<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                   FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2000.

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

                       Commission file number: 000-30075

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

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

                                 Kruisweg 609
                               2132 NA Hoofddorp
                                The Netherlands
                   (Address of principal executive offices)

                               (31) 20 666 1701
                          (Issuer's telephone number)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                     [ ] Yes    [X] No

As of April 1, 2000, the Registrant had outstanding 157,413,060 shares of its
capital stock.
<PAGE>

                             COMPLETEL EUROPE N.V.
                                   FORM 10-Q

                                     INDEX


<TABLE>
<CAPTION>
                                                                                               Page
                                                                                              Number
                                                                                              ------
<S>         <C>                                                                               <C>
PART I.     FINANCIAL INFORMATION                                                               1

   ITEM 1.  Financial Statements (unaudited)                                                    1

            Consolidated Condensed Balance Sheets as of
            March 31, 2000 and December 31, 1999 (unaudited)                                    1

            Consolidated Condensed Statements of Operations for the
            Three Months Ended March 31, 2000 and 1999 (unaudited)                              2

            Consolidated Condensed Statement of Shareholders' Equity (Deficit) for the
            Three Months Ended March 31, 2000 (unaudited)                                       3

            Consolidated Condensed Statements of Cash Flows for the
            Three Months Ended March 31, 2000 and 1999 (unaudited)                              4

            Notes to Unaudited Consolidated Condensed Financial Statements (unaudited)          5

   ITEM 2.  Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                                              12

   ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                         22

PART II     OTHER INFORMATION                                                                  23

   ITEM 1.  Legal Proceedings                                                                  23
   ITEM 2.  Changes in Securities and use of Proceeds                                          23
   ITEM 3.  Defaults upon Senior Securities                                                    23
   ITEM 4.  Submission of Matters to a Vote of Security Holders                                23
   ITEM 5.  Other Information                                                                  25
   ITEM 6.  Exhibits and Reports on Form 8-K                                                   25

SIGNATURES                                                                                     28

</TABLE>





                                       i

<PAGE>

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

Unless otherwise indicated, all share numbers reflect the five-for-one split we
effected February 25, 2000.


                                      ii

<PAGE>

                        PART I.  FINANCIAL INFORMATION

ITEM 1.   Financial Statements

                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                    --------------------------------------


                     CONSOLIDATED CONDENSED BALANCE SHEETS
                     -------------------------------------
                  (Stated in thousands of Euros  see Note 2)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                      March 31,      December 31,
                             ASSETS                                     2000             1999
                             ------                                -------------     ------------

CURRENT ASSETS:
<S>                                                                <C>               <C>
  Cash and cash equivalents                                        (Euro)521,643     (Euro)57,115
  Customer accounts receivable                                             4,588            1,709
  Affiliate receivables                                                    6,635              304
  Prepaid expenses, VAT receivables, and other current assets             12,102           14,677
                                                                   -------------     ------------
      Total current assets                                               544,968           73,805
                                                                   -------------     ------------
LONG-TERM ASSETS:
  Property and equipment, net (Note 4)                                   123,871           91,946
  Licenses and other intangibles, net                                      4,188            4,557
  Deferred financing costs, net                                           12,164            5,082
  Other long-term assets                                                     846              818
                                                                   -------------     ------------
      Total long-term assets                                             141,069          102,403
                                                                   -------------     ------------
TOTAL ASSETS                                                       (Euro)686,037    (Euro)176,208

  LIABILITIES AND SHAREHOLDERS' EQUITY:
  ------------------------------------

CURRENT LIABILITIES:
  Construction payables                                             (Euro)28,388   (Euro)  28,593
  Trade accounts payable                                                  12,947            9,850
  Accrued liabilities                                                     21,303           12,686
  Affiliate payables                                                       5,781            2,412
                                                                   -------------     ------------
      Total current liabilities                                           68,419           53,541
                                                                   -------------     ------------
LONG-TERM DEBT                                                            86,143           79,596
                                                                   -------------     ------------
SHAREHOLDERS' EQUITY:
  Ordinary shares, Euro.10 par value; 625,000,000 shares
    authorized, 157,413,060 and 126,133,060 shares issued
    and outstanding at March 31, 2000 and December 31, 1999,
    respectively                                                          15,741           12,613
  Additional paid-in capital                                             778,217          120,121
  Deferred compensation                                                 (105,493)         (28,087)
  Other cumulative comprehensive loss                                     (2,426)          (4,268)
  Accumulated deficit                                                   (154,564)         (57,308)
                                                                   -------------     ------------
TOTAL SHAREHOLDERS' EQUITY                                               531,475           43,071
                                                                   -------------     ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         (Euro)686,037    (Euro)176,208
</TABLE>


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





                                       1


<PAGE>

                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                    --------------------------------------


                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                -----------------------------------------------
(Stated in thousands of Euros, except share and per share amounts  see Note 2)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                  March 31,       March 31,
                                                    2000            1999
                                                ----------------------------
<S>                                             <C>             <C>
REVENUES                                        (Euro)  2,972   (Euro)     -
                                                -------------   ------------
OPERATING EXPENSES:
 Network costs                                          3,011            119
 Selling, general and administrative                   13,127          3,454
 Management fees to affiliated party                    2,117            856
 Non-cash compensation charges                         69,660             31
 Depreciation and amortization                          2,946            123
                                                -------------   ------------
  Total operating expenses                             90,861          4,583
                                                -------------   ------------

OPERATING LOSS                                        (87,889)        (4,583)

OTHER INCOME (EXPENSE)
 Interest income                                          444            500
 Interest expense, net of capitalized interest         (1,868)        (1,170)
 Foreign exchange loss and other expense               (7,943)             -
                                                -------------   ------------
  Total other income (expense)                         (9,367)           670
                                                -------------   ------------
NET LOSS BEFORE INCOME TAXES                          (97,256)        (5,253)

INCOME TAX PROVISION                                        -              -
                                                -------------   ------------
NET LOSS                                        (Euro)(97,256)  (Euro)(5,253)

BASIC AND DILUTED LOSS PER ORDINARY SHARE       (Euro)  (0.77)  (Euro) (0.07)
                                                =============   ============

WEIGHTED AVERAGE NUMBER OF ORDINARY
 SHARES OUTSTANDING                               126,820,533     76,258,178
                                                =============   ============
</TABLE>



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



                                       2
<PAGE>

                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                    --------------------------------------


      CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
      ------------------------------------------------------------------

                   FOR THE THREE MONTHS ENDED MARCH 31, 2000
                   -----------------------------------------
(Stated in thousands of Euros, except share and per share amounts - see Note 2)
                                  (Unaudited)



<TABLE>
<CAPTION>
                                                                                                                      Other
                                                                                                                   Cumulative
                                                       Common Shares             Additional                       Comprehensive
                                                ---------------------------       Paid-In          Deferred           Income
                                                  Number          Amount          Capital        Compensation         (Loss)
                                                -----------    ------------    -------------    --------------     ------------
<S>                                             <C>            <C>             <C>              <C>                <C>
BALANCE, December 31, 1999                      126,133,060    (Euro)12,613    (Euro)120,121    (Euro) (28,087)    (Euro)(4,268)

  Issuance of ordinary shares
    in connection with initial
    public offering, net of underwriters'
    discount and offering costs                  31,280,000           3,128          508,008                 -                -
  Deemed contributions by
    Parent related to allocation
    of non-cash compensation
    charges                                               -               -          141,312          (141,312)               -
Repurchase of shares allocated
    from Parent                                           -               -            3,022                 -                -
Issuance of stock options                                 -               -            5,754            (5,754)               -
  Amortization of deferred
    compensation                                          -               -                -            69,660                -
  Cumulative translation
    adjustment                                            -               -                -                 -            1,842

  Net loss                                                -               -                -                 -                -
                                                -----------    ------------    -------------    --------------     ------------
BALANCE, March 31, 2000                         157,413,060    (Euro)15,741    (Euro)778,217    (Euro)(105,493)    (Euro)(2,426)
                                                ===========    ============    =============    ==============     ============



                                                                           Total
                                                 Accumulated           Comprehensive
                                                   Deficit             Income (loss)      Total
                                                --------------         ------------   -------------
                                                <C>                    <C>            <C>
BALANCE, December 31, 1999                      (Euro) (57,308)        (Euro)(55,486) (Euro) 43,071

  Issuance of ordinary shares
    in connection with initial
    public offering, net of underwriters'
    discount and offering costs                              -                     -        511,136
  Deemed contributions by
    Parent related to allocation
    of non-cash compensation
    charges                                                  -                     -              -
Repurchase of shares allocated
    from Parent                                              -                     -          3,022
Issuance of stock options                                    -                     -              -
  Amortization of deferred
    compensation                                             -                     -         69,660
  Cumulative translation
    adjustment                                               -                 1,842          1,842

  Net loss                                             (97,256)              (97,256)       (97,256)

BALANCE, March 31, 2000                         (Euro)(154,564)        (Euro)(95,414) (Euro)531,475
                                                ==============         =============  =============
</TABLE>



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


                                       3
<PAGE>

                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                    --------------------------------------


                CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
                ----------------------------------------------
 (Stated in thousands of Euros, except unit and per unit amounts - see Note 2)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                             Three Months Ended
                                                          March 31,        March 31,
                                                            2000             1999
                                                       -------------    -------------
OPERATING ACTIVITIES:
<S>                                                    <C>              <C>
 Net loss                                              (Euro)(97,256)   (Euro) (5,253)
 Adjustments to reconcile net loss to cash
  used by operating activities-
   Depreciation and amortization                               2,946              123
   Non-cash compensation expense                              69,660               31
 Accretion of senior notes                                     2,933            1,161
   Amortization of deferred financing costs                       74                -
   Changes in assets and liabilities-
    Increase in receivables                                   (2,879)          (1,422)
    Decrease (increase) in other current assets                2,575             (282)
    Increase in other long-term assets                           (28)             (45)
    Increase in trade accounts payable                         3,097            5,220
    Increase (decrease) in accrued liabilities                 5,595             (620)
    Increase (decrease) in net affiliate
     payables/receivables                                      2,962           (4,460)
                                                       -------------    -------------
    Net cash used by operating activities                    (10,321)          (5,547)
                                                       -------------    -------------
INVESTING ACTIVITIES:
 Expenditures for property and equipment                     (33,254)          (9,776)
 Purchase of licenses and other intangibles                        -           (1,819)
 Senior discount notes offering proceeds and
  investment earnings placed in escrow                             -          (64,676)
                                                       -------------    -------------
    Net cash used by investing activities                    (33,254)         (76,271)
                                                       -------------    -------------
FINANCING ACTIVITIES:
 Proceeds from senior discount notes                               -           62,858
 Proceeds from initial public offering                       511,136                -
 Proceeds from issuance of common shares
  and subsequent capital contributions                             -           55,720
 Deferred financing costs                                     (6,938)          (3,269)
                                                       -------------    -------------
    Net cash provided by financing activities                504,198          115,310
                                                       -------------    -------------
 Effect of exchange rates on cash                              3,905           (2,072)
                                                       -------------    -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                    464,528           31,420

CASH AND CASH EQUIVALENTS, beginning of period                57,115            1,531
                                                       -------------    -------------
CASH AND CASH EQUIVALENTS, end of period               (Euro)521,643    (Euro) 32,951
                                                       =============    =============
</TABLE>



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



                                       4
<PAGE>

                    COMPLETEL EUROPE N.V. AND SUBSIDIARIES
                    --------------------------------------


        NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
        --------------------------------------------------------------



1.   GENERAL:
     --------

CompleTel Europe N.V. ("CompleTel Europe") (together with its wholly-owned
subsidiaries, the "Company") seeks to be a leading facilities-based operator of
a technologically advanced, high capacity fiber optic communications
infrastructure and provider of telecommunications and Internet-related services
to business and government end-users, carriers and Internet service providers in
targeted metropolitan areas across Western Europe, with an initial focus on
network deployment in France and Germany.  Additionally, the Company intends to
provide Internet access services in France, Germany and the United Kingdom
("UK").  The Company's deployment plan includes building networks in ten
metropolitan markets in France and seven markets in Germany.

The Company is majority owned by CompleTel LLC ("Parent").

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

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

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





                                       5
<PAGE>

also require additional capital (or require financing sooner than anticipated)
if it alters the schedule or targets of its roll-out plan in response to
regulatory, technological or competitive developments (including additional
market developments and new opportunities in and outside of its target markets).
The Company intends to evaluate potential joint ventures, strategic alliances,
and acquisition opportunities on an ongoing basis as they arise, and the Company
may require additional financing if it elects to pursue any such opportunities.
The Company also will be required to seek additional financing if it elects to
deploy networks in other Western European markets beyond its target markets.
Sources of additional financing may include commercial bank borrowings, vendor
financing and/or the private or public sale of equity or debt securities.

2.   BASIS OF PRESENTATION:
     ----------------------

The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States ("US 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 US GAAP for complete financial statements. The interim unaudited financial
statements should be read in conjunction with the audited financial statements
of the Company as of and for the year ended December 31, 1999. 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, 2000 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000.

The preparation of financial statements in conformity with US 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. The
Company has adopted a calendar fiscal year. Certain prior year amounts have been
reclassified to conform with the current year presentation.

Functional Currency

Prior to January 1, 2000, the functional currency for CompleTel Europe was the
U.S. dollar and the functional currency for each of CompleTel Europe's
subsidiaries was the applicable local currency. Effective January 1, 2000,
CompleTel Europe and each of its subsidiaries except those in the U.K. adopted
the euro as their functional currency. Additionally, the Company has elected the
euro as its financial reporting currency. As a result, the Company has restated
prior period amounts by translating prior period U.S. dollar amounts into the
euro. The Company's results of operations (accumulated deficit) for periods
prior to January 1, 1999 introduction date for the euro have been restated using
the January 1, 1999 exchange rate between the U.S. dollar and the euro.

3.   INITIAL PUBLIC OFFERING:
     ------------------------

On March 30, 2000, the Company completed its initial public offering ("IPO") of
common stock. In that offering, the Company issued 31,280,000 shares of its
common stock in exchange for gross proceeds of approximately (Euro)547.4
million. The Company will use the proceeds to (i) further develop fiber optic
networks in its target markets in France and Germany, (ii) fund the expansion of
its Internet-related services, (iii) develop complimentary local access systems,
(iv) fund net operating losses and (v) for general corporate purposes.

We have applied for an exemption from regulations required by the Investment
Company Act of 1940. As a result of the regulation, to remain in compliance with
the investment requirements we have invested approximately (Euro)434.8 million
of our initial public offering proceeds in short-term maturities of U.S.
treasury bills. As a result of this requirement, we have entered into forward
currency contracts for the amount of these investments to minimize our currency
exposure.

Compensation Charges

The Company's IPO caused certain common units of Parent held by employees of the
Company and Parent to vest as a result of meeting specified performance vesting
criteria. As a result, the Company recorded compensation expense of
approximately (Euro)42.4 million based on the value of those vested common units
as implied by the IPO price received. In addition, based upon the IPO value of
the Company as indicated above, the Company recorded additional compensation
expense and deferred compensation of approximately (Euro)24.0 million and
(Euro)74.9 million, respectively, for performance vesting units that did not
vest as a result of the IPO but which may vest upon a qualified sale by Madison
Dearborn Partners ("MDP") (investor in Parent) or in May 2005 based on a deemed
vesting date as defined. The additional deferred compensation will be amortized
to expense over the remaining vesting period to May 18, 2005 (deemed vesting
date if not prior due to a qualified sale by MDP as defined in the executive
securities agreements). The recorded amount of compensation expense and deferred





                                       6
<PAGE>

compensation for these awards will be adjusted at each reporting date to reflect
management's estimate of the number of such units that will ultimately vest and
the fair market value of those units as of the end of each reporting period
based on the then current market value of the Company's ordinary shares. For
each (euro)1 increase in the market value per ordinary share, additional
compensation expense and deferred compensation of approximately (euro)7.5
million will be recorded with respect to non-vested performance vesting units.

The compensation charges described above are included in non-cash compensation
charges in the accompanying statement of operations for the three months ended
March 31, 2000. Also included in non-cash compensation charges is (Euro)3.3
million resulting from the recognition of deferred compensation on stock options
granted to employees and other common units of Parent held by employees subject
only to time vesting.

Employee Loans

In January 2000 iPcenta Limited, a wholly-owned indirect subsidiary of the
Company loaned a Managing Director of CompleTel Europe the principal amount of
$206,500 to purchase common units of CompleTel LLC. The principal amount,
together with accumulated interest at the rate of 7% compounded semi-annually,
is due and payable on the earlier of January 15, 2003, or 30 days after a
termination for cause, or 90 days after any other termination of employment. The
common units are subject to vesting and forfeiture provisions and will, if
vested, entitle the Managing Director to receive a pro rata number of CompleTel
Europe shares when and if Parent is liquidated. iPcenta has agreed to forgive a
pro rata portion of the principal and interest on the note as the common units
vest or upon any forfeiture. The Company is recognizing compensation expense
equal to the $206,500 loan amount which will be forgiven over the related
vesting period of the common units.

A limited number of the Company's employees have obtained interest bearing loans
in an approximate aggregate principal amount of (Euro)2,000,000 from a
commercial bank to purchase the Company's shares. These include two loans to
Managing Directors of CompleTel Europe, in the principal amounts of
(Euro)567,000 and (Euro)309,000, respectively. The loans are for a term of 18
months and are secured by a pledge of the shares purchased by such individuals.
In addition, CompleTel Europe has agreed to guarantee the employee and officer
loans in the approximate total amount of (Euro)2 million and has agreed to
assume the interest cost payments on the loans.

4.   PROPERTY AND EQUIPMENT:
     -----------------------

Property and equipment includes network equipment, office furniture and
equipment, computer equipment and software, leasehold improvements and
construction in progress. These assets are stated at cost and are depreciated
when ready for their intended use. Property and equipment at March 31, 2000 and
December 31, 1999, consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                        March 31,     December 31,
                                                          2000            1999
                                                     --------------   ------------
<S>       <C>                                        <C>              <C>
          Network equipment                          (Euro)  61,743   (Euro)42,343
          Office furniture and equipment                      2,182          1,384
          Computer equipment and software                     6,334          5,095
          Leasehold improvements                              3,558          1,847
          Buildings                                             216            205
                                                     --------------   ------------
          Property and equipment, in service                 74,033         50,874
          Less: accumulated depreciation                     (7,013)        (4,144)
                                                     --------------   ------------
          Property and equipment, in service, net            67,020         46,730
          Network construction in progress                   56,851         45,216
                                                     --------------   ------------
          Property and equipment, net                 (Euro)123,871   (Euro)91,946
                                                     ==============   ============
</TABLE>





                                       7


<PAGE>

5.   LONG-TERM DEBT:
     ---------------

Senior Discount Notes

In February 1999, the Company completed an Offering of 147,500 units (the
"Units") consisting of $147.5 million aggregate principal amount at maturity of
14% Senior Discount Notes due 2009 (the "Notes") issued by CompleTel Europe and
1,475,000 non-voting Class B Membership Interests of CompleTel Holdings.
CompleTel Europe issued the Notes at a substantial discount from their principal
amount at maturity. The proceeds of the Offering, net of offering fees and
costs, were approximately $72.6 million ((Euro) 74.1 million) and were held in
an escrow account until CompleTel Europe received a minimum commitment of $90
million in senior credit facilities. To comply with Netherlands laws, the Notes
are guaranteed by Parent on a senior unsecured basis. As Parent is a holding
company with no operations other than the operations to be conducted by
CompleTel Europe and its subsidiaries, it is unlikely that Parent will have
sufficient funds to satisfy CompleTel Europe's obligations on the Notes if
CompleTel Europe is unable to satisfy its own obligation on the Notes. Of the
$75 million ((Euro) 76.6 million) gross proceeds from the Offering,
approximately $70.5 million ((Euro) 72.0 million) was attributed to the Notes
and approximately $4.5 million ((Euro) 4.6 million) was attributed to the
1,475,000 Class B Membership Interests of CompleTel Holdings.

Cash interest will not accrue on the Notes prior to February 15, 2004, with the
Notes accreting to their stated principal amount at maturity at an effective
interest rate of 15.1%.  The accretion will be charged to interest expense.
Commencing February 15, 2004, interest on the Notes will accrue at 14% per annum
and will be payable in cash on August 15 and February 15 of each year.  The
Notes mature February 16, 2009.

Credit Agreement
----------------

In January 2000, the Company executed an agreement for a (Euro)265 million
senior secured credit facility with Goldman Sachs International and Paribas as
co-arrangers of the facility. The funds will be available to the Company's
subsidiaries, initially to include CompleTel ECC, CompleTel Services S.A.S.,
CompleTel France and CompleTel Germany, in two tranches including a euro term
facility available until December 31, 2000, in the aggregate amount of (Euro)105
million and a euro revolving loan facility available until December 31, 2002, in
the aggregate amount of (Euro)160 million. The (Euro)160 million tranche will
become available after May 31, 2000, if the euro term facility is fully drawn,
and other conditions are satisfied. Following December 31, 2002, up to (Euro)141
million of the outstanding advances under the euro revolving loan facility will
first be converted into a term loan, and any other outstanding advances will
become part of a (Euro)19 million working capital facility. The facility matures
on December 31, 2006.

This agreement terminates, supersedes and replaces, without penalty, an original
commitment from Paribas for $90 million in senior credit.  Additionally, a
commitment with Nortel Networks for $20 million in vendor financing has been
terminated.  No termination fees are payable to Nortel Networks or Paribas.

The notes are structurally subordinated to any debt incurred under the senior
secured credit facility.  Additionally, the terms of the agreement require that
the senior secured credit facility be guaranteed to the extent allowed by law by
CompleTel Europe and each of its subsidiaries.  The terms of the agreement
further require that the senior secured credit facility be secured by a
perfected security interest in all of the Company's present and future material
assets and revenue and those of its subsidiaries and by a pledge of the stock of
each of the borrowers.





                                       8
<PAGE>

The funds are to be used substantially to deploy our networks in France and
Germany. Advances under the facility cannot exceed certain limits that increase
with time, and are subject to other conditions, including that the subsidiaries
must be operational in designated cities in France and Germany, and satisfy a
debt to capital test. In addition, the facility includes various financial and
other covenants and restrictions that limit our ability to pay dividends,
dispose of assets, and effect merger and consolidation transactions. The
facility also limits the use of proceeds of an initial public offering, other
equity investments, or a high yield debt issue as it provides that any such
proceeds be held as cash equivalent investments or used to develop our
telecommunications businesses in France and Germany.

The rate of interest will be variable based on EURIBOR, plus a margin of up to
3.75% per annum for the term loan facility or 3.00% per annum for the revolving
loan facility that will be determined based on a senior debt leverage ratio
test, and costs. Upon an event of default, advances may accelerate and become
immediately due and payable and the undrawn portion of the facilities will be
cancelled and the commitments of the banks reduced to zero. The facility is
secured by our assets and the assets of our subsidiaries and the stock in
certain of our subsidiaries, and we and several of our subsidiaries have agreed
to guarantee the payments under the facility and to indemnify the banks against
certain losses.

See note 7 for a discussion regarding structural modifications to the Company's
credit agreement which are required as a result of the Company's April 2000
senior notes offering (Note7).

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                       March 31,        December 31,
                                                                         2000               1999
                                                                     ------------       ------------
<S>                                                                  <C>                <C>
     14% Senior Discount Notes, face amount
          $147.5 million, due 2009, effective interest rate
          of 15.1%, at accreted value                                (Euro)86,143       (Euro)79,596
     (Euro)265 million senior secured credit facility                           -                  -
                                                                     ------------       ------------
          Total                                                      (Euro)86,143       (Euro)79,596
                                                                     ============       ============
</TABLE>
6.   SEGMENT REPORTING:
     ------------------

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders.  Operating segments are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.

Through March 31, 2000, the significant portion of the Company's expenditures
were associated with its network deployment in France and Germany.  A
significant portion of the Company's revenues through March 31, 2000 have been
generated by an indirect subsidiary of the Company's U.K. subsidiary.

Management currently evaluates the Company's development efforts according to
the geographic location of its markets.  Certain financial information
reflecting the Company's development efforts is presented below.





                                       9
<PAGE>

As of and for the three months ended March 31, 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                          CompleTel
                                     CompleTel    CompleTel   CompleTel    Europe
                                        SAS         GmbH       UK Ltd.    And Other    Consolidated
                                    -----------  ----------  ----------  ----------   -------------
<S>                                 <C>          <C>         <C>         <C>          <C>
Revenues                            (Euro)1,808  (Euro) 228  (Euro) 936  (Euro)   -   (Euro)  2,972
Depreciation and amortization             2,039         725          35         147           2,946
Net loss                                (13,436)     (6,515)       (313)    (76,992)        (97,256)
Total assets                            112,736      64,889       2,573     505,839         686,037
Expenditures for long-lived
  assets                                 18,616      14,446         165       1,317          34,544

As of and for the three months ended March 31, 1999 (in thousands):


                                                                          CompleTel
                                     CompleTel    CompleTel   CompleTel    Europe
                                        SAS         GmbH       UK Ltd.    And Other    Consolidated
                                    -----------  ----------  ----------  ----------   -------------

Revenues                            (Euro)    -  (Euro)   -  (Euro)   -  (Euro)   -   (Euro)      -
Depreciation and amortization               123           -           -           -             123
Net income (loss)                        (3,680)       (127)       (368)      1,078          (5,253)
Total assets                             50,321          47          49      75,130         125,547
Expenditures for long-lived
  assets                                  9,220          25          19         512           9,776

</TABLE>
7.   SUBSEQUENT EVENTS:
     ------------------

Senior Notes Offering
---------------------

In April 2000, the Company completed an offering of an aggregate (Euro)200
million 14% senior notes due 2010 (the "Senior Notes"). A portion of the
proceeds were used to repurchase $27.0 million ((Euro 27.6 million) principal
amount at maturity of the existing notes. The Company lent approximately
(Euro)78.0 million of the net proceeds to a wholly-owned subsidiary which used
the funds to invest in a portfolio of securities which is pledged as security
for the Senior Notes. The proceeds of these pledged securities will be used to
made the first six interest payments on the Senior Notes. The remaining proceeds
from the Senior Notes offering will be used to (i) fund the further deployment
of the Company's networks in existing markets and an additional six cities in
France and Germany, (ii) fund the expansion of the Company's Internet-related
services, (iii) develop complementary local access systems, (iv) fund net
operating losses and (v) for general and corporate purposes.



                                      10
<PAGE>

Credit Agreement with Lender
----------------------------

In April 2000, the Company entered into an agreement (the "Suspension
Agreement") with the lenders under its credit facility which provides that the
Company will not borrow funds under its credit facility until the credit
facility is amended and that, in turn, during this period, the lenders will
suspend the application of various provisions, including substantially all of
the representations, covenants and events of default in the credit facility.
During such period, certain other provisions of the credit facility will remain
in effect including, without limitation, the obligation to maintain the security
interests of the lenders and to pay, among other things, commitment fees to the
lenders. The Suspension Agreement will be in effect until the earlier of (a) six
months or, if extended by the Company, nine months after the effective date of
the Suspension Agreement, (b) the date the Company cancels its credit facility
or (c) the date an amendment to the credit facility is in effect. In the event
that an amendment to the credit facility cannot be agreed upon by six months,
or, if extended by the Company, nine months, after the effective date of the
Suspension Agreement, the Suspension Agreement and credit facility will
terminate. After giving effect to this offering, without this suspension of the
covenants, the Company would not be able to borrow under its credit facility
without obtaining a waiver from the lenders. The Company intends to negotiate an
amendment to the credit facility prior to the expiration of the Suspension
Agreement which will include modifications to the covenants and permit the
Company to borrow under such amended credit facility.




                                      11
<PAGE>

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

Introduction

We are a rapidly growing CLEC operating in France and Germany.  We offer
traditional fixed wireline retail business telecommunications services to our
directly connected on-net customers and sell wholesale services to other
carriers.  We also have established an Internet division to offer a full range
of Internet-related services through Internet data centers we are establishing
in France, Germany and the United Kingdom.

We have adopted the euro as our functional and reporting currency effective
January 1, 2000, as the principal economic environment in which we raise
capital, earn revenue and incur expenses has become significantly tied to euro
currency environments, such as France and Germany.

Significant Milestones

 .  Between May 1998 and January 1999, Madison Dearborn Partners, Inc. and LPL
   Investment Group Inc., our founders, other directors and other individual
   investors, contributed a total of $65.8 million to CompleTel LLC for our
   initial financing.

 .  In December 1998, we were awarded licenses to operate telecommunications
   facilities and provide services in selected regions in France.

 .  In February 1999, we closed a units offering in which we issued senior
   discount notes and CompleTel Holdings LLC issued Class B interests
   representing a 7% ownership interest in our then outstanding share capital.
   Net proceeds to us totaled $72.6 million.

 .  In March 1999, we were awarded licenses to operate telecommunications
   facilities and provide services in selected regions in Germany.

 .  In March 1999, we acquired all of the outstanding capital stock of Acces et
   Solutions Internet S.A.R.L., a Lyon-based Internet service provider for $2.1
   million in cash.

 .  In April 1999, we received a $90 million credit facility commitment from
   Paribas and Nortel Networks.

 .  In June 1999, we launched commercial services in France and obtained an
   experimental authorization for point-to-multipoint in Marseille.

 .  In June 1999, we acquired all of the outstanding capital stock of Web
   International Networks Limited (now iPcenta), a London-based Internet service
   provider for approximately $365,000 in cash plus approximately $240,000 in
   contingent earnout payments.

 .  In July 1999, we received an extension of the markets for our German
   licenses.




                                      12

<PAGE>

 .    In October 1999, we received a commitment from Goldman Sachs International
     and Paribas, as co-arrangers for syndicated bank financing in the form of a
     (Euro)265 million senior secured credit facility. The commitment
     terminated, superseded and replaced, without penalty, our commitment from
     Paribas and Nortel Networks.

 .    In November 1999, we launched commercial operations in Germany.

 .    In the fourth quarter of 1999, CompleTel LLC received additional equity
     contributions from its initial private equity investors, directors and
     management, and from a new private equity investor, Meritage Investment
     Partners, totaling $42.1 million, which CompleTel LLC immediately
     contributed to us and our operating subsidiaries.

 .    In January 2000, we executed the (Euro)265  million senior secured credit
     facility. To date, we have made no draws under this facility.

 .    In March 2000, we completed our initial public offering of 31,280,000 of
     our ordinary shares for total gross proceeds of euro 547.4 million.

 .    In April 2000, we completed a (Euro)200 million senior notes offering.


Results of Operations

We have generated operating losses and negative cash flow from our operating
activities to date.  As a result of our operating history, prospective investors
have limited operating and financial data about us upon which to base an
evaluation of our performance.

Revenues

We generated our first revenues in the quarter ended June 30, 1999.  For the
quarter ended March 31, 2000, revenues totaled (Euro)3.0 million.  Since January
1998, we have developed and refined our business plans, procured regulatory and
governmental authorizations for our 17 markets, raised capital, hired management
and other key personnel, designed, developed and begun installing our fiber
optic metropolitan area networks and operation support systems, obtained senior
financing commitments and negotiated equipment and facilities agreements.

Operating Expenses
------------------

Our primary operating expenses consist of network costs, selling, general and
administrative expenses, including start-up costs, management fees to affiliate,
and depreciation and amortization expenses.

Network Costs

Network costs for the quarter ended March 31, 2000 totaled (Euro)3.0 million,
compared to (Euro)0.1 million for the comparable period in 1999. We expect these
costs will increase as we expand our networks and services. Our network costs
include costs such as interconnection costs, the cost of leasing high capacity
digital lines that interconnect our network with the networks of other
providers, the cost of leasing local loop lines that connect our customers to
our network, and switch site rent, operating and maintenance costs. We also
lease dark fiber and conduit to establish and augment our networks in certain
markets.

For the quarter ended March 31, 2000, our direct operating margin, which
includes network costs directly associated with our revenues, such as
interconnect costs, totaled (Euro)1.6 million, or 54 percent. For the same time
period our gross margin, which includes all network costs, was approximately
break-even.


                                      13
<PAGE>

Selling, General and Administrative Expenses

Our selling, general and administrative expenses include selling and marketing
costs, customer care, billing, corporate administration, salaries and other
personnel costs and legal fees. For the quarter ended March 31, 2000, selling,
general and administrative expenses totaled (Euro)13.1 million compared to
(Euro)3.5 million for the comparable period in 1999. This increase was primarily
due to the rapid growth of personnel costs since commencement of operations.

We are assembling a large, locally based, direct sales force in our local and
regional markets and a national account team to service multiple location
customers and key account executives. We are supplementing our direct sales
force with commissioned indirect sales agents. To attract and retain a highly
qualified sales force, we offer our sales and customer-care personnel a highly
competitive compensation package. The number of employees increased from 109 as
of March 31, 1999 to 465 as of March 31, 2000. On March 31, 2000, we had a sales
force of 118 (including managers and administrators), compared to 18 on March
31, 1999. We expect the number of sales and marketing personnel to continue to
grow and our selling, general and administrative costs to increase as we develop
and expand our operations.

We incurred amortization of stock-based compensation expense of approximately
(Euro)1.6 million under our stock option plan for the three months ended March
31, 2000. This amount is based on deferred compensation totaling approximately
(Euro)31.9 million.

We incurred additional stock-based compensation expense of approximately
(Euro)42.4 million upon completion of our IPO due to the resulting vesting of
certain CompleTel LLC performance vesting units held by certain of our employees
in connection with a qualified public offering. This compensation expense is
based on an assumed IPO price of (Euro)17.50 per share. In addition, based upon
our value as indicated in the IPO, we recorded compensation expense and deferred
compensation of approximately (Euro)24.0 million and (Euro)74.9 million,
respectively, for performance vesting units that will not vest as a result of
the IPO but which may vest upon a qualified sale by Madison Dearborn Partners or
in May 2005 based on a deemed vesting date. The additional deferred compensation
is being amortized to expense over the remaining vesting period to May 18, 2005
(deemed vesting date if not prior due to a qualified sale by Madison Dearborn
Partners). The recorded amount of compensation expense and deferred compensation
for these awards will be adjusted at each reporting date to reflect management's
estimate of the number of such units that will ultimately vest and the fair
market value of those units as of the end of the reporting period based on the
then current market value of ordinary shares. For each (Euro)1 increase in the
market value per ordinary share, additional compensation expense and deferred
compensation totalling approximately (Euro)7.5 million will be recorded with
respect to non-vested performance vesting units.

Management Fees to Affiliate

CompleTel LLC operating subsidiaries, CompleTel Europe, and each of the entities
between CompleTel Europe and our operating subsidiaries, incur overhead costs
and expenses associated with their holding company operations. Our operating
subsidiaries bear their proportionate share of these costs and expenses. The
operating subsidiaries pay CableTel Management, Inc. a management fee of 105%
(103% for periods prior to the end of January 1999) of all allocated costs,
expenses, charges and disbursements that CableTel Management, Inc. and CompleTel
Europe incur in rendering services to each of the companies. For the quarter
ended March 31, 2000, we recorded (Euro)2.1 million of related-party management
fees compared to (Euro)0.9 for the same period of 1999.





                                      14
<PAGE>

Depreciation and Amortization

For the quarter ended March 31, 2000, we recorded depreciation and amortization
expense of (Euro) 2.9 million, compared to (Euro) 0.1 for the similar period in
1999. This increase is due to increases in network and non-network related
property and equipment. We started recording network depreciation during the
quarter ended June 30, 1999 when we initiated network services.

Other Income and Expense

We incurred interest expense, net of (Euro) 1.3 million of capitalized interest,
of (Euro) 1.9 million during the quarter ended March 31, 2000. Interest expense
for the quarter ended March 31, 1999 totaled (Euro) 1.2 million. The interest
expense recorded reflects the accretion of the notes 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" ("SFAS
34" ). Interest income totaled (Euro) 0.4 million for the quarter ended March
31, 2000, compared to (Euro) 0.5 for the similar period in 1999. We have applied
for an exemption from regulations required by the Investment Company Act of
1940. As a result of the regulation, to remain in compliance with the investment
requirements we have invested approximately (Euro) 434.8 million of our initial
public offering proceeds in short-term maturities of U.S. treasury bills. As a
result of this requirement, we have entered into forward currency contracts for
the amount of these investments to minimize our currency exposure.

Foreign Exchange Rates

We are not significantly exposed to changes in currency exchange rates because
our revenues, costs, assets and liabilities are, for the most part, denominated
in euros.  However, the 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 U.S. dollars, and a substantial portion of our future cash flow
used to service these payments will be denominated in local currencies,
including the euro.  While we intend to take steps to minimize exchange rate
risks, we cannot assure you that we will not be materially adversely affected by
variations in currency exchange rates.

As a result of exchange rate fluctuations between the date of pricing of the
initial public offering and the date of closing of the initial public offering,
when we purchased U.S. treasury bills to remain in compliance with the
Investment Company Act, we incurred an unrealized foreign exchange loss.

We adopted the euro as our functional and reporting currency effective
January 1, 2000.

Net Loss

Our net loss during the quarters ended March 31, 2000 and 1999 was (Euro) 97.3
million and (Euro) 5.3 million, respectively. The increase was primarily the
result of non-cash compensation charges and substantial start-up costs of the
operating subsidiaries, primarily our French subsidiary.

Adjusted EBITDA

Since the commencement of our operations, we have experienced significant
operating losses and negative Adjusted EBITDA, as set forth below.  We expect to
continue to generate significant operating losses and negative Adjusted EBITDA
in each of our markets as we develop, construct and expand our business, until
we have established a sufficient revenue-generating customer base in each
market.

                                      15
<PAGE>

We expect to experience increasing consolidated operating losses and negative
cash flows from operations as we expand our operations and enter new markets,
even if and after we have achieved positive cash flow from operations in our
initial markets. The following table summarizes our Adjusted EBITDA calculation
for the periods indicated (amounts in thousands of euros).

<TABLE>
<CAPTION>
                                                      Three Months Ended
                                               -------------------------------
                                                   March 31,        March 31,
                                                     2000            1999
                                               --------------   -------------
  <S>                                          <C>              <C>
  Net Loss                                     (Euro) (97,256)  (Euro) (5,253)
  Interest expense (net of interest income
    and capitalized interest)                           1,424            (670)
  Income taxes                                              -               -
  Depreciation and amoritization                        2,946             123
  Non-cash compensation expense                        69,660              31
  Foreign exchange loss and other expense               7,943               -
                                               --------------   -------------
      Negative Adjusted EBITDA                 (Euro) (15,283)  (Euro) (4,429)
                                               ==============   =============
</TABLE>


In view of our highly leveraged capital structure, we consider Adjusted EBITDA
to be an important performance measure.  Adjusted EBITDA consists of net
earnings (loss) before interest expense, interest income, income taxes, non-cash
compensation expense, depreciation and amortization and other non-cash charges,
including foreign currency exchange rate gains and losses.  Conceptually,
Adjusted EBITDA measures the amount of income generated each period that could
be used to service debt, because it is independent of the actual leverage
employed by the business; but Adjusted EBITDA ignores funds needed for capital
expenditures, income taxes and expansion.  Some investment analysts track the
relationship of Adjusted EBITDA to total debt as one measure of financial
strength.  However, Adjusted EBITDA does not represent cash provided or used by
operating activities and you should not consider Adjusted EBITDA in isolation or
as a substitute for measures of performance prepared in accordance with U.S.
generally accepted accounting principles.

You also should be aware that Adjusted EBITDA may differ significantly from cash
flows from operating activities as reflected in a statement of cash flows
prepared in accordance with U.S. generally accepted accounting principles.  Cash
from operating activities is net of interest and taxes paid and is a more
comprehensive determination of periodic income on a cash, rather than accrual,
basis and is exclusive of non-cash items of income and expenses such as
depreciation and amortization.  In contrast, Adjusted EBITDA is derived from
accrual basis income and is not adjusted for changes in working capital.
Consequently, Adjusted EBITDA is not affected by the timing of receivable
collections or when accrued expenses are paid.  We are not aware of any uniform
standards for determining 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.

                                      16
<PAGE>

Statements of Cash Flows
------------------------

We had cash and cash equivalents of (Euro) 521.6 million as of March 31, 2000,
an increase of (Euro) 464.5 million from (Euro) 57.1 million as of December 31,
1999. Details of the change in cash and cash equivalents are set forth in the
table below.

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                           -------------------------------------
                                                               March 31,              March 31,
                                                                2000                    1999
                                                           -------------           -------------
<S>                                                        <C>                     <C>
Cash flows from operating activities                       (Euro)(10,321)          (Euro) (5,547)
Cash flows from investing activities                             (33,254)                (76,271)
Cash flows from financing activities                             504,198                 115,310
Effect of exchange rates on cash                                   3,905                  (2,072)
                                                           -------------           -------------
Net increase in cash and cash equivalents                        464,528                  31,420
Cash and cash equivalents at beginning of period                  57,115                   1,531
                                                           -------------           -------------
Cash and cash equivalents at end of period                (Euro) 521,643          (Euro)  32,951
                                                           =============           =============

</TABLE>

Cash Flows from Operating Activities

During the quarter ended March 31, 2000, we used (Euro)10.3 million in operating
activities, a (Euro)4.8 million decrease from the (Euro)5.5 million used in
operating activities for the similar period in 1999. This decrease was primarily
related to the substantial organization and start-up costs incurred during the
development of our networks. Our development efforts increased significantly
since the first quarter of 1999.

Cash Flows from Investing Activities

We used approximately (Euro) 33.3 million of cash in investing activities during
the quarter ended March 31, 2000, compared to a use of (Euro) 76.3 million for
the similar period in 1999. The increase was primarily due to investment of our
initial public offering proceeds during the first quarter of 2000.

Cash Flows from Financing Activities

We had approximately (Euro) 504.2 million of cash flows from financing
activities during the quarter ended March 31, 2000, compared to (Euro) 115.3
million for the similar period in 1999. The increase was due to the proceeds
from our initial public offering. Cash flows from financing activities during
the first quarter of 1999 resulted from proceeds from our senior discount note
offering and equity contributions from our parent.

Liquidity and Capital Resources

The telecommunications business is capital intensive. Since January 1998, and
for the foreseeable future, we have needed and will continue to need large
amounts of capital to fund capital expenditures, working capital, debt service,
and operating losses. As of March 31, 2000, we had (Euro) 521.6 million of cash
and short-term investments and net working capital of (Euro) 476.5 million.


                                      17
<PAGE>

In January 2000, we executed an agreement for a (Euro) 265 million senior
secured credit facility with Goldman Sachs International and Paribas as co-
arrangers of the facility. As of March 31, 2000, we had no borrowings
outstanding under the facility. In April 2000, we entered into an agreement with
the co-arrangers and other parties whereby we agreed not to borrow funds under
the credit facility in exchange for their agreement to suspend the application
of substantially all of the representations, covenants and events of default.



                                      18
<PAGE>

In April 2000, we completed an offering of an aggregate (Euro) 200 million 14%
senior notes due 2010 (the "Senior Notes"). A portion of the proceeds were used
to repurchase $27.0 million ((Euro) 27.6 million) principal amount at maturity
of the existing notes. We lent approximately (Euro) 78.0 million of the net
proceeds to a wholly-owned subsidiary which used the funds to invest in a
portfolio of securities which is pledged as security for the Senior Notes. The
proceeds of these pledged securities will be used to made the first six interest
payments on the Senior Notes. The remaining proceeds from the Senior Notes
offering will be used to (i) fund the further deployment of our networks in
existing markets and an additional six cities in France and Germany, (ii) fund
the expansion of our Internet-related services, (iii) develop complementary
local access systems, (iv) fund net operating losses and (v) for general and
corporate purposes.

Capital Expenditures

During the quarters ended March 31, 2000 and 1999, we made capital expenditures
of (Euro) 34.5 million and (Euro) 9.8 million, respectively, for property and
equipment necessary to deploy networks in our initial markets. We also used
capital during these periods to fund our operating losses.

Based on our current plan, we believe we will satisfy our aggregate capital
requirements to fund the deployment of our business plan through December 31,
2001, with the remaining funds we have already raised, the proceeds from our
initial public offering and the proceeds from our senior note offering.



                                      19
<PAGE>

Euro Conversion

Effective January 1, 1999, the euro became the single legal currency of the
eleven participating European Union member states, including The Netherlands,
France and Germany and the conversion rates of the currencies of the
participating member states were irrevocably fixed against the euro as of that
date. Effective January 1, 1999, the French franc, the German mark and the
Netherlands guilder ceased to be the legal currency. From January 1, 1999 until
December 21, 2001, the French franc, the German mark and the Netherlands guilder
will be denominations of the euro and, as such, will be legal tender. The status
of the French franc, the German mark and the Netherlands guilder as
denominations of the euro will continue until, at the latest, June 30, 2002. On
that date (or, if these countries so determine, on some earlier date after
January 1, 2002), French francs, German marks and Netherlands guilders will be
withdrawn from circulation and will cease to be legal tender. Euro notes and
coins are not expected to be issued before January 1, 2002. Prior to that date,
cash payments will continue to be made in the local currencies. From January 1,
2002 until the local currencies are withdrawn and cease to be legal tender, cash
payments may be made by means of euro notes and coins or by way of French
francs, German marks and Netherlands guilders as appropriate.

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

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

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


                                      20
<PAGE>

Regulation and Licensing Matters
--------------------------------

France, Germany and the United Kingdom, and any new markets across Europe in
which we intend to operate, subject the telecommunications industry to a
significant degree of regulation. We need telecommunications licenses and other
equivalent authorizations to operate in each of these countries. Our ability to
deploy metropolitan area networks and provide Internet-related services in the
additional six cities included in our business plan depends on our ability to
obtain additional licenses and other authorizations or permissions. There can be
no assurance that we will be able to obtain the required licenses and, if we are
unsuccessful, we will heed to revise our network deployment strategy.

We must keep our licenses in our existing markets in force or we may be in
default under our senior discount notes and senior note indentures and our
credit facility, and we risk sanctions from the government authorities that
grant our licenses.  In most cases, these licenses and other authorizations are
of fixed duration, and we must comply with regulations and technical
requirements in order to maintain them.  For example, in France, we must comply
with French and European Union regulations and technical standards regarding
interconnection, secrecy, neutrality, non-discrimination, security,
environmental protection, limitations on ownership, and public service.

We cannot assure you that we will be successful in obtaining, maintaining, or
renewing licenses and other authorizations required for the services we provide
or plan to provide.  In addition, we cannot assure you that the required
licenses and other authorizations will be issued or renewed on commercially
viable terms.

New Accounting Standards
------------------------

Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") establishes accounting and
reporting standards for derivative instruments, including certain instruments
embedded in other contracts, and for hedging activities.  SFAS 133 requires that
an entity recognize all derivatives as either assets or liabilities and measure
those instruments at fair value.  It also specifies the accounting for changes
in the fair value of a derivative instrument depending on the intended use of
the instrument and whether (and how) it is designated as a hedge. SFAS 133 was
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
During 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137, "Accounting for Derivative Instruments
and Hedging Activities--Deferral of the Effective Date of SFAS 133" (SFAS 137)
which delayed the effective date of SFAS 133 until all fiscal quarters of fiscal
years beginning after June 15, 2000. As of March 31, 2000, the Company was not
entered into any transactions involving derivative financial instruments and,
therefore, cannot predict the financial statement impact of adopting SFAS 133
with respect to transactions which have not yet been entered into.

In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 ("SAB 101") "Views on Selected Revenue
Recognition Issues" which provides the staff's views in applying generally
accepted accounting principles to selected revenue recognition issues.  The
Company has evaluated SAB 101 and it believes that there is no effect on the
revenue recognition policies currently in place.


                                      21
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Investment Portfolio and Interest Rate Sensitivity

Our investment policy is limited by the indenture for the senior discount notes
and our senior secured credit facility. We are restricted to investing in
financial instruments with a maturity of one year or less (with certain limited
exceptions). The indenture requires investments that meet high credit quality
standards, such as obligations of the U.S. government securities 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. When and it we terminate the suspension of our
credit facility, we would be required to enter into an interest rate hedging
program with respect to 50% of every tranche of (EURO) 50 million borrowed to
mitigate foreign currency exchange rate risk.

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 operations are not significantly exposed to changes in currency exchange
rates because our revenues, costs, assets and liabilities are, for the most
part, denominated in euros. However, the senior discount notes which we issued
in February 1999 expose us to exchange rate fluctuations as the payment of
principal and interest on the notes will be made in dollars, and a substantial
portion of our future cash flows used to service these payments will be
denominated in euros. In addition, because of the issues surrounding our desire
to not be considered an investment company under the Investment Company Act of
1940, we must invest a substantial portion of our available cash in U.S.
government treasury bills with various short-term maturities. Accordingly, we
have executed certain forward currency contracts in order to hedge our risk
against foreign currency fluctuations between the U.S. dollar and the euro.
While we intend to take steps to minimize exchange rate risks, we cannot assure
you that we will not be materially adversely affected by variations in currency
exchange rates.

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

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

          December 31, 1998    $1.181(1)
          March 31, 1999       $1.073
          December 31, 1999    $1.007
          March 31, 2000       $0.961
------------------------
(1) Based on the exchange rate as of January 4, 1999, the date on which the Euro
    Noon Buying Rate was first quoted.

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

                                      22
<PAGE>

                          PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

We are not party to any pending legal proceedings that we believe would,
individually or in the aggregate, have a material adverse effect on our
financial condition or results of operations.

Item 2.  Changes in Securities and Use of Proceeds

a)   Securities sold:

     On February 18, 2000, the Company issued 19,534,725 of its ordinary shares
to CompleTel SPC II for consideration of one Class B Share of CompleTel Holding
I BV, pursuant to Section 4(2) of the Securities Act of 1933, as amended. This
transaction was part of a series of planned transactions resulting from November
and December 1999 capital contributions to our parent, CompleTel LLC and was
accounted for as a reorganization of entities under common control. Accordingly,
the accompanying financial statements retroactively reflect the contribution and
share issuance as if the transaction had occurred in December 1999.

b)   Use of proceeds from initial public offering:

Pursuant to our initial public offering of our ordinary shares, we issued
31,280,000 ordinary shares. The shares were registered with the Securities and
Exchange Commission pursuant to a Registration Statement on Form S-1 (No. 333-
78483) which was declared effective on March 27, 1999. The offering commenced on
the effective date and terminated after 31,280,000 ordinary shares were sold
pursuant to the Registration Statement for an aggregate offering price of $534.6
million (Euro 547.4 million). The public offering was underwritten by a
syndicate of underwriters led by Salomon Brothers International Limited, Goldman
Sachs International, Paribas and Merrill Lynch International. After deducting
discounts and commissions of (Euro)30.0 million and expenses of (Euro)6.3
million, we received net proceeds of (Euro)511.1 million.

Through March 31, 2000, the proceeds have been applied as follows (millions of
Euros):

      Temporary investment - U.S. Treasury Bills         $428.0
      Temporary investment - Cash, U.S. $ denominated       2.6
      Temporary investment - Cash, euro denominated        80.5
                                                         ------
                                                          511.1
                                                         ======

Item 3.  Defaults upon Senior Securities

         None

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

         The following matters were submitted to a vote of security holders
during the quarter ended March 31, 2000:

By written consent dated January 14, 2000, the sole shareholder appointed of
James E. Dovey, Lawrence F. DeGeorge and Paul J. Finnegan as additional managing
directors of the Company.

By written consent dated January 28, 2000, the sole shareholder granted to the
Board of Management the power and authority to resolve to issue shares in the
Company with the right to limit or exclude the pre-emptive right of
shareholders, subject to the approval of the Supervisory Board if one exists.

                                      23
<PAGE>

By written consent dated January 28, 2000, the sole shareholder approved the
appointment of Arthur Andersen LLP to audit the Company's 1998 and 1999
accounts.

By written consent dated February 17, 2000, the sole shareholder approved an
increase in the number of shares reserved for issuance under the Company's Stock
Option Plan to 18,919,955, and to determine that with regard to options granted
to employees resident in France the option price shall be the fair market value
of the Company's shares on the date of grant.

By written consent dated February 18, 2000, the sole shareholder approved the
issuance of 19,534,725 shares in CompleTel Europe NV to CompleTel SPC II in
exchange for CompleTel SPC II's one Class B Share in CompleTel Holding I BV and
waiving any pre-emptive rights.

By unanimous written consent dated February 25, 2000, the shareholders approved
an amendment of the company's articles of association to (i) increase the
nominal value of shares from NLG 0.03 to NLG 1.00 and (ii) convert such nominal
value into Euro 0.50.

By unanimous written consent dated February 25, 2000, the shareholders approved
an amendment of the company's articles of association to increase the authorized
capital of the company to Euro 62,500,000, divided into 625,000,000 ordinary
shares, each with a nominal value of Euro 0.10.

By unanimous written consent dated March 9, 2000, the shareholders approved an
amendment to the Company's Stock Option Plan to give the Management Board the
authority to determine vesting for options granted to residents of the United
States.

By unanimous written consent dated March 16, 2000, the shareholders approved the
execution, delivery and performance of the Amended and Restated Euro 265,000,000
Credit Facility Agreement and all collateral agreements.

By unanimous written consent dated March 16, 2000, the shareholders approved the
amended articles of association of the Company.

At its annual meeting held March 27, 2000, the company's sole shareholder
adopted the company's annual accounts for fiscal years 1998 and 1999.
126,133,060 votes were cast in favor, none against and none withheld.

By written consent dated March 29, 2000, the sole shareholder, subject to the
consummation of the public offering of the Company's ordinary shares: appointed
William H. Pearson, Martin Rushe and Hansjoerg Rieder as managing directors of
the Company; appointed James E. Dovey, James C. Allen, Lawrence F. DeGeorge,
Paul J. Finnegan, Royce J. Holland, James H. Kirby and James N. Perry as
supervisory directors of the Company; to authorize the Board of Management for
an 18-month period to acquire shares of the Company; to extend the period to
March 29, 2005 for which the Board of Management is authorized to grant rights
under the Company's Stock Option Plan; to revoke the authorization of the Board
of Management pursuant to the January 28, 2000 shareholder resolution and to
irrevocably authorize the Board of Management through March 29, 2005 to issue
shares in the capital of the Company and to limit or exclude the pre-emptive
right of shareholders as well as grant the right to subscribe for shares, upon
approval of the Supervisory Board if one exists; and to authorize the
overallotment option described in the registration statement for the public
offering of the Company's ordinary shares.

                                      24
<PAGE>

Item 5  Other Information

None

Item 6(a)  Exhibits

<TABLE>
<CAPTION>

<C>          <S>
Exhibit No.  Description
-----------  -----------

3.1          Amended Articles of Association of CompleTel Europe N.V.
4.1(1)       Indenture dated as of 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          Indenture dated as of April 13, 2000, between CompleTel Europe N.V as issuer and the Chase Manhattan Bank as trustee
10.1(4)      (Euro) 265 Million Senior Secured Credit Facility dated January 6, 2000, among Goldman Sachs International and Paribas
             Corporation, as co-arrangers, and other banks
10.2(4)      Purchase Agreement dated August 4, 1999, between CompleTel GmbH and Siemens AG
10.3(1)      Supply Agreement dated January 8, 1999, between CompleTel SAS and Matra Nortel Communications
10.4(1)      Arrete dated November 17, 1988 authorizing CompleTel SARL to set up and operate a telecommunications network open to
             the public and to supply the public with the telephone service, as published December 13, 1998
10.5(1)      License dated January 11, 1999 granted by the Secretary of State for Trade and Industry to CompleTel UK Limited under
             Section 7 of the Telecommunications Act 1984
10.6(2)      German License Certificate Class 3 for the Operation and Performance of Public Telecommunications German license
             certificate Class 3 for the Operation and Performance of Public Telecommunications Services by the Licensee or Others
             dated March 8, 1999
10.7(2)      German License Certificate Class 4 for the Operations of Voice Telephone Service on the Basis of a Self-Operated
             Telecommunications Network dated March 8, 1999
10.8(3)      Extension of Class 3 German License
10.9(3)      Extension of Class 4 German License
10.11(1)     Employment Agreement by and between CableTel Management, Inc. and William H. Pearson, dated as of May 18, 1998
10.12(1)     Employment Agreement by and between CableTel Management, Inc. and Richard N. Clevenger, dated as of May 18, 1998
10.13(1)     Employment Agreement by and between CableTel Management, Inc. and David Lacey dated as of December 16, 1998
10.14(1)     Employment Agreement by and between CableTel Management, Inc. and James E. Dovey dated as of May 18, 1999
10.15(1)     Amended and Restated CompleTel LLC Guaranty Agreement, dated as of July 14, 1999 by CompleTel LLC in favor of the
             noteholders
10.16(1)     Equity Registration Rights Agreement dated as of February 16, 1999 among CompleTel (N.A.) N.V., CompleTel Europe N.V.,
             the Shareholders named therein, the initial purchasers and U.S. Bank Trust National Association, as Transfer Agent
10.17(7)     First Amendment to CompleTel Europe N.V. 2000 Stock Option Plan
10.18(6)     Second Amended and Restated Registration Agreement dated as of November 23, 1999 by and among CompleTel LLC and the
             Holders named therein
10.19        First Supplement dated as of March 24, 2000 to Second Amended and Restated Registration Agreement dated as of November
             23, 1999 by and among CompleTel LLC and the Holders named therein
</TABLE>

                                      25
<PAGE>
<TABLE>
<CAPTION>
<C>      <S>
10.20    Pledge Agreement dated as of April 13, 2000 by CompleTel Europe N.V., CompleTel Escrow B.V. and The Chase Manhattan Bank as
         Trustee and The Chase Manhattan Bank as Securities Intermediary
10.21    Exchange and Registration Rights Agreement dated April 13, 2000 among CompleTel Europe N.V. and the Purchasers defined
         therein.
10.22    CompleTel Europe N.V. Guaranty Agreement, dated March 30, 2000 by CompleTel Europe N.V.
10.23    Amended and Restated (Euro) 265 Million Senior Secured Credit Facility Agreement dated March 17, 2000 among Members of the
         CompleTel Group as Borrowers, Goldman Sachs International and Paribas as Lead Arrangers, Paribas as Facility Agent, Paribas
         as Security Agent and Others
10.24    Supplemental Agreement dated April 6, 2000 between CompleTel Europe N.V. as Parent, CompleTel S.A.S. as Obligors' Agent,
         Members of the CompleTel Group as Original Borrowers, Members of the CompleTel Group as Original Guarantors, Goldman Sachs
         International and Paribas as Lead Arrangers, European Investment Fund as Risk Participant, Paribas as Security Agent,
         Paribas as Facility Agent and Others
10.25    Promissory Note dated March 23, 2000 between Martin Rushe as Maker and iPcenta Limited as Payee
10.26    Letter Agreement dated March 23, 2000 between Martin Rushe and iPcenta Limited
21.1(5)  Subsidiaries of CompleTel Europe N.V.
27.1     Financial Data Schedule
</TABLE>
___________
(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 Amendment No. 1 to the Registrant's
     Registration Statement on Form S-4, file number 333-82305, filed with the
     Securities and Exchange Commission on August 27, 1999 and incorporated
     herein by reference.
(3)  Previously filed as an exhibit to Amendment No. 2 to the Registrant's
     Registration Statement on Form S-4, file number 333-82305 filed with the
     Securities and Exchange Commission on September 14, 1999 and incorporated
     herein by reference.
(4)  Previously filed as an exhibit to the Post-Effective Amendment No. 1 to the
     Registrant's Registration Statement on Form S-4, file number 333-82305,
     filed with the Securities and Exchange Commission on January 31, 2000 and
     incorporated herein by reference.
(5)  Previously filed as an exhibit to the Registrant's Registration Statement
     on Form F-1, file number 333-30834, filed with the Securities and Exchange
     Commission on February 22, 2000 and incorporated herein by reference.
(6)  Previously filed as an exhibit to Amendment No. 1 to the Registrant's
     Registration Statement on Form F-1, file number 333-30834, filed with the
     Securities and Exchange Commission on March 6, 2000 and incorporated herein
     by reference.
(7)  Previously filed as an exhibit to Amendment No. 2 to the Registrant's
     Registration Statement on Form F-1, file number 333-30834, filed with the
     Securities and Exchange Commission on March 22, 2000 and incorporated
     herein by reference.

Item 6(b)  Reports on Form 8-K

The Company filed the following reports on Form 8-K during the three months
ended March 31, 2000:

                                      26
<PAGE>

On February 22, 2000, attaching a press release reporting the filing with the
Securities and Exchange Commission of a registration statement on Form F-1 for
an initial public offering of its ordinary shares.





                                      27
<PAGE>

                                   SIGNATURE

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


                                                           COMPLETEL EUROPE N.V.
                                                                    (Registrant)


Date:  May 15, 2000                    /s/ William H. Pearson
                                       ---------------------------------------
                                                            William H. Pearson
                                                          Authorized Signatory


Date:  May 15, 2000                    /s/ David E. Lacey
                                       ---------------------------------------
                                                                David E. Lacey
                                                       Chief Financial Officer


                                      28