<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-Q

                                   -----------

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                       OR

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                    FOR THE TRANSITION PERIOD FROM ______ TO ______

                         COMMISSION FILE NO. 000-30075

                                  -----------

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

            THE NETHERLANDS                                     98-0202823
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

             JAMES E. DOVEY                                       2132 NA
              KRUISWEG 609                                       (Zip Code)
   2132 NA HOOFDDORP, THE NETHERLANDS
(Address of principle executive offices)

      Registrant's telephone number, including area code: (31) 20 666 1701

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

     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

     The number of shares outstanding of the Registrant's common stock as of
April 1, 2001 was 160,555,222 ordinary shares.

<PAGE>

                             COMPLETEL EUROPE N.V.
                                    FORM 10-Q

                                      INDEX


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

         Consolidated Balance Sheets as of
         March 31, 2001 (unaudited) and December 31, 2000

         Consolidated Statements of Operations for
         the Three Months Ended March 31, 2001 and 2000 (unaudited)

         Consolidated Statement of Shareholders' Equity
         for the Three Months Ended March 31, 2001 (unaudited)

         Consolidated Statements of Cash Flows
         for the Three Months Ended March 31, 2001 and 2000 (unaudited)

         Notes to the Consolidated Financial Statements (unaudited)

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

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

PART II  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities and Use of Proceeds

Item 3.  Defaults upon Senior Securities

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

Item 5. Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES

<PAGE>

     PART I    FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
       (STATED IN THOUSANDS OF EUROS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                   MARCH 31,    DECEMBER 31,
                                                                        2001           2000
                                                                        ----           ----
<S>                                                                <C>             <C>

                                     ASSETS

CURRENT ASSETS:

     Cash and cash equivalents                                      E292,523       E361,698
     Short-term investments, restricted                               27,690         28,030
     Accounts receivable, net of allowance
       for doubtful receivables of E1,200 and E733 as of
       March 31, 2001 and December 31, 2000, respectively             17,370         13,883
     Affiliate receivables                                             1,500          1,500
     Prepaid expenses, VAT receivables and other current assets       44,020         54,886
                                                                    --------       --------
       Total current assets                                          383,103        459,997

NON-CURRENT ASSETS:
     Property and equipment, net                                     346,223        298,623
     Licenses and other intangibles, net                               6,678          6,858
     Deferred financing costs, net                                    15,161         15,129
     Non-current investments, restricted                              39,410         41,709
     Other non-current assets                                          2,200          2,465
                                                                    --------       --------
       Total non-current assets                                      409,672        364,784
                                                                    --------       --------
TOTAL ASSETS                                                        E792,775       E824,781
                                                                    ========       ========
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Network vendor payables                                        E 51,937       E 54,341
     Accrued liabilities and trade accounts payable                   77,349         71,684
     Affiliate payables                                                  597          2,199
                                                                    --------       --------
       Total current liabilities                                     129,883        128,224

LONG-TERM DEBT                                                       289,506        280,597

SHAREHOLDERS' EQUITY:
     Ordinary shares, nominal value E.10 per share, 625,000,000
       shares authorized; 160,555,222 shares issued and
       outstanding at March 31, 2001 and December 31, 2000,
       respectively                                                   16,055         16,055
     Additional paid-in capital                                      697,715        706,821
     Deferred compensation                                           (25,804)       (33,196)
     Other cumulative comprehensive loss                                 760          1,019
     Accumulated deficit                                            (299,787)      (259,185)
     Treasury stock, at cost                                         (15,553)       (15,554)
                                                                    --------       --------

TOTAL SHAREHOLDERS' EQUITY                                           373,386        415,960
                                                                    ========       ========

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          E792,775       E824,781
                                                                    ========       ========
</TABLE>

                     The accompanying notes are an integral
              part of these unaudited consolidated balance sheets.
<PAGE>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
       (STATED IN THOUSANDS OF EUROS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                            THREE MONTHS ENDED  THREE MONTHS ENDED
                                                                MARCH 31, 2001      MARCH 31, 2000
                                                                --------------      --------------
<S>                                                         <C>                 <C>
REVENUE                                                                E19,656              E2,527
OPERATING EXPENSES:
     Network costs                                                      18,691               3,011
     Selling, general and administrative                                23,442              13,127
     Allocated costs from affiliate                                      1,855               2,117
     Non-cash compensation charges                                      (1,731)             69,660
     Depreciation and amortization                                       9,506               2,946
                                                                  ------------        ------------
     Total operating expenses                                           51,763              90,861
                                                                  ------------        ------------

OPERATING LOSS                                                         (32,107)            (88,334)

OTHER INCOME (EXPENSE):
    Interest income                                                      5,398                 444
    Interest expense, net of capitalized interest                       (8,345)             (1,868)
    Foreign exchange loss and other expense                             (5,548)             (7,943)
                                                                  ------------        ------------
    Total other income (expense)                                        (8,495)             (9,367)
                                                                  ------------        ------------
NET LOSS                                                              E(40,602)           E(97,701)
                                                                  ============        ============
BASIC AND DILUTED LOSS PER ORDINARY SHARE                               E(0.26)             E(0.77)
                                                                  ============        ============
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING             157,413,763         126,820,533
                                                                  ============        ============

</TABLE>

         The accompanying notes are an integral part of these unaudited
                       consolidated financial statements.
<PAGE>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
       (STATED IN THOUSANDS OF EUROS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                 ORDINARY SHARES
                                                 ---------------
                                                                                                              OTHER
                                                                         ADDITIONAL                      CUMULATIVE
                                                                            PAID-IN        DEFERRED   COMPREHENSIVE  ACCUMULATED
                                                NUMBER        AMOUNT        CAPITAL    COMPENSATION            LOSS      DEFICIT
                                                ------        ------        -------    ------------            ----      -------

<S>                                        <C>               <C>           <C>            <C>                <C>      <C>
BALANCE, December 31, 2000                 160,555,222       E16,055       E706,821       E(33,196)          E1,019   E(259,185)

     Deemed contributions by LLC
        related to allocation of
        non-cash compensation charges               --            --         (9,122)         5,413               --          --
     Exercise of stock options                      --            --             16             --               --          --
     Amortization of deferred
        compensation                                --            --             --          1,979               --          --
     Cumulative translation adjustment              --            --             --             --             (259)         --
     Net loss                                                     --             --             --               --     (40,602)
                                           -----------        ------        -------        -------            -----    --------
Balance, March 31, 2001                    160,555,222       E16,055       E697,715       E(25,804)          E  760   E(299,787)
                                           ===========       =======       ========       ========           ======   =========


<CAPTION>



                                            TREASURY
                                              STOCK,           TOTAL
                                             AT COST   COMPREHENSIVE
                                            (NOTE 3)            LOSS         TOTAL
                                            --------            ----         -----

<S>                                        <C>            <C>             <C>
BALANCE, December 31, 2000                 E(15,554)      E(200,197)      E415,960
                                                           ========
     Deemed contributions by LLC
        related to allocation of
        non-cash compensation charges            --              --         (3,709)
     Exercise of stock options                    1              --             17
     Amortization of deferred
        compensation                             --              --          1,979
     Cumulative translation adjustment           --            (259)          (259)
     Net loss                                               (40,602)       (40,602)
                                            -------        --------       --------
Balance, March 31, 2001                    E(15,553)       E(40,861)      E373,386
                                           ========        ========       ========

</TABLE>

          The accompanying notes are an integral part of this unaudited
                       consolidated financial statement.
<PAGE>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (STATED IN THOUSANDS OF EUROS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED  THREE MONTHS ENDED
                                                                    MARCH 31, 2001      MARCH 31, 2000
                                                                    --------------      --------------
<S>                                                             <C>                 <C>
OPERATING ACTIVITIES:
     Net loss                                                             E(40,602)           E(97,701)
     Adjustments to reconcile net loss to net cash flows used in
       operating activities:
         Depreciation and amortization                                       9,506               2,946
         Non-cash compensation charges                                      (1,731)             69,660
         Accretion of senior discount notes                                  3,153               2,933
         Amortization of deferred financing costs                              447                  74
         Foreign exchange loss                                               5,070                  --
         Changes in operating assets and liabilities:
              Increase in accounts receivable                               (3,487)             (2,434)
              Decrease in prepaid expenses, VAT receivables and
                other current assets                                        13,674               2,575
              Decrease (increase) in other non-current assets                  265                 (28)
              Increase in accrued liabilities and trade accounts
                payable                                                      5,665               8,692
              Increase (decrease) in net affiliate payables/receivables     (1,602)              2,962
                                                                          --------            --------
              Net cash flows used in operating activities                   (9,642)            (10,321)
                                                                          --------            --------
INVESTING ACTIVITIES:
     Expenditures for property and equipment                               (56,926)            (33,254)
     Decrease in network vendor payables                                    (2,404)                 --
                                                                          --------            --------
              Net cash flows used in investing activities                  (59,330)            (33,254)
                                                                          --------            --------
FINANCING ACTIVITIES:
     Net proceeds from initial public offering                                  --             512,536
     Proceeds from exercise of stock options                                    17                  --
     Deferred financing costs                                                 (479)             (6,938)
                                                                          --------            --------
              Net cash flows (used in) provided by financing activities       (462)            505,598
                                                                          --------            --------
     Effect of exchange rates on cash                                          259               2,505
                                                                          --------            --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                           (69,175)            464,528
CASH AND CASH EQUIVALENTS, beginning of period                             361,698              57,115
                                                                          --------            --------
CASH AND CASH EQUIVALENTS, end of period                                  E292,523            E521,643
                                                                          ========            ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
     Cash paid for interest                                               E     --            E     --
     Cash paid for taxes                                                  E     --            E     --

</TABLE>

         The accompanying notes are an integral part of these unaudited
                       consolidated financial statements.
<PAGE>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
          NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1)  GENERAL

     CompleTel Europe N.V. ("CompleTel Europe") (together with its wholly-owned
subsidiaries, the "Company") is a Dutch holding company incorporated on December
14, 1998 for the purpose of completing a Rule 144A offering (the "Offering")
(see Note 5) to finance its planned operations.

     The Company has a strategic objective of becoming a leading facilities-
based operator of a technologically advanced, high-capacity, fiber optic
communications infrastructure and provider of telecommunications and
Internet-related services to business and government end-users, carriers and
Internet service providers in targeted metropolitan areas across Western
Europe, with an initial focus on network deployment in France and Germany.
Additionally, the Company is establishing Internet data centers ("IDCs") and
is providing Internet access, web hosting and other Internet value added
services in France, Germany and the United Kingdom. The Company is currently
implementing its business plan to deploy and operate metropolitan area
networks in markets in France and Germany and provide Internet-related
services in these markets and the United Kingdom. A facilities-based operator
uses mainly its own telecommunications facilities to provide service, in
contrast with non-facilities-based resellers who purchase the services of
other providers and then retail the services to customers.

(2)  BASIS OF PRESENTATION

     The accompanying interim unaudited consolidated financial statements have
been prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP") for interim financial information and are in the form
prescribed by the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by U.S. GAAP for complete
financial statements. The interim unaudited consolidated financial statements
should be read in conjunction with the audited financial statements of the
Company as of and for the year ended December 31, 2000. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 2001 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001.

     The preparation of financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates. Certain prior year amounts have been reclassified to conform with the
current year presentation.

(3)  PROPERTY AND EQUIPMENT

     Property and equipment includes network equipment, office furniture and
equipment, computer equipment and software, leasehold improvements and
construction in progress. These assets are stated at cost and are being
depreciated when ready for their intended use on a straight-line basis.

<PAGE>

     Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                         MARCH 31,  DECEMBER 31,
                                              2001          2000
                                              ----          ----
<S>                                      <C>         <C>
Network equipment                         E256,520      E216,016
Office furniture and equipment               6,074         5,186
Computer equipment and software             11,973        10,891
Leasehold improvements                       8,117         8,239
Buildings                                      205           205
                                          --------      --------

Property and equipment, in service         282,889       240,537
Less: accumulated depreciation             (34,302)      (24,963)
                                          --------      --------

Property and equipment, in service, net    248,587       215,574
Construction in progress                    97,636        83,049
                                          --------      --------

Property and equipment, net               E346,223      E298,623
                                          ========      ========
</TABLE>

         The Company capitalized approximately E3.5 million and E1.3 million of
interest expense for the three months ended March 31, 2001 and 2000,
respectively.

(4)  RELATED PARTY TRANSACTIONS

CONTRIBUTION OF COMPLETEL LLC COMMON UNITS FOR COMPLETEL EUROPE NV ORDINARY
SHARES

     In late November 2000, certain employees of CompleTel Europe who held
common units of CompleTel LLC ("LLC"), contributed all such common units, except
for those still subject to performance vesting provisions, to CompleTel Europe
in consideration for 3,142,162 newly issued ordinary shares of CompleTel Europe.
The number of ordinary shares issued was equal to the number of ordinary shares
represented by the common units contributed to CompleTel Europe and were
recorded at E15.6 million, the fair market value of those shares on the date of
issuance. The corresponding investment in LLC, representing approximately 3,280
common units which are exchangeable into 3,142,162 ordinary shares of the
Company, is reflected as a reduction of CompleTel Europe's equity in the
accompanying statement of shareholders' equity, similar to treasury stock. The
common units contributed included both vested and non-vested time vesting units.
The ordinary shares issued in respect of the non-vested units remain subject to
the same vesting provisions as the original award.

(5)  INDEBTEDNESS

SENIOR DISCOUNT NOTES

     In February 1999, the CompleTel Europe and CompleTel Holdings completed an
offering (the "Offering") of 147,500 units (the "Units") consisting of
approximately E131.9 million aggregate principal amount of 14% Senior Discount
Notes due 2009 (the "Notes") issued by CompleTel Europe and 1,475,000 non-voting
Class B Membership Interests of CompleTel Holdings LLC. All these Class B
Membership Interests were subsequently redeemed by CompleTel Holdings and a
corresponding portion of CompleTel Europe ordinary shares distributed to their
former holders. CompleTel Europe issued the Notes at a substantial discount from
their principal amount at maturity on February 16, 2009. A principal investor in
LLC acquired 400 Units in the Offering. The proceeds of the Offering, net of
offering fees and costs, were approximately E64.9 million and were held in an
escrow account until CompleTel Europe received a minimum commitment of $90
million in senior credit facilities, which was received in April 1999. The Notes
are guaranteed by LLC on a senior unsecured basis. As LLC is a holding company
with no operations other than the operations to be conducted by CompleTel Europe
and its subsidiaries, it is unlikely that LLC would have sufficient funds to
satisfy CompleTel Europe's obligations on the Notes if CompleTel Europe is
unable to satisfy its own obligation on the Notes. Of the approximately E67.1
million gross proceeds from the Offering, approximately

<PAGE>

E63.1 million was attributed to the Notes and approximately E4 million was
attributed to the 1,475,000 Class B Membership Interests of CompleTel
Holdings. The E4 million allocated to the Class B Membership Interests
represents additional discount on the Notes.

     Cash interest will not accrue on the Notes prior to February 15, 2004, with
the Notes accreting to their stated principal amount at maturity at an effective
interest rate of approximately 15.1%. The accretion is charged to interest
expense. Commencing February 15, 2004, cash interest on the Notes will accrue at
14% per annum and will be payable in cash on August 15 and February 15 of each
year. The Notes mature February 15, 2009.

SENIOR NOTES OFFERING

     In April 2000, the Company completed an offering of an aggregate E200
million 14% senior notes due 2010 (the "Senior Notes"). A portion of the
proceeds were used to repurchase $27.0 million (E27.6 million) principal amount
at maturity of the Senior Discount Notes. To comply with Netherlands laws, the
Senior Notes were guaranteed by LLC on a senior, unsecured basis. In March 2001,
this guaranty terminated. The Company lent approximately E78.0 million of the
net proceeds to a wholly-owned subsidiary which used the funds to invest in a
portfolio of securities which is pledged as security for the Senior Notes. The
proceeds of these pledged securities will be used to make the first six interest
payments on the Senior Notes. The remaining proceeds from the Senior Notes
offering will be used to (i) fund the further deployment of the Company's
networks in existing markets and an additional six cities in France and Germany,
(ii) fund the expansion of the Company's Internet-related services, (iii)
develop complementary local access systems, (iv) fund net operating losses and
(v) for general and corporate purposes.

     Long-term debt consists of the following (in thousands):


<TABLE>
<CAPTION>
                                                                 MARCH 31,  DECEMBER 31,
                                                                   2001          2000
                                                                   ----          ----
<S>                                                              <C>        <C>
     14% Senior Discount Notes, face amount $120.5 million,
     due 2009, effective interest rate of 15.1%, converted
     to euro at March 31, 2001 and December 31, 2000 exchange
     rates of 0.879 and 0.942, respectively                       E 89,506     E  80,597
     14% Senior Notes, face amount E200.0 million, due 2010        200,000       200,000
                                                                  --------      --------
                                                                  E289,506      E280,597
                                                                  ========      ========
</TABLE>

CREDIT AGREEMENT

     In January 2000, the Company executed an agreement for a E265 million
senior secured credit facility with Goldman Sachs International and BNP Paribas
as co-arrangers of the facility. Under the facility, the funds were to be
available to the Company's subsidiaries, initially to include CompleTel ECC
B.V., CompleTel Services S.A.S., CompleTel S.A.S., and CompleTel GmbH, in two
tranches including a euro term facility which was available until December 31,
2000, in the aggregate amount of E105 million, and a euro revolving loan
facility available until December 31, 2002, in the aggregate amount of E160
million. The E160 million tranche was to become available after May 31, 2000, if
the euro term facility was fully drawn and other conditions were satisfied.
Subsequent to December 31, 2002, up to E141 million of the outstanding advances
under the euro revolving loan facility were first to be converted into a term
loan, and any other outstanding advances were to become part of a E19 million
working capital facility. The facility matures on December 31, 2006.

     In April 2000, the Company entered into an agreement (the "Suspension
Agreement") with the lenders whereby the Company agreed not to borrow funds
under the credit facility in exchange for the lenders agreement to suspend the
application of various provisions, including substantially all of the
representations, covenants and events of default in the credit facility. In
March 2001, the Company extended the Suspension Agreement until June 30,

<PAGE>

2001. However, the Company is exploring funding options, and there is no
assurance that it will seek or obtain additional credit now or in the future.
During the period the Suspension Agreement is in effect, the facility is,
nevertheless, guaranteed by its subsidiaries and is secured by, among other
things, pledges of the stock of substantially all of its subsidiaries, as
well as a number of its present and future material assets and revenue.

(6)  SEGMENT REPORTING

     Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131"), establishes
standards for the way public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. Operating segments are components of
an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.

     Management currently evaluates the Company's development efforts according
to the geographic location of its markets. The key operating performance
criteria used in this valuation includes revenue growth and operating income
before interest, taxes, depreciation, amortization, non-cash compensation
expense and other non-cash items, including foreign exchange gains or losses
("Adjusted EBITDA"). Certain financial information reflecting the Company's
development efforts by geographic location is presented below.

     As of March 31, 2001 and for the three months ended March 31, 2001:

<TABLE>
<CAPTION>
                                                                        COMPLETEL
                                    COMPLETEL   COMPLETEL   COMPLETEL  EUROPE AND
                                          SAS        GMBH          UK       OTHER  CONSOLIDATED
                                          ---        ----          --       -----  ------------
<S>                                 <C>         <C>         <C>        <C>         <C>
Revenue                              E 15,603    E  2,809     E 1,244    E     --      E 19,656
Adjusted EBITDA                        (8,987)     (7,484)     (2,541)     (5,320)      (24,332)
Total assets                          224,435     156,079      18,568     393,693       792,775
Expenditures for long-lived assets     29,105      20,338       3,487       3,996        56,926

</TABLE>

     As of March 31, 2000 and for the three months ended March 31, 2000:

<TABLE>
<CAPTION>
                                                                          COMPLETEL
                                     COMPLETEL   COMPLETEL   COMPLETEL   EUROPE AND
                                           SAS        GMBH          UK        OTHER   CONSOLIDATED
                                          ---         ----          --        -----   ------------
<S>                                  <C>         <C>         <C>         <C>          <C>
Revenue                               E  1,491     E   146      E  890     E     --       E  2,527
Adjusted EBITDA                         (9,972)     (5,204)       (275)        (277)       (15,728)
Total assets                           112,736      64,889       2,573      505,839        686,037
Expenditures for long-lived assets      18,616      14,446         165           27         33,254

</TABLE>


(7)  NEW ACCOUNTING STANDARDS

     Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"), establishes
accounting and reporting standards for derivative instruments, including certain
instruments embedded in other contracts, and for hedging activities. SFAS 133
requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. It also specifies the
accounting for changes in the fair value of a derivative instrument depending on
the intended use of the instrument and whether (and how) it is designated as a
hedge. During 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of the Effective Date of SFAS 133" ("SFAS 137")
which delayed the application of SFAS 133 to all fiscal quarters of fiscal years
beginning after June 15, 2000. The adoption of SFAS 133 was not material to the
Company.

<PAGE>

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

     All assumptions, anticipations, expectations and forecasts contained in the
following discussion regarding our future business plans and products and
services, financial results, performance, and the telecommunications industry
and operating environment, and future events are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Our actual results may differ materially
because of a number of risks and uncertainties. The forward-looking statements
contained herein represent a good-faith assessment of our future performance for
which we believe there is a reasonable basis. The forward-looking statements are
generally identified by the use of forward-looking words such as "plans,"
"estimate," "believe," "expect," "will," "should" and "may" or other variations
of such terms, or by discussion of strategy that involves risks and
uncertainties. These forward-looking statements represent our view only as of
the dates they are made, and we disclaim any obligation to update
forward-looking statements contained herein, except as may be otherwise required
by law.

     All statements made herein are accurate only as of the date of filing this
Form 10-Q with the Securities and Exchange Commission and may be relied upon
only as of that date. Unless otherwise indicated, all share numbers reflect the
five-for-one split we effected on February 25, 2000.

OVERVIEW

     We are a rapidly growing, facilities-based provider of switched telephony,
data and Internet-related services to business end-users, government entities,
carriers and Internet service providers in targeted markets in Western Europe.
We were incorporated in December 1998, and through a series of transactions in
January 1999, became the holding company for our European telecommunications
businesses which commenced in January 1998, when CompleTel LLC was formed. We
accounted for these transactions as a reorganization of entities under common
control, similar to a pooling of interests. Accordingly, our historical results
of operations are presented as if we had been legally formed on January 8, 1998
and had performed all CLEC related development activities in Western Europe
since CompleTel LLC's inception.

     Prior to January 1, 2000, our functional currency was the U.S. dollar, and
the functional currency for each of our operating subsidiaries was the
applicable local currency. Effective January 1, 2000, we and each of our
subsidiaries, except those in the United Kingdom, adopted the euro as our
functional currency. Additionally, we adopted the euro as our financial
reporting currency. As a result, we have restated prior period amounts by
translating prior period U.S. dollar amounts into the euro. Our results of
operations (accumulated deficit) for periods prior to January 1, 1999
(introduction date for the euro) have been restated using the January 1, 1999
exchange rate between the U.S. dollar and the euro.

     We have generated operating losses and negative cash flow from our
operating activities to date. We expect to continue to experience operating
losses and negative cash flows from operations in each of our markets while we
emphasize development, construction and expansion of our business and until we
establish a sufficient revenue generating customer base in that market.

REVENUE

     Our revenue consists of revenue from three principal categories of service
offerings: retail, including voice, data and Internet; wholesale; and IDCs, web
hosting and other Internet-related services.

     o    RETAIL SERVICES. We generate revenue from the voice, data and
          Internet services we provide primarily to our directly connected
          retail customers. We have experienced growth in our retail services
          in the past year. We expect this growth to continue and to represent
          an increasing percentage of our overall revenue as we expand the
          deployment of our MANs in the major cities we already serve and build
          a new MAN in Nantes, France.

          o    VOICE SERVICES. We derive substantially all our voice
               revenue from the switched voice communications services
               we provide to customers directly connected to our networks
               through owned fiber and leased lines. This revenue is based
               primarily on traffic minutes

<PAGE>

               billed. Revenue from voice products accounted for approximately
               30% of our total revenue for the quarter ended March 31, 2001.

          o    DATA AND INTERNET SERVICES. We derive revenue from the
               local dedicated access and private line services we provide
               customers for data connections over our MANs. This revenue
               is based primarily on transmission capacity provided. We
               also derive revenue by providing high-capacity Internet
               protocol-based services and interconnection between local
               area networks in each of the cities in which our MANs
               operate. Revenue from these services accounted for
               approximately 10% of our total revenue for the quarter
               ended March 31, 2001.

     o    WHOLESALE SERVICES. We derive revenue by providing transmission
          capacity on a wholesale basis to other carriers, as well as dial-up
          Internet access to our Internet service provider customers.

          o    CARRIER AND TERMINATION SERVICES. We derive revenue from
               the services we provide on a wholesale basis to other
               telecommunications service providers that require
               transmission capacity to support gaps in their networks,
               need additional capacity or require alternate routing, or
               do not have their own transmission facilities. We also
               terminate traffic for other operators. This revenue, which
               is based primarily on traffic minutes billed, represented
               14% of our revenue in the quarter ended March 31, 2001, and
               we expect this revenue to increase in 2001.

          o    INTERNET DIAL-UP. We also derive revenue from the dial-up
               Internet access to our ISP customers delivering the traffic
               and plan to continue to do so both in France and Germany.
               This revenue, which is based primarily on transmission
               capacity provided, represented 35% of our overall revenue
               in the first quarter of 2001. Although we expect our
               Internet dial-up services to represent an increasing
               percentage of our total revenue in 2001, in future periods
               we expect them to represent a decreasing proportion, as our
               revenue from other services increase.

     o    INTERNET DATA CENTERS, WEB HOSTING AND OTHER INTERNET-RELATED
          SERVICES. We are beginning to derive revenue from the complex web
          hosting and other value-added Internet services we provide at our
          IDCs. We also offer web site creation and maintenance services as
          well as miscellaneous dial-up services to certain of our IDC
          customers. Revenue from our IDCs, web hosting and other
          Internet-related services accounted for approximately 11% of our total
          revenue for the quarter ended March 31, 2001.

     We derive revenue in France and Germany from all three of our principal
service offerings. In the United Kingdom, we derive revenue solely from our IDC,
web hosting, Internet-related services and other miscellaneous dial-up services.
As of March 31, 2001, we had commercially launched services in seven cities in
France and four in Germany and had deployed five IDCs in France, Germany and the
United Kingdom.

     We expect our revenue in France, where we launched commercial operations in
June 1999, to increase with the establishment of an additional MAN in Nantes,
France and with the accelerated build-out of our MANs in the major cities we
already serve to cover additional business parks and areas of business
concentration. Our development in Germany, where we launched commercial
operations in November 1999, continues to track our development in France
generally on a time-adjusted basis, and we expect our revenue in Germany to
represent an increasing percentage of our overall revenue.

     We expect revenue in the United Kingdom to grow as we brand and market our
IDC, web hosting and other Internet-related services, gain web hosting customers
and increase our value-added service offerings. However, we expect our revenue
in the United Kingdom to represent a smaller proportion of our overall revenue
due to our single IDC in the United Kingdom. Revenue in the United Kingdom in
the first quarter of 2001 was generated from our complex web hosting and
Internet-related services, from our recently launched IDC in London and from
miscellaneous dial-up services. We anticipate that this dial-up revenue will
decrease significantly in the remainder of the year and will represent an
insignificant percentage of our overall revenue in the future.

OPERATING EXPENSES

<PAGE>

     Our primary operating expenses consist of:
     o    network costs,
     o    selling, general and administrative expenses,
     o    allocated costs from affiliates,
     o    non-cash compensation charges, and
     o    depreciation and amortization expenses.

NETWORK COSTS

     Our network costs include costs such as interconnection costs, the cost of
leasing high-capacity digital lines that interconnect our network with the
networks of other providers, the cost of leasing local loop lines that connect
our customers to our network, switch site rental and operating and maintenance
costs, as well as costs associated with our IDCs, web hosting and other
Internet-related services. We lease dark fiber and conduit on a limited basis to
establish and augment our MANs in certain markets. We also lease fiber to
connect our MANs, in order to provide an IP backbone to support our IDCs, web
hosting and other Internet-related services. We incur other fixed costs, such as
switch site rent and network and switch maintenance, that normally are incurred
at the time of interconnection in anticipation of future revenue. To date, we
have been able to deploy our networks faster than we initially anticipated. As a
result, we have experienced higher incremental costs. As we continue to build
our networks and revenue increases, we believe that the incremental costs of
deployment will decrease as a percentage of our network costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Our selling, general and administrative expenses include costs relating to
our sales and marketing department, customer care, billing, corporate
administration, salaries and other personnel costs, as well as legal and
consultant fees. We expect that the rate of growth in selling, general and
administrative expenses is likely to decline as administrative costs begin to
stabilize and expenditures shift away from dependence on consultants towards the
use of internal resources and as we leverage economies of scale.

     We are assembling a large, locally-based, direct sales force in our local
and regional markets and a national account team to service multiple location
customers and key account executives. As of March 31, 2001, the number of our
employees totalled 848, including 201 sales employees, compared to 179 sales
employees as of December 31, 2000. We expect the number of sales and marketing
personnel to continue to grow and our selling, general and administrative costs
to increase correspondingly as we expand our operations and our focus on
multi-site customers. This increase, however, will be offset to some extent by a
decrease in costs as we replace consultants hired to perform management
information system implementation and network maintenance tasks with our own
employees.

ALLOCATED COSTS FROM AFFILIATE

     Allocated costs from affiliate include amounts we pay CableTel Management,
Inc. a wholly owned subsidiary of CompleTel LLC, as reimbursement of expenses
incurred by CableTel Management, Inc. in the performance of certain ordinary and
necessary general and administrative services for us and our operating
subsidiaries. Prior to October 1, 2000, these expenses consisted primarily of
executive management salaries and benefits and professional fees and were
allocated to us based upon an estimate of the proportion of such expenses
attributable to us and our operating subsidiaries. We reimbursed CableTel
Management, Inc. for the proportionate share of these costs and expenses by
paying management fees equal to 105% of such attributable costs. Beginning
October 1, 2000, a significant portion of the expenses that were previously
incurred on our behalf by CableTel Management, Inc. (representing primarily
salaries to our European employees) are now incurred by CompleTel Headquarters
Europe S.A.S, our wholly owned subsidiary, and accounted for as selling, general
and administrative costs. CableTel Management, Inc. continues to incur certain
general and administrative expenses on our behalf (consisting primarily of
salaries and benefits to our U.S. employees), for which we reimburse it. We
account for these amounts as allocated costs from affiliate.

NON-CASH COMPENSATION CHARGES

     We incur amortization of stock-based compensation expense under our fixed
stock option plan based on the deferred compensation at the date of grant. In
addition, based upon our value as determined at the time of our initial public
offering, we recorded compensation expense and deferred compensation for
performance vesting units that did

<PAGE>

not vest as a result of the IPO but which may vest upon a qualified sale by
Madison Dearborn Partners or in May 2005 based on a deemed vesting date. The
deferred compensation is being amortized to expense over the remaining
vesting period to May 18, 2005 (deemed vesting date if vesting does not occur
earlier upon a qualified sale by Madison Dearborn Partners). We also record
compensation expense and deferred compensation for certain time vesting units
that vest at various times throughout the year, and all will be vested by
November 2002. In addition to the above expenses, some of our employees have
purchased common units of CompleTel LLC for which CompleTel LLC incurs
non-cash compensation charges. For accounting purposes, we record such
non-cash compensation charges as a deemed capital contribution with an
offsetting entry to deferred compensation. Deferred compensation is amortized
to expense over the vesting period of the common units. The non-cash
compensation charges are attributable to employees whose salary and benefits
are otherwise classified within selling, general and administrative expenses.

DEPRECIATION AND AMORTIZATION

     We record depreciation and amortization expense for our property and
equipment, including network equipment, office furniture and equipment, computer
equipment and software, leasehold improvements and other properties and
construction in progress. Assets are stated at cost and are depreciated when
ready for their intended use on a straight line basis over their estimated
useful life. Network equipment is depreciated on a straight line basis over an
estimated useful life of three to eight years.

OTHER INCOME AND EXPENSE

     Other income includes interest income on the investment of the proceeds
from our initial public offering and our senior notes due 2010.

     Interest expense recorded reflects interest on our 14% senior notes due
2010, the accretion of our 14% senior discount notes due 2009 and the
amortization of deferred financing costs. We capitalize a portion of our
interest costs as part of the construction cost of our networks, in accordance
with Statement of Financial Accounting Standards No. 34 "Capitalization of
Interest Costs."

FOREIGN EXCHANGE LOSS AND OTHER EXPENSE

     Our revenue, costs, assets and liabilities are, for the most part,
denominated in euros, which is our functional and reporting currency, effective
January 1, 2000. Therefore, we are exposed to changes in currency exchange rates
primarily due to our U.S. dollar-denominated debt. Our 14% senior discount notes
due 2009 expose us to exchange rate fluctuations as the payment of principal and
interest on these notes will be made in U.S. dollars, and a substantial portion
of our future cash flow used to service these payments will be denominated in
local currencies, including the euro. We invest all excess cash in
euro-denominated accounts. While we intend to take steps to minimize exchange
rate risks, we cannot assure you that we will not be materially adversely
affected by variations in currency exchange rates.

RESULTS OF OPERATIONS

QUARTER ENDED MARCH 31, 2001 COMPARED TO QUARTER ENDED MARCH 31, 2000


REVENUE

     Revenue for the three months ended March 31, 2001 increased to E19.7
million, compared to approximately 2.5 million for the three months ended March
31, 2000. We attribute this increase in revenue to our overall growth resulting
from the implementation of our business plan and the rapid deployment of our
networks. Specifically, the increase resulted from significant growth of our
customer base, an increase in traffic over our networks and a heightened demand
for services from existing customers. For the three months ended March 31, 2001,
revenue from retail services totaled E7.7 million; revenue from wholesale
services totaled E9.7 million; and revenue from IDC, web hosting and other
Internet-related services totaled E2.3 million.

<PAGE>

     In France, we had revenue of approximately E15.6 million for the three
months ended March 31, 2001, compared to approximately E1.5 million for the
corresponding period in 2000. Revenue from our French operations represented 79%
of our total revenue for the three months ended March 31, 2001. We experienced
steady growth in revenue from retail customers in the seven French cities in
which our MANs operate and our overall signed customer base in France as of
March 31, 2001 grew to 862 customers. The increase in our customer base and
traffic resulted in a total of 653 million minutes of use carried over our
networks in France in the first quarter of 2001. During the three months ended
March 31, 2001, revenue from our IDC in Paris, our web hosting and other
Internet-related services generated 2% of our revenue in France.

     In Germany, we had revenue of approximately E2.8 million for the three
months ended March 31, 2001, compared to E0.1 million for the three months ended
March 31, 2000. This revenue represented 14% of our total revenue for the three
months ended March 31, 2001. As of March 31, 2001, we had over 165 signed
customers in Germany and carried over 38 million minutes of use in Germany
during the first quarter of 2001. Additionally, revenue from our IDCs in Berlin
and Munich, our web hosting and other Internet-related services cumulatively
generated 21% of our revenue in Germany for the quarter ended March 31, 2001.

     In the United Kingdom, we had revenue of approximately E1.3 million for the
three months ended March 31, 2001, compared to approximately E0.9 million for
the corresponding period in 2000. Revenue derived from our IDC in London, our
web hosting and other Internet-related services, represented 74% of revenue in
the United Kingdom for the three months ended March 31, 2001. We also derived
E0.6 million from miscellaneous dial-up services in the United Kingdom during
the first quarter of 2001, which represented 26% of our revenue in the United
Kingdom.

OPERATING EXPENSES

NETWORK COSTS

     Our network costs for the three months ended March 31, 2001 increased to
approximately E18.7 million from E3.0 million for the corresponding period the
previous year. This increase resulted primarily from the continued deployment of
our networks in France and Germany and the associated costs of establishing
interconnection and leasing arrangements. The increase also resulted from
increased customer traffic, which resulted in higher interconnection payments to
the incumbent telecommunications operators.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     For the three months ended March 31, 2001, selling, general and
administrative expenses totaled approximately E23.4 million, compared to
approximately E13.1 million for the three months ended March 31, 2000. This
increase primarily resulted from the rapid growth in the number of personnel and
the expenses related to wages and salaries. The increase also resulted from
administrative and start-up costs associated with the launches of our IDC
facilities.

ALLOCATED COSTS FROM AFFILIATE

     For the three months ended March 31, 2001, we recorded approximately E1.9
million of costs allocated from affiliates, compared with approximately E2.1
million for the three months ended March 31, 2000. This decrease was primarily a
result of decreased personnel, legal and accounting costs allocated from
CableTel Management, Inc.

NON-CASH COMPENSATION CHARGES

     We incurred amortization of stock-based compensation expense of
approximately E1.7 million under our fixed stock option plan for the three
months ended March 31, 2001. This amount was based on deferred compensation at
the date of grant totaling approximately E25.1 million.

     During the three months ended March 31, 2000, we incurred additional
stock-based compensation expense of approximately E41.9 million upon completion
of our initial public offering in March 2000 due to the accelerated vesting of
certain CompleTel LLC performance vesting common units held by certain of our
employees in connection with a qualified public offering. This compensation
expense was based on the IPO price of E17.50 per share. In addition, based upon
our value as indicated in the IPO, we recorded compensation expense and deferred
compensation at the IPO date, of approximately E24.0 million and E74.9 million,
respectively, for performance

<PAGE>

vesting units that did not vest as a result of the IPO but which may vest
upon a qualified sale by Madison Dearborn Partners or in May 2005 based on a
deemed vesting date. For the three months ended March 31, 2001, we reduced
previously recorded compensation expense by approximately E1.7 million, based
on the closing price per share on March 31, 2000. The non-cash compensation
charges are attributable to employees whose salary and benefits are otherwise
classified within selling, general and administrative expenses.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization increased to approximately E9.5 million for
the three months ended March 31, 2001, from approximately E 2.9 million for the
corresponding period in 2000. The majority of this increase resulted from the
build-out of our MANs throughout France and Germany.

OTHER INCOME AND EXPENSE

     We recorded interest income of approximately E5.4 million during the three
months ended March 31, 2001. For the three months ended March 31, 2000, interest
income totaled approximately E0.4 million. The increase is the result of the
investment of our IPO proceeds and proceeds from our senior notes due 2010.

     We incurred interest expense, net of approximately E3.5 million of
capitalized interest expense, of approximately E8.3 million during the three
months ended March 31, 2001. For the three months ended March 31, 2000, interest
expense totaled approximately E1.9 million, net of capitalized interest expense
of approximately E1.3 million. The interest expense recorded reflects interest
on our senior notes due 2010, the accretion of our senior discount notes due
2009 and the amortization of deferred financing costs.

FOREIGN EXCHANGE LOSS AND OTHER EXPENSE

     For the three months ended March 31, 2001, we recorded a E5.1 million
unrealized foreign exchange loss related primarily to our U.S.
dollar-denominated senior discount notes.

ADJUSTED EBITDA

     Many securities analysts use the measure of earnings before deducting
interest, taxes, depreciation and amortization, also commonly referred to as
"EBITDA," as a way of measuring the performance of a company. We consider an
adjusted measure we refer to as "adjusted EBITDA," to be a helpful performance
measure of our business. In calculating adjusted EBITDA, we also exclude
non-cash compensation charges and foreign exchange loss and other expenses. For
the three months ended March 31, 2001 and 2000, these charges and expenses
totaled E3.8 million and E77.6 million, respectively. We had adjusted EBITDA
losses of approximately E24.3 million and E15.7 million for the quarters
ended March 31, 2001 and 2000, respectively. We expect to continue to
experience operating losses and negative adjusted EBITDA as a result of our
development and market expansion activities.

    Adjusted EBITDA is not derived pursuant to generally accepted accounting
principles and therefore should not be construed as an alternative to operating
income (loss), as an alternative to cash flows from operating activities, or as
a measure of liquidity. Furthermore, we are not aware of any uniform standards
for determining adjusted EBITDA. Presentations of adjusted EBITDA may not be
calculated consistently by different companies in the same or similar
businesses. As a result, our reported adjusted EBITDA may not be comparable to
similarly titled measures used by other companies.

    The following table summarizes our adjusted EBITDA calculation for the
periods indicated (amounts in thousands).

<TABLE>
<CAPTION>
                                                                 Three Months Ended March 31,
                                                                    2001            2000
                                                                  ---------       ---------
<S>                                                               <C>             <C>
Net Loss......................................................    E (40,602)      E (97,701)
Interest expense (net of interest income).....................        2,947           1,424
Income taxes..................................................           --              --
Depreciation and amortization.................................        9,506           2,946
Non-cash compensation charges.................................       (1,731)         69,660
Foreign exchange loss and other expense.......................        5,548           7,943
                                                                  ---------       ---------
Adjusted EBITDA...............................................    E (24,332)      E (15,728)
                                                                  =========       =========
</TABLE>

NET LOSS

     Our net loss for the three months ended March 31, 2001 was E40.6 million,
compared to a net loss of approximately E97.7 million for the three months ended
March 31, 2000. This decrease resulted primarily from a decrease in non-cash
compensation charges.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED MARCH 31,
                                               ----------------------------
                                                    2001        2000
                                                    ----        ----
                                                 (EURO, IN THOUSANDS)

<S>                                             <C>         <C>
     Cash flows from operating activities       E (9,642)   E(10,321)
     Cash flows from investing activities        (59,330)    (33,254)
     Cash flows from financing activities           (462)    505,598
     Effect of exchange rates on cash                259       2,505
                                                --------    --------
          Net increase (decrease) in cash and
              cash equivalents                   (69,175)    464,528

          Cash and cash equivalents at
              beginning of period                361,698      57,115
                                                --------    --------

          Cash and cash equivalents at end of
              period                            E292,523    E521,643
                                                ========    ========
</TABLE>

<PAGE>

CASH FLOWS FROM OPERATING ACTIVITIES

     During the three months ended March 31, 2001, we used approximately E9.6
million in operating activities, a E0.7 million decrease from the approximately
E10.3 million used in operating activities for the corresponding period in the
prior year. This decrease in cash flows was primarily related to the significant
growth of our customer base and the improvement of operating costs as a
percentage of revenue as our business matures.

CASH FLOWS FROM INVESTING ACTIVITIES

     Our cash flow from investing activities was a use of approximately E59.3
million for the three months ended March 31, 2001, compared to a use of
approximately E33.3 million for the corresponding period in the prior year. The
increase was primarily due to an increased investment in property and equipment.

CASH FLOWS FROM FINANCING ACTIVITIES

     We used approximately E0.5 million of cash for financing activities during
the three months ended March 31, 2001, compared to E505.6 million of cash flows
provided by financing activities for the corresponding period in 2000. The
change was due primarily to the net proceeds from our IPO being reflected in the
first quarter of 2000.

LIQUIDITY AND CAPITAL RESOURCES

     The telecommunications business is capital intensive. We have needed and
will continue to need large amounts of capital to fund capital expenditures,
working capital, debt service and operating losses. As of March 31, 2001, we had
E320.2 million of cash and restricted short-term investments, and E39.4 million
of restricted long-term investments in escrow for debt service (see below).

     Since January 1998, CompleTel LLC has received E114.3 million in private
equity contributions, of which E63.0 million was contributed to our French
operating subsidiary, E42.3 million was contributed to our German operating
subsidiary, E2.3 million was contributed to us, and the remainder was retained
by CompleTel LLC for start up expenditures incurred on our behalf.

     In February 1999, we and CompleTel Holdings LLC completed a units offering
consisting of 14% senior discount notes due 2009 and class B interests in
CompleTel Holdings LLC resulting in gross proceeds in respect of the units of
approximately E67.1 million, of which E63.1 million was allocated to the 14%
senior discount notes due 2009, which represents a substantial discount from the
E131.9 million aggregate stated principal amount at maturity of the notes. The
remaining E4.0 million was allocated to the class B interests of CompleTel
Holdings LLC. Cash interest will not accrue on the 14% senior discount notes due
2009 prior to February 15, 2004. Commencing February 15, 2004, cash interest on
the notes will accrue at 14% per annum and will be payable in cash on August 15
and February 15 of each year. The notes mature on February 16, 2009. In April
2000, E 27.6 million principal amount at maturity were repurchased for E 14.9
million.

     In January 2000, we executed a E265 million senior secured credit facility
with Goldman Sachs International and BNP Paribas as co-arrangers of the
facility. Under the facility, the funds were to be available to certain of our
subsidiaries in two tranches including a euro term facility which was available
until December 31, 2000, in the aggregate amount of E105 million, and a euro
revolving loan facility available until December 31, 2002, in the aggregate
amount of E160 million. The E160 million tranche was to become available after
May 31, 2000, if the euro term facility was fully drawn and other conditions
were satisfied. Following December 31, 2002, up to E141 million of the
outstanding advances under the euro revolving loan facility were first to be
converted into a term loan, and any other outstanding advances were to become
part of a E19 million working capital facility. In April 2000, we entered into a
suspension agreement with the lenders whereby we agreed not to borrow funds
under the credit facility in exchange for their agreement to suspend the
application of substantially all the representations, covenants and events of
default. In March 2001, we extended the suspension agreement until June 30,
2001. However, we are exploring all our funding options, and there is no
assurance that we will seek or obtain additional credit now or in the future.
During the period the suspension agreement is in effect, the facility is,
nevertheless, guaranteed by our subsidiaries and is secured by, among other
things, pledges of the stock of substantially all our subsidiaries, as well as a
number of our present and future material assets and revenue.

<PAGE>

     In March 2000, we completed an initial public offering of ordinary shares.
We issued 31,280,000 ordinary shares in exchange for gross proceeds of
approximately E547.4 million, based on the euro public offering price of E17.50
per share. A portion of the IPO shares, 8,343,931, were offered in the United
States at a public offering price of U.S.$17.09 per share. After giving effect
to the translation of U.S. dollars received for shares offered in the United
States, gross proceeds translated into euro totaled approximately E551.4
million. We are using the proceeds: to develop further fiber optic networks in
our target markets in France and Germany; to fund the build-out of our IDCs and
the expansion of our Internet-related services; to develop complementary local
access systems; to fund net operating losses and for general corporate purposes.

     In April 2000, we completed an offering of an aggregate E200 million 14%
senior notes due 2010. A portion of the proceeds were used to repurchase
U.S.$27.0 million (E27.6 million) principal amount at maturity of our existing
14% senior discount notes due 2009. We lent approximately E78.0 million of the
net proceeds to a wholly-owned subsidiary which used the funds to invest in a
portfolio of securities which is pledged as security for the 14% senior notes
due 2010. We are using the proceeds of these pledged securities to make the
first six interest payments on the 14% senior notes due 2010.

CAPITAL EXPENDITURES

     For the three months ended March 31, 2001, we made capital expenditures of
approximately E56.9 million for property and equipment necessary to deploy
networks in our initial markets.

     We currently estimate that we will make aggregate capital expenditures of
approximately E140 million to E160 million for the year ending December 31,
2001.

     The actual amount and timing of our future capital requirements may differ
materially from our current estimates, and additional financing may be required
in the event of departures from our business plans and projections, including
those caused by unforeseen delays, cost overruns, engineering design changes,
demand for our services that varies from our expectations, adverse regulatory,
technological or competitive developments, difficulties, or delays in obtaining
necessary rights-of-way. We may also require additional capital, or require
financing sooner than anticipated, if we alter the schedule or target markets of
our roll-out plan in response to regulatory, technological or competitive
developments (including additional market developments and new opportunities
within and outside of our target markets). We intend to evaluate potential joint
ventures, strategic alliances, and acquisition opportunities on an ongoing basis
as they arise, and we may require additional financing if we elect to pursue any
such opportunities. We also may be required to seek additional financing if we
elect to provide complementary telecommunications services or deploy networks in
additional markets. Sources of additional financing may include commercial bank
borrowings, vendor financing and/or the private or public sale of debt
securities. We also may engage in private or public equity offerings of our
ordinary shares. We believe that such additional sources of funding will become
available as we need them. There can be no assurance, however, that these
sources will be available when we need them.

     Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"), establishes
accounting and reporting standards for derivative instruments, including certain
instruments embedded in other contracts, and for hedging activities. SFAS 133
requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. It also specifies the
accounting for changes in the fair value of a derivative instrument depending on
the intended use of the instrument and whether (and how) it is designated as a
hedge. During 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of the Effective Date of SFAS 133" ("SFAS 137")
which delayed the application of SFAS 133 to all fiscal quarters of fiscal years
beginning after June 15, 2000. The adoption of SFAS 133 was not material to the
Company.

EURO CONVERSION

     Effective January 1, 1999, the euro became the single legal currency of the
11 participating European Union member states, including The Netherlands, France
and Germany and the conversion rates of the currencies of the participating
member states were irrevocably fixed against the euro as of that date.

<PAGE>

     The establishment of the European Monetary Union may have a significant
effect on the economies of the participant countries. While we believe that the
introduction of the euro will eliminate exchange rate risks in respect of the
currencies of those member states that have adopted the euro, which includes
Germany and France, there can be no assurance as to the relative strength of the
euro against other currencies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INVESTMENT PORTFOLIO AND INTEREST RATE SENSITIVITY

     Our investment policy is limited by the indentures governing our
outstanding notes. We are restricted to investing in financial instruments with
a maturity of one year or less (with certain limited exceptions). We are
required to utilize investments that meet high credit quality standards, such as
obligations of the U.S. government or any European Economic Community member
government or any agency thereof guaranteed by the country, certificates of
deposits, money market deposits, and commercial paper with a rating of A-1 or
P-1. Under the terms of our E265 million senior secured credit facility, if we
were to draw down on the facility we would be required to enter into an interest
rate hedging program with respect to 50% of every tranche of E50 million
borrowed to mitigate foreign currency exchange rate risk. As we have not drawn
down on the credit facility to date, we currently are not subject to this
requirement. We have entered into a suspension agreement concerning this
facility.

     Interest income earned on our investment portfolio is affected by changes
in short-term interest rates. We are thus exposed to market risk related to
changes in market interest rates. To date, we have managed these risks by
monitoring market rates and the duration of our investments.

IMPACT OF FOREIGN CURRENCY RATE CHANGES

     Our revenue, costs, assets and liabilities are, for the most part,
denominated in euros, which is our functional currency, effective January 1,
2000. Therefore, we are exposed to changes in currency exchange rates due to our
U.S. dollar denominated debt and investments. The senior discount notes which we
issued in February 1999 expose us to exchange rate fluctuations as the payment
of principal and interest on the notes will be made in dollars, and a
substantial portion of our future cash flows used to service these payments will
be denominated in euros. While we intend to take steps to minimize exchange rate
risks, we cannot assure you that we will not be materially adversely affected by
variations in currency exchange rates.

     Our operating subsidiaries' monetary assets and liabilities are subject to
foreign currency exchange risk if purchases of network equipment and services
are denominated in currencies other than the subsidiary's own functional
currency. However, the majority of such purchases to date have been based on
each subsidiary's functional currency.

     The spot rates for the euro are shown below expressed in dollar per one
euro.

<TABLE>

<S>                                   <C>
     December 31, 1998                U.S.$1.181(1)
     December 31, 1999                U.S.$1.007
     December 31, 2000                U.S.$0.942
     March 31, 2001                   U.S.$0.879

</TABLE>

-----------

(1)  Based on the exchange rate as of January 4, 1999, the date on which the
     euro noon buying rate was first quoted.

     We intend to manage exchange rate risk by incurring financing liabilities
denominated in the currency of the country of operations. In addition, we intend
to adopt hedging strategies to manage our exposure to foreign currency exchange
rate risk.


<PAGE>

PART II           OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On February 27, 2001, we announced the appointment, subject to shareholders
approval, of Timothy A. Samples, who until recently, served as the chief
executive officer of FirstMark Communications Europe SA, as our new Chief
Executive Officer. On March 19, 2001, FirstMark alleged that the employment of
Mr. Samples as our Chief Executive Officer constitutes a breach of the
non-compete provisions in the services agreement between Mr. Samples and
FirstMark. We believe, after consultation with our legal counsel, that these
allegations are without merit, and that the ultimate liability, if any, arising
from these allegations will not have a material adverse effect on our financial
condition or results of operations. We are not party to any other pending legal
proceedings that we believe would, individually or in the aggregate, have a
material adverse effect on our financial condition or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

ITEM 5. OTHER INFORMATION

     Not applicable.


<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT NO.    DESCRIPTION
-----------    -----------
<S>            <C>
     3.1(1)    Articles of Association of CompleTel Europe N.V.

     4.1(2)    14% Senior Discount Notes Indenture, dated February 16, 1999,
               among CompleTel Europe N.V. as issuer, CompleTel ECC B.V. as
               guarantor and U.S. Bank Trust National Association as trustee

     4.2(1)    14% Senior Notes Indenture, dated April 13, 2000, between
               CompleTel Europe N.V. as issuer and The Chase Manhattan Bank as
               trustee

     10.4(3)   Extension of Supplemental Agreement, dated January 10, 2001,
               extending suspension of certain credit facility covenants

     10.2(3)   Form of Class 4 German National License, dated March 21, 2001

     10.3(3)   Employment Agreement, dated February 2001, between CompleTel
               Headquarters Europe SAS and Jerome de Vitry

     10.4      Employment Agreement, dated as of March 1, 2001, between
               Timothy A. Samples and Cabletel Management, Inc.

     10.5      Secondment Agreement, dated April 2001, by and among
               CableTel Management, Inc., Timothy A. Samples and CompleTel
               Headquarters UK Ltd.

     10.6      Non-qualified Stock Option Agreement, dated as of March 14, 2001,
               between CompleTel Europe N.V. and Timothy A. Samples

     10.7      Loan Agreement and Promissory Note, dated April 2, 2001, between
               Timothy A. Samples and CompleTel Europe N.V.

</TABLE>

-----------

(1)  Previously filed as an exhibit to the Registrant's Quarterly Report on Form
     10-Q for the period ended March 31, 2000 and incorporated herein by
     reference.

(2)  Previously filed as an exhibit to the Registrant's Registration Statement
     on Form S-4, file number 333-82305, filed with the Securities and Exchange
     Commission on July 2, 1999 and incorporated herein by reference.

(3)  Previously filed as an exhibit to the Registrant's Annual Report on Form
     10-K, for the period ended December 31, 2000 and incorporated herein by
     reference.

REPORTS ON FORM 8-K

     During the three months ended March 31, 2000, the Registrant filed:

(1)  On February 27, 2001, a Current Report on Form 8-K, disclosing that it
     announced its financial results for the year ended December 31, 2000. The
     report included as an exhibit the press release dated February 27, 2001.

(2)  On February 27, 2001, a Current Report on Form 8-K announcing the
     appointment of a new Chief Executive Officer. The report included as an
     exhibit the press release dated February 27, 2001.


<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
CompleTel Europe N.V. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on May 14, 2001.

                                        COMPLETEL EUROPE N.V.

                                        By:    /s/ William H. Pearson
                                             ---------------------------
                                             Name: William H. Pearson
                                             Title: Managing Director, President
                                             and Chief Executive Officer
                                             (Principal Executive Officer)



                                        By:  /s/ Martin Rushe
                                             ---------------------------
                                             Name: Martin Rushe
                                             Title: Managing Director



                                        By:    /s/ David E. Lacey
                                             -----------------------------
                                             Name: David E. Lacey
                                             Title: Chief Financial Officer
                                             (Principal Financial Officer)