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, 2002

                                     or

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

               For the transition period from ______to ______

                       Commission File 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.)
                  Kruisweg 609                               2132 NA
       2132 NA Hoofddorp, The Netherlands                  (Zip Code)
    (Address of principal executive offices)


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

      Securities registered pursuant to Section 12(b) of the Act: None

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

          ORDINARY SHARES, ((euro)) 0.10 NOMINAL VALUE, QUOTED ON
                        THE NASDAQ NATIONAL MARKET,
                         TRADED ON THE PARIS BOURSE
                                -----------

         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 |_|

         The number of shares outstanding of the Registrant's common stock
as of April 1, 2002 was 160,555,222 ordinary shares.


                             TABLE OF CONTENTS

PART I.              FINANCIAL INFORMATION

Item 1.              Financial Statements (unaudited)
                     Consolidated Balance Sheets as of March 31, 2002
                     (unaudited) and December 31, 2001 Consolidated
                     Statements of Operations for the Three Months Ended
                     March 31, 2002 and 2001 (unaudited) Consolidated
                     Statement of Shareholders' Equity for the Three Months
                     Ended as of March 31, 2002 (unaudited) Consolidated
                     Statements of Cash Flows for the Three Months Ended as
                     of March 31, 2002 and 2001 (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


                       PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

<TABLE>
<CAPTION>

                   COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
     (Stated in thousands of euro, except share and per share amounts)
                                (unaudited)

                                                                                   March 31,       December 31,
                                                                                        2002               2001
                                               ASSETS                              ---------       ------------
      CURRENT ASSETS:
<S>                                                                                     <C>                <C>
        Cash and cash equivalents                                                 (euro)56,166       (euro)81,613
        Short-term investments, restricted                                              16,863             16,694
        Accounts receivable, net of allowance for doubtful receivables
           of (euro)2,670 and (euro)2,330, respectively                                 21,347             18,357
        Affiliate receivables                                                              134              2,121
        VAT receivables                                                                 15,807             24,472
        Prepaid expenses and other current assets                                        9,705             11,494
                                                                                        ------            -------

                 Total current assets                                                  120,022            154,751
                                                                                       --------           -------

      NON-CURRENT ASSETS:
        Property and equipment, net                                                    276,255            277,807
        Licenses, net of accumulated
           amortization of(euro)267 and(euro)335, respectively                           1,292              2,104
        Goodwill                                                                         5,793              5,793
        Deferred financing costs, net                                                    7,308              7,525
        Non-current investments, restricted                                              8,172              8,085
        Other non-current assets                                                         2,769              2,525
                                                                                       -------            -------

                Total non-current assets                                               301,589            303,839
                                                                                       -------            -------

      TOTAL ASSETS                                                               (euro)421,611      (euro)458,590
                                                                                  =============      =============

                    LIABILITIES AND SHAREHOLDERS' EQUITY
      CURRENT LIABILITIES:
        Network vendor payables                                                   (euro)23,300       (euro)37,356
        Accrued liabilities                                                             26,656             21,896
        Trade accounts payable                                                          44,656             48,294
        Affiliate payables                                                                   -              1,393
                                                                                        -------           -------
                Total current liabilities                                               94,612            108,939
                                                                                        ------            -------

      LONG-TERM DEBT                                                                   232,350            227,735

      COMMITMENTS AND CONTINGENCIES (Note 6)

      SHAREHOLDERS' EQUITY:
        Ordinary shares, nominal value (euro).10 per share, 383,332,650
           shares authorized; 160,555,222 shares issued and
           outstanding at March 31, 2002 and
           December 31, 2001, respectively                                              16,055             16,055
        Additional paid-in capital                                                     688,575            690,093
        Deferred compensation                                                           (9,222)           (11,192)
        Other cumulative comprehensive loss                                              1,060                747
        Accumulated deficit                                                           (586,266)          (558,234)
        Treasury stock, at cost (Note 3)                                               (15,553)           (15,553)
                                                                                       --------           --------
      TOTAL SHAREHOLDERS' EQUITY                                                        94,649            121,916
                                                                                       --------           --------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                 (euro)421,611      (euro)458,590
                                                                                  =============      =============

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

</TABLE>

<TABLE>
<CAPTION>


                   COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
     (Stated in thousands of euro, except share and per share amounts)
                                (unaudited)

                                                                  Three Months Ended         Three Months Ended
                                                                    March 31, 2002             March 31, 2001
                                                                -----------------------    -----------------------
<S>                                                                             <C>                        <C>
REVENUE.............................................               (euro)       29,126        (euro)       19,656

OPERATING EXPENSES:
   Network costs....................................                            20,484                     18,691
   Selling, general and administrative..............                            18,439                     25,297
   Non-cash compensation............................                               451                     (1,731)
   Depreciation and amortization....................                             8,849                      9,506
   Restructuring, impairment and other charges......                             1,871                          -
                                                                -----------------------    -----------------------
         Total operating expenses...................                            50,094                     51,763
                                                                -----------------------    -----------------------

OPERATING LOSS......................................                           (20,968)                   (32,107)
                                                                -----------------------    -----------------------

OTHER INCOME (EXPENSE):
   Interest income..................................                               574                      5,398
   Interest expense, net of capitalized interest....                            (7,457)                    (8,345)
   Foreign exchange loss and other expense..........                              (181)                    (5,548)
                                                                -----------------------    -----------------------
         Total other income (expense)...............                            (7,064)                    (8,495)
                                                                -----------------------    -----------------------
NET LOSS                                                          (euro)       (28,032)       (euro)      (40,602)
                                                                =======================    =======================

BASIC AND DILUTED LOSS PER ORDINARY SHARE............             (euro)         (0.18)       (euro)        (0.26)
                                                                =======================    =======================

WEIGHTED AVERAGE NUMBER OF ORDINARY  SHARES
OUTSTANDING.........................................                       157,419,330                157,413,763
                                                                =======================    =======================

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

<TABLE>
<CAPTION>

                                            COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                     (Stated in thousands of euro, except share amounts)
                                                         (unaudited)

                                                                                                               Other
                                                                               Additional                    Cumulative
                                                      Ordinary Shares           Paid-in      Deferred       Comprehensive
                                                   Number          Amount        Capital    Compensation       Loss
                                                   ------          ------      -----------  ------------     ------------

<S>               <C> <C>                         <C>                  <C>          <C>            <C>              <C>
BALANCE, December 31, 2001....................    160,555,222    (euro)16,055 (euro)690,093  (euro)(11,192)  (euro) 747

 Deemed contributions by LLC related
   to allocation of
   non-cash compensation charges..............             --              --        (1,518)           830           --
 Amortization of deferred compensation........             --              --            --          1,140           --
 Cumulative translation adjustment ...........             --              --            --             --          313
 Net loss.....................................             --              --            --             --           --
                                                  ----------------------------------------------------------------------
BALANCE, March 31, 2002.......................    160,555,222  (euro)  16,055 (euro)688,575  (euro) (9,222)(euro) 1,060
                                                  ======================================================================


CONTINUATION OF TABLE

                                                                   Teasury Stock           Total
                                                     Accumulated     at Cost            Comprehensive
                                                      Deficit        (Note 3)              Loss           Total
                                                     -----------    ------------        -------------     -----

BALANCE, December 31, 2001....................       (euro)(558,234)   (euro)(15,553)   (euro)(299,321)  (euro)121,916
                                                                                             ========
 Deemed contributions by LLC related
   to allocation of
   non-cash compensation charges..............                  --                --               --             (688)
 Amortization of deferred compensation........                  --                --               --            1,140
 Cumulative translation adjustment ...........                  --                --               313             313
 Net loss.....................................              (28,032)              --           (28,032)        (28,032)
                                                    -------------------------------------------------------------------
BALANCE, March 31, 2002.......................      (euro) (586,266)   (euro)(15,553)    (euro)(27,719)  (euro) 94,649
                                                    ===================================================================


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

<TABLE>
<CAPTION>

                                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Stated in thousands of euro)
                                                  (unaudited)

                                                             Three Months Ended             Three Months Ended
                                                               March 31, 2002                 March 31, 2001
                                                          --------------------------       ---------------------
 OPERATING ACTIVITIES:
<S>                                                                        <C>                          <C>
   Net loss......................................                    (euro)(28,032)               (euro)(40,602)
   Adjustments to reconcile net loss to net cash flows
   provided by operating activities:
     Depreciation and amortization...............                            8,849                        9,506
     Non-cash compensation.......................                              451                       (1,731)
     Restructuring, impairment and other charges.                            1,871                            -
     Accretion of senior discount notes..........                            3,727                        3,153
     Amortization of deferred financing costs....                              217                          447
     Foreign exchange loss.......................                            1,033                        5,070
     Changes in operating assets and liabilities:
       Increase in accounts receivable...........                           (2,990)                      (3,487)
        Decrease in prepaid expenses,
         VAT receivables
         and other current assets................                           10,454                       13,674
       Decrease (increase) in other non-current assets                        (244)                         265
       Increase in accrued liabilities and trade
       accounts                                                              1,122                        5,665
            Payable
       Change in net affiliate payables/
         receivables.............................                              594                       (1,602)
                                                                       -------------                ------------

       Net cash flows used in operating activities                          (2,948)                      (9,642)
                                                                       -------------                ------------

 INVESTING ACTIVITIES:
   Expenditures for property and equipment.......                           (8,458)                     (56,926)
   Decrease in network vendor payables...........                          (14,056)                      (2,404)

         Net cash flows used in investing activities                       (22,514)                     (59,330)

 FINANCING ACTIVITIES:
    Proceeds from exercise of stock options......                               --                           17
   Deferred financing costs......................                               --                         (479)
                                                                       -------------                ------------
         Net cash flows provided by financing activities                        --                         (462)
                                                                       -------------                ------------

   Effect of exchange rates on cash..............                               15                          259
                                                                       -------------                ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                           (25,447)                     (69,175)


CASH AND CASH EQUIVALENTS, beginning of ...period                           81,613                      361,698
                                                                 ------------------         --------------------

CASH AND CASH EQUIVALENTS, end of period.........                 (euro)    56,166          (euro)      292,523
                                                                 =================          ===================

SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Cash paid for interest..........................                 (euro)        --           (euro)           --
 Cash paid for taxes.............................                 (euro)        --           (euro)           --


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



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



(1) Organization and Nature of Operations

         CompleTel Europe N.V. ("CompleTel Europe") (together with its
wholly-owned subsidiaries, the "Company") is a Dutch holding company
incorporated on December 14, 1998. The Company is a facilities-based
operator of a technologically advanced, high-capacity, fiber optic
communications infrastructure. A facilities-based operator uses mainly its
own telecommunications facilities to provide services, in contrast with
non-facilities-based resellers who purchase the services of other providers
and then retail the services to customers.

         The Company provides telecommunications and Internet-related
services to business and government end-users, carriers and Internet
service providers in targeted metropolitan areas, with a focus on network
deployment in France. It delivers these services primarily to connected,
on-net customers over its fiber optic metropolitan area networks, or MANs.
The Company has MANs in nine cities in France, including Paris, Lyon,
Marseille, Lille, Grenoble, Toulouse, Nice, Nantes and Strasbourg. The
construction of the Company's MANs was completed during the last quarter of
2001. The Company's MANs are connected by its leased inter-city network.

         Since its inception, the Company has generated operating losses
and negative cash flow from its operating activities. The Company expects
to continue to experience operating losses and negative cash flows from
operations until it establishes a sufficient revenue-generating customer
base. While the Company is experiencing growth in its core retail activity
in France, and believes that this trend will continue, during 2001 and
beginning of 2002, it observed signs of general weakness in the European
markets for carrier, dial-up Internet access and Internet data center
services. In light of these adverse market conditions, the Company has
implemented reorganization and restructuring measures in order to adjust
its operations to foreseeable market conditions, reducing ongoing operating
expenses and capital outlays. In particular, the Company has implemented a
major downsizing of its German operations in view of the slowdown in German
telecommunications markets (particularly in the carrier and ISP segments).
Furthermore, in April 2002, in connection with its planned recapitalization
as described below, the Company decided to sell its entire German
operations, which sale was completed, in early May 2002 (see Note 10). In
addition, faced with a significant downturn in the web hosting market,
linked to the collapse of the ".com" market and installed hosting
overcapacity in Europe, the Company has decided to scale down the Internet
data centers operations it has launched in France, Germany and the United
Kingdom. In France the Company has decided to integrate these activities
with its retail businesses, while in Germany and the United Kingdom, the
Company has exited these markets by selling its operations in these
countries (see Note 10).

         While the Company previously estimated its funding gap (that is,
the additional financing required to bring it to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, in light of (i) the
anticipated elimination of interest payments upon the exchange or
retirement of the Company's outstanding debt securities pursuant to the
recapitalization plan described below, (ii) the cash savings from the sale
of the Company's German and UK operations and cost reductions at the
Company's European headquarters, and (iii) the lower cash requirements
related to selling, general and administrative expenses and capital
expenditures resulting from the Company's restructuring efforts, the
Company currently estimates its funding gap to be approximately (euro)30
million. The Company expects that, upon the completion of the
recapitalization plan described below, its cash balances, together with the
anticipated cash flow from its operations, will be sufficient to fully fund
its restructured operations to cash flow breakeven.

         On May 15, 2002, the Company signed an agreement in support of a
recapitalization plan (the "Recapitalization") with an ad hoc committee of
holders of its 14% senior discount notes due 2009 and 14% senior notes due
2010 (collectively, the "Notes"), constituting over 75% of the Company's
outstanding Notes and with Meritage Private Equity Funds ("Meritage") and
DeGeorge Telecom Holdings ("DeGeorge Telecom"), two of the Company's
principal shareholders. The Recapitalization will involve a debt for equity
swap in respect of the outstanding Notes, the return to the holders of the
senior notes due 2010 of the outstanding balance in the escrow account
established to provide funds for interest payments on these senior notes,
and an equity investment in the aggregate of at least (euro)38 million.

         The Company intends to effect the Recapitalization by means of a
voluntary pre-arranged Netherlands composition proceeding known as an
Akkoord. To avail itself of this proceeding, CompleTel Europe would file
with the Dutch courts for protection from its creditors, which consist
almost entirely of holders of its Notes. At the same time, it would submit
to the Dutch courts a composition plan whereby the holders of the Notes
would receive convertible preferred B shares (the "Convertible Preferred B
Shares") and ordinary shares representing approximately 42.6% of the
Company's share capital that would be outstanding at the close of the
Recapitalization (on an as-converted basis). This composition plan, which
is subject to the support of the holders of at least 75% of the Notes and
the sanction of the Dutch courts, would be binding on all the Noteholders,
and would effectively eliminate CompleTel Europe's outstanding indebtedness
while permitting its operating subsidiaries to continue operations without
disruption. The Company believes it has obtained the level of commitments
from the holders of its Notes that would be required by The Netherlands
courts to approve the composition plan and the retirement of all of its
outstanding Notes.

         The Recapitalization includes an equity investment of an aggregate
of (euro)30 million by Meritage and DeGeorge Telecom in return for the
issuance of convertible preferred A shares (the "Convertible Preferred A
Shares") and ordinary shares representing approximately 42.6% of the share
capital (on an as-converted basis). In addition, certain of the holders of
the senior notes due 2010 have committed to make an equity investment of
approximately (euro) 8 million (reflecting a portion of the escrow funds to
be released to these holders) in return for the issuance of Convertible
Preferred A Shares and ordinary shares representing approximately 11.4% of
the share capital (on an as-converted basis).

         In accordance with their respective terms, in the event of a
liquidation of CompleTel Europe, the Preferred A Shares will rank senior to
the Preferred B Shares, which, will rank senior to CompleTel Europe's
ordinary shares. In addition, upon liquidation, the Preferred A Shares and
Preferred B Shares will be entitled to receive, prior to any distribution
in respect of the ordinary shares, an amount in cash equal to (euro)0.03
per share.

         Post-Recapitalization, the Noteholders, Meritage and DeGeorge
Telecom would own, in the aggregate, 96.6% of the Company's share capital
(on an as-converted basis), with the remaining shares (representing 3.4% of
the Company's share capital) held by the Company's currently existing
shareholders. Furthermore, post-Recapitalization, the Company's Supervisory
Board would be reconstituted as a six-member board, comprising two
designees of the holders of the Convertible Preferred A Shares, two
designees of the holders of the Convertible Preferred B Shares, and two
independent directors mutually acceptable to the Noteholders and to
Meritage and DeGeorge Telecom.

         As an alternative to an Akkoord, if the Company concludes that a
significant majority of the holders of the Notes support the
Recapitalization, it may pursue an out-of-court restructuring effected by
means of an unregistered exchange offer on substantially the same terms as
the Akkoord. This exchange offer would take the advantage of the exemption
from registration under the U.S. Securities Act of 1933 provided by Section
3(a)(9) of the Securities Act and could enable the Company to effect the
Recapitalization faster than by means of an Akkoord. In addition, the
company may pursue a pre-arranged U.S. Chapter 11 filing to accomplish the
Recapitalization.

         The completion of the Recapitalization, which is expected during
the third quarter of 2002, is subject to, among other things, the approval
of a share capital increase by the Company's existing shareholders, the
closure or sale of the Company's operations outside of France, and other
customary conditions. The Company believes that it has obtained the
required level of commitments from its existing shareholders to vote in
favor of the capital increase and other required actions.

         The Company's Supervisory and Management Boards voted unanimously
to approve the Recapitalization. The Company expects that, upon the
completion of the Recapitalization, its cash balances, together with the
anticipated cash flow from its operations, will provide it with sufficient
capital to fully fund its restructured operations to cash flow breakeven.

         There is no assurance that the Company will be able to effect the
Recapitalization, or that the Company will be able secure alternative
sources of financing if the Recapitalization is not consummated. If the
Company fails to effect the Recapitalization, or to obtain sufficient
alternative financing, it will effectively cease to be able to conduct its
business. Given its funding position, the Company believes that if the
Recapitalization is not realized, there would be a substantial doubt
regarding its ability to continue as a going concern.

(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, 2001. 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, 2002 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2002.
Certain amounts for prior periods have been reclassified to conform to the
current period presentation.

         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.

(3) Property and Equipment

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

<TABLE>
<CAPTION>

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

                                                                                March 31,    December 31,
                                                                                   2002            2001
                                                                                   ----            ----

<S>                                                                                  <C>               <C>
Network equipment............................................................  (euro)280,630     (euro)276,206
Office furniture and equipment...............................................          3,757             3,602
Computer equipment and software..............................................          7,143             7,152
Leasehold improvements.......................................................          4,165             4,096
Materials and supplies .....................................................           5,525             5,525
Buildings....................................................................            205               205
                                                                               -------------      ------------

Property and equipment, in service...........................................        301,425           296,786
Less: accumulated depreciation...............................................       (60,462)          (49,573)
                                                                                  ----------      ------------

Property and equipment, in service, net......................................        240,963           247,213
Construction in progress.....................................................         35,292            30,594
                                                                                 -----------      ------------

Property and equipment, net..................................................  (euro)276,255     (euro)277,807
                                                                               =============     =============

</TABLE>


         The Company capitalized approximately (euro)0.9 million and
(euro)3.5 million of interest for the three months ended March 31, 2002 and
2001, respectively.

         Expenditures for maintenance and repairs are expensed as incurred.

(4) Related Party Transactions

Employee Loans

         In December 2000, the Company loaned its then President and Chief
Executive Officer, the principal amount of U.S.$1.5 million. The principal
amount, together with accumulated interest at the annual rate of 7% was
originally scheduled to be due and payable on the earlier of December 31,
2001, or 180 days after any termination of employment. Effective as of
December 11, 2001, the maturity date for this loan was extended to December
31, 2002, or 180 days after any termination of employment. As a result of
this executive's resignation on February 22, 2002, the loan is currently
due and payable on August 19, 2002. As a result of the current fair market
value of the collateral, and the anticipated dilution to the currently
outstanding ordinary shares as part of the Company's planned
Recapitalization (see Note 1), the Company has recorded a reserve for the
loan amount and the accrued interest. The Company still expects payment of
the amount when due on August 19, 2002 and will fully pursue such
collection.

         In April 2001, the Company and its current Chief Executive Officer
("CEO"), entered into a Loan Agreement and a Promissory Note, pursuant to
which the Company made a (euro)865,000 loan to the CEO. The loan accrued
interest at 6%, compounded quarterly, and became due February 28, 2002. In
accordance with its terms, the repayment of the loan (including interest
and reimbursement of associated tax liabilities) has been forgiven by the
Company, as the CEO is still employed by the Company.

(5) Indebtedness

<TABLE>
<CAPTION>

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

                                                                                      March 31         December 31
                                                                                        2002              2001
                                                                                        ----              ----

<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,
          2002 and December 31, 2001 at exchange rates of 0.8702 and
          0.8901, respectively...................................................     (euro)104,093      (euro)99,333
      14% Senior Notes, due 2010.................................................           121,870           121,870
      Other long-term debt.......................................................             6,387             6,532
                                                                                            -------           -------
                                                                                      (euro)232,350     (euro)227,735
                                                                                            =======           =======

</TABLE>


(6) Commitments And Contingencies

Legal Proceedings

         The syndicate of co-owners of a building in which CompleTel France
installed certain telecommunications equipment, brought an action against
the Company before the Tribunal de Grande Instance of Paris alleging that
the equipment was installed without obtaining the necessary authorizations
and caused disturbances in the building. On May 11, 2001, the tribunal
issued a decision, following a preliminary injunction hearing (a) ordering
the Company to restore the premises to their original state, and (b)
appointing an expert with the mandate of determining the liability, if any,
the damages sustained, if any, and the work which the Company may have to
undertake with respect to the equipment to cease the disturbances. The
Company appealed against this decision and the expertise is currently in
progress. The Company is involved in discussions to settle this matter out
of court, but there can be no assurance that the Company will be able to
reach a settlement. If the negotiations to settle out of court are
unsuccessful, the Company may be required to move the equipment and may be
required to do so in a short period of time. In such an event, the Company
could suffer disturbances to its network, which could have an impact on its
customers activities. However, at this stage of the litigation, the Company
is not in a position to predict the outcome of this matter or determine the
impact, if any, that it may have on its activities.

         The Company is not party to any other pending legal proceedings
that it believes would, individually or in the aggregate, have a material
adverse effect on its financial condition or results of operations.

 (7) 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 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.

         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 expenses, restructuring, impairment and other charges
and other non-cash items, including foreign exchange gains or losses
("Adjusted EBITDA").

         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, the
Company is 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, the
Company's reported Adjusted EBITDA may not be comparable to similarly
titled measures used by other companies.

         Certain financial information reflecting the Company's development
efforts by geographic location is presented below.

As of and for the three months ended March 31, 2002:

<TABLE>
<CAPTION>

                                            CompleTel        CompleTel        CompleTel       CompleTel
                                               France          Germany               UK      Europe and
                                                                                                  Other              Total
         Revenue:
<S>                                            <C>               <C>            <C>            <C>                   <C>
           Retail                              14,972            3,105                -               -             18,077
           Carrier                              3,590            1,822                -               -              5,412
           ISP                                  3,787              193                -               -              3,980
           Hosting                                602              184              871               -              1,657
                                          ---------------------------------------------------------------------------------
             Total revenue                     22,951            5,304              871               -             29,126
         Adjusted EBITDA                      (4,034)            (993)             (809)         (3,961)            (9,797)
         Total long-lived assets, net         238,375           21,084                -          23,881            283,340
         Total assets                         286,261           27,916            2,518         104,916            421,611
         Expenditures for long-lived
             Assets                             8,215             (405)               -             648              8,458
</TABLE>


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

<TABLE>
<CAPTION>

                                                 CompleTel       CompleTel       CompleTel       CompleTel
                                                    France         Germany              UK      Europe and
                                                                                                     Other              Total
           Revenue:
<S>                                                  <C>             <C>                                                <C>
             Retail                                  6,609           1,159               -               -              7,768
             Carrier                                 1,822             973               -               -              2,795
             ISP                                     6,824             103               -               -              6,927
             Hosting                                   348             574           1,244               -              2,166
                                            ----------------------------------------------------------------------------------
               Total revenue                        15,603           2,809           1,244               -             19,656
           Adjusted EBITDA                          (8,987)         (7,484)         (2,541)         (5,320)           (24,332)
           Total long-lived assets, net            180,266         144,265          13,006          15,364            352,901
           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>

(8) Restructuring, Impairment and Other Charges

         In connection with the Company's restructuring efforts during the
second half of 2001, the Company recognized approximately (euro)167.6
million in restructuring, impairment and other charges.

<TABLE>
<CAPTION>

         These charges consist of the following (in millions):

<S>                                                                                  <C>
Write-down of German and United Kingdom assets............                      (euro)142.7
Write-down of materials and supplies..............................                      6.0
Restructuring charges.................................................                 15.8
Other charges...........................................................                3.1

Total.....................................................................      (euro)167.6
                                                                                ===========

</TABLE>

         The write-down of the Company's German and U.K. assets resulted
from the Company's decision to significantly scale-back its operations in
Germany and exit the market in the United Kingdom. As a result of its
restructuring, the Company determined, in accordance with its policy
relating to recoverability of long-lived assets, that the values of its
German and U.K. assets were impaired as of December 31, 2001. Accordingly,
as of December 31, 2001, the Company recorded charges to write-down the
carrying values of these assets to their estimated fair market values as
determined by the Company using a discounted cash flow approach. The
write-down of materials and supplies is related to the revaluation of
certain materials and supplies held by the Company resulting directly from
the decision by the Company to scale-back its operations in Germany, as a
result of which, these materials and supplies are in excess of what is
needed by the Company to complete construction of its networks. The
restructuring charges relate primarily to severance costs associated with
the reductions in the size of the Company's workforce in Germany and the
United Kingdom, as well as charges relating to lease terminations and
renegotiated interconnection agreements. The other charges of (euro)3.1
million are related to the costs associated with the repayment of certain
loans held by employees with a bank and the costs associated with the
forgiveness of a loan made to the CEO of the Company, in accordance with
its terms. Salary costs related to these employees have been included under
selling, general and administrative in the consolidated statement of
operations. In addition to these charges incurred in 2001, the Company also
recorded, in the first quarter of 2002, other charges of (euro)1.9 million,
related to a reserve made in connection with the decrease in value of the
collateral for a loan extended by the Company to its former President and
Chief Executive Officer, as described in Note 4.

         Management expects the restructuring to be completed during the
first half of 2002.

         The restructuring charges can be detailed as follows:

Summary of Restructuring Charges

<TABLE>
<CAPTION>
                                                                                    Europe HQ
                                        France         Germany            UK         and other             Total

<S>                                          <C>             <C>               <C>             <C>           <C>
Severance (1)                          (euro)1,151     (euro)2,399       (euro)527       (euro)603     (euro)4,680
Facilities and Network (2)                   1,558           5,194             992               -           7,744
Other (3)                                       20             601              50           2,694           3,365
                                       -----------      ----------      ----------      ----------     -----------
                                             2,729           8,194           1,569           3,297          15,789
Paid through March 31, 2002                  1,994           4,736           1,094           2,518          10,342
                                       -----------      ----------      ----------      ----------     -----------

Accrual balance,
 March 31, 2002                          (euro)735     (euro)3,458       (euro)475       (euro)779     (euro)5,447
                                        ==========    ============      ==========  ==============    ============

-------------------------------
     (1)   Severance charges relate to estimated termination salaries and
           benefits in connection with the termination of employees,
           related outplacement fees and other related benefits.

     (2)   Facilities and network charges relate to costs to terminate or
           renegotiate facilities and equipment leases and interconnection
           agreements.

     (3)   Other charges primarily relate to legal and consulting costs expected
           to be incurred in connection with the restructuring.

</TABLE>

(9)      New Accounting Standards

         In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"). SFAS 141 requires the use of the purchase method of
accounting for all business combinations initiated after June 30, 2001.
SFAS 142 requires intangible assets to be recognized if they arise from
contractual or legal rights or are "separable", i.e., it is feasible that
they may be sold, transferred, licensed, rented, exchanged or pledged. As a
result, it is likely that more intangible assets will be recognized under
SFAS 141 than its predecessor, APB Opinion No. 16, although in some
instances previously recognized intangibles will be subsumed into goodwill.

         Under SFAS 142, goodwill will no longer be amortized on a straight
line basis over its estimated useful life, but will be tested for
impairment on an annual basis and whenever indicators of impairment arise.
The goodwill impairment test, which is based on fair value, is to be
performed on a reporting unit level. A reporting unit is defined as a SFAS
No. 131 (see Note 7) operating segment or one level lower. Goodwill will no
longer be allocated to other long-lived assets for impairment testing under
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." Additionally, goodwill on equity
method investments will no longer be amortized; however, it will continue
to be tested for impairment in accordance with APB Opinion No. 18, "The
Equity Method of Accounting for Investments in Common Stock." Under SFAS
142, intangible assets with indefinite lives will not be amortized.
Instead, they will be carried at the lower of cost or market value and be
tested for impairment at least annually. All other recognized intangible
assets will continue to be amortized over their estimated useful lives.

         The Company adopted SFAS 141 and 142 effective January 1, 2002.
Accordingly, the Company discontinued amortizing its remaining balance of
goodwill of approximately (euro)5.6 million effective January 1, 2002. The
Company does not anticipate that the adoption of these statements will have
a material impact on its results of operations, its financial position or
its cash flows.

         The amortization expense and net loss of the Company for the three
months ended March 31, 2002 and 2001 are as follows (amounts in thousands):

<TABLE>
<CAPTION>

                                                                        2002         2001
                                                                        ----         ----
<S>                                                                 <C>             <C>
Goodwill amortization........................................      (euro)   -    (euro)81
Licenses amortization..........................................           121         101
Net loss, adjusted for no goodwill amortization............           (28,032)    (40,521)
</TABLE>

         In June 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS
143 establishes accounting requirements for retirement of obligations
associated with tangible long-lived assets, including (1) the timing of the
liability recognition, (2) initial measurement of the liability, (3)
allocation of cost to expense, (4) subsequent measurement of the liability,
and (5) related financial statement disclosure. SFAS 143 requires that the
fair value of the liability for an asset retirement obligation be
recognized in the period during which it is incurred, if a reasonable
estimate of fair value can be made. The associated asset retirement costs
are capitalized as part of the carrying value of the asset and depreciated
over life of the associated asset. SFAS 143 requires to measure changes in
the liability for an asset retirement obligation due to the passage of time
by applying an interest method of allocation to the amount of the liability
at the beginning of a reporting period. The interest rate used to measure
that change is the credit-adjusted-risk-free rate that existed when the
liability was initially measured. Finally, SFAS 143 requires such changes
in liability for asset retirement obligations to be recognized as an
increase in the carrying amount of the liability and as an expense
classified as an operating item in the statement of income. SFAS 143
applies to fiscal years beginning after June 15, 2002. The Company does not
anticipate that the adoption of SFAS will have a material impact on its
results of operations, its financial position, or its cash flows.

         In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"). SFAS 144 establishes a single accounting model for
long-lived assets to be disposed of by sale consistent with the fundamental
provisions of SFAS 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of." While it supersedes APB
Opinion 30 "Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions," it retains the
presentation of discontinued operations but broadens that presentation to
include a component of an entity (rather than a segment of a business).
However, discontinued operations are no longer recorded at net realizable
value and future operating losses are no longer recognized before they
occur. Under SFAS 144 there is no longer a requirement to allocate goodwill
to long-lived assets to be tested for impairment. SFAS 144 also establishes
a probability weighted cash flow estimation approach to deal with
situations in which there is a range of cash flows that may be generated by
the asset being tested for impairment. SFAS 144 also establishes criteria
for determining when an asset should be treated as held for sale.

         SFAS 144 is effective for fiscal years beginning after December
15, 2001 and interim periods within those fiscal years, with early
application encouraged. The provisions of the Statement are generally to be
applied prospectively. The Company does not anticipate that adoption of
SFAS 144 will have a material impact on its results of operations, its
financial position, or its cash flows.

         In April 2002, the Financial Accounting Standards Board issued
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145
rescinds SFAS 4 "Reporting Gains and Losses from Extinguishment of Debt"
and also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings or describe their applicability
under changed conditions. SFAS 145 applies to fiscal years beginning after
May 15, 2002. The Company does not anticipate that the adoption of SFAS 145
will have a material impact on its results of operations, its financial
position, or its cash flows.

(10) Subsequent Events

Sale of Germany and U.K. Operations

         On May 10, 2002, the Company completed the sale of its German
operations to a third party. Pursuant to the agreement governing the terms
of the sale, the Company transferred to the buyer the entire share capital
of CompleTel GmbH, which, until the sale, was an indirect wholly-owned
subsidiary of CompleTel Europe. Furthermore, the Company agreed to acquire
from CompleTel GmbH certain transmission equipment for (euro)500,000. In
addition, the Company agreed to provide the buyer free support billing and
financial IT services for a period of up to 12 months after the sale.
Following the sale of CompleTel GmbH, the Company no longer operates or
generates revenue in Germany. The Company expects to record a loss in
connection with this sale in its financial statements for the second
quarter of 2002. See Note 7 for details on the Company's German operations'
performance and their relative contribution to the Company's over-all
performance. In connection with the sale of its German operations, the
Company entered into reciprocal agreements for terminating traffic, which
will allow the Company to service its French customers that currently have,
or will develop, operations in Germany.

         On May 15, May 2002, the Company completed the sale of its U.K.
operations to a third party. Pursuant to the agreement governing the terms
of the sale, the Company transferred to the buyer the entire share capital
of CompleTel UK Limited, which, until the sale, was an indirect
wholly-owned subsidiary of CompleTel Europe. Following the sale of
CompleTel U.K. Limited, the Company no longer operates or generates revenue
in the United Kingdom. See Note 7 for details on the Company's U.K.
operations' performance and their relative contribution to the Company's
over-all performance.

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, Adjusted EBITDA forecasts,
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. The forward-looking statements are generally
identified by the use of forward-looking words such as "plan", "estimate",
"believe", "expect", "anticipate", "will", "should" and "may" or other
variations of such terms, or by discussion of strategy that involves 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. 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. The forward-looking statements contained
in this report involve known and unknown risks, uncertainties and other
factors that could cause our actual future results, performance and
achievements to differ materially from those forecasted or suggested
herein. The most important of such factors is our potential inability to
effect our recapitalization plan on the terms described in this report.
With respect to revenue forecasts, such factors include, but are not
limited to: (a) decline in demand for our telecommunications services; (b)
pricing pressures from our direct competitors as well as from providers of
alternative services; (c) failures, shutdowns or service disturbances with
respect to our networks; (d) worsening carrier and Internet data market
weakness; (e) major changes in market conditions and (f) completion of any
acquisition or disposition transactions. In addition to these risks,
Adjusted EBITDA forecasts and other forward-looking information in this
report are subject to such risks as: (a) unforeseen delays or increased
expenditures incurred in the construction of our operations; (b) our
inability to develop and maintain efficient operations support; (c)
regulatory developments adverse to us or difficulties we may face in
maintaining necessary telecommunications licenses or other governmental
approvals; and (d) our inability to obtain required financing on
satisfactory terms. For a more detailed discussion of such risks affecting
us, please refer to our prospectuses and annual reports filed with the U.S.
Securities and Exchange Commission.

         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 effect on February 25, 2000.

Overview

         We are a facilities-based operator of a technologically advanced,
high-capacity, fiber optic communications infrastructure. We provide
telecommunications and Internet-related services to business and government
end-users, carriers and Internet service providers in targeted metropolitan
areas, with a focus on network deployment in France. We deliver these
services primarily to connected, on-net customers over our fiber optic
metropolitan area networks, or MANs.

         We were incorporated in December 1998. Through a series of
transactions in January 1999, we became the holding company for our
telecommunications businesses, which commenced in January 1998 when
CompleTel LLC, our then ultimate parent, 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 competitive local exchange carrier related
development activities since CompleTel LLC's inception.

         We have generated operating losses and negative cash flow from our
operating activities to date, and we expect to continue to experience
operating losses and negative cash flows from operations until we establish
a sufficient revenue-generating customer base. We are experiencing growth
in our core retail activity in France, and believe that this trend will
continue. However, during 2001 and the beginning of 2002, we observed signs
of general weakness in the European markets for carrier, dial-up Internet
access and Internet data center services. In light of these adverse market
conditions, we have implemented reorganization and restructuring measures
to adjust our operations to foreseeable market conditions, reducing ongoing
operating expenses and capital outlays. In particular, we have implemented
a major downsizing of our German operations in view of the slowdown in
German telecommunications markets (particularly in the carrier and ISP
segments). Furthermore, in April 2002, in connection with our planned
recapitalization as described below, we decided to sell our entire German
operations. We completed this sale in early May 2002 (see Note 10 to our
consolidated financial statements). In addition, faced with a significant
downturn in the web hosting market, linked to the collapse of the ".com"
market and installed hosting overcapacity in Europe, we decided to scale
down the Internet data centers operations we have launched in France,
Germany and the United Kingdom. In France, we decided to integrate these
activities with our retail businesses, while in Germany and the United
Kingdom, we have exited these markets by selling our operations in these
countries (see Note 10).

         While we previously estimated our funding gap (that is, the
additional financing required to bring us to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, in light of (i) the
anticipated elimination of interest payments upon the exchange or
retirement of our outstanding debt securities pursuant to the
recapitalization plan described below, (ii) the cash savings from the sale
of our German and UK operations and cost reductions at our European
headquarters, and (iii) the lower cash requirements related to selling,
general and administrative expenses and capital expenditures resulting from
our restructuring efforts, we currently estimates our funding gap to be
approximately (euro)30 million. We expect that, upon the completion of the
recapitalization plan described below, our cash balances, together with the
anticipated cash flow from our operations, will be sufficient to fully fund
our restructured operations to cash flow breakeven.

         On May 15, 2002, we signed an agreement in support of a
recapitalization plan (the "Recapitalization") with an ad hoc committee of
holders of our 14% senior discount notes due 2009 and 14% senior notes due
2010 (collectively, the "Notes"), constituting over 75% of our outstanding
Notes and with Meritage Private Equity Funds ("Meritage") and DeGeorge
Telecom Holdings ("DeGeorge Telecom"), two of our principal shareholders.
The Recapitalization will involve a debt for equity swap in respect of the
outstanding Notes, the return to the holders of the senior notes due 2010
of the outstanding balance in the escrow account established to provide
funds for interest payments on these senior notes, and an equity investment
in the aggregate of at least (euro)38 million.

         We intend to effect the Recapitalization by means of a voluntary
pre-arranged Netherlands composition proceeding known as an Akkoord. To
avail ourselves of this proceeding, our holding company, CompleTel Europe
N.V., would file with the Dutch courts for protection from its creditors,
which consist almost entirely of holders of our Notes. At the same time, we
would submit to the Dutch courts a composition plan whereby the holders of
the Notes would receive convertible preferred B shares (the "Convertible
Preferred B Shares") and ordinary shares representing approximately 42.6%
of our share capital that would be outstanding at the close of the
Recapitalization (on an as-converted basis). This composition plan, which
is subject to the support of the holders of at least 75% of the Notes and
the sanction of the Dutch courts, would be binding on all the Noteholders,
and would effectively eliminate our outstanding indebtedness while
permitting our operating subsidiaries to continue operations without
disruption. We believe that we have obtained the level of commitments from
the holders of the Notes that would be required by The Netherlands courts
to approve the composition plan and the retirement of all of the
outstanding Notes.

         The Recapitalization includes an equity investment of an aggregate
of (euro)30 million by Meritage and DeGeorge Telecom in return for the
issuance of convertible preferred A shares (the "Convertible Preferred A
Shares") and ordinary shares representing approximately 42.6% of our share
capital (on an as-converted basis). In addition, certain of the holders of
the senior notes due 2010 have committed to make an equity investment of
approximately (euro) 8 million (reflecting a portion of the escrow funds to
be released to these holders) in return for the issuance of Convertible
Preferred A Shares and ordinary shares representing approximately 11.4% of
our share capital (on an as-converted basis).

         In accordance with their respective terms, in the event of a
liquidation of CompleTel Europe, the Preferred A Shares will rank senior to
the Preferred B Shares, which, will rank senior to the ordinary shares. In
addition, upon liquidation, the Preferred A Shares and Preferred B Shares
will be entitled to receive, prior to any distribution in respect of the
ordinary shares, an amount in cash equal to (euro)0.03 per share.

         Post-Recapitalization, the Noteholders, Meritage and DeGeorge
Telecom would own, in the aggregate, 96.6% of our share capital (on an
as-converted basis), with the remaining shares (representing 3.4% of our
share capital) held by our existing shareholders. Furthermore,
post-Recapitalization, our Supervisory Board would be reconstituted as a
six-member board, comprising two designees of the holders of the
Convertible Preferred A Shares, two designees of the holders of the
Convertible Preferred B Shares, and two independent directors mutually
acceptable to the Noteholders and to Meritage and DeGeorge Telecom.

         As an alternative to an Akkoord, if we conclude that a significant
majority of the holders of the Notes support the Recapitalization, we may
pursue an out-of-court restructuring effected by means of an unregistered
exchange offer on substantially the same terms as the Akkoord. This
exchange offer would take the advantage of the exemption from registration
under the U.S. Securities Act of 1933 provided by Section 3(a)(9) of the
Securities Act, and could enable us to effect the Recapitalization faster
than by means of an Akkoord. In addition, we may pursue a pre-arranged U.S.
Chapter 11 filing to accomplish the Recapitalization.

         The completion of the Recapitalization, which is expected during
the third quarter of 2002, is subject to, among other things, the approval
of a share capital increase by our existing shareholders, the closure or
sale of our operations outside of France, and other customary conditions.
We believe that we have obtained the required level of commitments from our
existing shareholders to vote in favor of the capital increase and other
required actions.

         Our Supervisory and Management Boards voted unanimously to approve
the Recapitalization. We expect that, upon the completion of the
Recapitalization, our cash balances, together with the anticipated cash
flow from our operations, will provide us with sufficient capital to fully
fund our restructured operations to cash flow breakeven.

         There is no assurance that we will be able to effect the
Recapitalization, or to secure alternative sources of financing if the
Recapitalization is not consummated. If we fail to effect the
Recapitalization, or to obtain sufficient alternative financing, we will
effectively cease to be able to conduct our business. Given our funding
position, we believe that if the Recapitalization is not realized, there
would be a substantial doubt regarding our ability to continue as a going
concern.

Revenue

         Our revenue consists of revenue from three principal categories of
service offerings, as follows:

         Retail Services

         We generate revenue from the voice, data and Internet services we
provide primarily to our directly connected retail customers. We expect
revenue from retail services to represent an increasing percentage of our
total revenue.

         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 our owned fiber and leased lines. This
                  revenue is based primarily on traffic minutes billed.
                  Revenue from voice products accounted for (euro)13.7
                  million, or approximately 47% of our total revenue for
                  the three months ended March 31, 2002 compared to
                  (euro)5.9 million, or approximately 29% of our total
                  revenue for the corresponding period in 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 (euro)4.4 million, or
                  approximately 15%, of our total revenue for the three
                  months ended March 31, 2002, compared to (euro)1.9
                  million, or approximately 10%, of total revenue for the
                  corresponding period in 2001.

         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 transmission capacity
                  provided and traffic minutes terminated, accounted
                  for(euro)5.4 million, or approximately 19% of our revenue
                  in the three months ended March 31, 2002, compared
                  to(euro)2.8 million, or approximately 14% of our total
                  revenue for the corresponding period in 2001. We expect
                  revenue from carrier and termination services to
                  represent a decreasing portion of our total revenue.

         o        Internet dial-up. We also derive revenue from dial-up
                  Internet access to our ISP customers delivering the
                  traffic. This revenue, which is based primarily on
                  traffic minutes, accounted for (euro)4.0 million, or
                  approximately 14% of our overall revenue in the three
                  months ended March 31, 2002, compared to (euro)6.9
                  million, or approximately 35%, of our total revenue for
                  the corresponding period in 2001. We expect our Internet
                  dial-up services revenue to represent a decreasing
                  proportion of our total revenue, as our revenue from our
                  retail services increases.

          Internet data centers, web hosting, Internet access and other
          Internet-related services

         We derive a small portion of our revenue from the web hosting,
Internet access and other value-added Internet services we provide at our
Internet data centers. We also offer web site creation and maintenance
services as well as miscellaneous dial-up services to certain of our
Internet data centers customers. Revenue from our Internet data centers,
web hosting, Internet access and other Internet-related services accounted
for (euro)1.6 million, or approximately 5%, of our total revenue for the
three months ended March 31, 2002 compared to (euro)2.2 million, or
approximately 12%, of our total revenue for the corresponding period in
2001. We expect revenue from our Internet data centers, web hosting,
Internet access and other Internet-related services to remain a small
portion of our total revenue.

         Operating expenses

         Our primary operating expenses consist of:

         o        network costs,
         o        selling, general and administrative expenses,
         o        non-cash compensation,
         o        depreciation and amortization expenses, and
         o        restructuring, impairment and other charges.

         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 Internet data
centers, 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 Internet data centers, 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 in our business plans. As a result, we have experienced
relatively high incremental costs. As we continue to expand our customer
base 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 selling, general and
administrative expenses are likely to continue to decline as a portion of
our total revenue and are undertaking efforts to control these expenses
through various means, such as restructuring and shifting expenditures away
from dependence on consultants towards the use of internal resources.

         We have 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, 2002, we had
689 employees, compared to 696 employees at December 31, 2001. This
decrease is primarily attributable to workforce reductions made in
connection with our restructuring in the United Kingdom and Germany.
Although our total headcount decreased slightly, the number of our sales
employees increased by 21 during the first quarter of 2002.

         Prior to 2002, we recorded amounts we paid to CableTel Management,
Inc., then a wholly-owned subsidiary of CompleTel LLC, to reimburse
expenses incurred by CableTel Management, Inc. in the performance of
certain ordinary and necessary general and administrative services for us
and our operating subsidiaries as allocated costs from an affiliate.
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 some of our European headquarter
employees) are now incurred by CompleTel Headquarters Europe S.A.S, our
wholly owned subsidiary and accounted for as selling, general and
administrative costs. Furthermore, in the first quarter of 2002, we
completed the acquisition of CableTel Management, Inc. from CompleTel LLC.
Accordingly, effective January 1, 2002, all the expenses incurred by
CableTel Management, Inc. are now accounted for as selling, general and
administrative costs.

         Non-cash compensation

         We incur stock-based compensation expense under our fixed stock
option plan based on the deferred compensation recorded on the date of
grant. In addition, some of our employees have purchased common units of
CompleTel LLC, our former ultimate parent, for which CompleTel LLC incurs
non-cash compensation charges. 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 were otherwise
classified as selling, general and administrative expenses.

         Depreciation and amortization expense

         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. 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 debt and equity offerings.

         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 euro, which became our functional and reporting currency
effective January 1, 2000. We invest all excess cash in euro-denominated
accounts. Therefore, we are exposed to changes in currency exchange rates
primarily due to our 14% senior discount notes due 2009. These notes expose
us to exchange rate fluctuations as the payment of principal and interest
on these notes will be made in U.S. dollars, while a substantial portion of
our future cash flow used to service these payments will be denominated in
other currencies, primarily the euro. While we believe that our exposure to
exchange rate risks is otherwise limited, there can be no assurance that we
will not be materially adversely affected by variations in currency
exchange rates.

Results of operations

Three months ended March 31, 2002 compared to three months ended March 31,
2001

         Revenue

         Revenue for the three months ended March 31, 2002 increased to
(euro)29.1 million, compared to approximately (euro)19.7 million for the
corresponding period in 2001. 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, 2002, revenue from retail services
totaled (euro)18.1 million; revenue from wholesale services totaled
(euro)9.4 million; and revenue from Internet data centers, web hosting and
other Internet-related services totaled (euro)1.6 million. For the three
months ended March 31, 2001, revenue from retail services totaled (euro)7.8
million, revenue from wholesale services totaled (euro)9.7 million, and
revenue from Internet data centers, web hosting and other Internet-related
services totaled (euro)2.2 million.

         In France, we had revenue of approximately (euro)23.0 million for
the three months ended March 31, 2002, compared to (euro)15.6 million for
the corresponding period in 2001. Revenue from our French operations
represented 79% of our total revenue for the three months ended March 31,
2002. We experienced steady growth in revenue from retail customers in the
nine French cities in which our MANs operate and our overall connected
customer base in France grew to 1,018 customers, as of March 31, 2002. This
increase in our customer base and traffic resulted in a total of 753
million minutes of use carried over our networks in France in the first
three months of 2002.

         In Germany, we had revenue of approximately (euro)5.3 million for
the three months ended March 31, 2002, compared to (euro)2.8 million for
the corresponding period in 2001. This revenue represented 18% of our total
revenue for the first three months of 2002. As of March 31, 2002, we had
276 connected customers in Germany. On May 10, 2002, we completed the sale
of our German operations (see Note 10 to our consolidated financial
statements). As a result of this sale, we no longer operate or generate
revenue in Germany.

         In the United Kingdom, we had revenue of approximately (euro)0.8
million for the three months ended March 31, 2002, compared to
approximately (euro)1.3 million for the corresponding period in 2001. In
accordance with our plan to exit this market, on May 15, 2002, we completed
the sale of our U.K. operations to a third party (see Note 10 to our
consolidated financial statements).

         Operating expenses

         Network costs

         Our network costs for the three months ended March 31, 2002
increased to approximately (euro)20.5 million from (euro)18.7 million for
the corresponding period in 2001. This increase resulted primarily from
increased customer traffic, which resulted in higher interconnection
payments to the incumbent telecommunications operators. Our incremental
costs of network deployment are decreasing as a percent of our total
network costs.

         Selling, general and administrative expenses

         For the three months ended March 31, 2002, selling, general and
administrative expenses totaled approximately (euro)18.4 million, compared
to approximately (euro)25.3 million (including (euro)1.9 million, which
were then accounted for as allocated costs from an affiliate) for the
corresponding period in 2001. This decrease primarily resulted from the
effect of our restructuring measures taken in the second half of 2001. As a
percentage of our total revenue, selling, general and administrative
expenses represented 63% of our total revenue for the three months ended
March 31, 2002, compared to 129% (including allocated costs from an
affiliate) for the corresponding period in 2001. We expect our selling,
general and administrative expenses as a percentage of our total revenue to
continue to decrease in future periods, as our revenue increases and our
restructuring and other cost saving measures take effect.

         Non-cash compensation

         We incurred non-cash stock-based compensation expense of
approximately (euro)1.1 million under our fixed stock option plan for the
three months ended March 31, 2002. This amount was based on deferred
compensation at the date of grant totaling approximately (euro)25.1
million. Additionally, we recorded a compensation credit of approximately
(euro)0.6 million, based on the closing price per share on March 31, 2002
related to our performance vesting and time vesting shares. The non-cash
compensation charges are attributable to employees whose salary and
benefits were otherwise classified within selling, general and
administrative expenses.

         Depreciation and amortization

         Depreciation and amortization decreased to approximately (euro)8.8
million for the three months ended March 31, 2002, from approximately
(euro)9.5 million for the corresponding period in 2001. The majority of
this decrease resulted from a lower depreciable asset base as a result of
our write-down of our German and U.K. assets in the fourth quarter of 2001.
Additionally, we discontinued amortization of our remaining balance of
goodwill effective January 1, 2002, in accordance with SFAS 142.

         Restructuring, impairment and other charges

         In connection with the our restructuring efforts during the second
half of 2001, we recognized approximately (euro)167.6 million in
restructuring, impairment and other charges.

         These charges consist of the following (in millions):

Write-down of German and United Kingdom assets.................   (euro)142.7
Write-down of materials and supplies...........................           6.0
Restructuring charges..........................................          15.8
Other charges..................................................           3.1
                                                                   ---------
Total..........................................................  (euro)167.6
                                                                    ========

         The write-down of our German and U.K. assets resulted from our
decision to significantly scale-back our operations in Germany and exit the
market in the United Kingdom. As a result of our restructuring, we
determined, in accordance with our policy relating to recoverability of
long-lived assets, that the values of our German and U.K. assets were
impaired as of December 31, 2001. Accordingly, we recorded charges to
write-down the carrying values of these assets to their estimated fair
market values as determined by us, using a discounted cash flow approach.
The write-down of materials and supplies is related to the revaluation of
certain materials and supplies and results directly from our decision to
scale-back our operations in Germany, as a result of which, these materials
and supplies are in excess of what we need to complete construction of our
networks. The restructuring charges relate primarily to severance costs
associated with the reductions in the size of our workforce in Germany and
the United Kingdom, as well as charges relating to lease terminations and
renegotiated interconnection agreements. The other charges of (euro)3.1
million are related to the costs associated with the repayment of certain
loans held by employees with a bank and the costs associated with the
forgiveness of a loan made to our CEO, in accordance with its terms, as
described in Note 3 to our consolidated financial statements. In addition
to these charges incurred in 2002, we also recorded, in the first quarter
of 2002, other charges of (euro)1.9 million related to a reserve made in
connection with the decrease in value of the collateral for a loan we
extended to our former President and Chief Executive Officer, as described
in Note 4 to our consolidated financial statements.

         We expect to complete the restructuring during the first half of
2002.

         The restructuring charges can be detailed as follows:

Summary of Restructuring Charges

<TABLE>
<CAPTION>

                                                                                    Europe HQ
                                         France         Germany            UK        and other              Total

<S>                                          <C>             <C>               <C>             <C>           <C>
Severance (1)                          (euro)1,151     (euro)2,399       (euro)527       (euro)603     (euro)4,680
Facilities and Network (2)                   1,558           5,194             992               -           7,744
Other (3)                                       20             601              50           2,694           3,365
                                    ---------------- -------------  --------------  -------  -----   -------------
                                             2,729           8,194           1,569           3,297          15,789
Paid through March 31, 2002
                                             1,994           4,736           1,094           2,518          10,342
                                    --------------    ------------  --------------  ------   -----    ------------
Accrual balance,
 March 31, 2002                         (euro)735      (euro)3,458       (euro)475       (euro)779     (euro)5,447
                                       ===========    ============  ==============  ==== =========    ============

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

     (1)   Severance charges relate to estimated termination salaries and
           benefits in connection with the termination of employees,
           related outplacement fees and other related benefits.

     (2)   Facilities and network charges relate to costs to terminate or
           renegotiate facilities and equipment leases and interconnection
           agreements.

     (3)   Other charges primarily relate to legal and consulting costs expected
           to be incurred in connection with the restructuring.

</TABLE>

         Other income and expense

         We recorded interest income of approximately (euro)0.6 million
during the three months ended March 31, 2002, compared to (euro)5.4 million
for the corresponding period in 2001. This decrease is the result of
decreasing cash and cash equivalents balances.

         We incurred interest expense, net of approximately (euro)0.9
million of capitalized interest expense, of approximately (euro)7.5 million
during the three months ended March 31, 2002, compared to interest expense
for the corresponding period in 2001 of approximately (euro)8.3 million,
net of capitalized interest expense of approximately (euro)3.5 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 gain (loss) and other expense

         For the three months ended March 31, 2002, we recorded foreign
exchange loss and other expenses of (euro)0.2 million, compared to
(euro)5.5 million in the corresponding period in 2001. The foreign exchange
loss and other expenses in the three month periods ended March 31, 2002 and
2001 resulted primarily from an unrealized foreign exchange loss related to
our dollar-denominated senior discount notes due 2000.

         Net loss

         Our net loss for the three months ended March 31, 2002 was
(euro)28.0 million, compared to a net loss of approximately (euro)40.6
million for the corresponding period in 2001. This change resulted
primarily from the increase in our revenue and the effect of our
restructuring efforts, as described above.

         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, including restructuring, impairment and
other charges. We had Adjusted EBITDA losses of approximately (euro)9.8
million and (euro)24.3 million for the three months ended March 31, 2002
and 2001, 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 three months ended March 31, 2002 and 2001 (amounts in
thousands).

<TABLE>
<CAPTION>

                                                                   2002          2001
                                                                   ----          ----

<S>                                                            <C>              <C>
Net Loss.............................................    (euro)(28,032)   (euro)(40,602)
Interest expense (net of interest income)............            6,883            2,947
Income taxes.........................................               --               --
Depreciation and amortization........................            8,849            9,506
Non-cash compensation................................              451           (1,731)
Restructuring, impairment and other charges..........            1,871               --
Foreign exchange loss and other expense..............              181            5,548
                                                             ----------        ---------
Adjusted EBITDA......................................    (euro) (9,797)   (euro)(24,332)
                                                         ==============   ==============

</TABLE>


Statements of Cash Flows

         We had cash and cash equivalents of approximately(euro)56.2
million as of March 31, 2002, a decrease of(euro)25.4 from approximately
(euro)81.6 million as of December 31, 2001. Additionally, as of March 31,
2002, we had approximately(euro)25.0 million of restricted investments
placed in escrow for debt service.

         Details of the change in cash and cash equivalents are set forth
in the table below.

<TABLE>
<CAPTION>

                                                                             Three Months Ended March 31,
                                                                                    2002         2001
                                                                                  (euro, in thousands)


<S>                                                                                   <C>           <C>
Cash flows from operating activities..................................          (euro)(2,948) (euro)(9,642)

Cash flows from investing activities..................................               (22,514)      (59,330)

Cash flows from financing activities..................................                    --          (462)

Effect of exchange rates on cash.......................................                   15           259
                                                                                   ----------      --------

Net increase decrease in cash and cash equivalents...............                    (25,447)      (69,175)

Cash and cash equivalents at beginning of period...................                   81,613       361,698
                                                                                    --------       --------

Cash and cash equivalents at end of period...........................           (euro)56,166 (euro)292,523
                                                                                     ========      ========

</TABLE>


         Cash flows from operating activities

         During the three months ended March 31, 2002, we used
approximately (euro)2.9 million in operating activities, a (euro)6.7
million decrease from the approximately (euro)9.6 million used in operating
activities for the corresponding period in 2001. This decrease in cash used
for operating activities was primarily related to the increase in revenues
and to the operating cost savings resulting from our restructuring efforts.

         Cash flows from investing activities

         We used approximately (euro)22.5 million in investing activities
during the three months ended March 31, 2002, compared to using
approximately (euro)59.3 million for the three months ended March 31, 2001.
The decrease was primarily due to lower capital expenditure as we completed
the buildout of our MANs.

         Cash flows from financing activities

         We did not utilize cash for financing activities during the three
months ended March 31, 2002, compared to (euro)0.5 million of cash flows
used in financing activities for the corresponding period in 2001.

Liquidity and Capital Resources

         The telecommunications business is capital intensive. We used and
will continue to need large amounts of capital to fund capital
expenditures, working capital, debt service and operating losses. As of
March 31, 2002, we had (euro)56.2 million of unrestricted cash and cash
equivalents, and (euro)25.0 million of restricted investments.

         While we previously estimated our funding gap (that is, the
additional financing required to bring us to cash flow breakeven) to be
approximately (euro)60 million to (euro)90 million, in light of (i) the
anticipated elimination of interest payments upon the exchange or
retirement of our outstanding debt securities pursuant to the
Recapitalization, (ii) the cash savings from the sale of our German and UK
operations and cost reductions at our European headquarters, and (iii) the
lower cash requirements related to selling, general and administrative
expenses and capital expenditures resulting from our restructuring efforts,
we currently estimates our funding gap to be approximately (euro)30
million. We expect that, upon the completion of the Recapitalization, our
cash balances, together with the anticipated cash flow from our operations,
will be sufficient to fully fund our restructured operations to cash flow
breakeven.

         In March 2000, we completed the initial public offering of our
ordinary shares. We issued 31,280,000 ordinary shares in exchange for gross
proceeds of approximately (euro)551.4 million.

         Since January 1998, CompleTel LLC, our former ultimate parent, has
received (euro)114.3 million in private equity contributions, of which
(euro)63.0 million was contributed to our French operating subsidiary,
(euro)42.3 million was contributed to our German operating subsidiary,
(euro)2.3 million was contributed to us, and the remainder was retained by
CompleTel LLC for start up expenditures incurred on our behalf.

         In April 2000, we completed an offering of an aggregate (euro)200
million 14% senior notes due 2010. A portion of the proceeds were used to
repurchase U.S.$27.0 million ((euro)27.6 million) principal amount at
maturity of our existing 14% senior discount notes due 2009. We lent
approximately (euro)78.0 million of the net proceeds to our 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.

         In February 1999, we and CompleTel Holdings LLC completed a units
offering consisting of U.S. dollar denominated 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 (euro)67.1 million, of
which (euro)63.1 million was allocated to the 14% senior discount notes due
2009, which represents a substantial discount from the (euro)131.9 million
aggregate stated principal amount at maturity of the notes. The remaining
(euro)4.0 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, we repurchased (euro)27.6 million
principal amount at maturity for (euro)14.9 million.

         During the year ended December 31, 2001, as part of our effort to
improve our financial position, we repurchased a total of (euro)78.1
million principal amount of our senior notes due 2010 for a total purchase
price of (euro)28.9 million, including (euro)17.7 million in restricted
cash released from the escrow established for these notes. We purchased
these bonds in the open market.

Capital Expenditures

         We made capital expenditures of approximately (euro)8.5 million
during the three months ended March 31, 2002. These capital expenditures
were primarily for connecting customers to our MANs and include capitalized
interest of (euro)0.9 million. During the three months ended March 31,
2001, we made capital expenditures of approximately (euro)56.9 million for
property and equipment necessary to deploy networks in our initial markets.
The decrease in capital expenditures during the first three months of 2002
is attributable to the completion of the build out of our MANs during 2001
and our current focus on network development to connect new customers to
our existing MANs, which generally involves lower expenses in comparison to
deployment of new MANs.

         Assuming we obtain the additional funding we need, we currently
estimate that we will make aggregate capital expenditures of approximately
(euro)30 million to (euro)35 million for the year ending December 31, 2002,
most of which will be expended to connect new customers to our MANs. 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 current 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, delays in obtaining necessary rights-of-way, or
major changes in market conditions.

New Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board authorized
the issuance of Statement of Financial Accounting Standards ("SFAS") No.
141, "Business Combinations" (SFAS 141") and SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). SFAS 141 requires the use of the
purchase method of accounting for all business combinations initiated after
June 30, 2001. SFAS 142 requires intangible assets to be recognized if they
arise from contractual or legal rights or are "separable", i.e., it is
feasible that they may be sold, transferred, licensed, rented, exchanged or
pledged. As a result, it is likely that more intangible assets will be
recognized under SFAS 141 than its predecessor, APB Opinion No. 16 although
in some instances previously recognized intangibles will be subsumed into
goodwill.

         Under SFAS 142, goodwill will no longer be amortized on a straight
line basis over its estimated useful life, but will be tested for
impairment on an annual basis and whenever indicators of impairment arise.
The goodwill impairment test, which is based on fair value, is to be
performed on a reporting unit level. A reporting unit is defined as a SFAS
No. 131 (see Note 7 to our consolidated financial statements) operating
segment or one level lower. Goodwill will no longer be allocated to other
long-lived assets for impairment testing under SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of." Additionally, goodwill on equity method investments will no
longer be amortized; however, it will continue to be tested for impairment
in accordance with APB Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock". Under SFAS 142, intangible assets with
indefinite lives will not be amortized. Instead, they will be carried at
the lower of cost or market value and be tested for impairment at least
annually. All other recognized intangible assets will continue to be
amortized over their estimated useful lives.

         We adopted SFAS 141 and 142 effective January 1, 2002. We do not
anticipate that the adoption of these statements will have a material
impact on our results of operations, financial position, or cash flows.

         In June 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS
143 establishes accounting requirements for retirement of obligations
associated with tangible long-lived assets, including (1) the timing of the
liability recognition, (2) initial measurement of the liability, (3)
allocation of cost to expense, (4) subsequent measurement of the liability,
and (5) related financial statement disclosure. SFAS 143 requires that the
fair value of the liability for an asset retirement obligation be
recognized in the period during which it is incurred, if a reasonable
estimate of fair value can be made. The associated asset retirement costs
are capitalized as part of the carrying value of the asset and depreciated
over life of the associated asset. SFAS 143 requires to measure changes in
the liability for an asset retirement obligation due to the passage of time
by applying an interest method of allocation to the amount of the liability
at the beginning of a reporting period. The interest rate used to measure
that change is the credit-adjusted-risk-free rate that existed when the
liability was initially measured. Finally, SFAS 143 requires such changes
in liability for asset retirement obligations to be recognized as an
increase in the carrying amount of the liability and as an expense
classified as an operating item in the statement of income. SFAS 143
applies to fiscal years beginning after June 15, 2002. We do not anticipate
that the adoption of SFAS will have a material impact on our results of
operations, financial position, or cash flows.

         In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets". SFAS No. 144 establishes a single accounting model for long-lived
assets to be disposed of by sale consistent with the fundamental provisions
of SFAS 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." While it supersedes APB Opinion 30
"Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions" it retains the presentation of
discontinued operations but broadens that presentation to include a
component of an entity (rather than a segment of a business). However,
discontinued operations are no longer recorded at net realizable value and
future operating losses are no longer recognized before they occur. Under
SFAS No. 144 there is no longer a requirement to allocate goodwill to
long-lived assets to be tested for impairment. It also establishes a
probability weighted cash flow estimation approach to deal with situations
in which there are a range of cash flows that may be generated by the asset
being tested for impairment. SFAS No. 144 also establishes criteria for
determining when an asset should be treated as held for sale.

         SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001 and interim periods within those fiscal years, with early
application encouraged. The provisions of the Statement are generally to be
applied prospectively. We do not anticipate that adoption of SFAS No. 144
will have a material impact on our results of operations, financial
position or cash flows.

         In April 2002, the Financial Accounting Standards Board issued
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145
rescinds SFAS 4 "Reporting Gains and Losses from Extinguishment of Debt"
and also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings or describe their applicability
under changed conditions. SFAS 145 applies to fiscal years beginning after
May 15, 2002. We do not anticipate that the adoption of SFAS 145 will have
a material impact on our results of operations, financial position, or cash
flows.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Investment portfolio and interest rate sensitivity

         Our investment policy is limited by the indentures for 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.

         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 revenues, costs, assets and liabilities are, for the most
part, denominated in euro, 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. 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 euro. We intend to manage exchange rate
risk by incurring financing liabilities denominated in the currency of the
country of operations.

         Based on the total March 31, 2002 US dollar borrowings under the
senior discount notes, a hypothetical 10% variance in the US dollar to euro
exchange rate would create additional foreign exchange results of
approximately (euro)9.1 million.

         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.


December 31, 1998............................................... U.S.$1.181(1)
December 31, 1999............................................... U.S.$1.007
December 31, 2000............................................... U.S.$0.942
December 31, 2001............................................... U.S.$0.8901
March 31, 2002.................................................. U.S.$0.8702
-----------

(1)   Based on the exchange rate as of January 4, 1999, the date on which
      the Euro Noon Buying Rate was first quoted.



PART II     OTHER INFORMATION

Item 1. Legal Proceedings

         The syndicate of co-owners of a building in which CompleTel France
installed certain telecommunications equipment, brought an action against
the Company before the Tribunal de Grande Instance of Paris alleging that
the equipment was installed without obtaining the necessary authorizations
and caused disturbances in the building. On May 11, 2001, the tribunal
issued a decision, following a preliminary injunction hearing (a) ordering
the Company to restore the premises to their original state, and (b)
appointing an expert with the mandate of determining the liability, if any,
the damages sustained, if any, and the work which the Company may have to
undertake with respect to the equipment to cease the disturbances. The
Company appealed against this decision and the expertise is currently in
progress. The Company is involved in discussions to settle this matter out
of court, but there can be no assurance that the Company will be able to
reach a settlement. If the negotiations to settle out of court are
unsuccessful, the Company may be required to move the equipment and may be
required to do so in a short period of time. In such an event, the Company
could suffer disturbances to its network, which could have an impact on its
customers activities. However, at this stage of the litigation, the Company
is not in a position to predict the outcome of this matter or determine the
impact, if any, that it may have on its activities.

         The Company is not party to any other pending legal proceedings
that it believes would, individually or in the aggregate, have a material
adverse effect on its 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 the Vote of Security Holders

         Not applicable.

Item 5.  Other Information

         Sale of Germany and U.K. Operations

         On May 10, 2002, the we completed the sale of our German
operations to a third party. Pursuant to the agreement governing the terms
of the sale, we transferred to the buyer the entire share capital of
CompleTel GmbH, which, until the sale, was our wholly-owned subsidiary.
Furthermore, we agreed to acquire from CompleTel GmbH certain transmission
equipment for (euro)500,000. In addition, we agreed to provide the buyer
free support billing and financial IT services for a period of up to 12
months after the sale. Following the sale of CompleTel GmbH, we no longer
operate or generate revenue in Germany. In addition, we expect to record a
loss in connection with this sale in our financial statements for the
second quarter of 2002. See Note 7 to our consolidated financial statements
for details on our German operations' performance and their relative
contribution to our over-all performance. In connection with the sale of
our German operations, we entered into reciprocal agreements for
terminating traffic, which will allow us to service our French customers
that currently have, or will develop, operations in Germany.

         On May 15, May 2002, we completed the sale of our U.K. operations
to a third party. Pursuant to the agreement governing the terms of the
sale, we transferred to the buyer the entire share capital of CompleTel UK
Limited, which, until the sale, our wholly-owned subsidiary. Following the
sale of CompleTel U.K. Limited, we no longer operate or generate revenue in
the United Kingdom. See Note 7 for details on our U.K. operations'
performance and their relative contribution to our over-all performance.

Item 6. Exhibits and Reports on Form 8-K

Exhibits


Exhibit No.       Description

4.1(1)         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(2)         14% Senior Notes Indenture, dated April 13, 2000, between
               CompleTel Europe N.V. as issuer and The Chase Manhattan Bank
               as trustee

10.1(3)        CompleTel Europe NV 2000 Stock Option Plan, as amended

10.2           Retention Agreement, dated March 15, 2002, between CableTel
               Management Inc. and Timothy A. Samples

10.3           Retention Agreement, dated March 15, 2002, between CableTel
               Management, Inc. and J. Lyle Patrick

10.4           Summary of a Retention Agreement, dated March 15, 2002,
               between CompleTel Europe N.V. and Jerome de Vitry

-----------

(1) 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.

(2) 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.

(3) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the period ended September 30, 2001 and incorporated herein
by reference.


Reports on Form 8-K

         On January 23, 2002, we filed a Current Report on Form 8-K, in
which we reported the completion of the repurchase of (euro)15,730,000
principal amount at maturity of our Senior Notes due 2010. No financial
statements were filed with that report.

         On March 5, 2002, we filed a Current Report on Form 8-K, in which
we reported our financial results for the quarter and year ended December
31, 2001. No financial statements were filed with that report.


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 15, 2002.

COMPLETEL EUROPE N.V.

By:       /s/ Timothy Samples
        ---------------------------
        Name:  Timothy Samples
        Title: Managing Director, President and Chief Executive Officer
        (Principal Executive Officer)


By:     /s/  Jerome de Vitry
        ---------------------------
        Name:  Jerome de Vitry
        Title: Managing Director and Chief Operating Officer


By:     /s/  J. Lyle Patrick
        ---------------------------
        Name:   J. Lyle Patrick
        Title:  Chief Financial Officer


By:     /s/  John M. Hugo
        ---------------------------
        Name:   John M. Hugo
        Title:  Chief Accounting Officer and Corporate Controller