SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED:
         SEPTEMBER 30, 1999

[ ]      TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
         __________ TO __________

                        Commission file number: 333-82305

                              COMPLETEL EUROPE N.V.

             (Exact name of registrant as specified in its charter)

   Amsterdam, The Netherlands                                98-0202823
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                            Identification No.)

                       6300 South Syracuse Way, Suite 355
                            Englewood, Colorado 80111
                    (Address of principal executive offices)

                                 (303) 741-4788
                           (Issuer's telephone number)

                                 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
requirements for the past 90 days.

                                [ ] Yes [ X ] No

As of October 1, 1999, the Registrant had outstanding 21,071,429 shares of its
capital stock.


<PAGE>

                                  COMPLETEL EUROPE N.V.

                                    FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                                Page
                                                                                                                Number

<S>               <C>                                                                                             <C>
PART I.           FINANCIAL INFORMATION............................................................................4

       ITEM 1.    Financial Statements (unaudited).................................................................4

                  Consolidated Condensed Balance Sheets as of
                  September 30, 1999 and December 31, 1998 ........................................................4

                  Consolidated Condensed Statements of Operations for the
                  Three and Nine Months Ended September 30, 1999 and 1998
                  and from the Commencement of Operations to September 30, 1999 and 1998...........................5

                  Consolidated Condensed Statement of Shareholders' Equity (Deficit) for the
                  Nine Months Ended September 30, 1999.............................................................6

                  Consolidated Condensed Statements of Cash Flows for the
                  Nine Months Ended September 30, 1999
                  and from the Commencement of Operations to September 30, 1999 and 1998...........................7

                  Notes to Unaudited Consolidated Condensed Financial Statements...................................8

       ITEM 2.    Management's Discussion and Analysis of Financial Condition and
                  Results of Operations...........................................................................13

       ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk......................................23

PART II OTHER INFORMATION.........................................................................................24

       ITEM 1.    Legal Proceedings...............................................................................24
       ITEM 2.    Changes in Securities...........................................................................24
       ITEM 3.    Defaults upon Senior Securities.................................................................24
       ITEM 4.    Submission of Matters to a Vote of Security Holders.............................................24
       ITEM 5.    Other Information...............................................................................24
       ITEM 6.    Exhibits and Reports on Form 8-K................................................................24

SIGNATURES        ................................................................................................25

</TABLE>
                                       2
<PAGE>


When used in this Report, the words "intend," "expects," "plans," "estimates,"
"anticipates," "projects," "believes," and similar expressions are intended to
identify forward-looking statements. Specifically, statements included in this
Report that are not historical facts, including statements about our beliefs and
expectations about our business and our industry are forward-looking statements.
These statements are subject to risks and uncertainties that could cause actual
results or outcomes to differ materially. These risks and uncertainties include,
but are not limited to, our ability to implement the senior credit facility, the
degree to which we are leveraged and the restrictions imposed on us under our
existing debt instruments that may adversely affect our ability to finance our
future operations, our ability to compete effectively against better capitalized
competitors and to develop a sufficient customer base, and other factors
discussed in our filings with the Securities and Exchange Commission.
Forward-looking statements included in this Report speak only as of the date of
this report and we will not revise or update these statements to reflect events
or circumstances after the date of this report or to reflect the occurrence of
unanticipated events.

                                       3
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements
<TABLE>
<CAPTION>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      (A Company in the Development Stage)

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                      (Stated in thousands of U.S. Dollars)
                                   (Unaudited)

                                                                                       September 30,       December 31,
                                                                                           1999                1998
                                                                                       -------------       ------------
                                      ASSETS
                                      ------
CURRENT ASSETS:
     <S>                                                                               <C>               <C>
     Cash and cash equivalents                                                         $  58,880         $     1,718
     Receivables                                                                           8,387                 527
     Affiliate receivables                                                                 7,084                  --
     Other current assets                                                                  1,469                 179
                                                                                          ------               -----
           Total current assets                                                           75,820               2,424
                                                                                          ------               -----
LONG-TERM ASSETS:

     Property and equipment, net (Note 3)                                                 54,745               3,371
     Deferred financing costs, net                                                         4,779                 869
     Licenses and other intangibles, net                                                   3,864                 950
     Other long-term assets                                                                  387                 256
                                                                                         -------               -----
           Total long-term assets                                                         63,775               5,446
                                                                                          ------               -----
TOTAL ASSETS                                                                           $ 139,595         $     7,870
                                                                                         =======               =====
                 LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
                 ----------------------------------------------

CURRENT LIABILITIES:

     Trade accounts payable                                                            $  21,836            $  1,959
     Accrued liabilities                                                                   5,119               1,453
     Affiliate payables                                                                   10,062              10,470
                                                                                          ------              ------
           Total current liabilities                                                      37,017              13,882
                                                                                          ------              ------
LONG-TERM DEBT                                                                            77,129                  --
                                                                                          ------              ------
SHAREHOLDER'S DEFICIT:

     Common shares, $.016 par value (converted from NLG .03); 105,330,800 shares
        authorized; 21,071,433 and 4,888,964 shares
        issued and outstanding, respectively                                                 337                  78
     Additional paid-in capital                                                           65,551               2,195
     Deferred compensation                                                                (1,142)               (540)
     Other cumulative comprehensive loss                                                  (1,973)               (160)
     Deficit accumulated during the development stage                                    (37,324)             (7,585)
                                                                                         -------               -----
TOTAL SHAREHOLDER'S EQUITY (DEFICIT)                                                      25,449              (6,012)
                                                                                         -------               -----
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)                                  $  139,595            $  7,870
                                                                                         =======               =====
</TABLE>

         The accompanying notes are an integral part of these unaudited
                     condensed consolidated balance sheets.

                                       4
<PAGE>

<TABLE>
<CAPTION>


                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      (A Company in the Development Stage)

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
    (Stated in thousands of U.S. Dollars, except share and per share amounts)
                                   (Unaudited)

                                                                                     Commencement of    Commencement of
                                                                                        Operations        Operations
                               Three Months        Three Months     Nine Months    (January 8, 1998)  (January 8, 1998)
                                    Ended             Ended           Ended               To                To
                               September 30,       September 30,   September 30,     September 30,      September 30,
                                    1999              1998              1999               1998             1999
                               -------------       -------------   -------------   -----------------   -----------------
<S>                               <C>              <C>              <C>              <C>               <C>
REVENUES                          $   1,055        $       --       $    1,376       $       --         $     1,376
                                     ------            ------           ------           ------              ------
OPERATING EXPENSES
    Network costs                       871                --            1,435               --               1,435
    Selling, general and
       administrative                 9,579               775           20,178            1,510              24,730
    Management fees to
       affiliated party               1,552               697            3,563            1,451               6,526
    Depreciation and
       amortization                   1,406                29            1,829               33               1,875
                                      -----            ------           ------           ------              ------
       Total operating
          expenses                   13,408             1,501           27,005            2,994              34,566
                                     ------            ------           ------           ------              ------
OPERATING LOSS                      (12,353)           (1,501)         (25,629)          (2,994)            (33,190)

OTHER INCOME (EXPENSE)
    Interest income                     636                --            2,223               --               2,223
    Interest expense, net of
       capitalized interest          (1,863)               --           (6,080)              --              (6,080)
    Other income
       (expense), net                    13                92             (253)              92                (253)
                                     ------            ------           ------           ------              ------
       Total other
          income (expense)           (1,214)               92           (4,110)              92              (4,110)
                                     ------            ------           ------           ------              ------
NET LOSS BEFORE
    INCOME TAXES                    (13,567)           (1,409)         (29,739)          (2,902)            (37,300)

INCOME TAX PROVISION                     --               --                --               --                  --
                                     ------            -----            ------            -----              ------
NET LOSS                          $  (13,567)      $  (1,409)       $  (29,739)      $   (2,902)        $   (37,300)
                                     ======            =====            ======            =====              ======
BASIC AND DILUTED LOSS
    PER COMMON SHARE              $      (.64)      $   (.29)       $    (1.55)      $     (.59)        $     (3.37)
                                     ========          =====            ======            =====              ======
WEIGHTED AVERAGE
    NUMBER OF COMMON
    SHARES OUTSTANDING             21,071,433      4,888,964        19,150,590        4,888,964          11,059,208
                                   ==========      =========        ==========        =========          ==========
</TABLE>


         The accompanying notes are an integral part of these unaudited
                  condensed consolidated financial statements.

                                       5
<PAGE>


<TABLE>
<CAPTION>


                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      (A company in the Development Stage)

       CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
      (Stated in thousands of U.S. Dollars, except share amounts unaudited)


                                                                                     Other      Deficit      Total
                                             Common                                Cumulative   Accumulated  Compre-
                                             Shares      Additional               Comprehensive During the   hensive
                                       ----------------   Paid-in     Deferred      Income      Development  Income
                                       Number    Amount   Capital    Compensation   (Loss)      Stage        (Loss)        Total
                                       ------    ------  ----------  ------------ ------------- ----------- --------       -----

<S>                                    <C>        <C>   <C>           <C>         <C>          <C>           <C>             <C>
BALANCE December 31, 1998              4,888,964 $ 78   $  2,195      $(540)      $  (160)     $ (7,585)     $ (7,721)     $ (6,012)
                                                                                                                =====
   Issuance of common shares in
     connection with corporate
     reorganization                   14,666,891  235     57,810         --            --            --            --        58,045
   Issuance of common shares in
     connection with the Units
     Offering                          1,515,578   24      4,454         --            --            --            --         4,478
   Deemed contribution by Parent
     related to allocation of non-
     cash compensation charges                --   --      1,092     (1,092)           --            --            --           --
   Amortization of deferred
     compensation                             --   --         --        490            --            --            --           490
   Cumulative translation adjustment          --   --         --         --        (1,813)           --        (1,813)       (1,813)
   Net loss                                   --   --         --         --            --       (29,739)      (29,739)      (29,739)
                                        --------  ---     ------      -----         -----        ------        ------        ------
BALANCE, September 30, 1999           21,071,433 $337   $ 65,551    $(1,142)      $(1,973)     $(37,324)     $(31,552)      $25,449
                                      ==========  ===     ======      =====         ======       ======        ======        ======

</TABLE>
                                       6
<PAGE>

<TABLE>
<CAPTION>

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      (A Company in the Development Stage)

                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
     (Stated in thousands of U.S. Dollars, except unit and per unit amounts)
                                   (Unaudited)

                                                                   Nine         Commencement of        Commencement
                                                                  Months           Operations          of Operations
                                                                  Ended        (January 8, 1998)     (January 8, 1998)
                                                              September 30,     to September 30,     to September 30,
                                                                   1999               1998                 1999
                                                             -----------------  ----------------     -----------------
OPERATING ACTIVITIES:
   <S>                                                            <C>               <C>                <C>
    Net loss                                                      $ (29,739)        $  (2,902)         $  (37,300)
    Adjustments to reconcile net loss to cash
       used by operating activities-
          Depreciation and amortization                               1,829                33               1,875
          Non-cash compensation expense                                 490               232                 682
          Accretion of senior notes                                   6,598                --               6,598
          Amortization of deferred financing costs                      166                --                 166
          Changes in assets and liabilities-
              Increase in receivables                                (7,921)             (251)             (8,448)
              Increase in other current assets                       (1,333)              (33)             (1,512)
              Increase in other long-term assets                       (156)             (342)               (412)
              Increase in trade accounts payable                     20,301               358              22,260
              Increase in accrued liabilities                         3,819               782               5,272
              Increase (decrease) in net affiliate
                payables/receivables                                 (7,178)            2,494               3,292
                                                                      -----            ------              ------
              Net cash provided by (used by) operating
                activities                                          (13,124)              371              (7,527)
                                                                     ------            ------              ------
INVESTING ACTIVITIES:

    Purchase of property and equipment                              (53,473)             (947)            (56,891)
    Purchase of licenses and other intangibles                       (3,129)             (458)             (4,079)
    Offering proceeds and investment earnings placed in escrow      (73,198)               --             (73,198)
    Proceeds from escrowed offering proceeds and investment
       earnings                                                      73,198                --              73,198
                                                                     ------            ------              ------
              Net cash used by investing activities                 (56,602)           (1,405)            (60,970)
                                                                     ------            ------              ------
FINANCING ACTIVITIES:

    Proceeds from senior notes                                       72,572                --              75,572
    Proceeds from issuance of common shares
       and subsequent capital contributions                          62,523             1,463              64,041
    Deferred financing costs                                         (4,076)             (242)             (4,945)
                                                                     ------            ------              ------
              Net cash provided by financing activities             131,019             1,221             134,668
                                                                     ------            ------              ------
    Effect of exchange rates on cash                                 (4,131)              (89)             (7,291)
                                                                     ------            ------              ------
NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                      57,162                98              58,880
CASH AND CASH EQUIVALENTS,
    beginning of period                                               1,718                --                  --
                                                                     ------            ------              ------
CASH AND CASH EQUIVALENTS,
    end of period                                                 $  58,880         $      98          $   58,880
                                                                   ========           =======            ========
</TABLE>

         The accompanying notes are an integral part of these unaudited
                  condensed consolidated financial statements.

                                       7
<PAGE>


26
565896v3

                     COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                      (A Company in the Development Stage)

         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(1)    GENERAL

CompleTel Europe N.V. ("CompleTel Europe") (together with its wholly-owned
subsidiaries, the "Company") seeks to be a leading facilities-based provider of
switched local telecommunications and related services to business and
government end-users in targeted metropolitan areas across Western Europe, with
an initial focus on network deployment in France and Germany. Additionally, the
Company intends to provide Internet services within the United Kingdom ("UK").
The Company's deployment plan includes building networks initially in seven
metropolitan markets in France (Paris, Lyon, Marseilles, Lille, Toulouse,
Grenoble and Nice) and four markets in Germany (Berlin, Munich, Nuremberg and
Essen).

The Company's parent CompleTel LLC ("Parent") indirectly owns 93% of CompleTel
Europe and its subsidiaries.

The Company is in the development stage and since commencement of operations,
the Company has incurred net losses totaling approximately $37.3 million.
Parent's subsidiaries have been principally engaged in developing its business
plans, applying for and procuring regulatory and government authorizations,
raising capital, hiring management and other key personnel, working on the
design and development of its fiber optic networks and operation support
systems, negotiating equipment and facilities agreements, and negotiating
interconnection agreements and certain right-of-way agreements. As a result of
its development-stage activities, the Company has experienced significant
operating losses and negative cash flows from operations. The Company expects to
continue to generate negative cash flows from operations in each market while it
emphasizes development, construction and expansion of its business and until the
Company establishes a sufficient revenue generating customer base in that
market. The Company also expects to experience increasing operating losses and
negative cash flows from operations as it expands its operations and enters new
markets, even if and after it achieves positive cash flow from operations in its
initial markets.

The Company's ultimate success will be affected by the problems, expenses and
delays encountered in connection with the formation of any new business and by
the competitive environment in which the Company intends to operate. The
Company's performance will further be affected by its ability to obtain
licenses, properly assess potential markets, secure financing or raise
additional capital, design networks, acquire right-of-way and building access
rights, implement interconnection with incumbent public telecommunications
operators ("PTOs"), lease adequate trunking capacity from PTOs, purchase and
install switches in additional markets, implement efficient OSS and other back
office systems, develop a sufficient customer base, and attract, retain and
motivate qualified personnel. Delays or failure in receiving required regulatory
approvals or the enactment of new adverse regulations or regulatory requirements
may have a material adverse effect upon the Company. Although management
believes that the Company will be able to successfully mitigate these risks,
there is no assurance that the Company will be able to do so or that the Company
will ever operate profitably.

The actual amount and timing of the Company's future capital requirements may
differ materially from the Company's current estimates, and additional financing
may be required in the event of departures from the Company's business plans and
projections, including those caused by unforeseen delays, cost overruns,
engineering design changes, demand for the Company's services that varies from
that expected by the Company, and adverse regulatory, technological or
competitive developments. The Company may also require additional capital (or
require financing sooner than anticipated) if it alters the schedule or


                                   8
<PAGE>

targets of its roll-out plan in response to regulatory, technological or
competitive developments (including additional market developments and new
opportunities in and outside of its target markets). The Company intends to
evaluate potential joint ventures, strategic alliances, and acquisition
opportunities on an ongoing basis as they arise, and the Company may require
additional financing if it elects to pursue any such opportunities. The Company
also will be required to seek additional financing if it elects to deploy
networks in other Western European markets beyond its target markets. Sources of
additional financing may include commercial bank borrowings, vendor financing
and/or the private or public sale of equity or debt securities. There can be no
assurance that the Company will be able to fund its network deployment and
operations in any or all of its initial markets to the point of operating
profitably with its currently anticipated capital resources, and there can be no
assurance that any additional financing will be available on terms acceptable to
the Company or at all.

(2)    BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles 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 generally accepted accounting
principles for complete financial statements. The interim unaudited financial
statements should be read in conjunction with the audited financial statements
of the Company as of and for the year ended December 31, 1998. 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 and nine month periods ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999.

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

(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 depreciated
when ready for their intended use. Property and equipment at September 30, 1999
and December 31, 1998, consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                                                       September 30,         December 31,
                                                                            1999                 1998

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

                  <S>                                                    <C>                <C>
                  Network equipment                                      $   32,409         $      --
                  Office furniture and equipment                                889               129
                  Computer equipment and software                             2,649               608
                  Leasehold improvements                                      5,012                24
                                                                             ------             -----
                  Property and equipment, in service                         40,959               761
                  Less: accumulated depreciation                             (1,773)              (46)
                                                                             ------             -----
                  Property and equipment, in service, net                    39,186               715
                  Network construction in progress                           15,559             2,656
                                                                             ------             -----
                  Property and equipment, net                            $   54,745          $  3,371
                                                                             ======             =====
</TABLE>

                                       9
<PAGE>

(4)      LONG-TERM DEBT

In February 1999, the Company completed an Offering of 147,500 units (the
"Units") consisting of $147.5 million aggregate principal amount at maturity 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.
CompleTel Europe issued the Notes at a substantial discount from their principal
amount at maturity. The proceeds of the Offering, net of initial purchaser's
discount, were approximately $72.6 million and were held in an escrow account
until CompleTel Europe received a minimum commitment of $90 million in senior
credit facilities. To comply with Netherlands laws, the Notes are guaranteed by
Parent on a senior unsecured basis. As Parent is a holding company with no
operations other than the operations to be conducted by CompleTel Europe and its
subsidiaries, it is unlikely that Parent will 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 $75 million gross proceeds from
the Offering, approximately $70.5 million was attributed to the Notes and
approximately $4.5 million was attributed to the 1,475,000 Class B Membership
Interests of CompleTel Holdings. Cash interest will not accrue on the Notes
prior to February 15, 2004, with the Notes accreting to their stated principal
amount at maturity by that date at an effective interest rate of 15.1%. The
accretion will be charged to interest expense. Commencing February 15, 2004,
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 26, 2009.

Long-term debt consists of the following:

                                               September 30,      December 31,
                                                   1999               1998
                                               ------------       ------------
    14% Senior Discount Notes, face amount
      $147.5 million, due 2009,
      effective interest rate
      of 15.1%, at accreted value                $77,129            $     -
                                                  ======             ======


 (5)      SEGMENT REPORTING

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
establishes standards for the way that 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.

The Company is currently in the development stage. Through September 30, 1999,
the significant portion of the Company's expenditures were associated with its
network deployment in France. The Company expects to incur significant costs
associated as it expands its network deployment efforts into Germany. The
Company currently is not deploying networks in the UK and, as a result,
development costs in the UK are minimal.

Management currently evaluates the Company's development efforts according to
the geographic location of its markets. Certain financial information reflecting
the Company's development efforts is presented below. Results for Germany and
the UK are included in "corporate and other" since the results of those markets
are not significant to the consolidated financial statements:


                                       10
<PAGE>


<TABLE>
<CAPTION>
As of and for the period from inception (January 8, 1998) to September 30, 1998
(In thousands):
                                                                           Corporate
                                                              France       and Other      Consolidated
                                                              ------       ----------     ------------
       <S>                                                   <C>             <C>         <C>
       Revenue                                               $     -      $      -       $     -
       Depreciation                                          $    32      $      1       $    33
       Management Fee (Expense) Income                       $(1,451)     $      -       $ (1,451)
       Net Loss                                              $(2,870)     $    (32)      $ (2,902)
       Total Assets                                          $ 1,584      $    789       $  2,373
       Expenditures for Long-lived Assets                    $   971      $    434       $  1,405

As of and for the nine months ended September 30, 1999 (In thousands):
                                                                           Corporate
                                                              France       and Other      Consolidated
                                                              ------       ----------     ------------
       Revenue                                               $    957     $    419       $  1,376
       Depreciation and Amortization                         $  1,604     $    225       $  1,829
       Management Fee (Expense) Income                       $ (2,852)    $   (711)      $ (3,563)
       Net Loss                                              $(19,626)    $(10,113)      $(29,739)
       Total Assets                                          $ 81,404     $ 58,191       $139,595
       Expenditures for Long-lived Assets                    $ 48,474     $  8,128       $ 56,602

As of and for the three months ended September 30, 1998 (In thousands):
                                                                           Corporate
                                                              France       and Other      Consolidated
                                                              ------       ----------     ------------
       Revenue                                               $      -      $     -        $      -
       Depreciation and Amortization                         $     28      $     1        $     29
       Management Fee (Expense) Income                       $   (697)     $     -        $   (697)
       Net Loss                                              $   (971)     $  (438)       $ (1,409)
       Total Assets                                          $  1,584      $   789        $  2,373
       Expenditures for Long-lived Assets                    $    772      $   344        $  1,116

As of and for the three months ended September 30, 1999 (In thousands):
                                                                           Corporate
                                                              France       and Other      Consolidated
                                                              ------       ----------     ------------
       Revenue                                               $    676      $   379        $  1,055
       Depreciation and Amortization                         $  1,278      $   128        $  1,406
       Management Fee (Expense) Income                       $ (1,243)     $  (309)       $ (1,552)
       Net Loss                                              $(10,078)     $(3,489)       $(13,567)
       Total Assets                                          $ 81,404      $58,191        $139,595
       Expenditures for Long-lived Assets                    $ 22,729      $ 4,381        $ 27,110

</TABLE>

                                       11
<PAGE>



(6)    SUBSEQUENT EVENT

On October 26, 1999, the Company received a commitment from Goldman Sachs
International and Paribas, the co-arrangers, to provide syndicated bank
financing in the form of a senior credit facility in an aggregate amount of euro
equivalent to approximately $280 million to finance the deployment of networks
in France and Germany. This new commitment terminates, supercedes and replaces,
without penalty, the original commitment from Paribas for $90 million in senior
credit as disclosed in the Company's June 30, 1999 unaudited consolidated
financial statements. Additionally, the commitment with Nortel Networks for $20
million in vendor financing has been terminated. No termination fees are payable
to Nortel or Paribas.

Under the terms of the new commitment, the borrowers under the senior credit
facility would be two of the Company's wholly-owned Dutch holding companies
(CompleTel Holdings I B.V. and CompleTel Holdings II B.V.), the Company's
principal French operating companies (CompleTel S.A.S. and CompleTel Services
S.A.S.) and the Company's German operating company (CompleTel GmbH). If the
senior credit facility is implemented, the Notes would be structurally
subordinate to any debt incurred under the facility. Additionally, the terms of
the new commitment require that the senior credit facility be guaranteed to the
extent allowed by law by the Company and each of its subsidiaries. The terms of
the new commitment further require that the senior credit facility be secured to
the extent allowed by law by a perfected security interest in all of the
Company's present and future material assets and revenue and those of its
subsidiaries and by a pledge of the stock of each of the borrowers.

The senior credit facility, if and when implemented, would consist of an initial
tranche in the form of a term loan facility in the amount of the euro equivalent
of $110 million available up to December 31, 2000, repayable beginning 2003, and
a subsequent tranche of the euro equivalent of $170 million available up to
December 30, 2002, a portion of which would thereafter remain available as a
revolving credit facility for working capital purposes. The senior credit
facility would bear interest at a variable rate commencing at EURIBOR plus a
margin and costs, with a final maturity date of December 30, 2006.

The final implementation of the commitment and the availability of the first
tranche term loan remain subject to several conditions, including the delivery
of a business plan satisfactory to the arrangers, injecting the euro equivalent
of approximately $181 million of net proceeds from a combination of existing and
new equity contributions, subordinated shareholder loans, and the proceeds of
the notes, into the Company's French and German subsidiaries and having spent
the euro equivalent of at least $175 million, consistent with an approved
business plan, on French and German network deployment in the target markets,
and the satisfaction of customary conditions including preparation of definitive
documentation and satisfactory completion of due diligence. To meet the
implementation criteria, we are required to obtain $40 million in new equity
contributions. Based on the terms of the new commitment, the availability of
credit in subsequent drawings under the senior credit facility would be
contingent on a number of conditions precedent, including the satisfaction of
various financial ratios.

                                       12
<PAGE>



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

Introduction

         CompleTel Europe N.V. is the European holding company for a group of
companies whose ultimate parent is CompleTel LLC, a Delaware limited liability
company. CompleTel LLC indirectly owns 93% of CompleTel Europe and its
subsidiaries. We began our present business in January 1998 when we formed
CompleTel LLC. CompleTel Europe was incorporated in December 1998 in connection
with a reorganization of the holding company structure to permit the issuance of
the high yield notes described below. We accounted for these transactions as a
reorganization of entities under common control, similar to a pooling of
interests. This discussion reviews the financial position of CompleTel Europe
and its subsidiaries as if they had been formed and were a consolidated entity
since January 1998. In this discussion "we" and "our" refer to CompleTel Europe
N.V. and its subsidiaries.

Results of operations

         Our consolidated net loss during the third quarter and the nine-month
period ended September 30, 1999, was $13.6 million and $29.7 million,
respectively, compared to $1.4 and $2.9 million in the corresponding periods of
1998. The increase was primarily the result of substantial start-up costs of the
operating subsidiaries, primarily our French subsidiary. Start-up
facilities-based telecommunications companies, such as ours, typically incur
large capital expenditures to construct their networks, obtain operating
licenses, and obtain equipment, hardware and software to operate their networks.
Start-up telecommunications companies also normally incur significant marketing
and other expenses as they begin commercial operations. We began to depreciate
and amortize our telecommunications network capital costs upon the launch of our
services in June 1999. We have expensed and will continue to expense all other
start-up and organization costs in accordance with generally accepted accounting
principles.

         In view of our highly leveraged capital structure, we consider EBITDA
to be an important performance measure. Conceptually, EBITDA measures the amount
of income generated each period that could be used to service debt, because
EBITDA is independent of the actual leverage employed by the business; but
EBITDA ignores funds needed for capital expenditures and expansion. Some
investment analysts track the relationship of EBITDA to total debt as one
measure of financial strength. However, EBITDA does not represent cash provided
or used by operating activities and you should not consider EBITDA in isolation
or as a substitute for measures of performance prepared in accordance with
generally accepted accounting principles.

         You also should be aware that EBITDA may differ significantly from cash
flows from operating activities as reflected in a statement of cash flows
computed in accordance with generally accepted accounting principles. Cash from
operating activities is net of interest and taxes paid and is a more
comprehensive determination of periodic income on a cash (vs. actual) basis,
exclusive of non-cash items of income and expenses such as depreciation and
amortization. In contrast, EBITDA is derived from accrual basis income and is
not adjusted for changes in working capital. Consequently, EBITDA is not
affected by the timing of receivable collections or when accrued expenses are
paid. We are not aware of any uniform standards for determining EBITDA.
Presentations of EBITDA may not be calculated consistently by different
companies in the same or similar businesses. As a result, our reported EBITDA
may not be comparable to similarly titled measures used by other companies.

         During this start-up stage, we have experienced significant operating
losses and negative EBITDA. We expect to continue to generate negative EBITDA in
each market, as we emphasize

                                       13
<PAGE>


development, construction and expansion of our business, until we have
established a sufficient revenue-generating customer base in that market. We
expect to experience increasing operating losses and negative cash flows from
operations as we expand our operations and enter new markets, even if and after
we have achieved positive cash flow from operations in our initial markets. The
following table summarizes our EBITDA calculation for the periods indicated
(amounts in thousands of U.S. Dollars).
<TABLE>
<CAPTION>

                                                                                                     Commencement
                                                                                                     of Operations
                                                          Three Months          Nine Months        (January 8, 1998)
                                                             Ended                 Ended                  to
                                                         September 30,         September 30,         September 30,
                                                              1999                 1999                  1999
                                                      ---------------------  ------------------  ----------------------
        <S>                                              <C>                   <C>                  <C>
        Net Income (Loss)                                $  (13,567)           $  (29,739)          $  (37,300)
        Interest Expense (net of Interest Income)             1,227                 3,857                3,857
        Taxes                                                     -                     -                     -
        Depreciation and Amortization                         1,406                 1,829                1,875
                                                             ------                ------               ------
        Earnings Before Interest, Taxes,
          Depreciation and Amortization                  $  (10,934)           $  (24,053)          $  (31,568)
                                                             ======                ======               ======
</TABLE>


Revenues

         We generated no revenues from inception (January 8, 1998) through March
31, 1999. For the three and nine-month periods ended September 30, 1999,
revenues totaled $1.1 million and $1.4 million, respectively. Since January
1998, we have developed and refined our business plans, procured regulatory and
governmental authorizations for our initial 11 markets, raised capital, hired
management and other key personnel, designed, developed and begun installing our
fiber-optic networks and operation support systems, obtained senior financing
commitments and negotiated equipment and facilities agreements. During the same
time period, our French operating subsidiary has procured most of the
rights-of-way agreements for the initial French markets, has begun installing
switches and fiber, has completed one acquisition and in June 1999 launched
commercial services in two markets.

         We expect to generate most of our revenues from local access, local
usage, special access and private line services, from long-distance resale and
from Internet access sales, all to high-volume end-users. We may also pursue
additional acquisitions during 1999, which will supplement our core strategy in
our initial markets.

         We intend to price our services competitively and we may offer combined
service discounts designed to give customers incentives to buy a portfolio of
services from us. We plan generally to price our costs for local service at a
discount to the incumbent providers. However, although pricing will be an
important part of our strategy, we believe that customer relationships, customer
care, and consistent quality will be the keys to generating customer loyalty and
to minimizing customer churn. Our marketing plan includes various sales
promotions to win customers, including free installation and risk-free trials,
especially in the first few years as we establish a market presence.

Operating Expenses

         Our primary operating expenses during 1999 have and will continue to
consist of network costs, selling, general and administrative expenses, and
depreciation and amortization expenses.


                                       14
<PAGE>

         Network Costs

         Network costs for the three and nine-month periods ended September 30,
1999 totaled $0.9 million and $1.4 million, respectively. We did not incur
network costs in the similar 1998 periods. We expect these costs will increase
as we expand our networks and initiate services. 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 and switch
site rent, operating and maintenance costs.

         We are deploying digital switching platforms with hybrid local and long
distance capability and constructing fiber and wireless local loops in our
selected markets in France and Germany. This requires us to invest a significant
amount of funds to develop the central office switch sites, deploy the
transmission and distribution electronics, and invest in quality information
technology software (for example, billing and traffic management).

         In January 1999, our French operating subsidiary entered into an
equipment supply agreement with Matra Nortel Communications to provide switches
and related equipment and services in our markets in France. At the same time,
we entered into an agreement with Nortel plc establishing certain guidelines for
any future agreements we may make with Nortel affiliates to purchase equipment
and services in other countries within the European Union where we may establish
a network.

         We expect switch-site and operation service center lease costs to be a
large fixed component of our ongoing cost of services. We will also lease dark
fiber and conduit to establish and augment our networks in certain markets. We
expect these additional lease costs to increase as we increase the size of our
networks and to be a significant component of our cost of services in some
markets.

         We expect interconnection costs to be a major portion of our cost of
services. To enter a market and make ubiquitous calling available to customers,
we must enter into interconnection agreements with incumbent providers.
Typically, interconnection agreements set the fixed and variable costs to be
charged by each party for calls that are exchanged between the two carriers'
networks. Generally, a carrier must compensate another carrier when a call by
the first carrier's customer terminates on the second carrier's network. These
costs will grow as our customers' outbound call volume grows. We expect,
however, to generate revenue from other carriers for inbound calls to our
customers. These inbound revenues will offset our outbound interconnection costs
to some extent. In December 1998, our French subsidiary entered into an
interconnection agreement with France Telecom. In June 1999, our German
subsidiary entered into an interconnection agreement with Deutsche Telekom.

         We plan to enter into resale agreements with long distance carriers to
provide us with transmission services. Typically, long distance carriers resell
their services on a per-minute basis and may require us to make a minimum volume
commitment and to pay underutilization charges if we don't meet the minimum
commitment. If we underestimate our need for transmission capacity, we may be
required to obtain capacity through more expensive means. We expect these costs
will be a significant portion of our cost to deliver long distance services.
These costs will increase as our customers' long distance calling volume
increases.

         Selling, general and administrative expenses

         Our selling, general and administrative expenses include infrastructure
costs, such as selling and marketing costs, customer care, billing, corporate
administration, salaries and other personnel costs and legal fees. Selling,
general and administrative expenses increased $8.8 million to $9.6 million for
the


                                       15
<PAGE>

quarter ended September 30, 1999, compared to $0.8 million for the same quarter
in 1998. For the nine-month period ended September 30, 1999, selling, general
and administrative expenses totaled $20.2 million compared to $1.5 million for
the same period in 1998. This increase was primarily due to the rapid growth of
personnel costs in our startup.

         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. To attract and retain a highly
qualified sales force, we offer our sales and customer-care personnel a highly
competitive compensation package. The number of employees increased from 11 as
of September 30, 1998 to 262 as of September 30, 1999. On September 30, 1999 we
had a sales force of 75 (including managers and administrators), compared to 1
on September 30, 1998. We expect the number of sales and marketing personnel to
grow significantly as we prepare to introduce our services in the initial
markets and as we expand into new markets. We expect our selling and marketing
costs will increase as we develop and expand our operations.

         We have incurred and will continue to incur significant costs as we
continue to develop and implement our customer support and network support
systems. We also will incur ongoing expenses for customer care and billing.
Since our strategy stresses the importance of personalized customer care, we
expect the expense of running our customer-care department to be a large part of
our ongoing administrative expenses. Billing will also be a significant part of
our ongoing administrative expenses.

         We incur other costs and expenses associated with the maintenance of
our networks, administrative overhead, office leases and bad debt. We expect
that administrative overhead will be a large portion of these expenses during
the start-up phase of our business. We also expect that these costs will grow as
we expand our operations but that they will become smaller as a percentage of
revenue as we build our customer base.

         Management fees to affiliated party

         Our ultimate parent, our European holding company, and each of the
entities between our ultimate parent and the operating subsidiaries, incur
overhead costs and expenses associated with their holding company operations.
Our operating subsidiaries bear these costs and expenses. During 1998, our
ultimate parent, CompleTel LLC, and its wholly owned subsidiary, CableTel
Management, Inc., a Colorado corporation, entered into an agreement for CableTel
Management to provide management services for CompleTel LLC and all the other
companies in the group. The companies pay CableTel Management a management fee
of 105% (103% for periods prior to the end of January 1999) of all allocated
costs, expenses, charges and disbursements that CableTel Management incurs in
rendering services to each of the companies. For the three and nine months ended
September 30, 1999, we recorded $1.6 million and $3.6 million, respectively, of
related-party management fees. For the period from inception to September 30,
1999, we have recorded $6.5 million of such fees.

         Depreciation and amortization

         We have recorded depreciation and amortization expense of $1.4 million
for the three months ended September 30, 1999, compared to $29,000 for the three
months ended September 30, 1998. For the nine months ended September 30, 1999,
we have recorded depreciation and amortization expense of $1.8 million, compared
to $33,000 for the similar period in 1998. This increase is due to increases in
non-network related property and equipment. We started recording network
depreciation during the quarter ended June 30, 1999, when we initiated network
services.

         Other income and expense

         We have incurred interest expense of $1.9 million and $6.1 million
during the three and nine-month periods ended September 30, 1999, respectively.
The interest expense recorded reflects the accretion of the notes and the
amortization of deferred financing costs. We capitalize a portion of our


                                       16
<PAGE>

interest costs as part of the construction cost of our networks, in accordance
with Statement of Financial Accounting Standards No. 34. The amount of interest
capitalized during the three and nine-month periods ended September 30, 1999
totalled $0.7 million. Interest income for the same periods was $0.6 million and
$2.2 million, respectively, which represents the investment of the proceeds from
the high-yield notes and the investment of the available cash from the equity
contributions.

         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.

         Foreign exchange and interest rates

         We are exposed to changes in currency exchange rates because our
revenues, costs, assets and liabilities are, for the most part, denominated in
local currencies. As a result, our financial condition and results of
operations, as reported in U.S. dollars, may be affected by changes in the value
of the local currencies in which we transact business. The notes also expose us
to exchange rate fluctuations as the payment of principal and interest on the
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. While we intend to take steps to minimize interest rate and
exchange rate risks, we cannot assure you that we will not be materially
adversely effected by variations in interest rates and currency exchange rates.

Liquidity and capital resources

         Due to the start-up nature of our company, we reflect operating cash
flow deficits of $13.1 million for the nine months ended September 30, 1999, and
$7.5 million for the period from inception (January 8, 1998) to September 30,
1999. These operating cash flow deficits are the result of the development and
expansion of our operations.

         The telecommunications business is capital intensive. Since January
1998, and for the foreseeable future, 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 September 30, 1999, we had $58.9 million of
cash and short-term investments and net working capital of $38.8 million.

         Based on our current business plan and projections, we estimate that we
will need, since commencement of operations, approximately $450 million to fund
the deployment and operation of networks in our 11 target markets (including
requirements to finance capital expenditures, working capital, financing costs,
and debt service in those markets) and development of an Internet service
provider business in the United Kingdom, through the end of 2002. Since January
1998, CompleTel LLC has received $65.8 million in private equity contributions,
of which $59.5 was contributed to our French operating subsidiary. Our issuance
in a February 1999 units offering consisting of high yield notes and equity
interests resulted in gross proceeds to the Company in respect of the units of
approximately $75.0 million of which $70.5 million was allocated to the notes,
which represents a substantial discount from the $147.5 million aggregate stated
principal amount at maturity of the notes. Cash interest will not accrue on the
notes prior to February 15, 2004. At that date, the principal amount of the
notes will have increased to the $147.5 million stated principal amount at
maturity, at an effective interest rate of 15.31%. The $77 million increase in
principal amount will be charged to interest expense. Commencing February 15,
2004, 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 16,
2009. The units offering was closed in


                                       17
<PAGE>

escrow. In April 1999, we received out of the escrow
$73.1 million in net proceeds and interest, a portion of which we used to pay
costs of the offering.

         On October 26, 1999, we received a commitment from Goldman Sachs
International and Paribas, the co-arrangers, to provide syndicated bank
financing in the form of a senior credit facility in an aggregate amount of euro
equivalent to approximately $280 million to finance the deployment of our
networks in France and Germany. This new commitment terminates, supersedes and
replaces, without penalty, our original commitment from Paribas for $90 million
in senior credit. We have terminated the commitment with Nortel Networks for $20
million in vendor financing. No termination fees are payable to Nortel or
Paribas.

         The final implementation of the commitment and the availability of the
first tranche term loan of euro equivalent to approximately $110 million remain
subject to several conditions, including:

       o  the delivery of a business plan satisfactory to the arrangers;

       o  injecting the euro equivalent of approximately $181 million of net
          proceeds from a combination of existing and new equity contributions,
          subordinated shareholder loans, and the proceeds of the notes, into
          our French and German subsidiaries and having spent the euro
          equivalent of at least $175 million, consistent with an approved
          business plan, on French and German network deployment in the target
          markets;

       o  the perfection of the security interests;

       o  the satisfaction of customary conditions including preparation of
          definitive documentation and satisfactory completion of due diligence;
          and

       o  the satisfaction of the business plan in all material respects,
          including full satisfaction of revenue, EBITDA and fiber roll-out
          targets.

        Based on the terms of the new commitment, we expect the availability of
credit in subsequent drawings under the senior credit facility would be
contingent on a number of conditions precedent, including the satisfaction of
various financial ratios.

         Based on this new commitment, we expect to be able to fully fund the
development of our 11 target markets and an Internet Service provider business
in the United Kingdom with the proceeds from the issuance of the notes, the
funding expected to be available from the senior credit facility, equity
contributions received to date and approximately $40 million in new equity
contributions that we will be required to obtain in order to implement the
senior credit facility. We cannot assure you, however, that we will be
successful in implementing the senior credit facility or, if implemented, in
meeting subsequent drawdown conditions. Our inability to implement or draw on
the senior credit facility could cause us to suffer a funding shortfall that
would prevent us from deploying our networks in these markets and that could
materially adversely affect our business and prospects.

         We have had, and will continue to have, discussions concerning
potential acquisitions of Internet service providers and other providers of
telecommunication services to augment and expedite our business strategy.
Subject to the availability of funds, we intend to pursue attractive acquisition
opportunities. In March 1999, our French operating company acquired all of the
outstanding stock of Acces Internet et Solutions S.A.R.L., an Internet service
provider based in Lyon. In June 1999, our UK operating company acquired all of
the outstanding stock of Web International Networks Limited, an Internet service
provider based in London.

         The actual amount and timing of our future capital requirements may
differ materially from our estimates as a result of, among other things:

     o    the cost of development of the networks in each market;

     o    demand for our services;

                                       18
<PAGE>

     o    regulatory, technological, or competitive developments, including new
          market developments and opportunities within or outside of the initial
          markets;

     o    any change in development plans or projections that leads to
          alterations in the roll-out plan schedule or targets;

     o    the decision to pursue joint ventures, strategic alliances and
          acquisition opportunities; or

     o    the decision to deploy networks in other markets beyond the initial
          markets.

         As such, our actual costs and revenues may vary from expected amounts,
possibly by a significant degree. Any variation is likely to affect our future
capital requirements.

         During the three and nine-month periods ended September 30, 1999, we
made capital expenditures of $26.5 million and $53.4 million, respectively, for
property and equipment necessary to deploy networks in our initial markets.
During the same periods in 1998, we expended $.6 million and $.9 million,
respectively, for similar capital expenditures. We also used capital during both
of these periods to fund operations. Excess cash was invested in short-term
investments and money market investments.

Impact of the year 2000

         The "year 2000" generally describes the various problems that may
result from the improper processing of dates and date-sensitive calculations by
computers and other equipment as a result of computer hardware and software
using only the last two digits of the year to identify the year in a date field.
If a computer program or other piece of equipment fails to properly process
dates including and after the year 2000, the computer's calculations may be
inaccurate and equipment may malfunction. The failure to process dates could
result in system failures or miscalculations causing disruptions in operations
including, among other things, a temporary inability to process transactions,
send invoices or engage in other routine business activities.

         State of readiness. Generally, we have identified two areas for year
2000 review: internal systems and operations, and external systems and services.
As a new enterprise, we are not burdened internally with legacy systems that are
not year 2000 ready. As we develop our network and support systems, we intend to
ensure that all systems will be year 2000 ready. We are purchasing our customer
and network support systems with express specifications, warranties and remedies
that all systems be year 2000 ready. However, until well into the year 2000, we
cannot assure you that all systems will function adequately. Also, we intend to
sell our telecommunications services to companies that may rely upon
computerized systems to make payments for our services, and to interconnect
certain portions of our network and systems with other companies' networks and
systems. These transactions and interactions potentially expose us to year 2000
problems arising in these other companies' systems.

         We are in the process of contacting our external suppliers, vendors and
providers to obtain information about their year 2000 readiness. Based on that
information we are assessing the extent to which these external information
technology and non-information systems (including embedded technology) could
cause a material adverse effect on our operations in the event that these
systems fail to properly process date-sensitive calculations after December 31,
1999.

         Our assessment of our year 2000 readiness is ongoing as we continue to
develop our operations support systems and as we become reliant on the systems
of additional third parties as we expand our business into additional markets.
As a result, in the future we may identify a significant internal or external
year 2000 issue which, if not remedied in a timely manner, could have a material
adverse effect on our business, financial condition and results of operations.

                                       19
<PAGE>

         Costs to address year 2000 issues. We have used our internal
information technology and other personnel, not outside consultants, to identify
year 2000 issues. As a result, we have not incurred any significant costs in
identifying issues. We also do not anticipate any significant costs to insure
that our internal systems are year 2000 compliant because we do not expect that
any remediation will be required. Because we have not identified any material
year 2000 issues in connection with external sources, we cannot reasonably
estimate costs that may be required for remediation or for implementation of
contingency plans. As we gather information relating to external sources of year
2000 issues, we will reevaluate our ability to estimate costs associated with
year 2000 issues. Despite our efforts, we cannot assure you that as additional
year 2000 issues are addressed, our costs to remediate such issues will be
consistent with our historical costs.

         Risks of year 2000 issues. We cannot reasonably ascertain the extent of
the risks involved in the event that any one system fails to process
date-sensitive calculations accurately because we have not identified any
material year 2000 issues. Potential risks include:

     o    the inability to process customer billing accurately or in a timely
          manner;

     o    the inability to provide accurate financial reporting to management,
          auditors, investors and others;

     o    litigation costs associated with potential suits from customers and
          investors;

     o    delays in implementing other information technology projects as a
          result of work by internal personnel on year 2000 issues;

     o    delays in receiving payment or equipment from customers or suppliers
          as a result of their systems' failure; and

     o    the inability to occupy and operate in a facility.

Any one of these risks, if they materialize, could individually have a material
adverse effect on our business, financial condition or results of operations.

         All of our information technology and non-information technology
systems and products are manufactured or supplied by third parties outside of
our control. As a result, we cannot assure you that the systems of any of those
companies will be year 2000 ready. In particular, we will be dependent upon
France Telecom, Deutsche Telekom, other incumbent public telecommunications
providers and other competitive providers and long-distance carriers for
interconnection and completion of off-network calls. These interconnection
arrangements are critical to our ability to conduct our business and failure by
any of these providers to be year 2000 ready may have a material adverse effect
on our business in the affected market. We have recently been informally
notified by France Telecom that they may need to redirect their technicians'
attention on year 2000 problems during the last quarter of 1999. If year 2000
problems arise for France Telecom, the interconnections that we need to put
certain of our additional target markets in France into service may be delayed
unless we are able to purchase services from operators that already are
interconnected to France Telecom. France Telecom could not indicate the
likelihood or scope of delays they expect to occur.

         Moreover, although we have taken precautions to purchase our internal
systems to be fully year 2000 ready, we cannot assure you that every vendor will
fully comply with year 2000 readiness requirements. If some or all of our
internal and external systems fail or are not year 2000 ready in a timely
manner, there could be a material adverse effect on our business, financial
condition or results of operations.

         Contingency plans. Even though we have not identified any specific year
2000 issues, we believe that the design of our networks and support systems
could provide us with operating contingencies in the event critical external
systems fail. For example, in most of our markets we have established or intend
to establish interconnection agreements with the incumbent provider and other
regional and international carriers with points of presence in that market to
have the ability to remote traffic to another carrier

                                       20
<PAGE>

should one fail for any reason including year 2000 problems. As a result, in
large markets such as Paris or London, and even in smaller markets such as Lyon,
if we are able to interconnect with all carriers, we believe the risk of
complete loss of interconnection should be reduced. This may not be the case,
however, in other markets where the incumbent public telecommunications provider
may be the only interconnection provider. In that case, if the carrier fails,
there may be nothing we can do to mitigate the impact of that failure on our
operations.

         We have attempted to ensure that our own operations facilities and
systems are fully backed up with auxiliary power generators capable of operating
all equipment and systems for indefinite periods should power supplies fail,
subject to the availability of fuel to run these generators. We also have the
ability to relocate headquarters and administrative personnel to one of our
backed-up facilities should power and other services at our Paris headquarters
fail. Despite these contingency plans, which are intended to avoid singular
significant disruptions, we cannot assure you that we will not experience
numerous disruptions, individually insignificant, but in the aggregate
sufficient to cause a material disruption to our operations.

Euro conversion

         On January 1, 1999, 11 of the 15 member countries of the European Union
(excluding Denmark, Greece, the United Kingdom and Sweden, which may convert to
the euro at later dates) established fixed conversion rates between their then
existing sovereign currencies (the legacy currencies) and the euro and adopted
the euro as their common legal currency on that date. The legacy currencies are
scheduled to remain legal tender in the participating countries as denominations
of the euro until January 1, 2002. During the transition period, public and
private parties may pay for goods and services using either the euro or the
participating countries' legacy currency.

         Because our company is newly established, we are not burdened with
systems that must be redesigned to accommodate the introduction of the euro. We
have purchased and specified our business support systems, including billing, to
accommodate euro transactions and dual currency operations during the transition
period. In addition, we intend to require all vendors supplying third party
software to us to warrant compliance.

         We will be dependent on banks, customers and other providers to
complete business transactions and we will be exposed to problems inherent in
these third-party systems. During the transition period, to the extent we are
supplying local and national service, we can continue billings and collections
in the legacy currency to avoid euro conversion problems. However, to the extent
we have international transactions, we will be exposed to euro-related risks.

         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. Since a substantial portion of our net sales will
be denominated in euro or legacy currencies of participant countries, we will be
exposed to that risk.

                                       21
<PAGE>


ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

Investment portfolio and interest rate sensitivity

         Our investment policy is limited by the indenture for the notes. We are
restricted to investing in financial instruments with a maturity of one year or
less (with certain limited exceptions). The indenture requires investments that
meet high credit quality standards, such as obligations of the United States
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.

         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.

         We do not think we are exposed to significant changes in fair value of
our investment portfolio because of our conservative investment strategy.

Impact of foreign currency rate changes

         We are exposed to foreign exchange rate changes related to our
operating subsidiaries' monetary assets and liabilities and to the financial
results of those foreign subsidiaries when their respective financial statements
are translated into U.S. dollars in consolidation.

         Our operating subsidiaries' monetary assets and liabilities are subject
to foreign currency exchange risk because purchases of network equipment and
services are denominated in currencies other than the subsidiary's their own
functional currency.

         The spot rates for the euro and the pound sterling are shown below per
one U.S. dollar.

                                                    Euro    Pound Sterling
                                                    ----    --------------

              December 31, 1998. . . . . . . .  .   0.86         0.60

              March 31, 1999. . . . . . . . . . .   0.93         0.62

              June 30, 1999 . . . . . . . . . . .   0.97         0.63

              September 30, 1999 . . . . . . .  .   0.94         0.61

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

                                       22
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings

         The Company is involved in legal proceedings from time to time, none of
which management believes, if decided adversely to the Company, would have a
material adverse effect on the business, financial condition or results of
operations of the Company.

ITEM 2.  Changes in Securities

         None

ITEM 3.  Defaults upon Senior Securities

         None

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

         None

ITEM 5.  Other Information

         None

ITEM 6(a)         Exhibits

         Exhibit Number

         27.1            Financial Data Schedule

ITEM 6(b).        Reports on Form 8-K

         The Company did not file any report on Form 8-K during the three months
ended September 30, 1999.

                                       23
<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                     COMPLETEL EUROPE N.V.
                                          (Registrant)

Date: November 12, 1999
                                     /s/ David E. Lacey
                                     -------------------------------------------
                                     David E. Lacey
                                     Principal financial officer of the Company
                                       and duly authorized officer