the sale transaction, which will be included in the plan of arrangement
which will also address distributions to shareholders and liquidation of the
Company.

|8
|-

---

SIGNATURE

Telesystem International Wireless Inc. 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.

TELESYSTEM INTERNATIONAL WIRELESS INC.By:
      (signed) Bruno DucharmeName:
      Bruno DucharmeTitle:
      Chief Executive
      Officer andChairman of the
      BoardBy:
      (signed) André GauthierName:
      André GauthierTitle:
      Vice-President
      and Chief Financial OfficerBy:
      (signed) Terry EnepekidesName:
      Terry EnepekidesTitle:
      Vice-President,
      Corporate Finance andChief
      Accounting Officer


Dated: March 31, 2005

---