20-F

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

[  ]	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2002 OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from      to

Commission file number
333-83764-01

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

(Exact name of Registrant as specified in its charter)

(Translation of Registrant’s name into English)

The Netherlands
(Jurisdiction of incorporation or organization)

World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands
(Address of principal executive offices)

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

Title of each class	Name of each exchange on which registered
None	None

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

None
(Title of Class)

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

TIWC Guarantee of 14% Senior Guaranteed Notes
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

10,000,000,000 common shares par value €0.0045378

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

[X] Yes [  ] No

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

[  ] Item 17 [X] Item 18

TABLE OF CONTENTS

explanatory notes
exchange rate information

ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3 - KEY INFORMATION

ITEM 4 - INFORMATION ON THE COMPANY

ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 8 - FINANCIAL INFORMATION

ITEM 9 - THE OFFER AND LISTING

ITEM 10 - ADDITIONAL INFORMATION

ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 13 - DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

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

ITEM 15 - CONTROLS AND PROCEDURES

ITEM 16 [RESERVED]

ITEM 17 - FINANCIAL STATEMENTS

ITEM 18 - FINANCIAL STATEMENTS

ITEM 19 - EXHIBITS

EXPLANATORY NOTES

     References herein to the “Company”, “we”, “us” or “our” are references to Telesystem International Wireless Corporation N.V. (“TIWC”), a Netherlands corporation, and, where the context requires, its subsidiaries and operating companies. TIWC is a wholly owned subsidiary of Telesystem International Wireless Inc (“TIW”), a Canadian corporation, and a guarantor of TIW’s 14% senior guaranteed notes.

     All references herein to “dollars” and “$” refer to the lawful currency of the United States of America, unless otherwise expressly stated. All references herein to “Cdn$” refer to the lawful currency of Canada; all references herein to “Euro” or “€” refer to the lawful single currency of the European Monetary Union; all references herein to “Leu” refer to the lawful currency of Romania; and all references herein to “Koruna” refer to the lawful currency of the Czech Republic.

     Although we present our financial statements in U.S. dollars, all financial statements and financial information derived therefrom presented herein have been prepared in accordance with Dutch generally accepted accounting principles (“Dutch GAAP”). For a discussion of the principal differences between Dutch GAAP and U.S. generally accepted accounting principles (“U.S. GAAP”), see Note 14 to the consolidated financial statements.

     Information contained in this document concerning the wireless telecommunications industry, our general expectations concerning this industry and our market positions and market shares are based on estimates we prepared using data from publicly available industry sources as well as from various research analysts’ reports, market research and industry analyses, and on assumptions made based on our knowledge of this industry, which we believe to be reasonable. We believe, however, that this data is inherently imprecise, although generally indicative of relative market positions and market shares.

     Certain data concerning the wireless telecommunications industry found in this document was taken from the following independent publications: Global Mobile®, published by Baskerville Communications Corporation and EMC World Cellular Database. Industry and company data are approximate and reflect rounding in certain cases.

     Unless otherwise indicated, all operating data presented herein are as of December 31, 2002. Our parent company TIW as well as our subsidiary ClearWave N.V. (“ClearWave”) are registrants with the Securities Exchange Commission of the United States and, as such, are subject to the continuous disclosure requirements of the Securities Exchange Commission in the United States. TIW and ClearWave have filed on May 20, 2003, annual reports on Form 20-F for their respective year ended December 31, 2002. TIW, ClearWave and us provide certain operational figures on a proportionate basis. Differences in the proportionate numbers presented in the filings of TIW, TIWC and ClearWave are due to (i) the ownership structure of ClearWave (TIW’s total interest in ClearWave is in part held directly by TIW and in part held through us) and (ii) the date as at which the figures are reported given post year end changes in ClearWave’s ownership of MobiFon.

EXCHANGE RATE INFORMATION

     The following table sets forth the exchange rates for one U.S. dollar in effect at the end of the periods noted and the average of the exchange rates on the last day of each month during such periods. The exchange rates expressed in Canadian dollars and Euros are based on the noon buying rate as reported by the Federal Reserve Bank of New York; the exchange rates expressed in Romanian Leu are based on the daily fixing rate as reported by the National Bank of Romania; and the exchange rates expressed in Czech Koruna are based on the daily fixing rate as reported by the Czech National Bank. As of June 16, 2003, such exchange rates were Cdn$1.3397 = $1.00; Euro 0.8444 = $1.00; Leu 32,247.00 = $1.00; Koruna 26.4350 = $1.00.

	2002				2001				2000
	End		Average		End		Average		End		Average
Canadian Dollar		1.5718		1.5666		1.5956		1.5490		1.4995		1.4855
Euro		0.9537		1.0532		1.1235		1.1167		1.0652		1.1132
Romanian Leu		33,475.00		33,525.70		31,597.00		29,060.90		25,926.00		21,662.00
Czech Koruna		30.1410		30.5470		36.2590		38.0380		37.8130		38.5900

[Additional columns below]

[Continued from above table, first column(s) repeated]

	1999				1998
	End		Average		End		Average
Canadian Dollar		1.4440		1.4852		1.5375		1.4874
Euro		0.9930		0.9891		0.8519		0.8508
Romanian Leu		18,250.00		15,621.00		11.000.00		9,009.00
Czech Koruna		36.0000		34.6000		29.9000		32.3000

FORWARD-LOOKING STATEMENTS

     This document contains certain forward-looking statements concerning our future operations, economic performances, financial conditions and financing plans, including such things as business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of the wireless telecommunications industry and our business and operations and references to future success. Forward-looking statements may be identified by use of forward-looking terminology such as “believe”, “intend”, “may”, “will”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms, variations of those terms or the negative of those terms. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including, among other things, the risk factors discussed below. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us and our subsidiaries or their businesses or operations.

PART I

ITEM 1 — IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not applicable.

ITEM 2 — OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

ITEM 3 — KEY INFORMATION

SELECTED FINANCIAL DATA

The following table sets forth certain consolidated financial information derived from TIWC’s consolidated financial statements for the fiscal years ended December 31, 2002, 2001, 2000, 1999 and 1998, which have been audited by Ernst & Young, Accountants. You should read the information set forth below in conjunction with our Operating and Financial Review and Prospects and our consolidated financial statements, and the notes thereto, included elsewhere in this Form 20-F. Our consolidated financial statements have been prepared in accordance with Dutch GAAP. For a discussion of the principal differences between Dutch GAAP and U.S. GAAP, see Note 14 to our consolidated financial statements.

	Year Ended December 31,
(U.S.$)	2002			2001			2000			1999			1998
	(in thousands)
Statement of Loss Data:
Revenues(1)		839,107			844,757			715,185			498,093			320,272
Operating income (loss) (1)		112,671			65,369			(53,205	)		(6,185	)		(30,972	)
Income (loss) from continuing operations(1)		(205,999	)		208,666			(4246	)		(100,927	)		(77,669	)
Net loss(1)		(205,999	)		(233,370	)		(273,838	)		(90,243	)		(131,423	)
Revenues (U.S. GAAP)		694,453			526,225			342,271			239,522			166,729
Income (loss) from continuing operations (U.S. GAAP)		6,271			245,149			(4,246	)		(100,927	)		(77,669	)
Net loss (U.S. GAAP)		(241,208	)		(402,059	)		(273,838	)		(90,243	)		(131,423	)

	As of December 31,
Balance Sheet Data:	2002			2001			2000			1999			1998
	(in thousands of dollars)
Total Assets		1,412,440			1,845,584			3,285,574			2,465,656			2,108,342
Share Capital		47,611			40,364			41,316			6,157			7,186
Shareholders’ Equity (Deficiency)		(718,004	)		(597,650	)		(434,279	)		(108,129	)		68,416
Total Assets (U.S. GAAP)		1,411,888			1,369,833			2,641,483			1,833,809			1,358,902
Share Capital (U.S. GAAP)		42,560			42,560			41,316			6,157			7,186
Shareholders’ Equity (Deficiency) (U.S GAAP)		(721,005	)		(591,393	)		(434,279	)		(108,129	)		68,416

(1) On March 5, 2002, we adopted a formal plan to dispose of our remaining Brazilian cellular joint venture operations by way of a sale of our equity interest within the next twelve months. The financial position and results of operations of the Brazilian cellular joint venture operations were proportionately consolidated for the first six months ended June 30, 2002. Starting July 1, 2002, they were accounted for using the equity method. Under U.S. GAAP, the equity method was used throughout the year. See our Operating and Financial Review and Prospects included at Item 5 of this form 20-F.

CAPITALIZATION AND INDEBTEDNESS

     Not applicable.

REASONS FOR THE OFFER AND USE OF PROCEEDS

     Not applicable.

RISK FACTORS

We may not be able to obtain the financing we need to meet our capital requirements.

     We have significant capital requirements to meet in the next twelve months. As at December 31, 2002, due to the short-term maturity of TIW’s corporate credit facility and the maturity of TIW’s 14% senior guaranteed notes on December 30, 2003, the committed cash obligations of TIW for the upcoming twelve months exceed the committed sources of funds and TIW’s cash and cash equivalents on hand. In addition, it will be necessary for TIW to comply with the covenants to have access to its financing arrangements according to the terms of the related agreements. As a result, there is significant uncertainty as to whether TIW will have the ability to continue as a going concern. Subsequent to year end, the corporate credit facility, under which we were a co-borrower was fully repaid. However, we depend on continued support from TIW and we act as a guarantor of the 14% senior guaranteed notes issued by TIW. Consequently, there is significant uncertainty as to whether we will have the ability to continue as a going concern. There can be no assurance that we or TIW will be able to secure the funds required to meet our cash needs, either through refinancing, cash flow from our operations, disposition of certain of our assets, sale of debt or equity securities, or through any other means of financing. Failure to obtain such required funds or postpone the maturity of our senior indebtedness could have a material adverse effect on us and could result ultimately in our insolvency or bankruptcy.

     The business of our operations is capital-intensive. Our operating companies also expect to have significant future capital requirements, particularly in relation to the expansion of their cellular operations and the servicing of their debt. Our operating companies intend to finance such future capital requirements from cash flow from operating activities, borrowing under existing credit facilities, funding from shareholders’ contributions and through other externally generated funds such as disposition of assets, the sale of debt and equity securities, vendor financing and project financing from commercial banks and international financial agencies. The ability to generate sufficient short-term and long-term capital in the future is dependent upon many factors, including general economic conditions in the countries where we conduct our principal operations, financial market conditions, our and such operating companies’ financial and operating performance and prospects and market perceptions thereof, which will be adversely impacted by the “going concern” qualification currently included in our financial statements. There can be no assurance that the operating companies will be able to obtain the financing required to meet debt service requirements, make planned capital expenditures, provide working capital or meet other cash needs. Failure to obtain required financing could have a material adverse effect on us and, among other things, could result in the loss or revocation of licenses held by the operating companies or require that certain planned projects be delayed or abandoned.

We are highly leveraged, which could make it difficult for us to service our debt or comply with the covenants in the documents governing our indebtedness.

     We continue to depend on TIW for financial support. TIW continues to have a substantial amount of indebtedness outstanding, including as at December 31, 2002, $272.6 million in secured indebtedness at the TIW level consisting mainly of $47.4 million drawn on its corporate credit facility and $223.9 million in 14% senior guaranteed notes (including conditional indebtedness of $3.4 million accrued on such notes as at December 31, 2002). We are a co-borrower on the corporate credit facility and we are a guarantor of the 14% senior guaranteed notes. As at June 1, 2003, the corporate credit facility had been repaid in full, $48.2 million in 14% senior guaranteed notes had been redeemed and TIW had informed the trustee of the 14% senior guaranteed notes that it will redeem an additional $24.2 million of notes on June 30, 2003, leaving approximately $148.2 million in senior indebtedness as at that date. Also, as at December 31, 2002, our consolidated debt, excluding intercompany indebtedness, was $738.0 million. The terms of certain of these debt instruments currently limit, but do not prohibit, the incurrence of additional indebtedness by our subsidiaries, our operating companies, or us.

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

• the debt service requirements may become so high that TIW or our subsidiaries have difficulty making debt service payments on outstanding indebtedness or satisfying our obligations with respect to such indebtedness;

• our ability to pay dividends will be reduced, assuming we are otherwise permitted to pay dividends under the restrictive covenants contained in our debt instruments;

• our ability to obtain additional debt financing may be limited;

• the ability of our parent company to pay interest on its debt and finance its and our activities at the corporate level may be limited by cash sweep provisions requiring it to repay the principal outstanding on its senior indebtedness from cash raised from financing activities, asset sales and certain distributions from our affiliates; and

• our flexibility in reacting to changes in our business and market conditions may be reduced.

     Any failure to pay such indebtedness or other liabilities when due could have a material adverse effect on us.

     To date, assets of our operating companies have secured certain of the debt financing obtained by the operating companies, and it is likely that any debt financing our operating companies obtain in the foreseeable future will also be secured. The pledge of assets to secure debt financing may make it substantially more difficult to obtain additional financing from other sources.

     Along with certain of our operating companies, TIW must maintain certain financial ratios, satisfy financial conditions and comply with other covenants pursuant to the terms of their indebtedness. If TIW is unable or if any of such operating companies is unable to generate sufficient cash flow or otherwise obtain funds necessary to make required payments, or otherwise fails to comply with the various covenants in such indebtedness, we would be in default under the terms thereof, which would permit the holders of such indebtedness to accelerate the maturity of the indebtedness, prohibit further drawings thereunder or exercise other remedies.

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

     Our subsidiary Český Mobil has generated substantial operating losses since inception. In addition, while Český Mobil currently generates positive cash flow from operations, it has generated negative cash flow from operations in the past and continues to generate net losses. There can be no assurance that our operations can improve their profitability or that they will generate net earnings and enough positive cash flow in the future. The growth of these operations will depend on a number of significant financial, logistical, technical, marketing, legal, competitive, economic and other factors, the outcome of which cannot be predicted. We have sustained significant losses since inception. As of December 31, 2002, we had an accumulated deficit of $461.7 million. We generated a loss from continuing operations before minority interests and income taxes of $191.1 million in 2002 and although we generated income from continuing operations before minority interest and income taxes of $202.8 million in 2001, these results include non recurring gains on investments of $299.8 million. Our net losses were $206.0, million $233.4 million and $273.8 million for the years ended December 31, 2002, 2001 and 2000. There can be no assurance that we will be able to sustain or improve operating profitability in the future. Failure to sustain or improve operating profitability would adversely affect our ability to service our indebtedness.

Our holding company structure may make it difficult to access cash flow from the operating companies and may result in structural subordination of certain of our outstanding securities

     We are a holding company with no material sources of income or assets of our own other than the equity interests that we own in our subsidiaries and operating companies. We conduct substantially all of our operations through such subsidiaries and Český Mobil a.s., MobiFon S.A. and Hexacom India Limited, our indirectly held operating companies. TIW’s cash flow and, consequently, its ability to service the debt we guarantee depends upon the ability of our subsidiaries and operating companies to pay dividends or otherwise make distributions to us. Our subsidiaries and operating companies are separate and distinct legal

entities and, except for any intercompany loans owed to us, will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions to us or to otherwise pay amounts due with respect to the 14% senior guaranteed notes or to make funds available for such payments. Because the subsidiaries will not be required to guarantee the payment of principal of or interest on the 14% senior guaranteed notes, any right we may have to receive assets of our subsidiaries or operating companies upon their liquidation or reorganization will be structurally subordinated to the prior claims of such subsidiaries’ and operating companies’ respective creditors, including, without limitation, tax authorities, trade creditors and lenders.

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

• we may not have the necessary control, by ourselves, to cause such entities to pay dividends to their equity holders;

• certain of such entities are currently or may become parties to credit or other borrowing agreements that restrict or prohibit the payment of dividends and distributions, and such entities are likely to continue to be subject to such restrictions and prohibitions for the foreseeable future;

• it can be expected that Český Mobil will generally reinvest all of its cash flow in its business for the foreseeable future and that MobiFon may reinvest part of its cash flow in its business for the foreseeable future; and

• some of the countries in which such entities conduct business impose legal limitations on the declaration of dividends and tax the payment and repatriation of such dividends or otherwise restrict the repatriation of funds, even though we typically structure our operations to minimize any such tax on such payment and repatriation of funds.

     Although our subsidiary MobiFon has declared and paid dividends in the recent past and initiated a share repurchase in 2002, we may not be able to generate any significant cash through dividends or other distributions from the operating companies in the near future, and there can be no assurance that we will be able to generate any significant cash flow from the operating companies at any time in the future.

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

     We are incorporated under the laws of the Netherlands and our subsidiaries are incorporated under the laws of various jurisdictions and conduct operations in different countries. Consequently, the laws and regulations of The Netherlands or one or more countries in which our subsidiaries are organized or operate could apply to litigation or bankruptcy proceedings. Under bankruptcy laws in the United States, courts typically have jurisdiction over a debtor’s property, wherever located, including property situated in other countries. There can be no assurance, however, that courts in The Netherlands or elsewhere would recognize the United States bankruptcy court’s jurisdiction. Accordingly, difficulties may arise in administering a United States bankruptcy case involving a Dutch debtor or a debtor with its principal operating assets outside the United States, and any orders or judgments of a bankruptcy court in the United States may not be enforceable.

You may find it difficult to enforce your rights because we are a foreign company.

     Judgments of U.S. courts including judgments against us, our supervisory board, our board of management or our officers, that are predicated on the civil liability provisions of the federal securities laws of the United States are not directly enforceable in The Netherlands. Even if an investor prevails on a claim in a United States court, it may find it difficult or impossible to enforce its rights in The Netherlands and might have to relitigate the merits of the matter before the competent court in The Netherlands in order to enforce its rights. Furthermore, an investor may find it difficult or impossible to effect service of process on the members of our boards or the board of directors of our subsidiaries, their officers and others connected to them.

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

     On March 26, 2003, we disposed of our entire interest in Telpart and settled or terminated all litigation which related to such interest. In July 2000 we and certain co-investors in our Brazilian operations had initiated legal proceedings against certain affiliates of Banco Opportunity which were co-investors in or managed certain funds invested in Telpart Participaçoes S.A. The proceedings sought to enjoin the affiliates of Banco Opportunity in respect of the control over Telpart. Considerable litigation in various jurisdictions among the partners followed the institution of these proceedings. Although all such litigation has now been settled or terminated as part of the sale of our interest in Telpart, the parties may recommence the litigation should such sale be unwound for any reason.

We may not be able to sell or transfer our ownership interests in our operating companies on commercially acceptable terms.

     Our ability to sell or transfer our ownership interests in our operating companies is generally subject to:

• contractual limitations in favor of strategic partners including, in certain cases, co-sale rights or rights of first refusal (see “ — Arrangements among shareholders of our Romanian subsidiary could make it harder for us to engage in transactions that could benefit our shareholders”); and

• provisions in local operating licenses and local governmental regulations that, in certain cases, may restrict or prohibit the transfer of our ownership interests in such operating companies.

     Moreover, we have been required, along with local partners, to pledge our equity interests in certain operating companies to secure credit facilities obtained by those operating companies, and we may be prohibited from or restricted in transferring or otherwise disposing of such equity interests so long as they are pledged as collateral for those credit facilities. In addition, our operating companies currently have no publicly traded securities, and there can be no assurance that there will in the future be either a public or private market for the securities of our operating companies. As a result, our ability to liquidate any or all of our investments may be substantially limited.

     Even if any sales are completed, the prices realized on those sales could be less than our investment, and there may be substantial local taxes, currency exchange controls or other restrictions on repatriation of monies imposed on us in the case of any such sales.

Arrangements among shareholders of our Romanian subsidiary could make it harder for us to engage in transactions that could benefit our shareholders.

     Any issuance, sale or transfer of shares of ClearWave may trigger rights of first refusal given to shareholders of ClearWave’s Romanian subsidiary, MobiFon, under MobiFon’s contract of association. Such rights apply to direct sales of shares of MobiFon and, as long as the shares of MobiFon held by ClearWave represent more than 25% of the fair market value of ClearWave’s assets, to indirect sales. These rights entitle shareholders of MobiFon to purchase a proportionate number of shares of MobiFon held by ClearWave upon an issuance, sale or transfer of shares of ClearWave, at the same proportionate price in the case of cash transactions in ClearWave’s shares, or at the fair market value of the MobiFon shares, in the case of non-cash transactions in ClearWave’s shares. On December 12, 2000, we obtained from Vodafone Europe B.V., a holder of 20.1% of the outstanding

shares of MobiFon at that date, a waiver of such rights in respect of transactions in ClearWave shares under certain circumstances such as certain future primary issuances of shares of ClearWave and the issuance and resale of certain shares of ClearWave.

     As consideration for the waiver, we agreed with Vodafone that we or our affiliates will control the voting of the shares in MobiFon held by ClearWave. We further agreed to directly or indirectly maintain voting control of ClearWave except as provided below. We also agreed that for so long as Vodafone continues to hold at least 10% of the outstanding equity of MobiFon:

• Until December 11, 2003, TIWC will not sell to a third party shares of ClearWave that would convey voting control over ClearWave unless Vodafone is afforded the right to submit an offer to acquire all of TIWC’s interest in ClearWave. If Vodafone submits such an offer, TIWC cannot sell a controlling interest in ClearWave to another party for six months after the Vodafone offer is received except on terms more advantageous to TIWC than Vodafone’s offer.

• In the event of a change of voting control of ClearWave, TIWC will ensure that Vodafone’s right of first refusal over MobiFon shares will be exercisable for a number of MobiFon shares equal to the greater of

(1)	the number of MobiFon shares determined by the contract of association to be covered; and
(2)	the lesser of:

(a)	the number of such shares required to increase Vodafone’s equity interest in MobiFon to 50.1% and
(b)	30% of MobiFon’s issued equity.

     Vodafone’s right of first refusal continues to apply in respect of any direct transfer of MobiFon shares that we hold or of the shares of our affiliates which own MobiFon shares.

Given that we have pledged the shares we hold in ClearWave as collateral to our guarantee of the 14% senior guaranteed notes, a realization on our interest in ClearWave, as well as any foreclosure by the trustee on such capital stock may trigger certain rights under these arrangements.

     In the event there has not been an initial public offering of the shares of MobiFon by October 1, 2004, certain minority shareholders in MobiFon holding in aggregate approximately 21% of the outstanding shares of MobiFon, may require us or, at our option, ClearWave to make an offer to acquire their shares of MobiFon at a price representing the fair market value of such shares as determined by an independent valuation. This price shall be payable, at TIW’s option, in cash or in its marketable securities. This right terminates upon an initial public offering of ClearWave shares that meets certain criteria. Should such right be exercised, we may not have the necessary cash on hand to pay the purchase price.

We may not be able to satisfy conditions in our agreements dealing with changes in control.

     ClearWave’s Romanian and Czech operating companies have entered into senior credit facilities with bank syndicates under which a direct or indirect change of control of such operating companies could trigger default provisions under these borrowing facilities, unless the lenders consent. A foreclosure by the trustee of the 14% senior guaranteed notes on the capital stock of ClearWave subject to the lien securing our guarantee of the notes would likely trigger these change of control provisions, which could impede the ability of the trustee to rapidly realize on this security interest or could reduce the value of the security interest.

     The indenture governing the 14% senior guaranteed notes requires TIW, upon a change of control, to make an offer to purchase the notes at a price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest. There can be no assurance that, upon a change of control, TIW or we would have sufficient funds to purchase all notes tendered.

We compete with companies that have greater resources than we have and use technology different than ours.

     The wireless telecommunications industry is highly competitive. A number of large international telecommunications companies are actively engaged in programs to develop and commercialize wireless telecommunications services in both developing and developed countries. In many cases, we will also compete against landline carriers, including government-owned telephone companies. Most of these companies have substantially greater financial and other resources, research and development staffs and technical and marketing capabilities than we do. We believe that there is increasing competition for additional licenses and increased competition to the extent others obtain such licenses.

Rapid technological changes or the adoption of incompatible standards could render our services obsolete or non-competitive.

     We may face competition from new technologies and services introduced in the future. The wireless telecommunications industry is experiencing significant technological change, as evidenced by the introduction of new standards for mobile communications, such as universal mobile telecommunications systems and generalized packet radio service, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. Such continuing technological advances make it difficult to predict the extent of the future competition we may face. As a result, there can be no assurance that existing, proposed or as yet undeveloped technologies will not become dominant in the future and render the technologies we use less profitable or even obsolete. There can be no assurance that new products and services that are more commercially effective than our products and services will not be developed. Furthermore, there can be no assurance that we will be successful in responding in a timely and cost-effective way to keep up with these developments. Changing our products or services in response to market demand may require the adoption of new technologies that could render many of the technologies that we are currently implementing less competitive or obsolete. To respond successfully to technological advances and emerging industry standards, we may require substantial capital expenditure and access to related or enabling technologies in order to integrate the new technology with its existing technology. We may not be successful in modifying our network infrastructure in a timely and cost-effective manner to facilitate such integration, which could adversely affect our quality of services, our results of operations and our business and prospects.

     Český Mobil has decided not to participate in the auction for licenses giving the right to operate networks using universal

mobile telecommunications systems or other recently developed technologies. The acquisition of these licenses and the build out of these networks by our competitors could make the products and services of Český Mobil less attractive and consequently have an impact on our revenues and profitability.

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

     We have grown rapidly since our inception in 1992. As part of our development strategy, we consider development and acquisition opportunities in the wireless telecommunications industry on an ongoing basis and at any time may be engaged in various stages of discussions regarding such opportunities or the increase of our equity participation in our existing operations. Such growth strategy presents the risks inherent to identifying and assessing the value, strengths and weaknesses of development and acquisition opportunities, to evaluating the costs and uncertain returns of building and expanding the facilities for operating systems and to integrating and managing the operations of additional operating systems. Our growth strategy will place significant demands on our operational, financial and marketing resources and will result in our subsidiaries, operating companies, and us incurring substantial additional indebtedness. In addition to the risks associated with increased leverage, there can be no assurance that:

• we will be able to correctly identify appropriate investment opportunities or successfully manage any businesses we may acquire; or

• we will not incur significant unanticipated expenses.

We are subject to governmental regulation and licensing requirements, which may increase our operating costs and may dictate where and how we operate.

     Our operations are subject to governmental regulation, which may change from time to time. To date, certain operating companies have been subject to service requirements, restrictions on interconnection of wireless systems to government-owned or private telephone networks, subscriber rate-setting and requirements that the operating companies or development projects complete construction, meet network coverage tests or commence commercial operation of the networks by specified deadlines and other requirements. In addition, licenses may contain restrictions on foreign ownership or share transfers. These restrictions or conditions may be difficult to comply with, particularly given demographic, geographic or other issues in a particular market. Failure to comply with these restrictions or conditions may result in penalties or in the loss or revocation of a license. Furthermore, changes in the regulatory framework may limit the ability to add subscribers to developing systems.

     The ability of our operations to retain and exploit their existing telecommunications licenses and to renew them on favorable terms when they expire is essential to our operations. The governmental agencies responsible for the administration of licenses may, however, unilaterally limit, revoke or otherwise adversely modify the terms of these licenses in the future, and we, along with our operating companies, may have limited or no legal recourse if these events occur. In certain cases, the governmental issuer has explicitly reserved the right to modify certain license terms, to terminate the license in the public interest and to take over the operating company’s network and services in the interest of national security. There can be no assurance that our operations will be able to retain or renew their licenses or satisfy the conditions of such licenses or that the restrictions imposed upon such licenses will permit the commercial exploitation of such licenses, any of which could have a material adverse effect on us.

     We believe that the opportunity to acquire substantial new wireless telecommunications licenses in developed and developing countries will exist only for a limited time. Governments of developed and developing countries are increasingly requiring financial bidding for licenses. This requirement has increased the cost of these licenses, and may restrict our ability to obtain additional licenses. Furthermore, relevant governmental authorities may grant additional licenses with respect to the same or different technologies and covering the same geographical areas as the operating companies’ licenses and may preclude us from competing for such additional licenses.

     Our operations also are subject to laws and regulations governing environmental protection, including requirements for the management, use and disposal of hazardous substances. Such laws and regulations can impose substantial fines and criminal sanctions for violations, and may require us to remediate contaminated soil and groundwater affecting property we operate.

We operate in developing countries, which may increase our operating costs and restrict our ability to transfer funds from our operating companies to ourself.

     We invest in developing countries where governments have exercised and continue to exercise influence over many aspects of the private sector. In some cases, the government controls companies that are or may in the future become our competitors or companies, such as national telephone companies, upon which our operations may depend for required interconnections to landline telephone networks and other services. Expropriation, confiscatory taxation, nationalization, political, economic or social instability, regulatory changes, electricity shortages, or other developments could also materially adversely affect our interests in operating companies in particular developing countries. Moreover, where foreign law governs applicable agreements relating to our interests in our operations, enforcement may be difficult, especially where local commercial law has not developed appropriate rights or recourses. Accordingly, we may have little or no recourse upon the occurrence of any of these developments or if any of our partners seek to re-negotiate existing or future memoranda of understanding or other agreements. In addition, the process whereby governments grant licenses, through privatization or otherwise, are sometimes challenged by judicial proceedings.

     In addition, local taxes, foreign exchange controls or other restrictions may effectively prevent the transfer of funds to us or the exchange of local currency for dollars. Foreign exchange controls also could restrict the ability of our operating companies to pay debt. The operating companies may also experience increased credit and collection difficulties in certain developing countries where credit verification systems are not yet adequately developed.

Competition in our markets could increase our churn rates and decrease our average revenue per user, which would adversely affect our operating income.

     Churn rates reflect the number of customers who disconnect or are disconnected from our networks in a given period. An increase in our churn rates may raise our operating costs, as we seek to add a greater number of new customers to maintain our subscriber growth. Our aggressive pricing strategy in the Czech Republic, and the anticipated response to that strategy by our competitors, as well as the recent aggressive pricing strategies of our competitors in Romania, could lead to increased, or more volatile, churn rates as well as lower average revenue per user. The growth of consumer awareness, additional service offerings from competitors and an increased focus on the retail consumer market segment may increase churn rates and reduce average revenue per user.

Our quarterly revenues and operating results are volatile.

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

• the size of our subscriber base;

• changes in pricing by us or our competitors;

• increased competition;

• the nature and effectiveness of investments made by us;

• growth or cancellations of service contracts;

• developments relating to our existing licenses and frequency allocations or the issuance of new licenses or frequency allocations; and

• general economic conditions.

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

     The success of our wireless systems will in some cases depend upon services provided by other telecommunications providers, some of which are our competitors. For example, the operating companies generally require interconnection agreements with national or regional telephone companies in order for their wireless systems to connect with landline telephone systems, and may require the use of other microwave or fiber optic networks to link their wireless systems. Although our operating companies have entered into required interconnection agreements or have interconnection arrangements in place, these agreements and arrangements typically have limited terms and must be periodically renegotiated or renewed. The revocation, loss or modification of any of these existing agreements or arrangements or the failure to obtain necessary agreements or arrangements in the future on terms favorable to the operating company could have a material adverse effect on us.

We are subject to currency exchange risks, which may negatively impact our financial results and may increase our costs to repay our debts.

     Our operations depend, in large part, on the economics of the markets in which we have interests. Those markets are in countries with economies in various stages of development or structural reform, some of which are subject to rapid fluctuations in terms of consumer prices, employment levels, gross domestic product and interest and foreign exchange rates. Many developing countries, such as Romania, have experienced substantial, and in some periods extremely high, rates of inflation and resulting high interest rates for many years. Inflation and rapid fluctuations in interest rates have had and may continue to have negative effects on the economies and securities markets of certain developing countries which in turn may have adverse effects on operations in those countries, including the ability to obtain financing, the ability of subscribers to pay for services provided by the operating companies or the ability to support the growth of such operations.

     The value of our investment in Český Mobil is partially a function of the currency exchange rate between the U.S. dollar and the Czech Koruna, its functional currency. The devaluation of the functional currency applicable to an operating company will result in a reduction in the carrying value of our investment in such operating company. Such reduction is accounted for as a reduction of shareholders’ equity until the sale of the investee, at which time the cumulative gain or loss is recorded as part of the gain or loss on sale. In addition, Český Mobil reports its results of operations in the local currency, and accordingly, our results of operations will be affected by changes in currency exchange rates between the Koruna and the U.S. dollar. We have entered into hedging arrangements in the Czech Republic to systematically hedge against foreign currency exchange rate risks on long-term debt denominated in Euros. In certain circumstances, we may decide to accept the inherent currency risk, principally because of the relatively high cost of buying, or the inability to buy, forward cover in currencies of the countries in which we operate. We do not anticipate any near-term changes in management’s objectives and strategies with respect to managing such exposures. As of March 31, 2003, Romania was defined for accounting purposes as a highly inflationary economy, and the dollar, our functional currency, was used as MobiFon’s measurement currency. Each fiscal quarter, we make an assessment as to whether Romania is still defined as a highly inflationary economy, in order to determine whether a further assessment is needed as to which currency should be MobiFon’s functional currency for subsequent fiscal quarters. MobiFon’s borrowings are in U.S. dollars and tariffs are adjusted to account for the effects of the devaluation of the Romanian lei versus the U.S. dollar due to inflation. Consequently, exchange fluctuations have not had a material effect on our consolidated results in the past. However, Romania is currently a second wave European Union accession candidate and it is foreseeable that the Euro will take prominence in Romania in the future. Consequently, depending on the result of our assessment and the progression of Romania towards the Euro, exchange rate fluctuations may have a more significant impact on our results of operations in the future. As a result, we may experience economic loss with respect to our investments and fluctuations in our results of operations solely as a result of currency exchange rate fluctuations. Many of the currencies of developing countries have experienced steady, and at times significant, devaluations relative to the U.S. dollar, and significant exchange rate fluctuations have occurred in the past and may again occur in the future, all of which could have a material adverse effect on us.

     Any revenues operating companies generate will generally be paid to the operating companies in the local currency. By contrast, some significant liabilities of the operating companies, such as liabilities for the financing of telecommunications equipment, may be payable in U.S. dollars or in currencies other than the local currency. As a result, any devaluation in the local currency relative to the currencies in which such liabilities are payable could have a material adverse effect on us.

Because any future investment by us may be limited to a minority interest, we may not be able to determine or influence significant decisions of the businesses in which we invest.

     In some cases, we take minority interests in our operations because either applicable laws limit foreign investors to minority equity positions or the financial resources required to make bids for large market licenses have resulted in us joining consortia to pursue such opportunities. Our strategy is to obtain influence through board of directors and management representation, supermajority voting requirements, veto rights and financial controls, although we are not always successful in obtaining such rights.

     Our minority positions may preclude us from controlling such entities and implementing strategies that we favor, including strategies involving the expansion or development of projects or the pursuit of certain financing alternatives. We may also be unable or unwilling to provide additional equity to minority-owned affiliates, which would result in the dilution of our equity interest or a significant impairment or loss of the value of our investment. We may depend on our partners to construct or operate projects. There can be no assurance that such partners will have the same level of experience, technical ability, human resources and other attributes that we possess or that the projects require. Any such partners may have conflicts of interest, including those relating to their status as a provider of goods and services to the operating company. In addition, we may be unable to access cash flow, if any, of our operating companies.

We may not be able to attract and retain key personnel and adequately staff our operations, which could impair the execution of our business plans.

     Our success and our growth strategy depend in large part on our ability to attract and retain key management, marketing, finance and operating personnel, both at holding and operating company levels. There can be no assurance that we will continue to attract and retain the qualified personnel needed for our business. In addition, the loss of the services of one or more members of our senior management team could have a material adverse effect on us.

If we are not able to obtain qualified subcontractors, equipment or sites on a timely or cost-efficient basis, we will be unable to build out and operate our networks as planned.

     The operating companies in which we invest typically require substantial construction of new telecommunications networks and additions to existing wireless networks. Construction activity will require the operating companies to obtain qualified subcontractors and necessary equipment on a timely basis, the availability of which varies significantly from country to country. Construction projects are subject to cost overruns and delays not within the control of the operating company or its subcontractors, such as those caused by acts of governmental entities, including failure to issue required permits with respect to siting and other matters, financing delays and catastrophic occurrences. Delays also can arise from design changes and material or equipment shortages or delays in delivery. The successful build-out of our wireless networks will also depend on the lease or acquisition of sites for the location of cells or transmission equipment. The site selection process may require obtaining zoning variances or other state and local governmental permits for certain of such sites. There can be no assurance that lease or acquisition agreements will be negotiated on terms favorable to our operations or that necessary permits and approvals will be obtained. Accordingly, there can be no assurance that the operating companies will be able to complete current or future construction projects for the amount budgeted or within the time periods projected, or at all.

     Failure to complete construction for the amount budgeted or on a timely basis could jeopardize subscriber contracts, franchises and licenses and could have a material adverse effect on us. In particular, telecommunications licenses often are granted on the condition that network construction be completed or commercial operations be commenced by a specified date. Failure to comply with these deadlines could result in the loss or revocation of the licenses.

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

     The fraud and bad debt we experience in a given period will directly reduce our net income and cash flow. Our ability to screen applicants for creditworthiness is limited due to the lack of credit reporting agencies or data in the countries where we operate. Our screening processes and gradual restrictions on access to our services in the event of non-payment may not be effective in limiting our fraud and bad debt exposure. Consequently, we may have a significant number of customers that are unable to pay their bills on time, if at all.

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

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

We are subject to anti-monopoly regulation, which could restrict our business.

     MobiFon is subject to oversight and regulation by Romania’s Competition Council, which is authorized to regulate Romanian companies deemed to be a dominant force in, or a monopolist of, a market. Regulatory measures may include the imposition of tariffs or restrictions on acquisitions or on other activities, such as contractual obligations. Because Romanian law does not clearly define “market” in terms of either services provided or geographic area of activity, it is difficult to determine under what circumstances we could be subject to these or similar measures. We cannot exclude the possibility, however, that our current subscriber market share in our license area in Romania could trigger close scrutiny by the Competition Council of the pricing and other terms of our services. MobiFon could be subject to anti-monopoly regulation in the future, which could adversely affect our business.

Concerns about radio frequency emission may lead to increased regulation or discourage the use of cellular telephones, which could result in our having to change our business plan or reduce our subscriber revenues.

     Media reports have suggested that certain radio frequency emissions from cellular telephones may be linked to certain medical conditions such as cancer. In addition, certain interest groups have requested investigations into claims that digital transmissions from handsets used in connection with digital wireless technologies pose health concerns and cause interference with hearing aids and other medical devices. There can be no assurance that the findings of such studies will not have a material adverse effect on our business or will not lead to governmental regulation. The actual or perceived health risks of wireless communications devices could adversely affect wireless communications service providers, including our operating companies, through reduced subscriber growth, reduced network usage per subscriber, threat of product liability lawsuits or reduced availability of financings to the wireless telecommunications industry.

ITEM 4 – INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

     We develop, acquire, own and operate wireless telecommunications networks. As of December 31, 2002, we had operations in Romania, the Czech Republic and India representing 3.9 million subscribers which, based on our percentage ownership in these operations as of December 31, 2002, represent 823,000 equity subscribers. As of December 31, 2002, our principal operations also included cellular operations in Brazil which we disposed of on March 26, 2003 for total cash consideration of US$70 million.

     Telesystem Ltd. founded Telesystem International Wireless Corporation N.V. under Dutch law on May 21, 1992 to pursue international opportunities in the wireless telecommunications services market. On September 9, 1996, TIW was incorporated under the Canada Business Corporations Act to acquire directly and indirectly all our issued capital stock. In September 2001, TIW issued its 14% senior guaranteed notes of which we are a guarantor.

     Our head office and principal place of business is World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands, and our telephone number is 011 31 (20) 305.09.80. CT Corporation System, 111 Eighth Avenue, New York, NY 10011, (212) 894-8500, acts as our agent for service of process in the United States.

     The following table sets forth, by segment, the progression since 1998 in the number of subscribers and equity subscribers excluding discontinued operations. The table excludes subscribers of certain Brazilian operating companies in which we held an interest as at December 31, 2002 and which we sold subsequent to year end.

		Years ended December 31
		2002			2001			2000		1999		1998
Romania
	Subscribers		2,635,200			2,003,600			1,171,800		702,100		325,300
	Equity Subscribers(1)		684,640	(3)		580,000	(2)		690,200		384,000		201,700
Czech Republic
	Subscribers		1,179,800			858,400			301,700
	Equity Subscribers(1)		124,060			86,700	(2)		65,200
India
	Subscribers		112,400			74,000			35,400		15,000		9,000
	Equity Subscribers(1)		14,300			7,500			3,600		1,500		3,000
Total
	Subscribers		3,927,400			2,936,000			1,508,900		717,100		334,300
	Equity Subscribers(1)		823,000			673,200	(2)		759,000		385,500		204,700

(1)	Equity subscribers represent our ultimate proportionate ownership in subscribers figures of our operations, based on our equity ownership percentage in such operations.
(2)	The decrease in equity subscribers for Central/Eastern Europe reflects the issuance of units in February 2001 which reduced our equity interest in ClearWave from 100% to 45.5%.

(3) During the fourth quarter of 2002, ClearWave tendered, as part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of MobiFon for total cash consideration of $24.6 million, bringing ClearWave’s ownership in MobiFon to 62.4%. Other shareholders of MobiFon have until June 30, 2003 to tender their shares in the share repurchase which may cause ClearWave’s ownership interest in MobiFon to increase. On March 19, 2003 we closed the sale of 11,135,555 shares of MobiFon for total cash consideration of $42.5 million. Following the share repurchase and the sale, ClearWave’s ultimate ownership of MobiFon is expected to be between 56.6% and 57.7% depending on the extent of the participation of other MobiFon shareholders in the share repurchase. For the same reasons, our ultimate equity interest in MobiFon could vary between 25.75% and 26.25% and, as a result, our equity subscribers on a pro forma basis as at December 31, 2002 for Romania may vary between 678,640 and 691,830.

BUSINESS OVERVIEW

Strategy

     Our strategy is to create shareholder value by taking advantage of growth opportunities in the international wireless telecommunications industry. To achieve this objective, we are currently providing wireless telecommunications services in developing countries with significant unmet demand and attractive competitive environments for telecommunications services. Furthermore, we selectively consider strategic opportunities in the wireless telecommunications industry on an ongoing basis, and engage from time to time in various stages of discussion regarding potential development projects or acquisitions. We are especially interested in the geographic markets where we already operate and in new complementary technologies.

ORGANIZATIONAL STRUCTURE

     The following chart summarizes the equity interests we hold, directly and indirectly, in each of our principal operating companies and our position within the ownership structure of the TIW Group as at December 31, 2002, unless otherwise specified. The chart excludes the interest we held in certain Brazilian operating companies as at December 31, 2002, which we accounted for as at that date as assets held for sale and which we sold on March 26, 2003. Percentages in brackets represent the voting interests we hold where they differ from the equity interests we hold.

(1)	This chart is a simplification of the corporate structure as at December 31 and omits certain companies.
(2)	As at April 30, 2003. During the fourth quarter of 2002, ClearWave tendered, as part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of MobiFon for total cash consideration of US $24.6 million, bringing ClearWave’s ownership in MobiFon to 62.4%. Other shareholders of MobiFon have until June 30, 2003 to tender their shares in the share repurchase which may cause ClearWave’s ownership interest in MobiFon to increase. On March 19, 2003 we closed the sale of 11,135,555 shares of MobiFon for total cash consideration of $42.5 million. Following the share repurchase and the sale, ClearWave’s ultimate ownership of MobiFon is expected to be between 56.6% and 57.7% depending on the extent of the participation of other MobiFon shareholders in the share repurchase. As at March 31, 2003, ClearWave owned 56.6% of MobiFon.
(3)	Capital contributions funded prior to year end but formalized only in the first quarter of 2003 increased TIW Czech N.V.’s ownership in Český Mobil to 96.3 %.

Operations

     The following table sets forth our operations and interests and certain information related thereto, as of December 31, 2002, unless otherwise specified. The table excludes the interest we held in certain Brazilian operating companies as at December 31, 2002, which we accounted for as at that date as assets held for sale and which we sold subsequent to year end.

	Start-up		Licensed
	date of		Population		Total		Equity				Equity			Equity
	operations		Coverage		Subscribers(1)		Ownership(2)				persons		Subscribers (5)
			(in millions)				(%)			(in millions)
Central/Eastern
Europe
Romania		Q2 1997		22.4		2,635,208		25.98	(3)			5.82			684,640
Czech Republic (4)		Q1 2000		10.3		1,179,752		10.52				1.08			124,062
				32.7		3,814,960						6.9			808,700
Other
India (Rajasthan)		Q2 1997		56.5		112,393		12.7				7.2			14,300
Total				89.2		3,927,353						14.1			823,000

(1)	As of December 31, 2002, unless otherwise specified. Figures include our pre-paid subscribers: 1,693,987 for Romania, 760,014 for the Czech Republic and 65,909 in India.
(2)	Figures represent the Company’s ultimate ownership interests in its operations before the exercise of options.
(3)	As at May 30, 2003. During the fourth quarter of 2002, ClearWave tendered, as part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of MobiFon for total cash consideration of US $24.6 million, bringing ClearWave’s ownership in MobiFon to 62.4%. Other shareholders of MobiFon have until June 30, 2003 to tender their shares in the share repurchase which may cause ClearWave’s ownership interest in MobiFon to increase. On March 19, 2003 we closed the sale of 11,135,555 shares of MobiFon for total cash consideration of $42.5 million. Following the share repurchase and the sale, ClearWave’s ultimate ownership of MobiFon is expected to be between 56.6% and 57.7% depending on the extent of the participation of other MobiFon shareholders in the share repurchase. For the same reasons, our ultimate equity interest in MobiFon is expected to be between 25.75% and 26.25% and, as a result, our equity subscribers on a pro forma basis as at December 31, 2002 for Romania is expected t be between 678,640 and 691,830.
(4)	Through an intermediate holding company, we have voting control of Český Mobil.
(5)	Proportional operational data represent the combination of our ultimate proportionate ownership in each of its subsidiaries and is not intended to represent any measure of performance in accordance with generally accepted accounting principles

CLEARWAVE: CENTRAL AND EASTERN EUROPEAN CELLULAR

     We are a leading provider of wireless telecommunications services in Romania through MobiFon, and a rapidly growing wireless telecommunications services provider in the Czech Republic through Český Mobil. MobiFon received its 900 MHz national license in November 1996 and launched commercial service in April 1997. MobiFon operates in Romania under the highly recognized brand name CONNEX. Český Mobil was awarded an 1800 MHz national license in October 1999 and launched commercial service in the Czech Republic in March 2000 under the brand name Oskar.

     In September 1999, we created TIW Eastern Europe N.V., a wholly-owned subsidiary, to serve as the platform for our Central and Eastern European strategy and hold our interests in MobiFon and Český Mobil. On May 30, 2000, TIW Eastern Europe N.V. changed its name to ClearWave N.V. ClearWave is organized under the laws of The Netherlands. ClearWave is a reporting issuer in each of the provinces in Canada and a registrant with the Securities and Exchange Commission in the United States. As such, ClearWave is subject to the continuous disclosure requirements of the securities regulatory authorities in each of the provinces in Canada and of the Securities and Exchange Commission in the United States.

     As of December 31, 2002, ClearWave had licenses covering 32.7 million persons. ClearWave grew at an average of more than 79,400 net new subscribers per month in 2002 and added a total of over 953,000 net new subscribers in 2002. As of December 31, 2002, ClearWave had approximately 3,815,000 subscribers which based on our ultimate percentage of ownership of MobiFon and Český Mobil as of that date represents approximately 808,700 equity subscribers. ClearWave added an additional 128,300 net subscribers during the first quarter of 2003, bringing ClearWave’s total subscribers as of March 31, 2003 to approximately 3,943,300 subscribers which based on our ultimate percentage of ownership of MobiFon and Český Mobil as of that date represents approximately 821,800 equity subscribers. We intend to use our existing operations as a platform from which to pursue new opportunities, including broadening our service offerings through innovative technologies and expanding our presence in Central and Eastern Europe.

     Romania. MobiFon was the first GSM operator to launch services in Romania and offers a full range of voice services as well as advanced data applications. MobiFon serves its customers on its state-of-the-art network, which covers approximately 97% of the population and all major highways in Romania. During the twelve months ended December 31, 2002, MobiFon added 631,600 net subscribers, an increase of 32% from December 31, 2001. MobiFon grew at a rate of 52,600 subscribers per month in 2002 and had 2,635,200 subscribers at December 31, 2002, up from 2,003,600 at the end of 2001. During the first quarter of 2003, MobiFon added and additional 37,500 net subscribers. Our reports indicate MobiFon had a 51% market share as at March 31, 2003. Since launching service in April 1997, MobiFon has developed an exceptional track record both in terms of subscriber growth and financial performance. MobiFon achieved operating income before depreciation and amortization break-even in the third quarter of 1998, 17 months after launch of services. It recorded an operating income before depreciation and amortization of $231.6 million in 2002, a 24% increase over the $186.4 million recorded in 2001, and of $65.8 million in the first quarter of 2003.

     Czech Republic. Český Mobil received the third national GSM license in the Czech Republic in October 1999. Český Mobil is committed to compete not only in traditional voice services, but also in new technologies such as (1) general packet radio service or GPRS, an evolved technology that permits increased high-speed wireless Internet access and data transmissions, and (2) wireless application protocol or WAP, a technology that allows direct Internet access through cellular devices. When Český Mobil launched commercial service in March 2000, its network covered 50% of the Czech Republic#s population, including all major Czech cities. Český Mobil achieved 98% population coverage by December 31, 2000, in advance of its mid-2001 license requirement. The Czech Republic cellular market grew during 2002 by 1,635,000 subscribers, or 23%, to a total of 8,581,000 subscribers, representing a penetration rate of 84.2% of the population. With the addition of 321,325 net subscribers in 2002, representing a 37% increase since the beginning of 2002, Český Mobil continues to be one of the fastest growing start-up cellular operators in Central and Eastern Europe. It reached 1,179,800 subscribers as at December 31, 2002. During the first quarter of 2003, Český Mobil added an additional 90,800 net subscribers and recorded an operating income before depreciation and amortization of $17.3 million.

Market Opportunity

     Europe represents one of the world’s largest wireless communications markets, with, according to EMC World Cellular Database, approximately 35.6% of the 1,135.4 million cellular subscribers worldwide as of December 2002. Since 1996, the European cellular market has grown, according to EMC World Cellular Database, at a compound annual growth rate of 48.8%, from 37.7 million subscribers in 1996 to 403.9 million in 2002. As a result of this rapid growth, the European market is now almost three times as large as the USA/Canada market, based on number of subscribers.

     The universal GSM standard in Europe, established by the European Telecommunications Standards Institute, as well as the “calling party pays” approach and the early adoption of pre-paid packages, have contributed to this significant growth. The creation of a single open standard and the large market size has fostered significant competition among network equipment providers, which has driven down the costs associated with network deployment and handsets. The wireless operators have been able to pass these savings directly to consumers through reducing both handset and service plan prices. European wireless service providers are also rapidly adding data transmission, multimedia and Internet applications to their networks, which are expected to contribute to future growth.

     While the majority of the growth in Europe has historically occurred in the Western European markets which are now close to saturation, growth has accelerated in some countries in Central and Eastern Europe in recent years. The wireless communications market in Central and Eastern Europe grew at a compound annual growth rate of 91.3%, from 1.5 million subscribers in 1996 to approximately 76.0 million in 2002. During 2002, according to EMC World Cellular Database, wireless markets in Central and Eastern Europe added 25.2 million cellular subscribers, representing an annual growth rate of 49.6%. In comparison the wireless market in Western Europe grew at a rate of 8.9% in 2002. Despite this accelerated growth in subscribers, the penetration rate in Central and Eastern European countries wireless markets lags behind that of Western European markets with penetration rates as at December 31, 2002 of 4.1% in Belarus to 90.4% in Slovenia in Central and Eastern Europe and of 61.6% in France to 104.1% in Luxembourg in Western Europe. We believe this further highlights the growth potential of Central and Eastern Europe. As at December 31, 2002, the penetration rates in Romania and the Czech Republic were respectively 22.3% and 84.2%.

     There is a growing trend in certain countries for mobile phone users to subscribe to services of more than one operator for the same region through the use of a single handset but different subscriber identity module cards commonly referred to as “SIM cards”. This trend suggests that penetration rates could expand beyond the 100% mark since penetration is calculated based on number of subscriptions to cellular services rather than number of persons using cellular services.

     In addition to the growing demand for traditional voice services, we believe that many markets in Central and Eastern Europe will embrace data transmission and Internet-based services via technologies such as general packet radio service and Enhanced Data GSM Environment (EDGE).

     We believe that several other factors make Central and Eastern Europe attractive for wireless telecommunications services, especially as a substitute for traditional fixed-line services:

1.

the region typically has relatively less developed fixed-line telecommunications systems than Western Europe. For example, according to the 2001 annual report of the Greek telecommunications company OTE, Romania had fixed-line penetration of approximately 18.8% as at January 1, 2002 and the Czech Republic had fixed-line penetration of 36%, versus 58% in the United Kingdom;

2.

waiting lists for the installation of fixed-line phones can be lengthy. In Romania, the estimated waiting time for a domestic-only fixed-line phone was 2.7 years at the end of 2001 (with 580,000 persons on the waiting list), with a longer wait for an international line. In the Czech Republic, although waiting list periods have declined over recent years to an average of one month in 2002, a negative perception of fixed line service persists.

     The cost to consumers of wireless service is becoming increasingly competitive with fixed-line rates. For example, during peak hours, MobiFon’s average price per minute under certain plans for business customers and other high-end users is less than that of the national fixed-line phone company for national long-distance calls.

     The telecommunication market deregulation which became effective on January 1, 2003 in Romania has caused the entrance of new players in the Romanian telecommunications industry. New technology and data networks will be used by these new players to capture a share of international, fixed and fixed-wireless voice revenues, mostly from the business segment of the market. Thus, our revenue market share may be adversely affected by this increased competition. In addition, deregulation may result in

increased pressure on pricing and profit margins for some revenue streams. Expanding our services portfolio will allow us to protect our revenue and exploit other areas of communication connectivity such as international incoming calls. Also, MobiFon intends to offer packages to its business customers providing custom solutions that integrate mobile and fixed voice communication together with mobile and fixed data transmission.

Products and Services

     We currently offer GSM and GPRS (General Packet Radio Service) wireless services as well as data services. Our service packages offer users a variety of practical, simple services and are priced competitively with the service packages of the other operators in our markets. We also sell handsets and offer customers access to web-based services via their handsets.

Basic and Value-added Voice Services

     We provide basic voice services for wireless telephone communications over a GSM network. As with the rest of Europe, we follow the “calling party pays” model in billing. We supplement these basic voice services with a range of value-added services, many of which are standard in each of our service packages. These additional services include voice mail, short messaging system, international roaming and call management capabilities such as call forwarding, call waiting, call hold, call barring, conference calls and caller identification. In most cases, we were the first cellular wireless operator to introduce these value-added services in Romania.

     Both in Romania and the Czech Republic, based on short messaging system, we developed a wide range of entertainment services, some of them unique on the market, targeting mostly the youth segment. We provide, among other things, the ability to chat, to play games, to read horoscopes and to send voice quotes from one phone to another. Personalization of handsets through ring tones and logos is also available. Revenues and penetration of short messaging service is stimulated by the continuous introduction of innovative SMS-based services and promotions.

     In Romania we began the implementation in 2002 of partnerships with third-parties, on a revenue sharing model, to provide services based on interactive voice response systems and short messaging systems. These value added services marketed by our partners and including mostly entertainment services started to represent a growing revenue potential from the Romanian market in 2002.

Data, Internet and Advanced Messaging Services

     We offer a range of data applications, including (1) wireless application protocol commonly referred to as WAP, (2) general packet radio service commonly referred to as GPRS, and (3) basic data and fax transmission.

     Wireless application protocol-enabling technologies permit the deployment of data applications, including the ability to access e-mail and the Internet. WAP allows us to offer utility services as well as games and other entertainment services. We launched wireless application protocol services at MobiFon on August 1, 2000 and on October 30, 2000 at Český Mobil. GPRS permits the transfer of data and use of data services at much faster speeds than current GSM capabilities and represents the next step in the evolution of GSM networks toward third-generation technologies. Possible service capabilities via general packet radio service include remote high-speed Internet and Local Area Network access, high quality audio clips and still image capabilities.

     In Romania, we launched GPRS services at the end of 2001 and currently provide GPRS and Local Area Network access addressing mostly the needs of the business segment, being the segment where we identify the highest interest and potential for vertical applications implementation. We offer at MobiFon a flexible selection of GPRS packages in order to address the many different needs of our customer based and to remain competitive in the market.

     In the Czech Republic we launched GPRS services for our postpaid customers in February 2002 after an innovative trial period in which 150 users of GPRS technology participated. These 150 participants thoroughly tested and used our GPRS offering and continued to provide technical support to other users. This was enabled through a dedicated website where these 150 ‘technoid’ users could converse with one another and on an additional website where they could converse with the public at large about their GPRS experiences with our service. On January 27, 2003, Český Mobil launched GPRS services also for prepaid subscribers.

Český Mobil currently has over 40,000 activated GPRS subscribers. In February 2003, Český Mobil launched Oskar GPRS Connect services which enable our business subscribers to access their corporate networks via a secure GPRS connection.

     Using WAP, GPRS and also SMS we offer our customers a variety of Content Services enabling them to gather information such as weather reports, traffic reports, lottery results and news headlines, access entertainment applications, and to perform banking transactions from a handset. These services are typically offered in partnership with 3rd party Content Providers on a revenue-sharing basis. We earn revenues on these services by charging not only for access to these services but also for the content that they provide.

     In the Czech Republic, Ericsson provides general packet radio service functionality with dedicated platforms serving the interconnected general packet radio service support node, gateway general packet radio service support node and packet control unit, and Siemens provides our wireless application protocol infrastructure. At MobiFon, GPRS functionality is provided by Siemens with dedicated platforms SGSN (Serving GPRS Support Node) and GGSN (Gateway GPRS Support Node), and Ericsson provides the wireless application protocol platform.

     MMS, a Multi Media Messaging Service which enables users to send and receive pictures, sounds and animations in addition to text, is being deployed throughout Europe. In the Czech market our competitors introduced MMS in late 2002. We are readying the infrastructure for this service and expect to launch it in both the Czech Republic and Romania in 2003.

     Our GSM technology can migrate easily to provide advanced wireless data services, either by deploying further enhancements to GPRS, such as faster coding schemes, and/or introducing EDGE, a technology upgrade to the GSM standard that the European Telecommunications Standards Institute has standardized. EDGE, which has been deployed in North America and Asia, enables data to travel at the same speed as that of the first phase of third-generation technology, and thus could allow GSM operators who do not have third-generation licenses to compete with operators that do. Older wireless technologies are not as flexible and cannot offer similar services as easily.

     In Romania, we currently offer dial-up Internet access nationally and are currently the largest internet service provider in Romania with more than 200,000 dial-up customers. We also offer dedicated internet access and virtual private network data services to the business segment of the market and we have more than 2,000 dedicated access and virtual private network ports. In response to the needs of our customers we have developed some specific added value services such as virtual private dial-up network, web hosting, server collocation and Connex Netzone, the first WLAN (wireless local area network) service launched in Romania.

     MobiFon has developed a wide range of data services for both business and individual customers. For businesses we offer internet dedicated access, virtual private networks, quality fixed voice access running on customer data infrastructure, frame relay access, dial-up gold, dial-up ISDN, virtual private dial-up networks, WLAN, web hosting and server collocation. For individuals we offer pre-paid dial-up, domain name registration, and various services delivered and included within our “myX Portal” package.

     Handsets

     We sell a broad selection of high-quality handsets. We currently offer multi-mode handsets manufactured by Sony-Ericsson, Mitsubishi, Motorola, Nokia, Siemens and Alcatel and expect to offer handsets from more manufacturers as they become available. We offer dual-mode and tri-mode handsets, which can operate on the GSM 900, GSM 1800 and GSM 1900 networks. These multi-mode handsets allow us to offer our customers roaming across a number of GSM networks in North America, Europe and Asia.

     The handsets have many advanced features, including word prompts and easy-to-use menus, one-touch dialing, multiple ring settings and call logs. Handsets may also be programmed to allow us to offer value-added services, such as voice mail, call waiting, call forwarding, call barring, conference calling and caller identification. In certain cases, our handsets are enabled for WAP, GPRS, MMS, EMS and/or Java. All the handsets we are selling are phase 2/2+ compliant and support OTA in order to help us introduce new value added services to our customer base.

     Our historical policy generally has been to limit the extent to which we subsidize the cost of handsets. We believe that the lack of significant handset subsidies contributes to reduced churn, as the incentive to switch operators to obtain a more modern handset

at a subsidized rate is reduced. In addition, the lack of a complete handset subsidy accelerates our per subscriber payback period, which recently in both Romania and the Czech Republic has been reached in approximately three months, and decreases the cost of subscriber acquisition. Furthermore, we believe that a non-subsidized handset reduces the likelihood of bad debt because those users who can cover the full cost of a handset are also more likely to be able to pay their bills.

     We intend to continue where feasible our practice of minimally subsidizing handsets. Currently, we do not subsidize handsets for new acquisitions of prepaid consumers. However, we may subsidize handset costs in some of our service packages as part of our initiative to promote new technologies and gain market share. Also, in Romania, we may have to match any future introduction of increased handset subsidies by our three competitors there, which could affect our subscriber payback period and increase the cost of subscriber acquisition. Furthermore, as the third GSM market entrant in the Czech Republic, we may subsidize handset costs in some of our service packages as part of our initiative to gain market share. We have partially offset handset subsidies in the Czech Republic through a reduction in distribution costs, made possible by our direct sales and delivery network.

Service Packages and Pricing

     We tailor our service packages to be competitive and simple to understand and to allow each customer to choose a package that suits his or her usage requirements. We bill customers for post-paid service, that is, via monthly bills rendered after the service is provided, on the basis of either per-second, and in some cases per-minute, rates or a packaged-minute plan. Customers can also choose to subscribe to our service under pre-paid packages, whereby a customer may purchase an airtime card that gives him or her calling time equivalent to the amount paid for the card. Our pricing strategies depend on the competitive environment, the subscriber profiles and the regulatory requirements in each of our operating markets.

Post-paid and Pre-paid Service Plans

     Post-paid service. We offer a number of post-paid cellular service packages that are targeted to specific types of subscribers and their expected usage patterns. These packages often include a specified number of minutes, as part of the monthly fee, with an overcall rate charged after such minutes are used. GSM roaming is available to subscribers traveling in other countries where we have signed roaming agreements with the local GSM operators. When roaming on a foreign GSM network, the subscriber is charged for the service of relaying the call internationally and for the actual number of minutes used. The per minute charges are at the rates charged by the local GSM operator plus a margin.

     Pre-paid service. We offer pre-paid cellular pricing packages to enable customers who prefer a pre-payment option or whose credit profiles do not qualify for post-paid service, to take advantage of our wireless services. Pre-paid service requires no contract and no monthly fee. The customer purchases an airtime card that gives him or her calling time equivalent to the amount paid for the card, and the customer can easily access further airtime by purchasing additional airtime cards. As of December 31, 2002, pre-paid subscribers accounted for 64% of each of our Romanian and Czech Republic subscriber bases, as compared to 63% and 71% respectively as of December 31, 2001. Pre-paid customers accounted for 68% and 46% of the net added subscribers in Romania and the Czech Republic, respectively, during the twelve-month period from December 31, 2001 to December 31, 2002. We began offering pre-paid service in the Czech Republic on April 19, 2000.

     In line with our strategy of offering diversity and flexibility to our customers, with a focus on increased profitability, in Romania we introduced in 2002 the first innovative airtime recharging mechanism for voice and data pre-paid customers, available at the points of sales and the ATMs of the largest bank in Romania. Český Mobil also has a recharging system available at numerous ATMs in the Czech Republic. The main benefits of the e-voucher system are the wide range of the credit values, its 24 hour availability and the reduction of the costs associated with production and distribution of plastic recharging cards.

Pricing

     We believe that our pricing structures compare favorably to the prices offered both by our Romanian and Czech wireless competitors and by wireless operators in neighboring markets. In Romania, our services are also priced to be competitive with the fixed line services of RomTelecom, the national fixed line phone company. For some post-paid programs, our rates for making in-country long distance calls historically have been cheaper than RomTelecom’s fixed line rates at certain times of the day, which encourages customers to use wireless instead of fixed line phone service.

     MobiFon’s initial launch strategy emphasized feature-rich service offerings that appealed to corporations, governmental agencies and other high-end subscribers. As part of our strategy to address the Romanian retail consumer market, we introduced programs that appeal to specific mass-market segments, based on disposable income research. Consequently, our prepaid portfolio was diversified to attract not only customers who preferred to use the service mainly for incoming calls, but also those customers who could not afford a postpaid program but had a higher propensity to make outgoing calls. On the postpaid side, we introduced low-end programs, with affordable monthly fees and flexible per minute rates, stimulating usage during non-peak hours, week-ends and/or for certain destinations. Our pre-paid products, together with the post-paid programs for the low-end consumer segment, were the major driving force in increasing our acquisition of new subscribers.

     As the third GSM market entrant in the Czech Republic, we initially differentiated ourselves from our competitors through our pricing strategy by aggressively pricing our feature-rich service plans. In the Czech Republic, we estimate that our prices are generally lower than those of our current competitors, Eurotel Praha and T-Mobile, for comparable plans and based on various usage assumptions. Our Czech competitors have already lowered their prices in response to our launch and may further lower their prices in the future. We have designed simplified service packages to provide our subscribers with everyday low pricing. We offer several service packages with per-second billing after the first minute and allow customers to carry over unused minutes for use in the following month. We have also lowered barriers to subscribing to our services by eliminating activation fees.

     We offer several post-paid and pre-paid pricing plans targeted at specific market clusters. Two plans, marketed under the names “Write Me” and “Between Us,” are contained in our Czech Republic license and are required to be offered until December 31, 2003. The “Write Me” package is designed for low-usage subscribers who desire wireless access, are high-SMS users and also appreciate the convenience of wireless at affordable rates. The “Between Us” package is designed for subscribers who incur over 300 outgoing minutes of use per month, with the majority of their calls occurring within the Oskar Network. The “Between Us” plan is our only consumer plan that is available as a contract plan. In addition to these plans, and in connection with our new marketing campaigns designed to attract higher value customers in the Czech Republic, we also offer new packages targeted toward high-end users and business subscribers.

Marketing and Distribution

Marketing

     In Romania, our marketing strategy focuses on protecting and growing revenue and profitability from the existing customer base, strengthening leadership by maintaining market share advantage, strengthening brand image and improving customer satisfaction. Taking the advantage of the opportunities offered by the newly deregulated telecom market, Connex has developed a new approach to the business customers designed to protect GSM revenues and capture as much as possible from the potential telecom needs of our high-end subscribes by integrating mobile voice, fixed voice and data in a single concept which we refer to as Integrated Service Strategy.

     A consumer survey we commissioned in November 2002 showed that we achieved a Connex brand awareness level of 95.3% in Romania. The survey revealed that the top-of-mind brand awareness was 52% for Connex, versus 43% for Orange. We accomplished such brand recognition through an extensive advertising campaign that focused on brand visibility through television, billboard and magazine advertisements. After having achieved brand awareness in Romania, we are now building on our brand image through various programs and campaigns to ensure brand loyalty.

     In the Czech Republic, we have established brand recognition through extensive use of our advertising icon, Oskar. Our brand is developed around a personality that is friendly, human, and Czech. These attributes are reflected in everything we do, from developing services to designing the layout of our stores. We believe that our brand strategy clearly differentiates us from the other market competitors. In less than two years after launch of operations we had achieved in-country brand awareness which was on par with or exceeded that of the competition but more importantly, Oskar has now achieved brand recognition levels similar to world premiere brands such as Coca Cola. Over the past two years Oskar has positioned itself as an agent of innovation and a leading force behind changes in the Czech mobile market. Oskar has built one of the strongest Czech brands and laid down a new style of communication.

     Having launched with a mass market brand and tagline of “Everybody, Everyday”, Oskar has since repositioned its brand to appeal to mid and high value subscribers and the small business market. Oskar has positioned itself as the customer advocate that challenges conventions on behalf of customers.

     A number of MobiFon’s advertising campaigns have won international awards in the specialized fora: in 1999, the award for “best advertising campaign of the year” was granted by the Advertising Association for the image campaign “The future sounds good”; in 2001, Connex was awarded a Golden Drum award for television advertising in the Telecommunications category, granted at the Portoroz Festival; in 2002, at the Cannes 3GSM Conference, the advertising campaign for Connex Play was among the nominees for best marketing campaigns. Since launch, Oskar has won over 45 domestic and international awards. Oskar was also nominated for Best Mobile operator in 2001 and 2002 and Best Branding Campaign in 2001 at the prestigious World Communication Awards.

Distribution

     We tailor our distribution schemes to our service packages and according to our strategic position in our markets.

     In Romania, Connex distributes through 3 channels; a direct sales force that serves the top 6,500 business accounts, a network of corporate stores in strategic cities for consumers and small business and through both exclusive and non exclusive independent distributors. Distribution is also separated by our product offerings – postpaid and prepaid. Exclusive independent distributors distribute both post and prepaid products and services with a heavy emphasis on postpaid (handsets and activations). We have also developed non-exclusive channels with a variety of specialty retail stores and hypermarkets. In addition, prepaid products are distributed through high traffic retail locations such as gas stations, lottery outlets and kiosks. Recent electronic means of recharging prepaid products through Automated Teller Machines have also resulted in partnerships with financial institutions such as Banca Commerciala Romana. As of the beginning of 2003 our distribution network includes 10 corporate stores, more than 750 exclusive postpaid locations and more than 4,700 points of sale for prepaid cards. Also, a special distribution channel was developed for selling data services. Due to the data services characteristics (need for integration in a complete information technology solution, services complexity, high value, need for customized support) we have developed a non-exclusive channel of

data partners. Connex Data Partners are national and regional resellers, including system integrators and service providers, who have the resources, skills and assets to meet the demands of the large enterprise and metro markets for integrated information technology solutions.

     In the Czech Republic, Oskar relies on direct channels of distribution to target both consumer and business customers. One of Oskar’s primary channels of distribution is direct delivery. Through this channel, customers can order service packages and handsets over the phone from a fully dedicated telesales team. Delivery to your office or your home is free and expected within 48 hours. Direct delivery allows us to minimize the number of external parties involved in the sale, build closer customer relationships and reduce acquisition costs by eliminating costs associated with dealers and dealer commissions. Additionally, eliminating intermediaries helps us to maintain standardized distribution processes and procedures and allows us to ensure that every contact with our customers is consistent with the Oskar brand image.

     Oskar also operates a retail channel of distribution through its 38 corporate stores and 2 mobile stores. The larger corporate stores are located in the larger urban centers of the Czech Republic, while the smaller stores focus on providing a physical presence in regional shopping centers and secondary cities. Our distribution strategy in the Czech Republic also includes a team of dedicated sales representatives for larger business accounts and third-party distributors of pre-paid airtime cards.

Customer Care

     We view customer care as an essential element in our strategy and seek to promote our customer focus to minimize customer churn. With our increasing focus on the retail consumer segments in our markets, we are making increasing use of automated customer service that matches the level of service with what customers pay for their subscription. Customers who subscribe to more expensive services receive personalized customer service, while customers who subscribe to more economical packages are served through our interactive voice response unit and through internet access to key features of their account and general information. We have established toll-free customer care call center telephone lines staffed by trained employees to answer inquiries by existing and potential subscribers. We utilize fully integrated, flexible customer care and billing systems to ensure that customer service representatives are fully equipped to deal with customer concerns on a real time basis. We closely monitor customer care calls and use information gathered from these calls to identify and remedy system shortfalls and to customize marketing strategies and pricing and promotional plans.

     As the first GSM entrant in Romania, we established the benchmark quality and service standards for that market. We believe that our customer care initiatives in Romania have been key in allowing us to maintain our low churn rates and high levels of customer satisfaction. Through constant refining of internal processes, we reached very high levels of productivity in the call center and we make an on-going effort to control the number of calls per customer in a market where the need for education regarding cellular service is still very high. In the Czech Republic we offer customer care options to our subscribers including our extensive and user-friendly “self-care” program which has allowed us to handle large growths in the subscriber base without adding corresponding staff in the customer service group.

Billing

     Billing is governed by the nature of the subscriber’s service package. Our billing and customer care systems are fully convergent. The integration of billing data and customer service information in a single system provides our staff with a comprehensive view of our subscriber’s account. We use an automated collections process, making use of short text messaging services, interactive voice response and voice mail.

     In the Czech Republic, we have chosen a best-in-class billing system that enables us to maintain competitive advantages in the area of flexibility, speed to market, convergence and scalability. Its state-of-the-art flexibility allows the rapid configuration of new products and services and supports innovative discounting and packaging concepts. Multi-tiered tariff schemes, bundling of services and cross-product discounts are all integral parts of this convergent billing solution, which also provides room for expansion into other lines of business. The ability to sort information in this way allows us to further customize our pricing and billing plans, and offer our customers additional value-added services, which we believe will help us increase market penetration and capture market share.

     In Romania, we started a process of replacing our old billing system in mid-2002, as it reached limitations in terms of functionality and it approached capacity limits. The new system is a best-in-class product that will provide maximum flexibility, will allow for rapid configuration of new products and services and will support innovative discounting and packaging concepts. It employs state-of-the-art technology that will provide both GSM/data and prepaid/postpaid convergence, allowing us to offer bundled services and cross-product discounting in a consistent manner across all product lines and payment channels. The new billing system has been in use since November 2002 for new subscribers in parallel with the old solution, which it will completely replace in mid-2003 providing Connex with a significant competitive advantage.

Bad Debt and Churn Management

     Exposure to bad debt is managed through account spending limits. Each operating company’s fraud department reviews billing reports to monitor potential fraud or credit abuse. In Romania, actual bad debt write-offs have historically been fully covered by reserves which, in 2002, amounted to 2.0% of billable revenue. Once customers are deactivated for non-payment, an extended legal collection process is performed, in order to recover losses and increase the level of awareness in the market about the importance of clearing customers’ debt. All of the GSM operators in Romania have access to a shared database of subscribers who have been removed from their network for nonpayment. An individual in this database who wishes to subscribe to our service must pay a deposit.

     To assist in managing and reducing both bad debt and churn levels in the Czech Republic, we have implemented an initial mandatory deposit for any postpaid activation and an account spending limit. With the account spending limit, as a customer reaches 50% and 75% of this limit, he or she is notified that he or she is within the percentage of his or her spending limit. At 100%, the customer is “hotlined”, which prevents him or her from making outgoing calls until the account is brought under the spending limit. As the customer’s creditworthiness is proven, we proactively increase their credit limit (similar to credit card companies) to increase spending and ARPU. New post-paid subscribers who do not pay their invoice have their service restricted 5 days after the invoice due date. They are removed from our subscriber numbers 31 days after the due date of their invoice. Uncollectible account balances are written off 180 days after their due date. In the Czech Republic actual bad debt write-offs amounted to 7.7% of applicable service revenues in 2000, 5.0% in 2001 and 1.8% in 2002.

     In the telecommunications industry, the term “churn” refers to the rate at which customers leave an operator’s network. This can occur for a number of reasons. In the case of voluntary churn, the customer may decide that he cannot afford the service, move out of the coverage area or decide to subscribe to a competing service. In the case of involuntary churn, post-paid customers who have not paid their bill are, after a period of attempted collection, removed from the network by us. At MobiFon, we include in our churn calculation those pre-paid subscribers whose services we terminated after several months have lapsed since they last placed an outgoing call. MobiFon adjusts the number of months of permitted inactivity based on market practice and currently churns customers after 12 months. At Český, our pre-paid churn policy is based upon the amount of time that has elapsed since the customer replenished his account rather than on activity. Churn rates increase our operating costs by forcing us to increase our spending on marketing and incentive plans to maintain current subscribers and continue to attract new ones. A future increase in churn would likely increase our costs in those areas.

     MobiFon’s average monthly churn rate was 2.12% in 2000, 1.68% in 2001 and 1.85% in 2002.

     Český Mobil’s average monthly churn rate, which includes for 2002 subscribers who have had no activity in their account for more than 6 months, was 1.32% in 2000, 1.86% in 2001 and 2.4% in 2002.

Competition

     During the past 10 years, the international wireless telecommunications industry has experienced rapid growth. The continued emergence of new service and bearer technologies and deregulation of the industry in a significant number of countries have created a number of business opportunities and, consequently, led to increased competition and proliferation of services. Pan-American, Pan-European and even global network operators have emerged to leverage economies of scale. Our success will depend on our ability to compete with other wireless telecommunications network operators, particularly with respect to brand recognition, services, pricing, network quality and coverage, management, reliability, marketing and distribution.

     In some instances, our competitors or their principal corporate shareholders have been operating for a number of years in our markets or in other markets for wireless services, are currently serving a substantial subscriber base, have greater name recognition and have significantly greater financial, technical, marketing, sales and distribution resources than those available to us. However, we believe that our brand recognition and pricing strategies will provide us with an edge over these competitors. Although we currently face competition from other forms of telecommunications technologies, we believe that our GSM-based wireless networks should continue to enjoy cost and accessibility advantages over these other technologies.

     Romania. Besides MobiFon, Romania currently has three other licensed mobile operators holding a total of four separate licenses: (1) MobilRom, the other digital GSM 900 operator, (2) RomTelecom, a digital GSM 1800 operator, and (3) Telemobil, a digital CDMA/2000 and an analog NMTP operator using the Nordic mobile telephone protocol.

(1)	MobilRom, majority owned by France Telecom and operated initially under the name Dialog, won its 900 MHz license at the same time as MobiFon in November 1996 and launched its services in June 1997. MobilRom is owned by a consortium led by France Telecom. Dialog re-branded its services under the Orange brand on April 5, 2002.
(2)	RomTelecom, the national fixed-line phone company, in which the part-privatized Greek telecommunications company OTE has a 54.0% equity interest, acquired its 1800 MHz license in connection with its privatization in November 1998. It launched its operations under the brand name Cosmorom in 2000.
(3)	Telemobil won its analog nordic mobile telephone protocol license in March 1992 and launched operations in May 1993 but never succeeded in reaching significant market penetration. In December 2001, Telemobil launched a new service based on an advanced form of code division multiple access technology known as CDMA/2000. Inquam Romania, in which Qualcomm Inc. and Omnia Holdings are investors, is now the main shareholder of Telemobil. Telemobil is the first European mobile operator to use code division multiple access technology and the first to use the 450 MHz band worldwide. Telemobil has titled its new service Zapp and is trying to position its technology as the first third-generation service in Romania.

     According to their respective 2002 year end financial reports, as of December 31, 2002, MobiFon/Connex had a market share of 52.5%, MobilRom of 44.1%, Cosmorom of 2.0% and Telemobil of 1.4%.

Operator	Brand Name	Technology	License Award	Start of Operations	Market Share
1) MobilRom	Dialog/Orange	GSM 900	November 1996	June 1997		44.1	%
2) RomTelecom	Cosmorom	GSM 1800	November 1998	June 2000		2.0	%
3) Telemobil	Zapp	CDMA 2000/NMTP	March 1992	May 1993		1.4	%
4) MobiFon	CONNEX	GSM 900	November 1996	April 1997		52.5	%

     Czech Republic. Besides Český Mobil, the Czech Republic currently has two other licensed mobile operators holding a total of five licenses: (1) Eurotel Praha, a digital GSM 900/1800 Mobile Telephone Protocol operator and analog nordic mobile telephone protocol (NMT450) operator and a holder of a UMTS license; and (2) Radiomobil, another digital GSM 900/1800 operator and holder of a Universal Mobile Telecommunications System license.

(1)

Eurotel Praha won its NMT450 license in November 1990 and launched commercial analog service operations in September 1991. The entry of GSM services reversed Eurotel Praha’s earlier nordic mobile telephone protocol subscriber growth. Eurotel Praha won its 900 MHz GSM license in March 1996 and launched commercial operations in July 1996. Eurotel Praha was allocated 1800 MHz frequencies in July 2001. Shareholders of Eurotel Praha include Český Telecom, the national fixed-line operator.

(2)

Radiomobil won its 900 MHz license in March 1996 and began providing commercial service under the brand name Paegas in September 1996. Radiomobil was allocated 1800 MHz frequencies in July 2001. Radiomobil’s shareholders include Deutsche Telekom AG. In April 2002 Radiomobil rebranded its services to the T-Mobile brand name, and is underway with changing it’s company name to T-Mobile Czech Republic.

As of December 31, 2002, Eurotel was the market leader with a 45.4% market share (including the subscribers using its nordic mobile telephone protocol services – 1% of total Eurotel subscribers); T-Mobile had a 40.9% market share. As of December 31, 2002, Český Mobil had a market share of 13.7%.

     Both T-Mobile and Eurotel acquired UMTS licences in December 2001 but have not yet officially announced when they expect to launch their respective UMTS operations. The terms of the UMTS licenses provide that the operations’ ventures must cover 90% of Prague by January 2005. In February 2003, Eurotel announced that it is performing a technical trial of UMTS in Prague in conjunction with Nokia. Customer trials and/or public relations events are expected as early as the third quarter of 2003. According to industry sources, Eurotel and T-Mobile are expected to launch UMTS service in the second or third quarter of 2004 in Prague. Depending upon customer demand, other major centres such as Brno, Ostrava and Plzen might be covered post 2005.

Operator	Brand Name		Technology	License Award	Start of Operations	Market Share
Eurotel Praha	Eurotel/Go		GSM 900/1800	March 1996	July 1996		45.4	%
	Eurotel		NMT 450	November 1990
		—	UMTS	December 2001
T-Mobile/ Radiomobil	T-Mobile/Paegas/Twis		GSM 900/1800	March 1996	September 1996		40.9	%
			UMTS	December 2001
		—
Český Mobil	Oskar		GSM 1800/900*	October 1999	March 2000		13.7	%

*Used outside of Prague

Future Competition

In the future, as we build out our GSM networks and offer enhanced services, we will face competition from other wireless communication technologies, such as specialized mobile radio systems, enhanced specialized mobile radio systems, data-only, packet-switched networks and satellite-based voice and data transmissions technologies, as well as other technologies that have not yet been developed.

We may also compete directly with additional conventional fixed line telecommunications service providers and with cable operators who expand into offering two-way communications services over their networks.

The introduction of two-way messaging services may allow the paging industry to compete with us for some of the enhanced services we intend to introduce. Some manufacturers and network operators have studied further modifications to the GSM standard to provide enhanced specialized mobile radio-like services, in particular providing automated conferencing calls. Several entities are currently operating or developing global satellite networks to provide domestic and international cellular communications services from geostationary and low earth orbit satellites. We do not expect them to compete with land-based wireless communication services on price. However, they may eventually augment or replace communications that have segments of land-based wireless systems. At the very least, we may also be challenged by existing wireless systems that have been upgraded from analog to digital, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements, and changes in end-user requirements and preferences.

Regulatory Environment

     Romania. In 2002 the old Telecommunication Law was replaced by The Emergency Government Ordinance 79/2002 (The Ordinance) and the 591/2002 Law regarding The General Regulatory Framework in Communication (the New Telecommunication Law). This new framework has been complemented by other regulations regarding, among other things, access and interconnection, data protection, numbering and significant market power designation and obligations.

     Under the new regulatory regime the old license has been replaced by three separate licenses:

• An authorization to provide electronic communication networks and services

• A license to use allocated numbering resources

• GSM frequency license to use radio-electric frequencies

     Companies that provide any communications networks or services are now subject to general authorization procedures.

     While the Ministry of Communication and Information Technology (MCIT) will be in charge of radio spectrum management at the national level, the National Regulatory Authority for Communications (NRAC) will be in charge of numbering resources management. MCIT will grant radio spectrum only to the companies that obtained the general authorizations. The same treatment will be regarding numbering resources, only that the license will be issued by NRAC.

     The new regulatory framework contains provisions regulating significant market power positions. In December 2002, an obligation to publish a Reference Interconnection Offer with respect to interconnection termination rates set by the regulatory authority was imposed on RomTelecom, given its significant market power as provider of access to the public networks of fixed telephony. In February 2003 RomTelecom complied with their obligation and published the requested RIO.

     MobiFon has been designated as having significant market power and, as a result, regulatory authorities have imposed maximum interconnection termination rates of $0.11/min until December 31, 2003 and $0.10 from January 1, 2004 to July 2004 and on the basis of the long run incremental cost model thereafter. Regulatory authorities have also imposed on MobiFon certain interconnection obligations with respect to transparency (the publishing of interconnection rates) and account separation. The same obligations were applied to Orange, MobiFon’s main competitor. Only transparency obligations were imposed on Cosmorom and Zapp.

     Czech Republic. A resolution of the Czech Republic government dated August 10, 1994 set out the principles of the national telecommunications policy and maintained Český Telecom’s monopoly, until December 31, 2000, on the fixed-line long distance and international telephone services market. The same resolution also restricted competition in the fixed-line local telephone services market for the same period. In 1997, the Czech Republic became a signatory to the World Trade Organization Reference Paper on Telecommunications through its Additional Commitments to the Schedule on Basic telecommunications services, which committed the country to liberalizing its telecommunications market. Following this agreement, in April 1999, the Czech government adopted a resolution setting out the principles of a new national telecommunications policy. Among the main goals of this policy was the preparation of a Telecommunications Act to open the Czech Republic’s telecommunications market to competition by December 31, 2001. The new Telecommunications Act came into force July 1, 2000.

The Telecommunications Act:

• regulates the telecommunications industry;

• provides for a certain level of state regulation and control over the telecommunications sector; and

• provides for the full liberalization of the telecommunications market, including the implementation of call-by-call carrier selection and full number portability for fixed network subscriber numbers.

     The Czech Telecommunications Office, known as the CTU, constituted under the Act as the national regulatory authority, is responsible for telecommunications, including licenses, pricing and pricing policies and dispute resolution. As of January 1, 2003, responsibilities for the telecom industry policies moved from the Ministry of Transport and Communications to the newly established Ministry of Informatics. The Telecommunications Act of 2000 is now currently under review by this Ministry, and is scheduled to be replaced, most likely in 2004, by a new Act on Electronic Communications, so as to harmonize applicable laws to those of the European Union.

Licenses

     Romania. Until January 1, 2003, MobiFon held one of three licenses issued to provide nationwide GSM-based cellular telecommunications services throughout Romania. MobiFon paid an initial license fee of $50 million in 1996 and an additional $25 million in 1999 for the extension of the license term to 2011. In addition, MobiFon must pay a recurring annual fee of $5 million per year for the 22 channels allocated in the 900 MHz range under the license. MobiFon purchased 40 additional channels in the 900 MHz frequency ranges, at an annual price per channel of $230,000 for national coverage, $35,000 for Bucharest and $2,300 for each other city. Of the 62 channels, MobiFon uses 31 on a national basis. MobiFon has access to 12.4 MHz of spectrum in the 900 MHz band, and since December 31, 2002, MobiFon may have access to spectrum in the 1800 MHz band for additional fees. This additional spectrum will enable it to increase network capacity and to maintain the performance criteria required by its license. As of January 1, 2003, the old license has been replaced by three separate grants, namely, an authorization to provide electronic communication networks and services, a numbering license and a GSM frequency license all of which have been granted except for the GSM frequency license which has been continued by government ordinance on the terms of the pre-January 2003 license. In addition, MobiFon must pay annual fees of approximately $0.2 million for the right to operate microwave frequencies to connect GSM base stations to switching centers.

     If we fail to comply with the authorization to provide electronic communication networks, the regulatory authority may apply administrative fines up to 5% of turnover. Breaches which are subject to administrative fines include the following: (1) breach of obligations regarding the general authorization, (2) using radio frequency without having a license, (3) using numbering resources without a license and (4) not complying with the license terms and obligations.

     Czech Republic. In 2002, so as to more accurately reflect the language of the Telecommunications Act, the former GSM Authorization has been replaced by CTU decision 5379/2002-610 on granting of the telecommunications license to establish and operate public mobile telecommunication networks under the GSM standard issued on June 17, 2002, and by CTU decision 8951/2002-610 on granting of the telecommunications license to provide the public telephone service through the public mobile telecommunication network issued on June 20, 2002. Both of these decisions came into force on November 13, 2002, following an appeal process, and the licenses are valid for a period of 18 years.

     Český Mobil paid an initial license fee of one billion Koruna ($28.5 million), and must also pay a recurring annual fee for the right to operate GSM base stations and radio operating stations, which amounts to approximately 72 million Koruna ($2.2 million) now that Èeský Mobil has reached 98% population coverage. In addition, Český Mobil must pay a recurring annual fee for the right to operate microwave frequencies to connect GSM base stations to switching centers. In 2002, this fee amounted to approximately 77 million Koruna ($2.4 million).

     Český Mobil is now entitled to 18 MHz of spectrum in the 1800 MHz band. In addition, it has the right to use 4 MHz of spectrum in the 900 MHz band. The Czech Telecommunication Office can reallocate frequencies with six months’ notice. In the process that resulted in the issuance of the new licences, 20 additional channels in the 1800 MHz band were allocated to Český Mobil.

     The new Telecommunication Act, issued in July 2000, regulates a number of issues that were previously included in the former Authorization, thus removing the need to incorporate such issues in the licenses. Consequently, the new licenses are much less detailed than the Authorization, basically only maintaining the price obligations (old tariffs T1 “I Hear You” and T2

“Agreement with Oskar” – pricing plans) until December 31, 2003, and some minimum quality parameters of coverage of area and population.

     The Czech Telecommunication Office is entitled to restrict, suspend or terminate Český Mobil’s license for a number of reasons, including a significant public interest, or a material breach of the provisions of the License, or of the Telecommunication Act. Furthermore, when the initial Authorization was issued, Český Mobil had undertaken to construct the technological infrastructure required to provide Internet access to schools and libraries throughout the Czech Republic, by October 8, 2002. Český Mobil has submitted a comprehensive proposal to fulfill its obligation within the required deadline, and negotiations are still underway with different ministries to discuss the potential implementation of the proposal.

Ownership Restrictions

     Some of our licenses place restrictions on our ability to dispose of our interests in our operating companies. For example, Český Mobil’s initial Authorization requires us to notify the Czech Telecommunication Office in writing at least 45 days before Český Mobil or any shareholder holding more than 25% of its registered capital is involved in a transaction involving more than 10% of its registered capital. This is only a notice requirement; the license does not give the Czech Telecommunication Office a right to approve the transfer. However, this notification obligation was not replicated in the new Licenses of Český Mobil that came into force on November 13, 2002, and therefore is no longer applicable.

Co-Investors

     Romania. Our strategic partners in MobiFon are (1) Vodafone Europe B.V., (2) Deraso Holding B.V., a group of financial investors led by J.P. Morgan Partners, LLC and (3) certain other minority investors including, since March 2003, an affiliate of Emerging Market Partnership (EMP).

     During the fourth quarter of 2002, our subsidiary ClearWave tendered as part of a share repurchase initiated by MobiFon, an aggregate of 6,460,250 shares of MobiFon for total cash consideration of US $24.6 million bringing ClearWave’s ownership percentage in MobiFon from 63.5% to 62.4%, as of December 31, 2002. As at that date, the participation of our partners in MobiFon was 20.8% for Vodafone, 14.9% for Deraso, and less than two percent for the minority investors. Other shareholders of MobiFon have until June 30, 2003 to tender their shares in the share repurchase which may cause their ownership interest in MobiFon to decrease and ClearWave’s ownership interest in MobiFon to increase

     On March 19, 2003 we announced the sale to an affiliate of Emerging Market Partnership of 11,135,555 of our shares of MobiFon for total cash consideration of US $42.5 million. Following this sale, ClearWave’s ownership of MobiFon decreased to 56.6%. This ownership percentage could vary between 56.6% and 57.7% depending on the extent of the participation of other MobiFon shareholders in the share repurchase which ends on June 30, 2003. For the same reason, EMP’s ultimate ownership may vary between 5.7% and 5.9%.

     Czech Republic. Our interest in Český Mobil is held through TIW Czech N.V. Our strategic and financial partners in TIW Czech N.V. are large institutional investors. ClearWave holds a 50.8% voting interest and 24.2% equity interest in TIW Czech N.V. with the institutional investors holding the remaining 49.2% voting and 76.6% equity interest. TIW Czech N.V. holds a 96.3% direct interest in Český Mobil and its co-shareholders in Český Mobil, Český konsolidacni agentura and United Pan-Europe Communications N.V., hold the remaining 3.7% interest. Through this shareholding structure, we currently control 96.3% of Český Mobil.

Liquidity Agreements

     ClearWave entered into agreements with its co-shareholders in TIW Czech, as well as with certain minority shareholders in MobiFon holding in aggregate approximately 22% of the outstanding shares of MobiFon, to allow these parties to participate in

certain transactions that create liquidity for ClearWave’s shares. Two types of events trigger tag-along rights for these shareholders under the agreements:

• sales by TIWC of shares of ClearWave pursuant to a bona fide arms’ length transaction for cash or liquid stock; or

• public sales of shares of ClearWave.

     Accordingly, such shareholders would have the right to participate in the particular transaction on terms as close as possible to those applicable to TIWC or ClearWave by selling all or some of their shares in TIW Czech and MobiFon. ClearWave and TIWC also have the right, under certain conditions, to require such participation.

     In the event there has not been an initial public offering of the shares of MobiFon by October 1, 2004, certain minority shareholders in MobiFon holding in aggregate approximately 21% of the outstanding shares of MobiFon, may require TIWC or, at TIWC’s option, ClearWave to make an offer to acquire their shares of MobiFon at a price representing the fair market value of such shares as determined by an independent valuation and shall be payable, at our option, in cash or in our marketable securities. This right terminates upon an initial public offering of ClearWave shares that meets certain criteria.

     As part of the creation of Český Mobil, a minority shareholder was granted by TIWC a put option on all common shares in the capital of Český Mobil that the minority shareholder holds. As a result of the assignment of this put by TIWC to TIW Czech, TIW Czech may have to purchase this minority shareholder’s shares of Český Mobil for a price equal to the total subscription price paid for the shares plus interest calculated from their respective dates of issuance at a rate of 7% per annum. This option remains exercisable until October 8, 2003. As at December 31, 2002, this minority shareholder had contributed $13.0 million to the equity of Český Mobil.

Networks

     We chose major cellular equipment vendors to design and build networks that provided us with state-of-the-art service that allowed us to begin operating quickly and to expand and upgrade our service as we acquired more subscribers and new technology became available. Flexibility to keep up with new technology is essential to comply with license requirements and compete effectively. We have also invested significantly in advanced operation and maintenance systems to provide quality service to our existing network subscribers. We continuously monitor network traffic and measure the real-time technical performance of our services against global benchmarks. Our comprehensive surveillance of traffic-related activities enables us to respond quickly to conditions in which the traffic load exceeds expected levels.

     We purchase most equipment for our networks through competitive tendering. The two key principles guiding procurement decisions are benchmarking, to the extent available, and quality of products that provide value to the customer. Another principle influencing procurement decisions is avoidance of conflicts of interests. We and the other shareholders in our operating companies provide experts who review contracts and prices, and then benchmark them against contracts and prices obtained in cellular networks throughout the world. As a rule, when an equity partner is to provide equipment or services, or if any potential conflict of interest arises for any other reason, the shareholders, above a size threshold, and the Board of Directors, as applicable, of our operating companies must approve the final purchase for items exceeding a specified threshold.

     Romania. MobiFon began the development of its GSM-based cellular network, using 900 MHz frequencies, in December 1996. By March 1, 1997, MobiFon’s network was operational and covered Bucharest, the capital of Romania, including access roads and airports, as well as eight other major cities. As at December 31, 2002, MobiFon’s state-of-the-art network covered 96% of the population of Romania and all major highways in Romania. As of that date, MobiFon’s network consisted of 1021 remote base stations, 386 repeaters, 24 base station controllers, 11 cellular switching centers, 2 transit switching centers and 10 public switched telephone network (PSTN) interconnection points. Use of ATM technology and voice compression techniques led to significant increase in network efficiency, preserving a high quality level. Starting Jan. 1, 2003 MobiFon ensures direct international traffic interconnection with four carriers, no longer using transit through the local PSTN for such traffic. We

will be installing additional base stations and other equipment to increase capacity and enhance coverage and quality of service, and starting 2003 we have access to the 1800 MHz frequencies, to be used when needed for additional capacity. We have also installed the first-ever wind and solar powered cell sites in Central and Eastern Europe.

     Czech Republic. The design for the Czech network employs both 900 MHz and 1800 MHz frequencies, taking into account certain availability restrictions on the 900 MHz band. This design offers benefits with respect to greater rural coverage and greater capacity in dense urban environments. Český Mobil was using Ericsson and Siemens exclusively to construct its network, but now tenders the construction work to the most competitive contractors. While Český Mobil is utilizing Ericsson mobile switching centers throughout the network, it uses Ericsson cellsite equipment in the eastern part of the country and Siemens cellsite equipment in the western part of the country. As at March 31, 2003, Český Mobil’s network covered 99% of the population. As of that date, Český Mobil’s network consisted of over 2,429 base stations, 58 base station controllers, 6 cellular switching centers and diverse network interconnection points to all the major telecom operators in the Czech Republic including Český Telecom, Eurotel, T-mobile, Aliatel, Contactel, and GTS. Of the 6 cellular switching centers, 3 of them also perform the function of transit switching. We believe the network addresses current capacity adequately.

     We plan and construct each of our wireless telecommunications networks to meet a forecasted level of subscriber density and traffic demand. Once this level is exceeded, we are normally able to increase network capacity to maintain service standards by using techniques such as sectorization and cell splitting. Other wireless telecommunications network operators and infrastructure manufacturers have also developed techniques we can use to ensure service quality at minimal cost, such as microcells. Until technological limitations on network capacity are reached, we can usually add additional capacity in increments that closely match demand and at less than the proportionate cost of initial capacity.

Operations and Maintenance

     We design, in consultation with our vendors, state-of-the-art operation and maintenance systems and efficient network management structures. Our primary objectives are high customer satisfaction and compliance with license requirements.

     Our network management structures are divided into two main functional areas:

• Operations. This group operates the entire network, including base stations or cellsites, base station controllers, transmission and microwave systems, switches and value added services platforms and systems.

• Network planning, engineering and implementation. This group plans, designs and implements the network, including cell planning, frequency planning, network dimensioning and switching systems upgrades, and develops and introduces new products, services and technologies in the network.

     Our networks use standard monitoring and supervision features provided by the cellular switching centers, base stations, base station controllers and transmission equipment. These functions enable us to examine the state of the network in real-time and to produce both fault reports and performance reports. We continuously monitor the traffic on the networks and respond to conditions that may affect service or traffic levels.

     To ensure peak network reliability and service quality, our maintenance plans feature preventive and corrective maintenance programs, as well as procedures backed by system tools proven in other GSM systems throughout Europe. Our operations group continuously monitors and analyzes traffic trouble reports and potential network problems and analyzes network event data to determine where non-routine maintenance may be needed. Our operations group also sets appropriate alarm threshold levels for detection of equipment problems such as low batteries, equipment or circuit outages and security violations. They also continually refine maintenance procedures and documentation to improve mean-time-to-restoration for problems that directly affect subscribers and establish routine maintenance and testing of all switching, radio equipment and interconnect facilities.

     We have safeguarded our networks against disaster by using, at various locations, redundant/physically diverse transmission systems, redundant/physically diverse system components, battery back-ups, generators, fire suppression systems, and of course regional support staff. Regional centers maintain replacement parts for critical components in the event of switching center or other system failures. As a result of these precautions, we were able to keep our Romanian and Czech networks up and operating an average of respectively 99.89% and 99.90% of the time in 2001 and an average of respectively 99.91% and 99.94% of the time in 2002. We, through our local expertise and our suppliers, through their servicing and maintenance departments, work together to adequately support and maintain our networks.

Roaming and Interconnection Agreements

     Romania. MobiFon is a signatory of the GSM Memorandum of Understanding which is now known as the GSM Association. This association establishes common technology standards, thus facilitating worldwide roaming. As of December 31, 2002, MobiFon had negotiated roaming agreements with 221 operators in 95 countries and is continuing to negotiate additional roaming agreements. The roaming agreements allow MobiFon’s post-paid subscribers to use their own handsets in locations wherever GSM cellular service is provided, or to roam in such locations with a handset that is compatible with the local network. Presently the main objective is to increase the number of new roaming destinations for MobiFon’s customers, with a special emphasis on remote holiday destinations and Latin American countries. To maximize inbound roaming revenue, MobiFon has designed its network to emit the strongest signal in key international entry points, such as airports, so that visitors have a higher probability of picking up the MobiFon signal on arrival in Romania.

     In order to further maximize the roaming revenue MobiFon has started to negotiate and open prepaid roaming relations based on CAMEL Phase 1 and Phase 2 technologies. The prepaid roaming agreements allow MobiFon’s Kamarad prepaid subscribers to use their own handsets and prepaid cards wherever the prepaid roaming service is available. As of December 31, 2002, MobiFon was offering for its prepaid customers the possibility to roam in 16 networks covering 11 countries. On the other hand at the same date MobiFon was offering prepaid inbound roaming services for 13 of our roaming partners.

     In August 1997, MobiFon signed an initial one-year interconnection agreement with RomTelecom, extendable for additional 12-month periods. MobiFon and RomTelecom have extended this agreement to August 2003. Under this agreement, MobiFon will share revenues with RomTelecom for calls routed on the two networks. On March 12, 1998, the parties signed a first addendum to the interconnection agreement detailing the settlement procedure and the exchange of traffic information between parties. They signed a second addendum on May 2, 1999, providing the procedures for applying the fixed national-mobile tariff and for the settlement method in case of possible differences due to exchange rate fluctuations. On July 30, 1999, RomTelecom and MobiFon signed an addendum to the interconnection agreement providing that, with the exception of those services specified by the two networks, users of either RomTelecom’s or MobiFon’s services can access the services supplied on either network. The addendum further contemplates that the two companies would address the terms and conditions applying to services other than basic interconnection services through separate agreements. The leasing of RomTelecom’s facilities for MobiFon’s use is not subject to interconnection conditions but to the negotiation of an agreement between the parties.

     A December 2002 decision of the Romanian National Regulatory Agency for Communications (NRAC) designated RomTelecom as a significant market power with respect to the access to public networks of fixed telephony. The decision imposed on RomTelecom an obligation to publish a Reference Interconnection Offer with interconnect termination rates set by the NRAC. In February 2003 Romtelecom published the RIO.

     Another decision of NRAC, issued in March 2003, designated MobiFon as a significant market power with respect to call termination into its own network. The decision set the maximum level of the interconnect termination rate that MobiFon can charge. Other obligations resulting from the significant market power designation include offering interconnection services for call termination into MobiFon network to any authorised operator, to publish the interconnection rates and to offer non-discriminatory conditions to all operators requesting interconnection for call termination into MobiFon’s network.

     Due to the changes in the regulatory environment resulting in the obligations imposed by NRAC to both operators, in March 2003, MobiFon and RomTelecom have entered into the negotiation of a new interconnection agreement based on RomTelecom’s RIO and MobiFon’s Interconnect Offer.

     On May 5, 1997, MobiFon concluded a “Bill & Keep” interconnection agreement with MobilRom which applied until May 12, 1999, when MobiFon entered into another interconnection agreement with an initial term of 12 months, extendable for additional 12-month periods. MobiFon extended its agreement with MobilRom for an additional 12 months to May 2004. This interconnection agreement, like the one entered into with RomTelecom, provides for the interconnection of MobiFon’s network with that of MobilRom and the sharing of revenues from calls routed on the two networks. MobiFon and MobilRom signed two addenda to the interconnection agreement, one on May 28, 1999, and another on October 9, 2000, providing procedures for settlement and monthly traffic information exchanges and also providing the availability of the short messaging system service between the two networks.

     In March 2003, MobilRom (Orange) was also designated as a significant market power with respect to call termination in its own network. The same obligations as those imposed on MobiFon were imposed on MobilRom as a result of the decision.

     Due to changes in the regulatory environment resulting from the obligations imposed by NRAC on both operators in February 2003, MobilRom and MobiFon have entered into negotiations for a new interconnection agreement.

     MobiFon also entered into an interconnection agreement with Cosmorom on March 20, 2000, for an initial term of 24 months, now extended for an additional 24-month period. This interconnection agreement, like the ones previously signed with other parties, provides for the interconnection of MobiFon’s network with that of Cosmorom and the sharing of revenues from calls routed on the two networks. On April 12, 2001 MobiFon entered into an addendum to the interconnection agreement providing the availability of the short messaging system service between the two networks. MobiFon concluded the latest interconnection agreement with Telemobil S.A., the nordic mobile telephone protocol operator, on March 20, 2001, with an initial term of 24 months, extendable for additional 24-month periods. In 2001, Telemobil re-branded its service to the brand “Zapp” and obtained a licence for operating CDMA technology. On 9 August 2002 MobiFon and Telemobil (Zapp) entered into an addendum to the interconnection agreement providing the availability of the short message system service between the two networks.

     Due to the Romanian telecommunications market liberalisation in 2003, which ended RomTelecom’s monopoly for international traffic to and from Romania, MobiFon entered into bilateral international interconnection agreement to secure international traffic with certain international carriers including carriers in Germany, Italy and Austria

     Czech Republic. Český Mobil is a full member of the GSM Association (formerly known as the group of signatories of the GSM Memorandum of Understanding). As of March 31, 2003 Český Mobil had launched commercial roaming service with 137 operators in 71 countries including all of the operators in its neighboring countries.

     Český Mobil is directly or indirectly interconnected with all major players in the Czech telecommunications market. This list of directly interconnected parties includes: Český Telecom, Aliatel, GTS, Contactel, Pragonet, who each provide fixed line services in the Czech market and Eurotel and T-Mobile, who are the other two mobile operators in the market. Due to the current regulatory requirements, Český Mobil will have to interconnect directly with others licensed alternative operators that request change from indirect to direct interconnection.

     Over the past years, Český Mobil had been actively lobbying with the CTU to bring traditionally high interconnection rates closer to the true costs of providing mobile call termination services. On November 27, 2001, the CTU issued a price decision establishing a fully allocated cost-based methodology for setting interconnection rates for calls terminating in mobile networks, as well as a establishing a maximum rate of 3.66 Korunas per minute. This represented a 43% decrease compared to the previously valid rate. As the traffic exchanged between Český Mobil and its two competitors (Eurotel and T-Mobile) has not been balanced and works to Český Mobil’s disadvantage, such rate reduction has a significant positive impact on Český Mobil’s net position on

interconnection payments to other mobile networks. Both Eurotel and T-Mobile have challenged this price decision and are requesting rates that are, on average, approximately 1 Koruna higher than the maximum established.

     On September 3, 2002, the CTU issued a new price decision setting the interconnection rates for calls terminating into fixed networks based on a version of the long-run incremental cost model. This resulted in a 22% decrease of the rates compared to the previous blended termination rate. Although this new methodology has not been implemented as of yet in mobile networks, it is expected that the CTU will adopt a similar costing method in the near future which may lead to additional decreases in the level of mobile interconnection rates, and thus further improve our net position on interconnection payments. Český Mobil is advocating for the regulator to mandate the use of a similar methodology to established interconnection rates for calls terminating in mobile networks as soon as practicable.

Procurement and Financing

     Romania. MobiFon met its cash requirements as of December 31, 2002, by aggregate capital contributions of $270.6 million, of which approximately $25 million has been returned, as at December 31, 2002, to shareholders through a share repurchase, and borrowings under its new bank facilities of $255 million.

     In August 2002, MobiFon replaced its long term credit facility with a new senior secured corporate loan facilities for an aggregate $300 million. MobiFon used those amounts primarily to repay the remaining debt totalling $231 million (including principal, interest and cancellation fees) under its previous facility and to pay for continued network deployment and equipment costs. MobiFon also has a total of $20 million of working capital facilities with ABN AMRO Bank Romania and Citibank SA.

     MobiFon’s future capital requirements will include network expansion, debt repayment, new license and dividends. We expect cash flows from MobiFon’s operations to be sufficient to cover all requirements.

     Czech Republic. Český Mobil has met its cash requirements through December 31, 2002, primarily from shareholder contributions of $350.0 million and from $443.1 million of borrowings under its senior secured syndicated credit facility entered into on July 19, 2000.

     Český Mobil’s senior secured syndicated credit facility consists of approximately €295.7 million and Koruna 5.5 billion, totalling approximately $492 million, carrying interest for Euro drawings at a rate of EURIBOR plus 1.75%, (2.25% in the case of the non-revolving tranche representing approximately 10% of the entire Euro drawings) and for Koruna drawings at a rate of PRIBOR plus 1.75% (2.25% in the case of the non-revolving tranche representing approximately 34% of the entire Koruna drawings) reimbursable through instalments between June 2004 to December 2009. As at December 31, 2002, Český Mobil had drawn approximately $443.1 million under this facility. Český Mobil has and will continue to use the funds to finance the construction, operation, working capital, debt service and related requirements of its GSM network in the Czech Republic including the repayment of amounts financed under supply contracts with Siemens and Ericsson.

     Český Mobil’s capital requirements will include expanding its cellular network and financing its working capital requirements. Český Mobil expects that these requirements will be financed by drawings under its senior secured syndicated credit facility, by way of shareholders’ funding commitments, and from operating cash flow. In conjunction with our partners, we have provided $350.0 million in funding to Český Mobil as at December 31, 2002.

Environmental

     We are subject to certain local, regional, national and foreign laws and regulations governing environmental protection. Such laws and regulations impose strict requirements for the use, management and disposal of hazardous substances. We believe that we are in substantial compliance with existing environmental laws and regulations and do not expect the costs of complying with environmental laws to have a material impact on our capital expenditures, earnings or competitive position in the foreseeable future. As requirements in the countries in which we operate become more stringent, however, we may become subject to

increasingly rigorous requirements governing fuel storage for our towers, investigation and cleanup of contaminated properties on which our towers are located, and emissions of, and human exposure to, radio frequency emissions.

Employees.

     Romania. As of December 31, 2002, MobiFon had a total of approximately 1,700 employees.

     Czech Republic. As of December 31, 2002, Český Mobil had a total of 1,350 employees.

HEXACOM: INDIA CELLULAR

     We hold a 30% equity interest in TIW Asia N.V., a holding company which holds, directly and indirectly, a 42.2% equity interest in Hexacom India Limited (“Hexacom”), an Indian company formed to provide GSM-based cellular services in India. Hexacom obtained a cellular license for the State of Rajasthan in 1995. Rajasthan is located approximately 150 miles southwest of India’s capital, New Delhi, and has a population of approximately 56.5 million. Hexacom launched its commercial operations in Jaipur, the capital of Rajasthan, in June 1997 and had 112,393 subscribers as at December 31, 2002.

Regulatory Environment

     In 1997, the Indian government established the Telecom Regulatory Authority of India (“TRAI”) as an autonomous body with the mandate to regulate the telecommunications industry. TRAI has the authority to ensure compliance with telecommunications regulation, protect the interests of consumers and promote competition between service providers. However, the granting and the renewal of licenses remain under the authority of the Department of Telecommunications (“DoT”), Government of India. Foreign direct equity investments in companies holding licenses from the DoT to operate cellular, basic and other value-added telecommunications services in India cannot exceed 49%.

Co-Investors

     TIW Asia’s two partners in Hexacom are Telecommunications Consultants India Ltd. (“TCIL”) and Shyam Telecom Ltd. (“STL”). TCIL is a wholly-owned subsidiary of the DoT and deals primarily with turnkey international projects in the telecommunications industry. It has activities in more than 50 countries and participates in several joint ventures with international manufacturers to operate manufacturing plants in India. STL is a public company listed on Indian stock exchanges, including those in Mumbai and New Delhi, and manufactures radio-based telecommunications equipment for rural telephony, private automatic branch exchanges, satellite receivers, multiplexers and fiber-optic terminal equipment. TCIL and STL hold 30.0% and 25.3% equity interests, respectively, in Hexacom. The remaining 2.5% equity interest in Hexacom is held by other minority investors.

Networks and Operations

     In September 1996, Hexacom was awarded a 10-year license to provide GSM-based cellular services for the State of Rajasthan, extendable by five years. The term of the license was extended to 20 years pursuant to the National Telecommunication Policy 1999 (“NTP-99”). Hexacom launched commercial operations in Jaipur, the capital of Rajasthan, in June 1997 and has subsequently extended its network coverage to 38 other cities across the state. Hexacom currently has overall network capacity to service approximately 180,000 subscribers.

     A uniform interconnection agreement exists between each of the regional cellular operators in India and the two incumbent Public Switched Telephone Network (Bharat Sanchar Nigam Limited and Mahanagar Telecom Nigam Limited).

Marketing and Distribution

     Hexacom markets its cellular services as a necessity, rather than a luxury item, and as an alternative to landline services. Hexacom markets its services under the trade name OASIS Cellular, which has created brand name recognition and product awareness.

Competition

     Including Hexacom, there are presently five wireless operators in the State of Rajasthan. The other four are: (1) Aircell Digilink India Limited, which holds the second GSM license granted; (2) Bharat Sanchar Nigam Limited, the erstwhile Department of Telecommunications Services, which as the basic incumbent was granted the third GSM license; (3) Shyam Telelink Limited, which provides CDMA-based limited mobility services via its basic license; and (4) Reliance Infocomm, which also provides CDMA-based limited mobility services via its basic license. As at December 31, 2002, we estimate that Hexacom had a market share of 60%.

Employees

     As at December 31, 2002, Hexacom had a total of 201 employees.

BRAZILIAN ASSETS HELD FOR SALE

     As at December 31, 2002, we also held, through a wholly-owned subsidiary, TIW do Brazil Ltda., an interest in cellular operations in Brazil in the State of Minas Gerais and in the Amazon region. TIW do Brasil Ltda., now called TPSA do Brasil Ltda., holds a 48.9% interest in a consortium, Telpart Participaçoes S.A., which holds 19.9% of the equity and 52.1% of the voting shares of Telemig Celular Participaçoes S.A., a holding company that owns an equity interest of 82.9% in Telemig Celular S.A. Telpart also holds 19.3% of the equity and 51.9% of the voting shares of Tele Norte Celular Participaçoes S.A. Tele Norte in turn owns a 74.95% equity interest in Amazonia Celular S.A. As at December 31, 2002, Telemig Celular S.A. and Amazonia Celular S.A. had a total of 2,863,814 subscribers and licenses covering 32.1 million persons. On March 26, 2003, we disposed of TIW do Brazil for total consideration of US$70 million.

COMPETITION

     The international wireless telecommunications industry has been characterized by rapid growth, the emergence of new technologies and a progressive deregulation of telecommunications services in a significant number of countries in order to favor the introduction of new services and competition among service providers. Although these industry conditions have created many business opportunities, they have also intensified competition between service providers in all of our business segments.

     The success of our operations and development projects will depend on their ability to compete, particularly with respect to pricing, services, network quality and coverage, reliability and availability of features.

     We are facing competition from telecommunications service providers using similar wireless technologies and by other wireless telecommunications technologies that now exist. In some instances, our competitors have been operating for a number of years, are currently serving a substantial subscriber base, have greater name recognition and have significantly greater financial, technical, marketing, sales and distribution resources than those available to us.

     In the future, as we construct our GSM networks and offer enhanced services, we will face competition from other wireless communication technologies, such as specialized mobile radio systems, enhanced specialized mobile radio systems, data-only, packet-switched networks and satellite-based voice and data transmissions technologies, as well as other technologies that have not yet been developed. We may also compete directly with additional conventional fixed line telecommunications service providers and with cable operators who expand into offering two-way communications services over their networks. The introduction of two-way messaging services may allow the paging industry to compete with us for some of the enhanced services we intend to introduce. Several entities are currently operating or developing global satellite networks to provide domestic and international cellular communications services from geostationary and low earth orbit satellites. We do not expect them to compete with land-based wireless communication services on price. However, they may eventually augment or replace communications that have segments of land-based wireless systems. At the very least, we may also be challenged by existing wireless systems that have been upgraded from analog to digital, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements, and changes in end-user requirements and preferences.

     Finally, governments of developed and developing countries are increasingly requiring bidding for licenses, which increases competition for additional licenses and increases competition within markets to the extent licenses are obtained by others. Our competitors in these auctions may have substantially greater financial and other resources than we do.

PROPERTY, PLANTS AND EQUIPMENT

     We lease approximately 100 square meters of office space in Amsterdam from Maatschap World Trade Center, for our corporate headquarters. The lease provides for annual rent of approximately 40,000 Euros.

     In addition, our subsidiaries and operating companies have leases for office space, switching facilities and transmission sites in each of the countries where we operate the most material of which include the leases of MobiFon and Český Mobil described below.

     Romania. MobiFon leases approximately 9,500 square meters of office space for its head office in Bucharest for approximately $3 million annually including operating expenses. MobiFon also leases:

(1)	12,700 square meters for its call center, 3 MSC’s & IT operations at its AVRIG facility in Bucharest for approximately $4.5 million annually including operating expenses;
(2)	9,200 square meters for its MSC’s, engineering offices and warehouse at our DBC facility in Bucharest for approximately $2.6 million annually including operating expenses;
(3)	2,500 square meters for our network spares warehouse in Bucharest for approximately $225,000 annually including operating expenses;
(4)	1,400 square meters for our call center in Brasov for approximately $300,000 annually including operating expenses;
(5)	an aggregate of 3,100 square meters throughout Romania for its remaining MSC’s for an aggregate of approximately $580,000 annually including operating expenses;
(6)	an aggregate of 2,000 square meters throughout Romania for its corporate stores for an aggregate of approximately $680,000 annually including operational expenses;
(7)	an aggregate of 3,400 square meters for its 6 regional sales offices and for its regional engineering offices for a total of approximately $500,000 annually including operational expenses;
(8)	various locations for the operation of cell sites for an aggregate of approximately $12.2 million annually including operating expenses.

     In addition, cleaning and security costs for all MobiFon facilities are $1.3 million annually. Also, all MobiFon expenses noted above exclude value added tax of 19%.

     Czech Republic. Český Mobil leases approximately 12,394 square meters of office space for its head office in Prague for approximately $2.6 million including operating expenses, cleaning and security. Český Mobil also leases:

(1)	2,785 square meters for its call center in Chrudim for approximately $332,000 annually including operating expenses, cleaning and security;
(2)	an aggregate of 2,350 square meters throughout the Czech Republic for its regional stores, retail stores and mobile stores for a total of approximately $1.24 million annually including operating expenses but excluding security and cleaning;
(3)	an aggregate of 522 square meters for its 3 regional sales offices and for its regional operating center for a total of approximately $68,000 annually including operating expenses, cleaning and security;
(4)	an aggregate of 4,500 square meters for its 3 Mobile Switch Centers (MSC) for a total of approximately $883,000 annually including operating expenses, cleaning and security;
(5)	an aggregate of 785 square meters for its 6 Regional Operation Centers (ROC) for a total of approximately $88,000 annually including operating expenses, cleaning and security;
(6)	lines that connect cell sites to switching centers for an aggregate annual amount of approximately $6.3 million; and
(7)	various properties for the operation of cell sites for an aggregate of approximately $19 million annually including operating expenses and maintenance costs.

ITEM 5 – OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OUR OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Our Operating and Financial Review and Prospects is intended to assist in the understanding and assessment of the trends and significant changes in the results of operations and financial condition of Telesystem International Wireless Corporate N.V. Historical results may not indicate future performance. Our forward-looking statements are subject to a variety of factors that could cause actual results to differ materially from those contemplated by these statements. This review should be read in conjunction with our consolidated financial statements and accompanying notes.

OVERVIEW

We develop, acquire and operate wireless telecommunications networks. As at December 31, 2002, our operations, excluding operations to be disposed of in Brazil, had 3,927,000 subscribers, which, based on our ultimate percentage ownership in our operations, represent 823,000 equity subscribers. Our operations consist of cellular operations in Romania, the Czech Republic and India.

Our operations’ licenses entitle us to serve geographical areas that include approximately 89.2 million persons which, based on our ultimate percentage equity ownership in our operations, represent approximately 14.3 million persons as at December 31, 2002. As a part of our development strategy, we selectively consider strategic opportunities in the wireless telecommunications industry on an ongoing basis, especially in Central and Eastern Europe where we are already present, and at any time may be engaged in various stages of discussion regarding potential development projects, mergers, acquisitions or divestitures in these markets.

On July 27, 2001, we discontinued our specialized mobile radio and enhanced specialized mobile radio operations in Western Europe which were operated through Dolphin and its subsidiaries. Dolphin and certain of its subsidiaries took legal steps to reach a compromise with their creditors. On March 31, 2001, we disposed of our interest in Americel and Telet, two of our Brazilian cellular operations and on March 5, 2002, we adopted a formal plan to dispose of our remaining Brazilian cellular operations by way of sale of our equity interest in Telpart within the next twelve months. However, in light of the deterioration of the market conditions that existed at the date of the adoption of the formal plan to dispose, the horizon for disposal has been extended by an additional twelve months. On March 26, 2003, we disposed of our interest in Brazil. The proceeds from the sale was mainly used to reimburse parent corporate debt. The financial position and results of operations of Dolphin have been reported in our consolidated financial statements as discontinued operations. The results of discontinued operations and the impact of the discontinuation on our consolidated financial statements are described in the period over period discussion of this operating and financial review and prospects. Effective July 1, 2002, the Company ceased to proportionately accounts for the Brazilian activities held for sale and begun to be account for its investment using the equity method starting July 1st, 2002.

OPERATIONS

Our cellular operations in Romania and the Czech Republic are held through ClearWave, which was a wholly-owned subsidiary until February 14, 2001. At such date, TIW, the parent company, issued 43.8 million Units each comprised of a ClearWave share and an option to exchange five Units for one of our shares for no additional consideration, by tendering five Units back to us at any time on or prior to June 30, 2002. We refer to this option as the exchange option. Subsequent to such transaction, TIW issued an additional 2.1 million Units. As a result of these transactions, the TIW equity interest and voting rights in ClearWave then decreased to 45.5% and 80.7%, respectively. TIW’s interest in ClearWave was held through us and consequently, on February 14, 2001, the Company sold the shares included in the Units to TIW at their fair value for a total proceed of $272.5 million. This transaction resulted in a gain on disposal of $205.2 million and a reduction of our equity interest and voting rights of ClearWave to 45.5% and 80.7%, respectively. (See “Sources of financing”). In February 2002, TIW purchased back 33.7 million Units outstanding pursuant to an exchange offer. As a result, TIW equity interest and voting rights in ClearWave are now 85.6% and 94.9%, respectively. However, the shares TIW repurchased in February 2002 were not sold back to us and consequently our equity and voting interest remained at 45.5% and 80.7% respectively.

Romania — Cellular

Cellular services in Romania are provided by MobiFon, which holds a license for national GSM-based cellular services. Our initial investment in Romania was made in November 1996 and commercial operations were launched in April 1997. ClearWave’s equity interest in MobiFon increased from 54.7% to 58.9% in June 2000 and then to 63.5% in February 2001, following the sale by certain minority shareholders of their MobiFon shares to ClearWave. On October 30, 2002, the shareholders of MobiFon approved distributions of up to $38.8 million by means of a share repurchase. Shareholders can tender their shares between October 30, 2002 and June 30, 2003 in order to realize their pro-rata share of this distribution amount of which ClearWave’s share is $24.6 million. In the event not all MobiFon shareholders exercise their options to sell their entire pro-rata portion, any of the MobiFon shareholders shall have the right to buy-back the shares sold to MobiFon at the same purchase price by December 31, 2003. A first distribution of $16.6 million was paid on October 30, 2002, of which $15.8 million was paid to ClearWave. A further distribution of $8.8 million was paid to ClearWave on December 19, 2002. The effect of these distributions was to decrease ClearWave’s equity interest in MobiFon from 63.5% to 62.4% and to decrease our ultimate equity interest in MobiFon from 28.9% to 28.4%. MobiFon’s shareholders are not required to participate pro-rata in the share repurchase and ClearWave has also retained its right to buy-back the shares sold to MobiFon. Accordingly, our ultimate ownership of MobiFon may vary between 24.3% and 24.8%, throughout the tender period, depending on the timing and the extent of each shareholder’s participation in the repurchase.

On December 18, 2002 we reached an agreement for the sale of 11.1 million shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then issued and outstanding share capital of MobiFon for a total cash consideration of $42.5 million. The transaction, closed on March 19, 2003 and consequently, ClearWave will record a gain on disposal of such shares in the first quarter of 2003. As a result of the above transactions, our ultimate ownership in MobiFon may be reduced from the pre share repurchase level of 24.8% down to between 22.0% and 22.5% depending on the outcome of the share repurchase.

Czech Republic — Cellular

Český Mobil holds a license to provide GSM-based cellular services in the Czech Republic and launched commercial services in March 2000. ClearWave’s indirect ownership in Český Mobil increased from 22.3% to 23.3% following the January 20, 2003 negotiation of capital contributions in 2001 and 2002.

ClearWave’s equity interest in Český Mobil is held through TIW Czech, in which ClearWave owns 50.8% voting rights and a 24.2% equity interest.

As part of the creation of Český Mobil, a minority shareholder was given a put option and, as a result, TIW Czech may be required to purchase the Český Mobil shares owned by this minority shareholder for an amount equal to the amount paid, in Czech Koruna, for such shares by the minority shareholder plus interest of 7.0% per annum. This put option is exercisable during a period of two years beginning in October 2001. As at December 31, 2002, this minority shareholder has contributed $13 million to the equity of Český Mobil. ClearWave’s share of this commitment, if exercised, is $4.6 million as at December 31, 2002 and would result in ClearWave’s ultimate ownership of Český Mobil increasing from 23.3% to 24.2%.

Corporate and Other

We have a 30% equity interest in TIW Asia, which has a 42.2% indirect interest in Hexacom. Hexacom holds a license to provide GSM-based cellular services in the state of Rajasthan, India.

On December 24, 2001, we disposed of our 49% interest in Enlaces, a paging operation in Mexico and relinquished our joint control of the investment. On September 27, 2001, we disposed of our interest in W-Aura, a wireless internet operation based in Brazil.

In June 2000, following our successful bid for a third-generation mobile services license in the U.K., TIW UMTS, the bidding entity, was sold for a nominal amount. Concurrently with this transaction, we were granted an option to maintain a right of ownership of up to 9.9%. In July 2000, we waived 3.5% of our right for net proceeds of $75.4 million. On November 8, 2000 we took the decision not to exercise the remaining option.

In April 2000, Hunan Huajia, our 14.7% indirectly owned Chinese investee sold all of its assets to China Unicom and Hunan Huajia was liquidated. We also sold our 100% interest in CallMax, which held a national paging license in the Netherlands.

ACCOUNTING TREATMENT AND SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise indicated, all financial data and discussion herein is based upon financial statements prepared in accordance with Dutch GAAP. For a discussion of the principal differences between Dutch GAAP and U.S. GAAP, see Note 14 to our consolidated financial statements.

Investments

In accordance with Dutch GAAP, we consolidate revenues and expenses of each subsidiary that we have the ability to control. In this regard, we consolidate the results of MobiFon and Český Mobil. Investments, which are jointly controlled, are reported using the proportionate consolidation method. Under this method, our proportionate share of the assets, liabilities, income and expenses of the joint ventures are consolidated in our financial statements. In this regard, we proportionately consolidated the results of Telpart until June 30th 2002. Americel and Telet were proportionately consolidated up to March 30, 2001, the date of their sale and Enlaces up to December 24, 2001, the date we relinquished joint control. Investments over which the Company has significant influence are accounted for using the equity method. In July 2000, other partners and ourselves initiated common legal proceedings in order to invalidate certain changes to the ownership structure of Telpart, the consortium which holds our A-Band operations, effected by one of the partners which, we believe, contravened the general telecommunications law and breached certain agreements. Although we occupy one of three seats on Telpart’s Board of Directors, we ceased in July 2002 to have board representation at Telpart’s subsidiaries as a result of legal proceedings which we are vigorously contesting. We maintain that we have the legal right to joint control over these investments and are still pursuing legal proceedings to enforce this right but for which final judgments have not yet been issued. In light of these changes, we have ceased to proportionately account for these operations and account for our 48.9% investment in Telpart using the equity method starting July 2002. Telpart fully consolidates the results of Telemig Celular Participaçoes S.A., and Tele Norte Celular Participaçoes S.A., in each of which it has voting rights of 52.1% and 51.9%, respectively and equity interests of 19.9% and 19.3%, respectively.

Revenue Recognition

Revenues from airtime and roaming, including those billed in advance, are recognized when services are provided or when contracts expire in cases where services have not been used. Revenues from handsets and related equipment are recognized upon shipment except for those who use is restricted to the Company’s networks, which together with the related cost of equipment are deferred and amortized over the term of the contract. When handsets, related equipment and access to network are bundled with airtime, the revenue for the airtime is measured at the price of the airtime on a stand-alone basis. When prepaid cards are sold to dealers, the revenue from the airtime is measured at the face value of the time sold but such revenue is initially deferred until the airtime is actually used by the customer or the card expires. Commissions to dealers are classified within selling, general and administrative expenses.

Use of Estimates

The preparation of our consolidated financial statements in accordance with generally accepted accounting principles in Canada requires us to use estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Such estimate includes our assessment of the net realizable value of our investment held for sale. Actual results could differ from these estimates.

Our business is capital intensive and property plant and equipment and licenses had a carrying value as at December 31, 2002 of $1.2 billion. These long-lived assets are assessed for recoverability based on our business plans which include key assumptions and estimates regarding, among other items, interest rates, growth of the economies in which we operate, the renewal of our licenses, local tax rates, competition, foreign currency and cellular penetration rates. Changes in these key assumptions could have significant implications on our business plans.

Discontinued Operations

The results of our enhanced specialized mobile radio and specialized mobile radio operations which we refer to as ESMR/SMR and the results of our Brazilian operations have been reported as discontinued operations and are included in net loss but reported separately for current and prior periods. The consolidated balance sheet separately presents the current and long-term assets and liabilities related to the discontinued operations for prior periods.

For the year ended December 31, 2001, these results include the loss from ESMR/SMR operations to July 27, 2001, the date Dolphin voluntary petitioned for administration, and a loss we realized as a result of the deconsolidation of Dolphin due to the loss of control to the court appointed administrators.

Brazilian Activities Held for Sale

For the year ended December 31, 2002, the Company recorded an impairment of investment of $211.0 million in relation with its investment in Brazil. The Telpart results are accounted using the equity method, starting July 2002 as apposed to being proportionately accounted for the first six months of 2002 and in 2001.

U.S. GAAP Accounting Treatment

U.S. GAAP requires consolidation of subsidiaries controlled by us and the equity method of accounting for joint ventures and investees in which we have significant influence but not a controlling interest. Net loss and shareholders’ equity under the above presentations are the same.

In accordance with U.S. GAAP, the Brazil operations continued to be reported as continuing operations until the financial statements encompassing the date the decision to dispose of the operations were issued. The decision to dispose of the remaining Brazilian cellular operations occurred on March 5, 2002 and accordingly, these operations were presented as discontinued operations in the subsequent reporting periods starting in the three months ended March 31, 2002 whereas under Dutch GAAP these operations continued to be reported as continuing operations and proportionately consolidated until the loss of joint control which happened in the third quarter 2002 and accounted for as an equity investment for subsequent periods.

Basis of Presentation

The consolidated financial statements have been prepared on a going concern basis, which assumes we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the ordinary course of business. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we not be successful in our efforts to refinance debt, raise new financing and sell assets. (See “Liquidity and Capital Resources”.)

COMPOSITION OF OPERATING REVENUES AND EXPENSES

Cellular operations are the primary source of our revenues. Operating revenues include service revenues, as well as equipment revenues. Cellular service revenues primarily consist of variable airtime charges, in-bound interconnection charges and recurring fixed access charges. Equipment revenues consist of revenues from the sale of handsets. Equipment sales are not fundamental to our business. In fact, we generally offer handsets below cost, as an incentive for our customers to subscribe to our services, and these subsidies are accounted for as cost of revenues at the time of sale.

Our operations are capital intensive and our operating costs are composed of significant fixed costs with relatively low variable costs that are a function of the subscriber base level. Accordingly, subscriber growth is critical to the improvement of operating margins and results of operations.

Operating expenses include cost of revenues, selling, general and administrative expenses and depreciation and amortization expenses. Cost of revenues consists of fixed costs such as leased line charges, recurring spectrum fees, site rental and network maintenance, including overhead, as well as variable costs such as cost of equipment sold, and interconnection charges. Selling, general and administrative expenses consist primarily of salaries, wages and related benefits for selling, general and administrative personnel, advertising, promotional expenses, distribution costs, bad debt, corporate business development and other overhead expenses. Depreciation and amortization expenses consist primarily of depreciation recorded for our wireless telecommunication networks, as well as amortization of definite life intangibles such as wireless telecommunication license costs.

RESULT OF OPERATION
The following discussions compare the results of operations for the years ended December 31, 2002, December 31, 2001 and December 31, 2000.

Consolidated Results of Operations

For the years ended December 31,	2002			2001			2000
(in thousands of dollars)	$			$			$
Operating revenues		839,107			844,757			715,185
Total operating expenses		726,436			779,388			768,390
Operating income (loss)		112,671			65,369			(53,205	)
Interest expense		(88,986	)		(128,151	)		(86,646	)
Interest income		10,781			23,753			15,194
Foreign exchange loss		(4,435	)		(21,493	)		(16,882	)
Impairment of investment		(210,996	)		(36,483	)		—
Gain (loss) on investments		—			299,842			87,510
Loss on extinguishment of debt		(10,100	)		—			—
Income taxes recovery (expenses)		(32,543	)		(7,433	)		1,727
Minority interests		17,609			13,262			48,056
Income (loss) from continuing operations		(205,999	)		208,666			(4,246	)
Loss from discontinued operations		—			(442,036	)		(269,592	)
Net loss		(205,999	)		(233,370	)		(273,838	)

All subscriber numbers in the operating and financial review have been adjusted to reflect the discontinuation of Dolphin on July 27, 2001 and the loss of joint control of our Brazilian joint venture operations on July 2002. The year ended December 31, 2002, includes 6 months of operations of our Brazilian joint venture compared with 12 months the previous year.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

Revenues decreased to $839.1 million in 2002 from $844.8 million in 2001. The consolidation of Brazil for the six months in 2002 versus twelve months in 2001 accounted for $173.9 million of the decrease. This decrease was offset by MobiFon’s and Český Mobil’s continued growth which contributed $74.4 million and $103.7 million of the increase, respectively. During 2001, Enlaces contributed $9.9 million in revenues.

Total operating expenses decreased to $726.4 million in 2002 from $779.4 million in 2001. Included in total operating expenses are cost of revenues, which decreased to $321.8 million from $338.9 million. The part year consolidation of our Brazilian activities accounted for $64.6 million of the decrease and this was offset by a $28.7 million and a $23.7 million increase in cost of services in the Czech Republic and Romania, respectively, incurred in support of their revenue increase.

Selling, general and administrative expenses decreased from $254.8 to $214.4 million mainly due to the part year consolidation of our Brazilian activities, which accounted for $47.2 million of the decrease. MobiFon’s and Český Mobil’s cost remained stable in 2002 compared to 2001, as a result of cost control initiatives at both corporate and the operating subsidiaries.

Depreciation and amortization increased to $190.2 million in 2002 from $185.7 million in 2001, an increase of $4.5 million. A higher tangible asset base in Romania and in the Czech Republic contributed $11.5 million and $25.2 million to such increase, respectively, combined with a reduction of $30.7 million in our Brazilian activities resulting from the partial consolidation in 2002.

Interest expense decreased by $39.2 million to $89.0 million in 2002 mainly reflecting lower interest expense at the corporate level in 2002 as a result of the termination of interest charges in July 2001 on loans made to the Company in relation with the Dolphin discontinued operations. These loans contributed $32.2 million of interest in 2001. The variation also reflects the drawing by Český Mobil on their syndicated credit facility partially offset by a reduction of $7.6 million due to the part year consolidation of our Brazilian activities. The foreign exchange loss was $4.4 million in 2002, compared to $21.5 million in 2001. The 2002 loss is represented by losses in our Brazilian activities of $6.7 million combined with gains in Český Mobil of $4.0 million which primarily related to the appreciation of the Czech Koruna over the Euro, partially offset by a $1.9 million loss realized by MobiFon.

The 2002 results include the previously described impairment charge of $211.0 million related to Brazil compared with a gain of $263.4 million in 2001 where $205.2 million of such gain related to the ClearWave shares sold to TIW for inclusion in their Unit, $106.1 million gain for the disposition of the 16.3% equity interest in two Brazilian B-Band joint venture, $36.5 million loss related to the A-Band Brazilian activities, a loss of $9.3 million from the sale of W-Aura, a $5.6 million loss on our investment in Mexico and $4.1 million gain on other dispositions.

The loss on debt extinguishment relates to MobiFon’s refinancing of its long-term facility and consists of unamortized deferred financing costs in the amount of $5.2 million and additional interest paid and cancellation fees totalling $4.9 million

The income tax expense of $32.5 million relates to MobiFon which has generated net income and has utilized all its net operating loss carryforwards. We had available, as at December 31, 2002, net operating loss carry forwards in the amount of $233.4 million of which $61.0 million was from corporate which expire in 2009 and $172.4 million from Český Mobil which consists of $6.4 million, $90.7 million, $65.2 million and $10.1 million expiring in 2006, 2007, 2008 and 2009, respectively. We may be limited in our ability to use these loss carry forwards in any one year due to the uncertainty of generating sufficient taxable income and, as a result, the related future tax asset has been fully provided for by the valuation allowance.

Our share of losses allocated to minority interests amounted to $17.6 million in 2002, compared to $13.3 million in 2001. The 2002 minority interests is composed of our share of losses of subsidiaries attributed to minority interests in TIW Czech, partly offset by our share of earnings attributed to minority interests in MobiFon and ClearWave.

As a result of the foregoing, loss from continuing operations for the year ended December 31, 2002 was $206.0 million compared to and income of $208.7 million in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31, 2000

Revenues increased to $844.8 million in 2001 from $715.2 million in 2000. Brazilian activities contributed for a $42.9 million decrease. MobiFon’s continued growth contributed $64.7 million and Český Mobil, which had its first full year of operations in 2001, contributed $109.9 million of the increase.

Total operating expenses increased to $779.4 million in 2001 from $768.4 million in 2000. Included in total operating expenses are cost of revenues, which increased to $338.9 million from $300.4 million due to the decrease of $44.5 million in our Brazilian activities and to the $60.6 million increase in cost of service in the Czech Republic incurred in support of its revenue increase. Selling, general and administrative expenses decreased by $47.7 million to $254.8 million from $302.5 million in 2000. Brazilian activities, Corporate and MobiFon contributed $37.6 million, $4.7 million and $7.9 million to such decrease, respectively, combined with an increase of $2.5 million from Český Mobil.

Depreciation and amortization increased to $185.7 million in 2001 from $165.6 million in 2000, an increase of $20.1 million. The disposal of our B-Band operations accounted for $12.2 million of reduction combined with a higher tangible asset base in Romania and in the Czech Republic which contributed $11.8 million and $20.5 million to such increase, respectively.

Interest expense increased by $41.5 million to $128.2 million in 2001. Český Mobil accounted for almost all of the increase due to increased borrowings under its syndicated senior credit facility. Interest income increased to $23.8 million in 2001 from $15.2 million in 2000, primarily from our Brazilian activities. The foreign exchange loss was $21.5 million in 2001, compared to a loss of $16.9 million in 2000. The 2001 loss is a result of our Brazilian activities for $24.5 million attributable to the devaluation of the Brazilian currency over the U.S. dollar and the appreciation of the Czech Koruna over the Euro, which accounted for $6.8 million, partially offset by a $3.8 million loss realized by MobiFon.

Included in the gain on investments is a gain of $205.2 million resulting of the disposition of ClearWave shares sold for the TIW Units, $106.1 million gain on the disposition of the Brazilian B-Band operations, $36.5 million loss related to the A-Band Brazilian activities and a loss of $9.3 million from the sale of W-Aura, a $5.6 million loss on our investment in Mexico and $4.1 million gain on other dispositions. The 2000 results included gains on investments of $87.5 million, which included a $75.4 million gain realized for having waived our right to acquire 3.5% of the outstanding shares of 3G UK Holdings for equivalent proceeds.

Our share of losses allocated to minority interests amounted to $13.3 million in 2001, compared to $48.1 million in 2000. The 2001 minority interests is composed of our share of losses of subsidiaries attributed to minority interests in TIW Czech, partly offset by our share of earnings attributed to minority interests in MobiFon.

As a result of the foregoing, income from continuing operations for the year ended December 31, 2001 was $208.7 million compared to a loss of $4.2 million in 2000.

Our loss from discontinued operations is presented net of income tax recoveries of $30.7 million and $13.0 million in 2001 and 2000, respectively. For the year ended December 31, 2001, the loss from discontinued operations amounts to $442.0 million related to SMR/ESMR operations.

Net loss for the year ended December 31, 2001 was $233.4 million compared to $273.8 million in 2000.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Revenues increased to $715.2 million in 2000 from $498.2 million in 1999. The increase in the subscriber base of the Brazilian A-Band accounted for $102.1 million. MobiFon’s continued growth contributed $73.6 million and Český Mobil, which was launched in early 2000, contributed $34.0 million of the increase.

Total operating expenses increased to $768.4 million in 2000 from $504.3 million in 1999. Included in total operating expenses are cost of revenues, which increased to $300.4 million from $188.1 million due in part to the commercial launch of Český Mobil in March 2000. Selling, general and administrative expenses increased by $101.2 million to $302.5 million in 2000. Brazilian activities accounted for $36.1 million and Český Mobil’s launch in early 2000 accounted for $58.7 million of the increase.

Depreciation and amortization increased to $165.6 million in 2000 from $114.9 million in 1999, an increase of $50.7 million. The Brazilian activities accounted for $22.9 million combined with a higher tangible asset base in Romania which accounted for $13.7 million of the increase. The depreciation of the Czech Republic network assets commenced in 2000 and accounted for $22.0 million.

Interest expense increased by $5.0 million to $86.6 million in 2000. MobiFon’s higher level of borrowings under their credit facilities accounted for this increase. Interest income increased to $15.2 million in 2000 from $12.5 million in 1999, primarily due to the temporary cash surplus during the year at the corporate level, as well as the proceeds from the waiver of our rights in the U.K. UMTS operations. The foreign exchange loss was $16.9 million in 2000, compared to $42.4 million in 1999. The 2000 loss is a result of the devaluation of the Lei in Romania, which accounted for $6.5 million combined with a devaluation of the Brazilian currency.

In connection with the entry of new shareholders in 3G UK Holdings, in July 2000, we received $75.4 million and recognized a corresponding gain in exchange for waiving our right to acquire 3.5% of the outstanding shares of 3G UK Holdings. Included in the gain on investments is also the gain of $4.4 million recognized from the sale of the assets of our Chinese investee and the recovery of a loan previously written-down, for an amount of $6.2 million. The 1999 results included gains on investments of $37.8 million.

Due to the uncertainty of generating sufficient taxable income, the tax benefit of our losses has been fully provided for by the valuation allowance.

Share of losses allocated to minority interests amounted to $48.1 million in 2000, compared to share of earnings to minority interests of $10.0 million in 1999. The 2000 minority interests are composed of the share of losses of subsidiaries attributed to minority interests in TIW Czech, partly offset by the share of earnings attributed to minority interests in MobiFon.

As a result of the foregoing, loss from continuing operations for the year ended December 31, 2000 was $4.3 million compared to $100.9 million in 1999,

Loss from discontinued operations increased to $269.6 million for the year ended December 31, 2000 compared to an income of $10.7 million for the prior year period.

Net loss for the year ended December 31, 2000 was $273.8 million compared to $90.2 million in 1999.

MobiFon

For the years ended December 31,		2002		2001		2000
(in thousands of dollars)		$		$		$
Revenues
	Services		425,567		359,868		299,470
	Equipment		21,214		12,475		8,097
			446,781		372,343		307,567
	Cost of services		81,462		69,835		62,366
	Cost of equipment		39,160		27,236		18,347
	Selling, general and administrative expenses		94,613		88,836		96,735
Operating income before depreciation and amortization (1)			231,546		186,436		130,119
	Depreciation and amortization		89,439		77,791		65,965
Operating income			142,107		108,645		64,154

We use the term operating income before depreciation and amortization, also defined as EBITDA, which may not be comparable to similarity titled measures reported by other companies. Operating income before depreciation and amortization should not be considered in isolation or as an alternative measurement of operating performance or liquidity to net income (loss), operating income (loss), cash flows from operating activities or any other measure of performance under GAAP. We believe that operating income (loss) before depreciation and amortization is viewed as a relevant supplemental measure of performance in the wireless telecommunications industry.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

MobiFon’s service revenues increased to $425.6 million in 2002 from $359.9 million in 2001, reflecting the continued subscriber growth. MobiFon added 631,600 cellular subscribers, compared to 831,800 net additions in the same period in 2001 to reach 2,635,200 subscribers at as December 31, 2002 compared to 2,003,600 at the end of 2001.

Cost of service revenues decreased as a percentage of service revenues to 19.1% in 2002 compared to 19.4% in 2001 and was $81.5 million in 2002 compared to $69.8 million in 2001. The decrease as a percentage of service revenues was largely attributable to a lower proportion of interconnection costs associated with higher on network calling. The cost of equipment continues to exceed associated equipment revenues, consistent with our policy to sell equipment at prices that will attract new subscribers.

Selling, general and administrative expenses increased to $94.6 million in 2002 compared to $88.8 million in the previous year. However, as a percent of service revenue, selling general and administrative expenses decreased to 22.2% for 2002 compared to 24.7% for 2001 as a result of both the continued success from the implementation of a cost control program in 2001 and strong credit policies which reduced bad debt expense. MobiFon’s operating income before depreciation and amortization increased to $231.5 million in 2002 from $186.4 million in 2001 due to the above factors.

Depreciation and amortization increased to $89.4 million in 2002 from $77.8 million the previous year as a result of network expansion in Romania during 2002 and 2001 and due to the shortening of estimated lives on certain assets in the fourth quarter of 2002. As a result of the foregoing, the operating income increased to $142.1 million in 2002 from $108.6 million in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

MobiFon’s service revenues increased to $359.9 million in 2001 from $299.5 million in 2000, reflecting the continued subscriber growth. MobiFon added 831,800 cellular subscribers, compared to 469,700 net additions in the same period in 2000, to reach 2,003,600 subscribers at as December 31, 2001 compared to 1,171,800 at the end of 2000.

Cost of service revenues decreased as a percentage of service revenues to 19.4% in 2001 compared to 20.8% in 2000 and was $69.8 million in 2001 compared to $62.3 million in 2000. The decrease as a percentage of service revenues was attributable to continued tight control over operating costs and economies of scale. The cost of equipment continues to exceed associated equipment revenues, consistent with our policy to sell equipment at prices that will attract new subscribers.

Selling, general and administrative expenses decreased to $88.8 million in 2001 compared to $96.7 million in the previous year, as a result of both the continued success from the implementation of a cost control program in 2000 and strong credit policies which reduced bad debt expense. MobiFon’s operating income before depreciation and amortization increased to $186.4 million in 2001 from $130.1 million in 2000 due to the above factors.

Depreciation and amortization increased to $77.8 million in 2001 from $66.0 million the previous year as a result of network expansion in Romania during 2001 and 2000. As a result of the foregoing, the operating income increased to $108.6 million in 2001 from $64.2 million in 2000.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

MobiFon’s service revenues increased to $299.5 million in 2000 from $211.4 million in 1999, reflecting continued subscriber growth. MobiFon’s subscriber base increased to 1,171,800 at the end of 2000 from 702,100 at the end of 1999.

Cost of service revenues decreased as a percentage of revenues to 20.8% in 2000 compared to 24.0% in 1999 and was $62.4 million in 2000 compared to $50.7 million in 1999. Most of the decrease as a percentage of revenues was attributed to continued tight controls over operational expenses and economies of scale. The cost of equipment continued to exceed associated revenues, consistent with our practice to sell equipment at prices that will attract new subscribers.

Selling, general and administrative expenses remained stable at $96.7 million in 2000 compared to $95.7 million in the previous year, despite the growth of its subscriber base reflecting the implementation of a cost control program and a reduction in selling and marketing expenses compared to 1999. MobiFon’s operating income before depreciation and amortization increased to $130.1 million in 2000 from $54.9 million in 1999 due to subscriber growth.

Depreciation and amortization increased to $66.0 million in 2000 from $52.2 million the previous year as a result of the significant network expansion in Romania during late 1999 and 2000. As a result of the foregoing, the operating income increased to $64.2 million in 2000 from $2.7 million in 1999.

Český Mobil

For the years ended December 31,		2002			2001			2000
(in thousands of dollars)		$			$			$
Revenues
	Services		227,342			125,928			21,508
	Equipment		20,331			18,037			12,529
			247,673			143,965			34,037
	Cost of services		122,741			97,275			36,654
	Cost of equipment		25,594			22,323			15,969
	Selling, general and administrative expenses		79,143			65,921			63,418
Operating income (loss) before depreciation and amortization			20,195			(41,554	)		(82,004	)
	Depreciation and amortization		67,647			42,562			22,056
Operating loss			(47,452	)		(84,116	)		(104,060	)

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Český Mobil’s service revenues increased to $227.3 million in 2002 from $125.9 million in 2001, reflecting continued subscriber growth and the effect of the appreciation of the Koruna versus the U.S. dollar. Český Mobil added 321,400 net cellular subscribers, compared to 556,700 net additions in the same period in 2001, to reach 1,179,800 subscribers as at December 31, 2002 compared to 858,400 at the end of 2001.

Cost of service revenues increased by 26.2% to $122.7 million in 2002 compared to $97.3 million in 2001 in support of the 80.5% increase in service revenues. Cost of equipment continued to be greater than associated revenues consistent with our practice to sell equipment at prices to attract new subscribers.

Selling, general and administrative expenses increased by 20.1% to $79.0 million despite the 37.4% subscriber growth in 2002. Český Mobil’s operating income before depreciation and amortization increased to $20.2 million in 2002 from an operating loss before depreciation and amortization of $41.6 million in 2001 due primarily to revenue increases from subscriber growth coupled with economies of scale and tight controls over operating costs which constrained operating costs increases.

Depreciation and amortization increased to $67.7 million in 2002 from $42.6 million the previous year as a result of network expansion during 2002 and 2001. As a result of the foregoing, the operating loss decreased to $47.2 million in 2002 from $84.1 million in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Český Mobil’s service revenues increased to $125.9 million in 2001 from $21.5 million in 2000, reflecting continued subscriber growth and a full year of operations in 2001 compared to 10 months of commercial operations in 2000. Český Mobil added 556,700 net cellular subscribers, compared to 301,700 net additions in the same period in 2000, to reach 858,400 subscribers as at December 31, 2001 compared to 301,700 at the end of 2000.

Cost of service revenues increased by 165% to $97.3 million in 2001 compared to $36.7 million in 2000 in support of the 486% increase in service revenues. Cost of equipment continued to be slightly greater than associated revenues consistent with our practice to sell equipment at prices to attract new subscribers.

Selling, general and administrative expenses remained stable at $65.9 million despite the strong subscriber growth in 2001 due to tight cost controls compared to $63.4 million in the previous year. Český Mobil’s operating loss before depreciation and amortization decreased to $41.6 million in 2001 from $82.0 million in 2000 due primarily to subscriber growth.

Depreciation and amortization increased to $42.6 million in 2001 from $22.1 million the previous year as a result of network expansion during 1999 and 2000. As a result of the foregoing, the operating loss decreased to $84.1 million in 2001 from $104.1 million in 2000.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Český Mobil’s service revenues were $21.5 million in 2000, reflecting the launch of commercial operations in March 2000. Český Mobil’s subscriber base was 301,700 at the end of 2000.

Cost of service revenues was $36.7 million in 2000. Cost of equipment was higher than associated revenues consistent with our practice to sell equipment at prices to attract new customers and incentives offered on commercial launch.

Selling, general and administrative expenses were $63.4 million in 2000 compared to $4.7 million in the previous year, due to the commercial launch of operations in March 2000 and related subscriber and operations growth. Český Mobil’s operating loss before depreciation and amortization increased to $82.0 million in 2000 compared to $4.7 million in 1999 due to the above.

Depreciation and amortization increased to $22.1 million in 2000 from nil the previous year as a result of network expansion during 1999 and 2000. As a result of the foregoing, the operating loss was $104.1 million in 2000 compared to $4.7 million in 1999.

Brazil

For the years ended December 31,	2002		2001		2000
(in thousands of dollars)	$		$		$
Revenues
Services		134,737		287,272		296,152
Equipment		9,916		31,260		65,245
		144,653		318,532		361,397
Cost of services		39,119		80,880		89,281
Cost of equipment		13,712		36,519		72,567
Selling, general and administrative expenses		39,910		87,087		124,726
		92,741		204,486		286,574
Operating income before depreciation and amortization		51,912		114,046		74,823
Depreciation and amortization		33,084		63,742		75,949
Operating income (loss)		18,828		50,304		(1,126	)

On March 5, 2002, the Company approved a formal plan to dispose of its Brazilian cellular operations by way of a sale of its equity interest in the next twelve months. On March 26, 2003, the Company completed the sale for $70 million and no longer operates in the Brazilian telecommunications market.

The 2002 results include the results of our Brazilian cellular operations until July 1, 2002, at which time we ceased to proportionately consolidate the results of operations as we ceased to have board representation at Telpart’s subsidiaries although we maintained one of three seats on Telpart’s Board of Directors.

Liquidity and Capital Resources

The following table is a summary of our consolidated cash flows for the years ended December 31, 2002, 2001, and 2000

Cash Flow Data

For the years ended December 31,	2002			2001			2000
(in thousands of dollars)	$			$			$
Cash provided by operating activities		156,459			245,241			82,288
Cash used in investing activities		(250,861	)		(239,767	)		(418,252	)
		(94,402	)		5,474			(335,964	)
Cash provided by financing activities		76,836			154,395			813,736
Net effect of exchange rate translation on cash and cash equivalent		721			(18,150	)		(5,591	)
Net effect on cash and cash equivalents of the change in accounting from proportionate consolidation to equity of the Brazilian activities held for sale		(103,576	)		—			—
Cash provided by (used in) continuing operations		(120,421	)		141,719			472,181
Cash used in discontinued operations		—			(216,751	)		(328,443	)
Increase (decrease) in cash and cash equivalents		(120,421	)		(75,032	)		143,738
Cash and cash equivalents, beginning of period		167,052			242,084			98,346
Cash and cash equivalents, end of period		46,631			167,052			242,084

\

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

For the year ended December 31, 2002, operating activities provided cash of $156.5 million compared to $245.2 million for the same period last year. The decrease year over year is mainly expected by the inclusion of the Brazilian activities operating cash flows in 2001 whereas they are excluded in 2002 as the investment is accounted for using the equity method in 2002. This was partially offset by the $51.9 million increase in operating income before depreciation and amortization. Furthermore, results for 2001 include a significant increase in working capital mainly related to Český Mobil.

Investing activities used cash of $250.9 million for the year ended December 31, 2002, essentially for the expansion for cellular networks in Romania and the Czech Republic. This compares to cash used in investing activities of $239.8 million for the year ended December 31, 2001. MobiFon’s and Český Mobil’s operations utilized cash of $100.3 million and $142.6 million, respectively, for 2002 capital expenditures.

For the year ended December 31, 2002, financing activities generated cash of $76.8 million mainly explained by subsidiary’s shares issued to minority interests and net borrowings of debt of $29.9 million and $66.4 million, respectively, offset by subsidiary’s distributions paid to minority interests of $10.8 million and financing costs of $8.6 million. For the year ended 2001, cash provided by financing activities was $154.4 million mainly explained by proceeds from subsidiary’s shares issued to minority interests of $65.8, by borrowings of debt net of repayments of $125.6 million and by a repayment of short-term loan of $37.0 million.

Cash and cash equivalents as of December 31, 2002 totaled $46.6 million, including $0.2 million at the corporate level. As of December 31, 2002, total consolidated indebtedness, excluding intercompany indebtedness, was $0.8 billion, of which $267.7 million at MobiFon and $470.2 million at Český Mobil.

For 2001, cash used in discontinued operations was to $216.8 million. The use of cash in 2001 reflects the increase in operating loss before depreciation and amortization caused in Dolphin by lower service revenues and higher costs related to the build-out in the U.K., the launch of services in France as well as costs associated with network deployment in Germany.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Cash provided by operating activities was $245.2 million for the year ended December 31, 2001, compared to $82.3 million for 2000. The year-over-year increase is mainly attributable to increased operating income before depreciation and amortization at MobiFon and a reduction in Český Mobil’s operating loss before depreciation and amortization.

Investing activities used cash of $239.7 million during the year ended December 31, 2001, reflecting $369.8 million of cash used for acquisitions of property, plant and equipment and $23.2 million for the acquisition of additional shares of MobiFon. MobiFon, Český Mobil and the Brazilian activities operations accounted for $125.4 million, $161.1 million and $83.3 million of the capital spending, respectively. The proceeds of sale of Brazilian B-Band accounted for $153.3 million.

Financing activities generated cash of $154.4 million for the year ended December 31, 2001, reflecting $125.6 million, $65.8 million and $37.0 million by borrowing under our subsidiaries long-term debt facilities, from proceeds from investees’ shares issued to minority shareholders and the repayment of the short-term loans, respectively.

Cash used in discontinued operations increased to $216.8 million for the year ended December 31, 2001. The use of cash reflects the increase in operating loss before depreciation and amortization caused in Dolphin by lower service revenues and higher costs related to the build-out in the U.K., the launch of services in France as well as costs associated with network deployment in Germany.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Cash provided by operating activities in 2000 was $82.3 million compared to cash used in operating activities of $45.2 million in 1999. The difference is mainly due to an improvement in working capital partially offset by a reduction in operating income before depreciation and amortization.

Cash used in investing activities in 2000 amounted to $418.3 million. This amount mainly relates to the acquisition and build-out of property, plant and equipment in Brazil, MobiFon and Český Mobil for $143.1 million and $85.0 million and $239.5 million, respectively, partly offset by proceeds of $75.4 million from the waiver of our right to acquire a 3.5% interest in 3G Holdings.

Cash provided by financing activities in 2000 was $813.7 million compared to $303.1 million in 1999. Of the 2000 amount, $121.3 million related to proceeds of shares issued to minority interests, $528.6 million relates to increase in short-term loans, $163.8 million relates to increase of long-term debt, net of repayments, of which $187.2 million is attributable to Český Mobil.

Cash used in discontinued operations was $328.4 million for the year ended December 31, 2000 compared to $9.7 million for the corresponding prior period. The increase is mainly due to the build-out of the ESMR network in the U.K.

SOURCES OF FINANCING

At the corporate level, as at December 31, 2002, we had cash and cash equivalents of $0.2 million and we had amounts due to related parties of $942.0 million, consisting mainly of an intercompany loan to our parent company. From our inception to May 1997, substantially all of our cash requirements were met by the proceeds from private sales of equity securities, which were made pursuant to subscription agreements entered into over the 1994 to 1996 period, and totalled $240.0 million. Subsequent to that date, we were financed primarily by the parent company through intercompany loans.

On September 19, 2001, TIW issued $194.8 million of 14% Notes due December 30, 2003 as partial consideration for their senior discount notes. The 14% Notes are guaranteed by us.

TIW’s 14% Notes mature on December 30, 2003. Interest on the 14% Notes accrued at a rate of 14% per annum and is payable semi-annually on each June 30 and December 30. The interest payments on December 30, 2001 and June 30, 2002 were made by the issuance of $6.7 million and $14.1 million of additional 14% Notes. TIW has the option to redeem the 14% Notes, at any time, in whole or in part, at a price equal to 100% of the principal amount plus accrued and unpaid interest. Our guarantee is secured by a lien on the capital stock of TIW Latin America, a holding company which held our investments in cellular operations in Brazil and by a lien on capital stock of ClearWave held by us. The liens granted by us in favor of the holders of the 14% Notes rank second in priority to the lien it granted to the lenders under the corporate credit facility.

The 14% Notes contain mandatory redemption provisions, which will require their repayment upon the sale of our interests in either ClearWave as did our sale in March 2003 of our interest in Telpart. Furthermore, distributions from ClearWave will trigger mandatory repayments. The 14% Notes have covenants which, among others things, limit our ability to incur indebtedness, create liens and require TIW to make an offer to repurchase all or any part of the 14% Notes subsequent to a change in control. In addition, the 14% Notes prohibit us from reducing, under certain conditions, our ownership in ClearWave. On December 30, 2002, $5.0 million of additional 14% Notes were issued to holders and $10.0 million will be issued on June 30, 2003 unless, on or prior to such date, at least $72.4 million in principal amount of 14% Notes have been redeemed or repurchased. On May 30, 2003, TIW announced that it notified the trustee of the 14% Notes that it intends to redeem an additional $24.4 million in principal amount plus accrued interest on June 30, 2003 and accordingly will not proceed with the issuance of $10.0 million in additional 14% Notes.

In July 1999, we entered into a corporate credit facility, as a co-borrower with TIW, with certain financial institutions, providing for aggregate borrowing capacity of $140.0 million. Our corporate credit facility was amended on July 3, 2001 and subsequently on February 4, 2002, August 8, 2002 and December 6, 2002 resulting in the extension of the maturity to June 30, 2003. TIW made loan repayments during 2002 of $36.1 million bringing the amount available and fully drawn by TIW under the facility to $47.4 million. The facility is collateralized by substantially all of our assets and bears interest at U.S. base rate plus a margin of 8.36% or LIBOR plus a margin of 9.36%. Under the amended terms of the facility, any amount received by us and flowing from distributions paid by our Central and Eastern European operations, other than amounts representing ClearWave’s and our operational and investment requirements to June 30, 2003, will be used to further reduce the amount outstanding on the corporate credit facility. As a result of the sale of our Brazilian investments and the MobiFon transactions described below, the facility was repaid in full in April 2003.

During 2002, MobiFon approved aggregate distributions of $66.3 million consisting of dividends of $27.5 million and share repurchases of $38.8 million. ClearWave received $42.0 million of these distributions in 2002 and we received $34.0 million by way of the repayment of the inter-company demand loan and accrued interest thereto between us and ClearWave. On October 30, 2002, the shareholders of MobiFon approved distributions of up to $38.8 million by means of a share repurchase.

Shareholders can tender their shares between October 30, 2002 and June 30, 2003 in order to realize their pro-rata share of this distribution amount of which ClearWave’s share is $24.6 million and is included in the $42.0 million of distributions received by ClearWave in 2002. In the event not all MobiFon shareholders exercise their options to sell their entire pro-rata portion, any of the MobiFon shareholders shall have the right to buy-back the shares sold to MobiFon at the same purchase price by December 31, 2003. The effect of these distributions was to decrease our ultimate equity interest in MobiFon from 24.8% to 24.3%. MobiFon’s shareholders are not required to participate pro-rata in the share repurchase and ClearWave has also retained its right to buy-back the shares sold to MobiFon.

Accordingly, our ultimate ownership of MobiFon may vary between 24.3% and 24.8%, throughout the tender period, depending on the timing and the extent of each shareholder’s participation in the repurchase. As it is not determinable that all shareholders of MobiFon will participate pro-rata in the share repurchase, pending expiration of the tender period, distributions made through share repurchases have been accounted for in a manner similar to dividends declared by a subsidiary and the amount that MobiFon is committed to distribute to non-controlling interests is presented within current liabilities.

On March 19, 2003, we closed an agreement for the sale of 11.1 million shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then issued and outstanding share capital of MobiFon for a total cash consideration of $42.5 million. As a result of the above transactions, our ultimate ownership in MobiFon may be reduced from the pre share repurchase level of 24.8% down to between 22.0% and 22.5% depending on the outcome of the share repurchase.

At the operating company level, we seek, where possible, to finance the cash requirements of developing and expanding our operations on a project-by-project basis. Although projects are typically financed by contributions from our partners and us in the form of equity and shareholder advances, we seek to obtain third party financing after the initial stages of a project’s development. Sources of financing at the operating company level may include vendor financing provided by equipment suppliers, project financing from commercial banks and international financial institutions such as the European Bank for Reconstruction and Development, which we refer to as the EBRD, bank lines of credit and the sale of debt securities by the operating companies.

MobiFon

MobiFon’s cash requirements as at December 31, 2002 have been met by aggregate capital contributions of $270.6 million and borrowings under its bank facilities, net of repayments and capital leases, of $255.0 million and $12.7 million, respectively.

In September 1997, the EBRD arranged a $190.0 million loan facility for MobiFon. This EBRD facility included a $10.0 million subordinate loan bearing interest at 15% maturing in 2003, nine-year senior loans totalling $110.0 million bearing interest at LIBOR plus 3.25% and a $70.0 million eight-year syndicated senior loan bearing interest at LIBOR plus 3.05%. MobiFon entered into agreements, including interest rate swap agreements, pursuant to which $158.8 million of the above borrowings had effective fixed interest rates from 8.35% to 9.75% until April 2002

In January 1999, MobiFon closed a second long-term loan facility totalling $105.0 million, jointly arranged by ABN AMRO N.V. and the EBRD. This second EBRD facility comprised loans of $40.0 million and a $65.0 million syndicated export credit facility. Borrowings under this facility bore variable interest rates and were repayable in installments through 2006. MobiFon used the proceeds to complete the build-out of its cellular network and to pay $25.0 million to extend its ten-year license by five years to November 2011.

On August 27, 2002, MobiFon closed a $300 million senior loan facility. This new facility is composed of two tranches. Tranche I consists of a term loan of $238 million, fully drawn as at December 31, 2002, for which the proceeds were used to repay the interest and principal balance of the syndicated senior credit facilities entered into in 1997 and 1999 and the subordinated loans. A loss on extinguishment of debt of $10.1 million was recognized on early payment. Tranche II consists of a term loan of up to $62 million of which $17 million was drawn as at December 31, 2002. Each tranche is repayable in quarterly installments starting in January 2004 and maturing in October 2008. The interest rate on the facility is LIBOR + 3.5% up to December 31, 2003. Thereafter, the interest rate will range from LIBOR + 2.5% to LIBOR + 4.0% depending on certain financial ratios, including debt and capital ratios. As permitted by the loan agreement, the LIBOR portion of the interest rates on $87.3 million of Tranche I and $6.2 million of Tranche II have been fixed at 3.64% and 3.52% respectively.

Under the facility, MobiFon must comply with certain affirmative covenants such as the maintenance of certain financial covenants and ratios, including debt and capital ratios. The facility allows for distributions of cash provided from operations net of capital expenditures and scheduled debt service subject to MobiFon meeting certain financial ratios and maintaining minimum cash balances. To the extent such ratios are not met, a portion or all of these cash flows may be required to be used for mandatory prepayments of the facility. The facility is collateralized by a pledge of ours and of the minority interests’ shares in MobiFon and by substantially all of the assets of MobiFon. A commitment fee of 1% per annum is applicable to the unused Tranche II facility [$45 million at December 31, 2002] up to December 31, 2003 when the unused facility will expire under the credit agreement.

MobiFon entered into interest rate swap arrangements on notional principal amounts of $100 million and $30 million whereby the LIBOR portion of the interest on the related loan principal has been effectively fixed at 3.6% and 3.7%, respectively. The weighted average effective interest rate on the balance outstanding on this facility at December 31, 2002 is 6.9%.

MobiFon also has available $20.0 million of uncommitted operating capital facilities secured by a first right over the proceeds from any foreclosure of the pledge of MobiFon’s bank accounts.

Český Mobil

The cash requirements of Český Mobil through December 31, 2002 have been met primarily by shareholder contributions of $350.0 million and by borrowings under their senior secured syndicated credit facility and financing under supply contracts to be refinanced by the syndicated facility entered into on July 19, 2000 which using December 31, 2002 exchange rates, amount to $470.3 million.

In July 2000, Český Mobil entered into an agreement for a senior secured syndicated credit facility. The syndicated credit facility is composed of two tranches. Tranche A is in the form of a committed revolving credit facility converting to a term loan of up to €269.1 million and Koruna 3.8 billion, [totalling $407.0 million] carrying interest at a rate of EURIBOR plus 1.75% for Euro drawings and PRIBOR plus 1.75% for Koruna drawings, reimbursable by installments determined as a percentage of amounts drawn under the facility until June 2004 which will continue to be repaid until the maturity in December 2008.

Tranche B consists of a term loan of up to €26.6 million and Koruna 1.7 billion, [totalling $84.9 million] carrying interest at EURIBOR plus 2.25% for Euro drawings and PRIBOR plus 2.25% for Koruna drawings, reimbursable by installments determined as a percentage of amounts drawn under the facility starting in December 2008 until the maturity in December 2009. Drawings under either tranche must be on a dollar-for-dollar basis with the other tranche.

Český Mobil entered into interest rate and currency swaps arrangements pursuant to which €116.3 million [$122.0 million] of the Euro based borrowings as at December 31, 2002 are effectively Koruna based and, together with an additional 3.0 billion Koruna [$98.6 million] have effective fixed interest rates ranging from 8.59% to 9.98% until November 2005. Swaps have also been entered into on €71.7 million [$75.3 million] drawn which has the effect of fixing the Euro to Koruna conversion rate on the interest payments and changing the referenced interest rate from EURIBOR to PRIBOR. Interest on this €71.7 million draw has also been capped through the use of option agreements which are detailed as follows. €21.5 million [$22.6 million] and a further 287.6 million Koruna [$9.5 million] are subject to interest rate option agreements which provide that the PRIBOR component of the interest rate on these borrowings will not exceed 8.61%, until November, 2005; €50.2 million [$52.7 million] and 701.2 million Koruna [$23.3 million] are subject to interest rate option agreements which provide that the interest rate on these borrowings will not exceed 9.99%, until November, 2005. The effective weighted average interest rate on this credit facility is 7.0% at December 31, 2002 [8.0% in 2001].

Český Mobil used the funds drawn under its senior secured syndicated credit facility to finance the construction, operation, working capital, debt service and related requirements of their GSM network in the Czech Republic including the repayment of amounts financed under supply contracts with Siemens and Ericsson.

The facility is collateralized by a pledge of TIW Czech’s shares in Český Mobil and of substantially all of the assets of Český Mobil. Under this facility, Český Mobil must respect certain financial covenants and coverage tests. Furthermore, prior to each draw down, the ratio of senior debt to invested capital in Český Mobil must not exceed 60:40 or the total invested capital in Český Mobil will equal or exceed the Euro equivalent of $350.0 million. We and our partners have funded all of the required capital.

As a result of MobiFon’s and Český Mobil’s syndicated senior credit facilities, substantially all of ClearWave’s net assets are restricted, however, subject to fulfillment of certain conditions, cash distributions to shareholders are permissible under MobiFon’s credit facilities.

FUTURE CAPITAL REQUIREMENTS

We expect to have significant future capital requirements, particularly in relation to the expansion of our Czech Republic cellular network, the servicing of debt, the addition to capacity to our existing networks and the acquisition, if an option is exercised, of certain shares of Český Mobil owned by non-controlling interests. We intend to finance such future capital requirements from cash flow from operating activities, borrowing under our existing credit facilities, non-controlling shareholders’ funding under share subscriptions and through other externally generated funds such as the disposition of assets and the sale of debt and equity securities.

MobiFon’s future capital requirements will include debt repayment and network expansion, both of which are expected to be financed by cash flows from operations and by drawings on its senior facility. Český Mobil’s capital requirements will include the expansion of its cellular network and the financing of its losses. These requirements are expected to be financed by drawings under its senior secured syndicated credit facility and by way of shareholders’ subscriptions. As at December 31, 2002, our operations had purchase commitments of approximately $14 million with network equipment and systems support providers.

As of December 31, 2002, MobiFon is also committed to a frame leasing agreement with a national power supplier for 17 years or the end of the GSM license period whichever is shorter commencing in 2003, whereby the power supplier agreed to lease out 2 fiber optic strands over certain voltage poles and technical space to MobiFon, and MobiFon agreed to lease out communication capacity to the power supplier over a minor portion of the capacity of the enabled fiber. The leases payments and receipts, which individually are estimated to reach $5 million per annum by the end of the contract, are expected to offset one another such that minimal cash payments, if any, will be made by either party. The estimated cost to MobiFon to enable the entire leased fiber to be utilized is $8.5 million of which $3.4 million has been incurred as at December 31, 2002.

In the event there has not been an initial public offering of the shares of MobiFon by October 1, 2004, a holder of 14.4% of the shares of MobiFon may require us or ClearWave, at our option, to make an offer to acquire such minority shareholder’s shares. The purchase price of such shares will be the then fair market value as determined by an independent evaluator and shall be payable in cash or shares of the Company at our option. An additional 5.7% share ownership of MobiFon will be the object of a similar arrangement upon closing of the December 18, 2002 agreement to sell 11.1 million shares of MobiFon previously described.

We are a holding company with no material business operations, sources of income or operating assets of our own other than the shares of our subsidiaries and operating companies.

Our cash flow and, consequently, our ability to meet our debt service obligations is dependent upon the payment of funds by our subsidiaries in the form of loans, dividends, advances or otherwise. Under certain of our long-term debt agreements, we are subject to certain financial and negative covenants, including restrictions on our ability to incur indebtedness, pay dividends, make certain other payments, create liens, sell assets and engage in mergers. Restrictions also exist on the ability of operating our subsidiaries to transfer funds in the form of dividends, loans or otherwise.

As at December 31, 2002, due to the short-term maturities of our parent’s 14% Notes, which we guarantee, our committed cash obligations for the upcoming twelve months exceed our committed sources of funds and our cash and cash equivalents on hand. In addition, it will be necessary for us to comply with our debt covenants in order to have access to our financing arrangements according to the terms of the related agreements. As a result, there is significant uncertainty as to whether we have the ability to continue as a going concern. In addition to the available sources of funds from MobiFon’s distributions and the sale of 5.7% of our shares of MobiFon, we will therefore continue to review opportunities to repay intercompany indebtedness in order for TIW to refinance their corporate debt by way of raising new financing and selling assets. We regularly evaluate opportunities for the expansion of our operations or for further investments in wireless telecommunications projects, including increases in ownership in our current operations. The future capital requirements related to such investment activities, if any, will be incremental to the anticipated capital contributions to existing operations, and therefore additional corporate financing will be required to fund such development projects or to further support current operations. The ability to generate short-term and long-term capital in the future is dependent upon many factors, including general economic conditions in the countries where we conduct our principal operations and financial market conditions.

EXCHANGE RATES

We report our financial statements in U.S. dollars. We operate in different currency jurisdictions and virtually all of our revenues and a substantial portion of our operating expenses are in currencies other than our reporting currency. As a result, we are exposed to exchange rate risk. Any significant change in the relevant exchange rates, whether of a short-term nature or a steady long-term change in relative valuation, could have a material effect on our financial statements. In Romania, significant devaluation relative to the U.S. dollar has occurred in the past and may occur again in the future. In addition, we experience fluctuations in our results of operations solely as a result of exchange rate fluctuations. Where possible, we adjust our tariffs for the effects of inflation, one of the factors affecting relative exchange rates. However, we may be unable, due to regulatory restrictions and market conditions, to adjust our local tariffs in response to changes in the exchange rates relative to our reporting currency and may therefore be unable to protect ourselves from exchange rate fluctuations.

Until December 31, 2002, Romania was defined for accounting purposes as a highly inflationary economy and the U.S. dollar, our functional currency, was used as their measurement currency. In 2003, an assessment as to which currency is MobiFon’s functional currency will be made. MobiFon’s borrowings are in U.S. dollars and tariffs are adjusted to account for the effects of the devaluation of the Romanian lei versus the U.S. dollar due to inflation. Consequently, exchange fluctuations have not had a material effect on our consolidated results in the past. However, Romania is currently a second wave European Union accession candidate and it is foreseeable that the Euro takes prominence in Romania in the future. Consequently, depending on the result of our assessment and the progression of Romania towards the Euro, exchange rate fluctuations may have a more significant impact on our results of operations in the future.

At the corporate level, we may elect to enter hedging arrangements from time to time in the future, although we are not currently party to any such transaction and do not have a policy to systematically hedge against foreign currency fluctuations. At the operating company level, we seek to reduce our foreign exchange exposure arising from transactions through a policy of matching, where possible, assets and liabilities. In some cases, we may borrow in U.S. dollars or Euro because it is either advantageous for the operating companies to incur debt obligations in such currency or because such currency denominated borrowings are the only funding source available to the operating company at the time. Český Mobil has hedged a portion of its variable rate debt, by entering into interest rate and cross currency swaps in which Český Mobil has agreed to exchange, at specified intervals, the difference between fixed and variable interest on €116.3 million and 3.0 billion Koruna of variable rate debt until November 2005.

Additionally, these swaps have fixed the foreign currency rates on the Euro based debt from the Euro to Koruna. A swap was entered into on a further €71.7 million of borrowings which fixed the foreign currency rate on the interest payments from Euro to Koruna and changed the referenced interest rate from EURIBOR to PRIBOR.

Interest on this €71.7 million draw has also been capped through the use of option agreements which are detailed as follows: €21.5 million [$22.6 million] and a further 287.6 million Koruna [$9.5 million] are subject to interest rate option agreements which provide that the PRIBOR component of the interest rate on these borrowings will not exceed 8.61%, until November 2005; €50.2 million [$52.7 million] and 701.2 million Koruna [$23.3 million] are subject to interest rate option agreements which provide that the interest rate on these borrowings will not exceed 9.99%, until November 2005. Český Mobil also entered into a 6-month Euro to Koruna cross currency swap arrangement for €60.0 million [$63.0 million] on May 11, 2002 and upon expiration, Český Mobil entered into a similar swap arrangement for a further 6 months. On May 12, 2003, this swap expired and a similar new 12 month swap was arranged. In January 2003, a further €40.0 million of Český Mobil’s Euro based borrowing exposure was hedged in this manner and Český Mobil purchased a currency call option to hedge currency risk on the principal of an additional €10.0 million of Euro based debt. For the remaining amounts, we have decided to accept for the time being the inherent currency risk, principally because of the relatively high cost of buying, or the inability to buy, forward cover in currencies of the countries in which we operate.

INFLATION

Inflation has not been a material factor affecting our business to date. Although system equipment costs may increase over time as a result of inflation, we expect that the cost of subscriber equipment will decrease over time as volume increases, although there can be no assurance that this will be the case. General operating expenses such as salaries, employee benefits and lease costs are, however, subject to normal inflationary or deflationary pressures.

In Romania and certain other countries, the effects of inflation may become significant to our operations. Where permitted, and subject to competitive pressures, we intend to increase our tariffs to account for the effects of inflation. However, in those jurisdictions where tariff rates are regulated or specified in the license, such as in India, we may not be able to mitigate the impact of inflation on our operations.

REGULATORY ENVIRONMENT

We operate in regulated industries and in the normal course of business, our operational subsidiaries’ actions are subjected to scrutiny by various regulatory agencies, which, from time to time, will initiate administrative proceedings against us for alleged breaches to different regulations including arrangements for interconnection fees. We believe that the ultimate outcome of any of such proceedings currently in progress will not be materially adverse to us.

MobiFon and Český Mobil hold one of three licenses issued to provide nationwide GSM-based cellular telecommunications services in their respective countries. Our operational subsidiaries are committed to pay minimum annual spectrum fees of approximately $10.0 million. Starting in 2003, the new Romanian regulatory act will provide for other fees based on a percentage of revenue and other bases that have yet to be determined. The conditions to the various license agreements require our operational subsidiaries to substantially meet the deployment plans set out in their license agreement and, in certain instances, to provide a specified level of services in their respective coverage areas. The Company’s future performance may be affected by factors such as political changes including government actions relating to its licenses, changes in technology and competition.

ITEM 6 – DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

Directors

     The following table and notes thereto set out:

(1)	the name of each director appointed by unanimous written consent of the shareholders of TIWC to serve for an indefinite term;
(2)	the principal occupation or employment of each director; and
(3)	their respective periods of service as a director.

No terms of service contracts exist with the directors.

Name and Position or Office with TIWC	Principal Occupation or Employment	Director Since
MARIO BERTRAND Supervisory Director	President and Director of Telesystem (Antilles) Corporation N.V.	June 2002
ANDRÉ GAUTHIER Supervisory Director	Vice-President and Chief Financial Officer, Telesystem International Wireless Inc.	June 1999
JAMES J. JACKSON Supervisory Director	Chief Financial Officer, ClearWave and MobiFon	August 2001
MARGRIET ZWARTS Supervisory Director	General Counsel and Secretary, Telesystem International Wireless Inc.	January 1999

Mario Bertrand is President and Director of Telesystem (Antilles) Corporation N.V. since January 2003. Prior to January 2003, Mr. Bertrand was President of New Ventures of TIW since May 19999 and prior to that and prior to May 1999, Mr. Bertrand was President, Europe of TIW, and, prior to May 1997, held the position of Managing Director, Europe with Telesystem International Wireless Services since 1995. Mr. Bertrand was a guest lecturer at the École nationale d’administration publique and the Sorbonne, both in Paris, in 1994, President and Chief Executive Officer of Télé-Métropole Inc. from 1991 to 1993, President and Chief Executive Officer of M. Stores Inc., in 1990 and served as Chief of Staff to the Premier of Quebec from 1986 to 1990. Mr. Bertrand holds a Bachelor of Arts degree from the University of Montreal.

André Gauthier is Vice-President and Chief Financial Officer of TIW. Prior to June 2001, Mr. Gauthier was TIW’s Vice-President, Finance, and Treasurer. Prior to May 1999, Mr. Gauthier was TIW’s Vice-President and Controller, and, prior to May 1997, was Controller of Telesystem International Wireless Services since 1994. From 1988 to 1994, Mr. Gauthier held successive positions, including Director, Finance and Administration, at Cosmair Canada Inc., a cosmetics manufacturer. Prior to 1988, Mr. Gauthier was a Senior Manager at Ernst & Young in Montreal. Mr. Gauthier holds a Bachelor’s degree in Business Administration from the École des Hautes Études Commerciales in Montreal and is a member of the Canadian Institute of Chartered Accountants.

James J. Jackson was appointed as ClearWave’s Chief Financial Officer in September 1999, Český Mobil’s Chief Financial Officer in April 2000 and MobiFon’s Senior Vice President and Chief Financial Officer in 1997. From 1995 to 1997 Mr. Jackson was Vice Chairman, Finance, for Quadrant Amroq Bottling Co. Ltd., a venture capital firm holding the franchise for Pepsi Cola in Romania. Prior to that, he worked for fifteen years at Alcan Aluminium Ltd., including as President of one of its venture capital groups. Mr. Jackson is a member of the Institute of Chartered Accountants of Canada and is a registered Certified Public Accountant in the United States. Mr. Jackson left ClearWave, Český Mobil and MobiFon in February 2001 and returned to ClearWave as Chief Financial Officer in July 2001. Mr. Jackson now also holds the position of Chief Financial Officer at MobiFon.

Margriet Zwarts is General Counsel and Secretary of TIW. Prior to her appointment in March 1998, she was in private practice, initially with the law firm Martineau Walker and from 1989 with the law firm Ogilvy Renault, where she was a partner from 1991. She holds Bachelors degrees in Civil Law and in Common Law from McGill University and a Master’s degree in English Literature from the University of Toronto. She is a member of the Quebec Bar and the Law Society of Upper Canada.

Executive Officers

     The following table sets out information concerning TIWC’s corporate officers, including name and position with TIWC.

Name	Position
Cornelis van Ravenhorst	Managing Director
Yves Normand	Managing Director

     Cornelis van Ravenhorst has been an officer and acting corporate secretary of TIWC since November 1997 and was appointed a managing director of TIWC in January 1998. Prior to joining TIW in December 1996, Mr. Van Ravenhorst was a legal and financial consultant for BCE Inc. and Bell Canada International Inc. between 1993 and 1995. Mr. Van Ravenhorst was a practicing lawyer in Amsterdam since 1981 and was first admitted to the Quebec Bar in 1993 and The Netherlands Bar in 1981. Mr. Van Ravenhorst holds a masters degree of comparative law from the Southern Methodist University, Dallas, Texas and a doctorate from the University of Brabant at Tilburg, The Netherlands.

     Yves Normand has been a financial officer of TIWC since October 2000 and was appointed a managing director of TIWC in April 2001. Mr. Normand joined TIW in July 1996 as a controller and also held other financial positions at TIW. Prior to July 1996, Mr. Normand was a controller at Biochem Immunosystems Inc. in Montreal and was a senior manager at Deloitte & Touche from 1988 to 1993. Mr. Normand holds a bachelors degree in Business Administration from the École des Hautes Études Commerciales in Montreal and is a member of the Canadian Institute of Chartered Accountants.

Board Practices

     Directors. The Company is managed by a Board of Management, all members of which are employees of the Company. The activities of the Board of Management are generally supervised by the Board of Supervisory Directors, none of whom are employees of the Company. No Managing Director may be resident of Canada, whereas not more than half of the members of the Board of Supervisory Directors may be residents of Canada. In the event that a Managing Director has a conflicting interest with the Company, the Articles of Association require that the Company is to be represented by such member of the Board of Management or the Board of Supervisory Directors as the Board of Supervisory Directors shall designate for this purpose. The number of Supervisory Directors and Managing Directors is determined from time to time by the shareholders. Every Supervisory Director shall retire no later than on the day on which the annual general meeting of shareholders is held in the financial year in which he reaches the age of seventy-two. Managing Directors and Supervisory Directors may at any time be suspended or dismissed. Managing Directors may also at any time be suspended by the Board of Supervisory Directors. The remuneration for the Supervisory Directors and the remuneration and further conditions of employment for the Managing Directors is determined by the annual general meeting of shareholders.

     The audit committee. The audit committee is responsible for making recommendations to the board of management regarding the selection of independent auditors, reviewing the results and scope of the audit and other services provided by our independent accountants and reviewing and evaluating our audit and control functions. The supervisory board is currently exercising the functions of the audit committee.

     The compensation committee. The compensation committee is responsible for reviewing and, as it deems appropriate, recommending to the supervisory board with respect to members of the board of management, and to the board of management with respect to other managerial employees, policies, practices and procedures relating to compensation and the establishment and administration of employee benefit plans. The compensation committee is responsible for making recommendations to the board of management in relation to any employee stock option, stock purchase or other rights plans, and advises and consults with our officers as may be requested regarding managerial personnel policies. The Supervisory Board is currently exercising the functions of the compensation committee.

COMPENSATION OF DIRECTORS AND OFFICERS

     For the year ended December 31, 2002, an aggregate amount of $843,458 including salary, bonuses and benefits, was paid by us and our subsidiaries to members of our Management Board and members of our Supervisory Board including salary, bonuses and benefits paid to such members in the capacity of director or executive officer of our subsidiaries. Certain of the members of our Supervisory Board act in their capacity of Supervisory Board members as part their employment by our parent companies, as such, they receive no compensation from us or our subsidiaries for acting in such capacity.

     In addition, members of our Management Board and of our Supervisory Board are participants in TIW’s employee stock option plan. During the year ended December 31, 2002, Members of our Management Board and of our Supervisory Board who are not employees of our parent companies received an aggregate of 2,960,603 options to acquire common shares of TIW exercisable at prices ranging from US$0.43 to Cdn$1.90 and expiring in 2007. These numbers include options conditionally granted in November 2001 and in November 2002 and confirmed in May 2002 and May 2003 respectively. In May, 2003, TIW announced a consolidation of its common shares on the basis of one post-consolidation share for every five pre-consolidation shares. The number of options and the exercise prices of options under the TIW employee stock option plan will be adjusted to reflect the effect of the consolidation.

ITEM 7 – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

TIW

Major Shareholders

The following table and notes thereto set forth certain information regarding ownership of our common shares, being our only class of voting securities.

	Expressed as a % of all
Name of Beneficial Owner	Outstanding Common Shares
Telesystem International Wireless Inc.		19.7
Telesystem (Antilles) Corporation N.V		80.3
Total		100.0

Related Party Transactions

     During the financial year ended December 31, 2002, neither we nor our subsidiaries entered into any transaction with an insider or associate of ours, with any proposed nominee as a director or any associate or affiliate of any such insider or proposed nominee, that has or would materially affect us or any of our subsidiaries, except for transactions entered into under the following agreements:

1. An amended and restated credit agreement dated as of February 4, 2002, among us, Telesystem (Antilles) Corporation N.V. and Telesystem International Wireless Corporation N.V. as borrowers and Canadian Imperial Bank of Commerce, Caisse de dépôt et placement du Québec, Chase Securities Inc., (an affiliate of J.P. Morgan Partners, LLC), Deutsche Bank of Canada and National Bank of Canada as lenders for our senior credit facility as amended on August 15, 2002 and December 6, 2002. In March 2003, we repaid in full the amount outstanding under the facility and the facility was terminated.

ITEM 8 – FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

     Our consolidated financial statements for the fiscal years ended December 31, 2000, 2001 and 2002 and the auditors’ report signed by Ernst and Young Accountants are presented at Item 18 of this report.

LEGAL PROCEEDINGS

     We are involved in litigation, along with our subsidiaries and operating companies, from time to time in the ordinary course of our businesses. In management’s opinion, the litigation in which we or our subsidiaries or operating companies are involved at the date hereof is not material to our financial condition, results of operations or cash flow.

SIGNIFICANT CHANGES

Sale of Minority Interest in MobiFon and MobiFon Share Repurchase

     In 2002, MobiFon has initiated a share repurchase of up to US$ 38.8 million of which ClearWave’s share is US$ 24.6 million. Shareholders of MobiFon have until June 30, 2003, to tender their shares in order to realize their pro-rata share of this distribution amount. To date, MobiFon has already repurchased shares tendered by ClearWave for proceeds of US$ 24.6 million.

     On March 19, 2003 we announced that we had closed the sale of 11,135,555 shares of MobiFon currently owned by ClearWave, representing 5.75% of the then issued and outstanding share capital of MobiFon for a total cash consideration of US$ 42.5 million.

     ClearWave used substantially all of the proceeds from the sale and from the previously mentioned share repurchase by MobiFon to repay intercompany demand notes due to us and pay related interest. We used the proceeds from the repayment of those notes by ClearWave to reduce indebtedness at the corporate level. Depending on the timing and extent of each MobiFon shareholder’s participation in the share repurchase, ClearWave’s ultimate ownership of MobiFon is expected to be between 56.58% and 58.90%.

Sale of Brazilian Operations and Repayment of Credit Facility

     On March 26, 2003 we sold our indirect 49% interest in Telpart Participações S.A (Telpart) to Highlake International Business Company Ltd., an affiliate of Opportunity Fund. Telpart controls Telemig Celular Participações S.A. and Tele Norte Celular Participações S.A., holding companies of two cellular operators in Brazil. Outstanding litigation between us and the Opportunity group of companies has also been settled as part of this transaction. The total cash consideration received by us was US$ 70 million of which US$ 5 million was paid by Telemig and Tele Norte for release of claims for technical services. Part of the net proceeds from the sale were used to repay in full the TIW senior corporate credit facility under which we are a co-borrower.

Partial Redemption of 14% Senior Guaranteed Notes of TIW

     In April and June 2003, the amount of 14% senior guaranteed notes of TIW outstanding was reduced from 220.6 to $148.2 following certain redemption at par by TIW. We are a guarantor of the 14% senior guaranteed notes.

Refinancing of 14% Senior Guaranteed Notes

On June 25, 2003, TIW announced that its indirect subsidiary, MobiFon Holdings B.V., had priced a new US$ 225,000,000 issue of senior notes due 2010. The notes bear interest of 12.5% and are being offered at 97.686% of par for a yield to maturity of 13%. The closing of the offering is expected on or around June 27, 2003.

MobiFon Holdings, incorporated in the Netherlands, holds TIW’s 57.1% indirect equity interest in MobiFon, a major provider of GSM wireless telecommunications services in Romania. Substantially all of the net proceeds from the offering, after establishment of a debt service reserve account of US$ 28.1 million, will be used to repay intercompany loans made to MobiFon Holdings by ClearWave, MobiFon Holding’s direct parent company. ClearWave will use the funds it receives from MobiFon Holdings to repay outstanding indebtedness to TIW and to make distributions to its shareholders. TIW will apply the funds it receives from ClearWave and its available cash resources to repay in full its outstanding 14% senior guaranteed notes of which we are a guarantor. The MobiFon Holdings notes have not been registered under the U.S. Securities Act of 1933 and may not be offered or sold in the U.S. absent an applicable exemption from the registration requirements of the Act. The MobiFon Holdings notes will be offered in other jurisdictions in accordance with rules permitting offerings to professional investors or on a restricted basis.

ITEM 9 – THE OFFER AND LISTING

OFFER AND LISTING DETAILS

     Not applicable.

PLAN OF DISTRIBUTION

     Not applicable.

MARKETS

Guarantee of 14% Senior Notes

     On September 19, 2001, TIW issued $195 million in 14% senior guaranteed notes. We are a guarantor of the these 14% notes and our guarantee is secured by liens on certain of our assets. The 14% notes are due December 30, 2003 with interest payable semi-annually on June 30 and December 30 of each year commencing on December 30, 2001. The first two interest payments, payable in cash or kind, were paid by TIW through the issuance of additional notes. Other interest payments are payable only in cash. In April, 2002 TIW exchanged the 14% notes pursuant to the registration rights agreement relating to such notes. The new 14% notes have been registered under the Securities Exchange Act of 1933 on a registration statement on Form F-4, which was declared effective March 29, 2002.

     There is currently no established trading market for the 14% notes. There can be no assurance as to (1) the liquidity of any such market that may develop, (2) the ability of the holders of such securities to sell them or (3) the prices at which any such sales may be made. TIW does not presently intend to apply for a listing of the 14% notes on any national securities exchange or to quote them on a quotation system. The record holder of the 14% notes is a nominee of The Depository Trust Company in New York, New York.

ITEM 10 – ADDITIONAL INFORMATION

SHARE CAPITAL

     Not applicable.

MEMORANDUM AND ARTICLES OF ASSOCIATION

     The Company is a public company with limited liability (“naamloze vennootschap”) organized under the laws of the Netherlands. Our objects and purposes as set forth in article 3 of our Articles of Association are, (i) to organize, to assist and to participate in the formation and organization of enterprises, companies, partnerships, associations, and other feasible and suitable

legal entities (ii) to finance enterprises and companies, and furnish guarantees and other financing facilities, and to provide indemnification, for the benefit of enterprises and corporations in which the Company has, directly or indirectly, an investment and for third parties, (iii) to obtain financing for the Company and for enterprises and corporations in which the Company has, directly or indirectly, an investment and for third parties, (iv) to redeem, to pay off, to fulfill and to repurchase, as appropriate, notes, bonds, debentures, stock or other securities, (v) to manage, operate and supervise enterprises and corporations, (vi) to obtain, to own, to alienate, to manage and to exploit immovable property and assets in general, (vii) to acquire, to own, to transfer, to exploit and to license in and to license out intellectual property rights and (viii) to do anything in connection with and conducive to the above. The Company is registered under number 33238401 with the Trade Register of Amsterdam and our Articles of Association are publicly available there. The Articles of Association may only be amended at any general meeting of shareholders by a majority of the votes cast.

     Directors. The Company is managed by a Board of Management, all members of which are employees of the Company. The activities of the Board of Management are generally supervised by the Board of Supervisory Directors, none of whom are employees of the Company. No Managing Director may be resident of Canada, whereas not more than half of the members of the Board of Supervisory Directors may be residents of Canada. In the event that a Managing Director has a conflicting interest with the Company, the Articles of Association require that the Company is to be represented by such member of the Board of Management or the Board of Supervisory Directors as the Board of Supervisory Directors shall designate for this purpose. The number of Supervisory Directors and Managing Directors is determined from time to time by the shareholders. Every Supervisory Director shall retire no later than on the day on which the annual general meeting of shareholders is held in the financial year in which he reaches the age of seventy-two. Managing Directors and Supervisory Directors may at any time be suspended or dismissed. Managing Directors may also at any time be suspended by the Board of Supervisory Directors. The remuneration for the Supervisory Directors and the remuneration and further conditions of employment for the Managing Directors is determined by the annual general meeting of shareholders.

     Shares. The Company has one class of stock, being registered ordinary shares. Each share confers the right to cast one vote. All outstanding shares are, when issued and paid for, fully paid and non-assessable. General meetings will be convened by the Board of Management or the Board of Supervisory Directors. The convocation shall be given not later than on the 15th day prior to the meeting. The Company is required to hold an annual general meeting of shareholders within 6 months after the end of each financial year of the Company. There are no limitations under Dutch law or in the Company’s Articles of Association on the right of persons who are not citizens or residents in the Netherlands to hold or vote shares in the Company.

     Subject to certain restrictions contained in Dutch law and the Company’s Articles of Association, the Board of Management may cause the Company to purchase its own fully-paid shares up to 10% of the outstanding shares of capital stock, based upon nominal value, at the time of purchase. Such purchases may be made only upon authorization of shareholders, which authorization is valid for a maximum period of eighteen months and must include the number of shares to be acquired, the way in which they may be acquired and the limits within which the purchase price may be determined.

     Shares of the Company’s authorized but not-issued capital stock may be issued at such times and on such conditions as may be authorized by the shareholders at a general meeting or by another body of the Company if authorized by the shareholders. Such authorization may be given for a maximum period of five years. The shareholders have preemptive rights with regard to new shares to be issued, pro rata based on the number of their shares. Preemptive rights may be limited or precluded by resolution of a general meeting of shareholders or by another body of the Company designated in this respect by resolution of the general meeting for a fixed period of time not exceeding five years.

MATERIAL CONTRACTS

     The following is a list of each material contract, other than contracts entered into in the ordinary course of business, to which we or our subsidiaries are a party, for the two years preceding publication of this document:

1.	Mutual Release dated March 26, 2003 by and among TIW and certain of its subsidiaries, Highlake International Business Company Ltd., Opportunity Fund and CVC/Opportunity Equity Partners L.P. providing for the settlement of certain outstanding litigation and certain potential claims between the parties.
2.	Loan Agreements between ClearWave and us, and ClearWave and TIWC, representing advances made by TIW and TIWC to finance ClearWave’s development costs. As at March 31, 2003, an aggregate amount of $54.1 million in advances were made to ClearWave, bearing an annual interest rate of 14% and repayable on demand. These advances are convertible into class A subordinate voting shares of ClearWave subject to corporate and regulatory approvals;
3.	Exit Deed dated March 19, 2003 among EMP, TIW, TIWC and us providing for certain exit rights granted to Emerging Market Partnerships in connection with their investment in MobiFon;
4.	License awarded to Český Mobil to establish and operate a public mobile telecommunication network according to the GSM standard dated June 17, 2002;
5.	License awarded to Český Mobil to establish and operate a public mobile telecommunication network according to the VmTS standard dated June 20, 2002;
6.	Loan Agreement between MobiFon S.A. and European Bank for Reconstruction and Development dated August 27, 2002;
7.	Loan Agreement between MobiFon S.A. and Nordic Investment Bank dated August 27, 2002;
8.	Loan Agreement between MobiFon S.A. and Export Development Bank Canada dated August 27, 2002;
9.	Share Retention and Subordination Deed between MobiFon S.A., certain of its direct and indirect shareholders, Export Development Canada, Nordic Investment Bank and European Bank for Reconstruction and Development dated August 27, 2002.

EXCHANGE CONTROLS

     There are currently no limitations, either under the laws of the Netherlands or in our Articles of Association, on the rights of non-residents of the Netherlands to hold or vote our shares other than those that apply to holders that are resident in the Netherlands. Cash distributions, if any, payable in Euros on our shares may be officially transferred from the Netherlands and converted into any other currency without Dutch legal restrictions, except that, for statistical purposes, any payments in excess of €50,000 must be reported by us to the Dutch Central Bank. Cash distributions, if any, on our shares will be paid in U.S. dollars converted at the rate of exchange at the close of business on the date fixed for that purpose by the board of management in accordance with our Articles of Association.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

     The following is a summary of the principal U.S. federal income tax considerations applicable to an investment in TIW Notes by U.S. holders who hold such securities as capital assets within the meaning of the U.S. Internal Revenue Code of 1986, as amended. For purposes of this discussion, the term “U.S. holder” means a beneficial owner of TIW Notes that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any State or the District of Columbia, (iii) an estate the income of which is includable in gross income for U.S. federal income tax purposes regardless of its source, or (iv) a trust the administration of which is subject to the primary supervision of a United States court and for which one or more U.S. persons have the authority to control all substantial decisions. If a partnership holds TIW Notes, the U.S. federal income tax treatment of a partner generally depends upon the status of the partner and the activities of the partnership. We based this summary on the Internal Revenue Code, Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect on the date hereof and all of which are subject to change, which change may be retroactive and may affect the tax consequences described herein.

     This summary is for general information only and does not take into account the individual circumstances of any particular investor. Therefore, investors who are U.S. holders are strongly urged to consult their own tax advisors with respect to the tax consequences of an investment in the TIW Notes based on their particular circumstances, including any consequences of an investment in TIW Notes arising under state or local tax law or foreign tax laws of jurisdictions outside of the United States, including Canada and The Netherlands.

The TIW 14% Senior Guaranteed Notes

     The 14% senior guaranteed notes bear OID for U.S. federal income tax purposes. Accordingly, each U.S. holder of 14% senior guaranteed notes generally will be required to include OID in income as it accrues under a constant yield method in advance of cash payments attributable to such income, regardless of whether the U.S. holder is a cash or accrual basis taxpayer.

     The amount of OID with respect to each 14% senior guaranteed notes will be the excess of the stated redemption price at maturity of such 14% senior guaranteed note over its issue price. The stated redemption price at maturity of the 14% senior guaranteed notes includes all cash payments, including stated interest, due under the 14% senior guaranteed notes at or before their stated maturity. At the time the 14% senior guaranteed notes were originally issued, we took the position that the issue price of the 14% senior guaranteed notes was their face amount. The adjusted issue price of the 14% senior guaranteed notes is affected by the issuance of additional 14% senior guaranteed notes. Generally, the issuance of additional 14% senior guaranteed notes is not treated as a payment in respect of the 14% senior guaranteed notes; rather, on the issue date of any additional notes, the aggregate adjusted issue price of notes outstanding on that date is reallocated among the outstanding notes and the newly issued additional notes. Consequently, the adjusted issue price of newly issued additional 14% senior guaranteed notes is an allocable portion of the adjusted issue price of the then outstanding 14% senior guaranteed notes. The stated redemption price at maturity of the 14% senior guaranteed notes include all cash payments, including stated interest, due under the notes at or before their stated maturity.

     The timing and amount of payments on the 14% senior guaranteed notes will be subject to various contingencies that could affect the yield and maturity of the 14% senior guaranteed notes for U.S. federal income tax purposes and the resulting OID includible by a U.S. holder. At the time the 14% senior guaranteed notes were originally issued, we took the position, based on applicable Treasury regulations, that such contingencies should not be taken into consideration in determining the amount of OID on the 14% senior guaranteed notes as of their original issue date. This position was based on the conclusions that:

(i)	the requirement to issue additional 14% senior guaranteed notes on December 30, 2002 and June 30, 2003 did not have as a principal purpose the avoidance of OID provisions of the Internal Revenue Code, and
(ii)	in any other case, the likelihood, as of the date on which the 14% senior guaranteed notes were issued, of the particular contingency occurring was remote and that it was significantly more likely than not that we would not be required to make the payments that would be required if the contingencies did in fact occur.

     However, it is possible that the Internal Revenue Service could successfully assert that either or both of the foregoing conclusions is incorrect, in which case, the treatment of a U.S. holder would differ from that described above and, in particular, the amount of OID that a U.S. holder would be required to include in income in respect of the 14% senior guaranteed notes would be increased. In addition, if a contingency with respect to a 14% senior guaranteed note actually occurs, contrary to the assumption made, then, solely for purposes of computing the yield and maturity of the 14% senior guaranteed notes, the 14% senior guaranteed notes would be treated as retired and then reissued on the date of the change in circumstances for an amount equal to their adjusted issue price on that date. U.S. holders should consult their own tax advisors as to the consequences in the event that our conclusions on which our position is based are incorrect or that any of the relevant contingencies in fact occurs.

     Notwithstanding our position described in the previous paragraph that certain contingencies should not be taken into account in determining the amount of original issue discount on the 14% senior guaranteed notes, certain of those contingencies in fact

have occurred. We paid interest on outstanding notes due on the December 30, 2001 and June 30, 2002 interest payment dates in additional notes in lieu of cash and we issued additional notes on December 30, 2002. Further, additional interest accrued on outstanding 14% senior guaranteed notes during periods beginning on March 18, 2002, April 22, 2002 and July 6, 2002 due to provisions of the registration rights agreement. As a result, 14% senior guaranteed notes outstanding on each of those dates generally will be treated, solely for purposes of determining the amount of original issue discount on these 14% senior guaranteed notes, as having been retired and reissued on each of those dates for an amount equal to their adjusted issue prices on those dates, taking into account the changed circumstances. U.S. holders should consult their own tax advisors as to the consequences of the occurrences of those contingencies.

     U.S. holders who acquire TIW Notes with acquisition premium, amortizable bond premium or market discount should consult their tax advisors regarding their TIW Notes, including the availability of certain elections.

     A U.S. holder’s adjusted tax basis in a TIW Note will, in general, equal the holder’s cost for the TIW Note, increased by any amounts included in income as OID or market discount and reduced by any amortized bond premium and any cash payments, regardless of whether such payments are denominated as interest or principal. Upon the sale, exchange or retirement of a TIW Note, a U.S. holder will generally recognize capital gain or loss (except to the extent of accrued market discount that has not previously been included in income) equal to the difference between the amount realized on the sale, exchange or retirement and the U.S. holder’s adjusted tax basis in the TIW Note.

     U.S. holders of TIW Notes will be treated as actually receiving any Canadian withholding taxes paid by the Company with respect to a TIW Note (as well as any additional amounts in respect of Canadian withholding taxes), and, subject to complex limitations, a U.S. holder may be eligible for a foreign tax credit or deduction for such withholding taxes.

Passive Foreign Investment Company Considerations

     The Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by U.S. persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended December 31, 2002 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.

Backup Withholding and Information Reporting

     A U.S. holder generally is subject to information reporting requirements with respect to payments on TIW Notes made in the United States and to the proceeds from the sale or other disposition of TIW, unless such holder is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact. In general, if a non-corporate U.S. holder subject to information reporting fails to furnish a correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements, federal backup withholding tax at the applicable statutory rate may apply to amounts paid to such holder. The backup withholding tax is not an additional tax and may be credited against a U.S. holder’s regular U.S. federal income tax liability or refunded by the Internal Revenue Service, as applicable.

DIVIDENDS AND PAYING AGENTS

     Not applicable.

STATEMENT BY EXPERTS

     Not applicable.

DOCUMENTS ON DISPLAY

     Any documents referred to in this Annual Report may be inspected at our corporate offices which are located at World Trade Center, Strawinskylaan 707, 1077 XX Amsterdam, The Netherlands. You may read and copy annual reports, current reports and other information we file with the SEC at the SEC’s public reference room at 450 Fifth Street, NW, Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information concerning the public reference room. We file our annual reports, current reports and other information electronically with the SEC. You may access information about us on the SEC’s website at www.sec.gov.

ITEM 11 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

     We have used voting shares and bank and vendor credit facilities to finance our operations. These on-balance sheet financial instruments expose us to interest rate risk, foreign currency exchange rate risk and market price risk. Additionally, we have commitments under supply contracts, interest swaps, interest caps and currency swaps. These off-balance sheet items also create foreign currency exchange rate risk exposure.

     The carrying amounts of cash and cash equivalents, trade debtors, trade creditors and accruals, income value added taxes payable approximate their fair values due to the short-term nature of these instruments. Cash equivalents consist of term deposits and highly liquid debt instruments purchased with maturity of three months or less. The fair value of distribution payable to minority interests is not determinable because of the uncertainty as to the timing of payment and the extent of participation of non-controlling parties in the MobiFon share repurchase. The fair value of the amount due to parent and affiliated companies is not determinable because it cannot be determined when it will be reimbursed. The fair value of the portion of the MobiFon’s secured senior credit facility for which the interest rate has been fixed approximates $94.8 million. The fair value of the sale and lease back financing in MobiFon is not determinable because of the rarity of similar transaction in Romania. The carrying amounts of other long-term debt approximate their fair values because their interest rates fluctuate with market interest rates or are similar to interest rates currently available to the Company.

     As at December 31, 2002, most of our outstanding financial obligations in monetary terms, other than related party indebtedness, were of a variable-rate nature. However, MobiFon and Český Mobil use interest swap agreements to hedge some interest rate exposure associated with variable-rate on-balance sheet financial instruments. We have not entered into any such arrangements for the purposes of trading or speculation. We have entered into hedging arrangements in the Czech Republic to systematically hedge against foreign currency exchange rate risks on portions of long-term debt denominated in Euro. In certain circumstances, we may decide to accept the inherent currency risk, principally because of the relatively high cost of buying, or the inability to buy, forward cover in currencies of the countries in which we operate. We do not anticipate any near-term changes in the nature of our market risk exposures or in management’s objectives and strategies with respect to managing such exposures. Additionally, we believe that, to some extent, the mix of currencies in which we conduct our businesses and the geographic spread of our operations reduce the overall sensitivity of our results of operations to specific exchange rate fluctuations.

     Foreign currency translation adjustments for subsidiaries domiciled in non-highly inflationary countries are recorded to consolidated shareholders’ equity specifically. In Romania, a highly inflationary country, we record re-measurement gains and losses to the consolidated statements of income (loss). For the year ended December 31, 2002, our subsidiary in Romania recorded net foreign exchange losses of $1.9 million.

     The following table provides information about our market risk exposure associated with fluctuations in interest rates and foreign currency exchange rates. The information in the table pertains to corporate and all fully consolidated subsidiaries. The table presents principal cash flows and related interest rates by year of maturity for our bank and vendor credit facilities in effect as at December 31, 2002. The table excludes amounts related to facilities that had not been drawn upon as at December 31, 2002 and amounts due to parent and affiliated companies which have no redemption scheme. For the interest rate swap agreements, the table presents notional amounts and the related reference interest rates by year of maturity. Fair values included herein, as at December 31, 2002, have been determined based on:

• the carrying value for bank and vendor credit facilities

• estimates obtained from dealers to settle interest rate and cross currency swap agreements

Expected Maturities (in thousands of dollars)

																									Total		Fair
																									due at		Value
				2003			2004			2005			2006			2007			2008			There-after			maturity		12/31/02
Interest Rate Exposure
Long-Term Debt:
Fixed rate principal repayment					—			9,350			14,025			18,700			23,375			28,050			—			93,500		94,818
Average interest rate on loans outstanding					7.13	%		7.13	%		7.13	%		7.13	%		7.13	%		7.13	%		—			—		—
Variable rate principal repayment					—			30,119			79,745			105,729			144,250			170,886			73,872			604,601		604,601
Average interest rate on
loans outstanding					4.83	%		4.83	%		4.83	%		4.84	%		4.85	%		4.88	%		5.33	%		—		—
Swaps and Options:
Variable to Fixed Interest Rate Swaps:
		Notional principal amount			228,603			215,603			196,103			71,500			39,000			—			—			—		(15,784	)
		Average pay rate			6.05	%		6.19	%		6.45	%		3.62	%		3.62	%		—			—			—		—
		Average receive rate			2.81	%		2.90	%		3.05	%		1.39	%		1.39	%		—			—			—		—
EURIBOR to PRIBOR Cross-Currency Swap and Caps:
	Notional principal amount				75,287			75,287			75,287			—			—			—			—			—		(385	)
			Average pay rate (based
			on current PRIBOR)		4.43	%		4.43	%		4.43	%		—			—			—			—			—		—
			Average receive rate (based on current EURIBOR)		4.88	%		4.88	%		4.88	%		—			—			—			—			—		—
	Cap on pay rate				9.84	%		9.84	%		9.84	%		—			—			—			—			—		—
	Fixed Euro to Koruna Exchange Rate				33.95			33.95			33.95			—			—			—			—			—		—
	Cross Currency and Interest Rate Swaps:
		Notional principal amount			121,989			121,989			121,989			—			—			—			—			—		(30,427	)
		Average pay rate			9.59	%		9.59	%		9.59	%		—			—			—			—			—		—
		Average receive rate			4.88	%		4.88	%		4.88	%		—			—			—			—			—		—
		Fixed Euro to Koruna Exchange Rate			34.54			34.54			34.54			—			—			—			—			—		—
Koruna-denominated Interest Rate Swaps and Caps:
		Notional principal amount			23,280			23,280			23,280			—			—			—			—			—		(155	)
		Average pay rate			4.76	%		4.76	%		4.76	%		—			—			—			—			—		—
		Average receive rate			4.52	%		4.52	%		4.52	%		—			—			—			—			—		—
	Cap on pay rate				9.99	%		9.99	%		9.99	%		—			—			—			—			—		—
		Notional principal amount			9,549			9,549			9,549			—			—			—			—			—		—
	Interest rate cap				10.36	%		10.36	%		10.36	%		—			—			—			—			—		—
Capital Leases:
Principal repayment					—			12,700			—			—			—			—			—			12,700		—
Average fixed rate of
interest					32.33	%		32.33	%		—			—			—			—			—			—		—
Foreign Currency Exchange Rate Exposure
Long-Term Debt:
Euro
		Variable rate			—			9,689			38,509			50,931			72,049			80,891			24,255			276,324		276,324
		Average interest rate			4.88	%		4.88	%		4.88	%		4.89	%		4.91	%		4.96	%		5.33	%		—		—
Czech Koruna
		Variable rate			—			4.280			17,011			22,498			31,827			41,545			49,617			166,778		166,778
		Average interest rate			4.69	%		4.69	%		4.70	%		4.72	%		4.75	%		4.83	%		5.02	%		—		—

																Total		Fair
																due at		Value
		2003		2004		2005		2006		2007		2008		There-after		maturity		12/31/02
Forward Exchange Contract:
Principal amount
	Fixed Euro to Koruna		62,948		—		—		—		—		—		—		—		1,541
	Exchange Rate		30.80		—		—		—		—		—		—		—		—

ITEM 12 — DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

PART II

ITEM 13 — DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.

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

None.

ITEM 15 — CONTROLS AND PROCEDURES

     We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

     Within the 90-day period prior to the filing of this annual report on Form 20-F, an evaluation was carried out by our management, under the supervision, and with the participation, of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14). Based on that evaluation, the principal executive officer and principal financial officer concluded that such disclosure controls and procedures were adequate and effective and designed to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.

     There have been no significant changes in our internal controls or other factors which could significantly affect internal controls subsequent to the date of the evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.

ITEM 16 [RESERVED]

     Not applicable.

PART III

ITEM 17 — FINANCIAL STATEMENTS

     Not applicable.

ITEM 18 — FINANCIAL STATEMENTS

Financial Statements of TIWC

     Presented below are the Consolidated Financial Statements of TIWC, including the notes thereto, as of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001 and 2000, together with the auditors’ report thereon.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED BALANCE SHEETS
After Appropriation of Net Result

		2002			2001
		$			$
As at December 31,
[In thousands of U.S. dollars]
ASSETS [Note 1]
Fixed assets
	Goodwill and Licenses [Note3]		144,406			311,216
	Tangible assets [Note 4]		1,021,840			1,160,640
	Investments [Note 5]		79,990			9,067
	Deferred income tax assets [Note 9]		—			18,029
	Deferred financing cost		18,989			18,344
Total fixed assets			1,265,225			1,517,296
Current assets
	Cash and cash equivalents		46,631			167,052
	Trade debtors [Net of Allowance for Doubtful Accounts of $7,503, 2001 - - $8,510]		53,865			90,106
	Inventories		10,248			26,032
	Prepaid expenses		21,115			22,668
	Deferred income tax assets [Note 9]		1,010			3,548
	Other current assets		14,346			18,882
Total current assets			147,215			328,288
Total assets			1,412,440			1,845,584
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
Current liabilities
	Trade creditors and accruals		114,966			166,352
	Income and value added taxes payable		5,459			1,465
	Deferred revenues		38,468			34,002
	Distribution payable to minority interests [Note 5]		13,400			—
	Amounts due to related parties [Note 6]		943,182			954,598
	Current portion of long-term debt [Note 6]		—			77,297
Total current liabilities			1,115,475			1,233,714
Non-current liabilities
	Long-term debt [Note 6]		737,981			773,405
	Share of liabilities of certain investees		4,096			5,317
	Deferred income tax liabilities [Note 9]		5,211			3,548
	Other non-current liabilities		11,349			3,822
Total non-current liabilities			758,637			786,092
Total liabilities			1,874,112			2,019,806
Shareholders’ deficiency [Note 7]
	Share capital		47,611			40,364
	Share premium		281,397			281,397
	Deficit		(1,044,443	)		(838,444	)
	Cumulative translation adjustment		(2,569	)		(80,967	)
Total shareholders’ deficiency			(718,004	)		(597,650	)
	Minority interests		256,332			423,428
Total group deficiency			(461,672	)		(174,222	)
Total liabilities and shareholders’ deficiency			1,412,440			1,845,584

Commitments and contingencies [Notes 1, 11 and 13]

Subsequent events [Note 16]

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED STATEMENT OF LOSS
After Appropriation of Net Result

	2002			2001			2000
	$			$			$
For the years ended December 31,
[In thousands of U.S. dollars]
Revenues		839,107			844,757			715,185
Cost of revenues		321,788			338,944			300,140
Selling, general and administrative expenses [Note 10]		214,478			254,867			302,568
Depreciation and amortization [Note 10]		190,170			185,577			165,682
Operating income (loss)		112,671			65,369			(53,205	)
Interest expense [Note 10]		(75,801	)		(82,028	)		(81,613	)
Interest expense to affiliated companies [Note 6]		(13,185	)		(46,123	)		(5,033	)
Interest income		10,781			23,753			15,194
Foreign exchange loss		(4,435	)		(21,493	)		(16,882	)
Impairment of investment [Note 13 and 16]		(210,996	)		(36,483	)		—
Gain (loss) on investments [Note 5]		—			299,842			87,510
Loss on extinguishment of debt [Note 6]		(10,100	)		—			—
Income (loss) from continuing operations before income taxes and minority interests		(191,065	)		202,837			(54,029	)
Income tax recovery (expense) [Note 9]		(32,543	)		(7,433	)		1,727
Income (loss) before minority interest		(223,608	)		195,404			(52,302	)
Minority interests		17,609			13,262			48,056
Income (loss) from continuing operations		(205,999	)		208,666			(4,246	)
Loss from discontinued operations [Note 13]		—			(442,036	)		(269,592	)
Net loss		(205,999	)		(233,370	)		(273,838	)

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONSOLIDATED STATEMENT OF CASH FLOWS
After Appropriation of Net Result

		2002			2001			2000
		$			$			$
For the years ended December 31,
(in thousands of U.S. dollars)
OPERATING ACTIVITIES
Income (loss) from operations			(205,999	)		208,666			(4,246	)
Depreciation and amortization			190,170			185,577			165,682
Accreted interest on long-term debt			1,984			2,394			550
Impairment of investment			210,996			36,483			—
Minority interests			(17,609	)		(13,262	)		(48,056	)
Gains (loss) on investments			—			(299,842	)		(87,510	)
Other non cash items			—			—			15,061
Changes in operating assets and liabilities:
	Trade debtors		(9,811	)		(8,841	)		(34,532	)
	Inventories		(647	)		(3,809	)		(9,709	)
	Prepaid expenses and other current assets		2,029			2,265			(26,954	)
	Trade creditors and accruals		(20,752	)		122,069			95,713
	Deferred revenues		6,098			13,541			16,289
Cash provided by operating activities			156,459			245,241			82,288
INVESTING ACTIVITIES
Acquisition of tangible assets			(250,861	)		(369,839	)		(467,550	)
Increase of ownership in subsidiaries [Note 5]			—			(23,239	)		(17,519	)
Proceeds from sales of investments [Note 5]			—			153,311			75,366
Increase in other non-current assets			—			—			(8,549	)
Cash used in investing activities			(250,861	)		(239,767	)		(418,252	)
FINANCING ACTIVITIES
Increase in (repayment of) short-term loans			—			(36,987	)		528,586
Proceeds from subsidiary’s shares issued to minority interests, net of issue costs			29,930			65,799			121,321
Subsidiary’s distributions paid to minority interests [Note 5]			(10,798	)		—			—
Proceed from long-term debt			333,557			168,805			280,352
Repayment of long-term debt			(267,207	)		(43,222	)		(116,523	)
Deferred financing cost			(8,646	)		—			—
Cash provided by financing activities			76,836			154,395			813,736
Net effect of exchange rate translation on cash and cash equivalent			721			(18,150	)		(5,591	)
Net effect on cash and cash equivalent of the Brazilian activities to be disposed of			(103,576	)		—			—
Cash provided by (used in) continuing operations			(120,421	)		141,719			472,181
Cash used in discontinued operations			—			(216,751	)		(328,443	)
Increase (decrease) in cash and cash equivalent			(120,421	)		(75,032	)		143,738
Cash and cash equivalents, beginning of period			167,052			242,084			98,346
Cash and cash equivalents, end of period			46,631			167,052			242,084

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 1 Description of Business and Going Concern Uncertainty

The Company, either directly or indirectly, develops, acquires and operates wireless telecommunications networks. The Company currently has cellular operations in Romania, the Czech Republic and India. During 2001, the Company discontinued its ESMR/SMR services in Western Europe. The Company also sold its B-Band cellular joint venture operations in Brazil on March 30, 2001 and on March 5, 2002, adopted a formal plan to dispose of its A-Band cellular operations in Brazil. [See Notes 13 and 16].

The Company expects to have significant future capital requirements, particularly in relation to the expansion of the Czech Republic cellular network, the servicing of its debt, the addition of capacity to its existing networks and to acquire, if options are exercised, a certain number of shares of its operating subsidiaries owned by non-controlling interests. The Company intends to finance such future capital requirements from cash flow from operating activities, borrowings under its existing credit facilities, non-controlling interests’ funding under shareholders’ subscription and through other externally generated funds such as the disposition of assets and the sale of equity securities. The ability to generate sufficient short-term and long-term capital in the future is dependent upon many factors, including general economic conditions in the countries where the Company conducts its principal operations and financial market conditions.

As at December 31, 2002, due to the maturity of the Corporate Credit Facility on June 30, 2003 of Telesystem International Wireless Inc., [“TIW”] the parent Company of TIWC, and the maturity of the TIW’s 14% Senior Guaranteed Notes on December 30, 2003, the committed cash obligations of TIW for the upcoming twelve months exceed the committed sources of funds and TIW’s cash and cash equivalents on hand. In addition, it will be necessary for TIW to comply with the covenants to have access to its financing arrangements according to the terms of the related agreements. As a result, there is significant uncertainty as to whether TIW will have the ability to continue as a going concern. Subsequent to year end, the Corporate Credit Facility, to which the Company was a co-borrower was fully repaid. (See Note 16) However, the Company depends on continued support from TIW, and acts as Guarantor of 14% Senior Guaranteed Notes (the “14% Notes”) issued by TIW and consequently, there is significant uncertainty as to whether the Company will have the ability to continue as a going concern. In addition to the available sources of funds from the MobiFon transactions described in Note 5b and the proceeds from the sale of investments and the planned issuance of Senior Notes by MobiFon Holdings B.V. described in Note 16, TIW continues to review opportunities to refinance its corporate indebtedness, raise new financing and sell assets.

The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the ordinary course of business. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities including investment held for sale that may be necessary should the Company not be successful in its efforts to refinance its corporate indebtedness, raise new financing and sell assets.

The Company’s future performance may also be affected by other factors such as political changes including government actions relating to its licenses and local taxes, changes in technology, competition, inflation and foreign exchange fluctuations.

Note 2 Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with accounting principles generally accepted in the Netherlands [Dutch GAAP]. To improve presentation, certain modifications have been made to the prescribed legal format of the consolidated balance sheets and statements of loss. As further described in Note 14, these accounting principles differ in certain respects from those that would have been followed had these financial statements been prepared in conformity with accounting principles generally accepted in the United States and related rules and regulations adopted by the United States Securities and Exchange Commission. The preparation of financial statements by management in accordance with generally accepted accounting principles requires the selection of accounting policies from existing acceptable alternatives, the summary of significant accounting policies is as follow:

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (CONT’D)

INVESTMENTS

Investments over which the Company exercises control are consolidated. Investments, which are jointly controlled, are included using the proportionate consolidation method. Under this method, the Company’s proportionate share of the assets, liabilities, income, expenses and cash flows of its joint ventures are consolidated in the Company’s financial statements. Investments over which the Company has significant influence are accounted for using the equity method. Other long-term investments are stated at cost, less provisions for losses in value that are other than temporary. Investments held for sale are accounted for at the lower of their carrying value and estimated net realizable value.

The effect of the change in the Company’s equity interest as a result of the shares issued by subsidiaries to minority interests enters into the determination of consolidated net income (loss).

The following table summarizes, as at December 31, 2002 and 2001 the Company’s principal subsidiaries and investees, grouped by business segments, along with the accounting treatment for these operations:

			2002				2001
			Ultimate				Ultimate
			Equity Interest /	Accounting			Equity Interest /	Accounting
Company			Voting Rights	Treatment			Voting Rights	Treatment
Central / Eastern Europe
ClearWave N.V. (Holding) (“ClearWave”) [Notes 5 [b]]			45.5% / majority	Consolidation			45.5% / majority	Consolidation
	MobiFon S.A. (Romania) (“MobiFon”)		53.4% / majority	Consolidation			28.9% / majority	Consolidation
	TIW Czech N.V. (Holding) (“TIW Czech”)		20.7% / majority	Consolidation			10.4% / majority	Consolidation
		Český Mobil a.s. (Czech Republic) (“Český Mobil”)	19.8% / majority	Consolidation			10.1% / majority	Consolidation
Brazil (held for sale) [Notes 13 and 16]
	Telpart Participações S.A. (Holding)		48.9% / significant					Proportionate
	(“Telpart”) (A-Band) (1)		Influence	Equity			48.9% / joint	consolidation
		Telemig Celular Participações S.A.	9.7% / majority		(1	)	9.5% / majority		(1	)
		Tele Norte Celular Participações S.A.	9.5% / majority		(1	)	9.5% / majority		(1	)

(1) Telpart has majority voting rights in these investees and they are consolidated at the Telpart level; Telpart’s results are accounted for using the equity method, starting July 2002, in the Company accounts as opposed to being proportionately accounted for the first six months of 2002 and in 2001.

USE OF ESTIMATES

The preparation of the Company’s consolidated financial statements in accordance with Dutch GAAP requires management to use estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Such estimate includes the Company’s assessment of the net realizable value of its investment held for resale. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of term deposits and highly liquid debt instruments purchased with a maturity of three months or less, and are considered to be cash equivalents for cash flow reporting purposes.

INVENTORIES

Inventories consist of telecommunications equipment held for resale and are stated at the lower of cost, determined on a first-in first-out basis, and net realizable value.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (Cont’d)

TANGIBLE ASSETS

Tangible assets are recorded at cost and are amortized over their estimated useful lives using the straight-line method over the following periods:

Buildings	20 years
Network equipment and infrastructure	10 years
Computer equipment and software	3 to 5 years
Other equipment	3 to 5 years
Leasehold improvements	Term of the lease

The Company undertook a review of the remaining useful lives of certain of its assets based on the current and expected future technical condition and utility of these assets. As a result effective October 1, 2002, the Company changed the estimated useful lives of certain of these assets reported with network equipment and with computer equipment and software, which resulted in an increase in depreciation expense in 2002 of approximately $3.0 million including $1.6 million of assets write-down.

The costs of maintenance and replacement of minor items of property is charged to maintenance expense. Renewal and improvements are capitalized.

Tangible assets acquired through business acquisitions are recorded at the fair value at the date of acquisition. Interest is capitalized during the construction of the Company’s network by allocating a portion of borrowing cost to the expenditures incurred on assets under construction.

GOODWILL AND LICENCES

Licenses are stated at cost. Licenses and subscribers acquired through business combinations are recorded at the fair value at the date of acquisition. Licenses are amortized using the straight-line method over periods of up to 20 years.

Goodwill, representing the excess of the cost of business acquisitions over the fair value of the identifiable net assets acquired, is amortized over a period of up to 20 years. On an ongoing basis, management evaluates the carrying value of goodwill for possible impairment. Such evaluation compares current and anticipated non-discounted cash flows before interest charges from related operations to the unamortized goodwill balance, over its remaining life, and considers operating trends and other relevant factors.

AMOUNTS DUE FROM AND TO RELATED PARTIES

Amounts due from and to related parties are stated at face value.

FINANCING COSTS

Share and equity instrument issue costs are recorded as a reduction of the related accounts. Debt issue costs are deferred and are amortized over the life of the debt to which they relate using the effective interest rate method.

INCOME TAXES

The Company follows the liability method in accounting for income taxes. Future tax balances reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. Valuation allowances are established when it is more likely than not future tax assets will not be realized.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 2
Summary of Significant Accounting Policies (Cont’d)

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the Company’s functional currency. Transactions arising in foreign currencies are translated into U.S. dollars at the exchange rate at the transaction dates. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the year-end rates of exchange. The resulting translation gains or losses are recognized in the consolidated statements of loss.

Results of operations from self-sustaining subsidiaries and joint ventures which report in currencies other than U.S. dollars are translated using the monthly average exchange rates, while assets and liabilities are translated using the current rates at each balance sheet date. The resulting exchange gains or losses are accumulated in the cumulative translation adjustment account included as a component of shareholders’ equity.

The financial statements of foreign entities in highly inflationary economies are re-measured using the U.S. dollar as the functional currency. U.S. dollar transactions are shown at their historical value. Monetary assets and liabilities denominated in local currencies are translated into U.S. dollars at the prevailing year-end exchange rate. All other assets and liabilities are translated at historical exchange rates. Results of operations have been translated using historical rates. Translation differences resulting from the use of these different rates are charged to income.

REVENUE RECOGNITION

Revenues from airtime and roaming, including those billed in advance are recognized when services are provided or when contracts expire in cases where services have not been used. Revenues from handsets and related equipment are recognized upon shipment except for those whose use is restricted to the Company’s networks which together with related cost of equipment are deferred and amortized over the term of the contract. When handsets, related equipment and access to network are bundled with airtime, the revenue for the airtime is measured at the price of the airtime on a stand-alone basis. When prepaid cards are sold to dealers, the revenue from the airtime is measured at the face value of the time sold but such revenue is initially deferred until the airtime is actually used by the customer or the card expires. Commissions to dealers are classified within selling, general and administrative expenses.

SUBSCRIBER ACQUISITION COSTS

The excess between the cost of handsets to the Company over the amount recovered from sales to subscribers is recognized upon the sale of the handsets and is recorded in cost of equipment.

OTHER INCOME AND EXPENSES

Other income and expenses are allocated to the year they related to.

DERIVATIVE FINANCIAL INSTRUMENTS

Interest rate option and swap agreements and cross currency swap agreements are used by the Company to hedge cash flow risk on certain of its variable rate long-term debt. The gains (losses) on these instruments are recognized in the statement of loss when the hedged item affects earnings.

DISCONTINUED OPERATIONS

The results of discontinued operations are included in net loss but reported separately.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 3
Goodwill and Licenses

			Accumulated		Net Book
	Cost		Depreciation		Value
	$		$		$
December 31, 2002
Goodwill		56,024		6,218		49,806
Licenses		140,588		45,988		94,600
		196,612		52,206		144,406
December 31, 2001
Goodwill		56,024		3,418		52,606
Licenses		134,800		37,133		97,667
Brazilian goodwill and licenses to be disposed of [Notes 13 and 16]		194,068		33,125		160,943
		384,892		73,676		311,216

	TOTAL
Net book value		144,406
Cost
Net book value December 31, 2002		196,612
Additions		5,788
Change in accounting from proportionate consolidation to equity of the Brazilian activities		(194,068	)
Exchange rate movements		—
Net book value December 31, 2001		384,892
Accumulated Depreciation
Net book value December 31, 2002		52,206
Charges		15,555
Change in accounting from proportionate consolidation
to equity of the Brazilian activities		(43,243	)
Exchange rate movements		6,218
Net book value December 31, 2001		73,676

Note 4
Tangible Assets

			Accumulated		Net Carrying
	Cost		Depreciation		Value
	$		$		$
December 31, 2002
Network equipment and infrastructure		1,153,466		298,721		854,745
Buildings and leasehold improvements		34,267		8,716		25,551
Computer equipment and software		193,596		105,844		87,752
Other equipment		26,426		15,454		10,972
Construction in progress		42,820		—		42,820
		1,450,575		428,735		1,021,840
December 31, 2001
Network equipment and infrastructure		846,474		183,663		662,812
Buildings and leasehold improvements		29,767		6,573		23,194
Computer equipment and software		149,179		67,405		81,774
Other equipment		17,570		11,275		6,295
Construction in progress		97,006		—		97,006
Brazilian tangible assets to be disposed of [Notes 13 and 16]		454,129		164,570		289,559
		1,594,126		433,486		1,160,640

Included in building and leasehold improvements are assets with a net carrying value of $11.2 million as at December 31, 2002 [$12.2 million — 2001] that are financed through an obligation under a capital lease.

		TOTAL
Net book value			1,021,840
Cost
Net book value December 31, 2002			1,450,575
Additions			250,861
Change in accounting from proportionate consolidation
to equity of the Brazilian activities			(456,389	)
Exchange rate movements			61,977
Net book value December 31, 2001			1,594,126
Accumulated Depreciation
Net book value December 31, 2002			428,735
Charges			174,615
Change in accounting from proportionate consolidation
	to equity of the Brazilian activities		(193,821	)
Exchange rate movements			14,455
Net book value December 31, 2001			433,486

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 5
Investments

Investments consist of the following:

	2002		2001
	$		$
As at December 31,
Brazil [Notes 13 and 16]		70,000		--
Share of assets of India		9,990		9,067
		79,990		9,067

[a] Investments

Investments consist primarily of investments held for sale including the Company’s share in the assets of Hexacom India Limited [“Hexacom"] and in Brazil [see Notes 13 and 16]. The Company’s contribution in the capital of TIW Asia N.V., [“TIW ASIA”] was satisfied by the transfer of its equity interest in Hexacom India Limited [“Hexacom"] an Indian cellular operator. Since the Company retains the risks and rewards of ownership of Hexacom, the Company’s share of Hexacom’s assets and liabilities continue to be presented separately. The Company’s share in the liabilities of Hexacom totaled $4.1 million and $5.3 million as at December 31, 2002 and 2001, respectively and are included with other non-current liabilities. As at December 31, 2002, cash contributions that would otherwise have been made by the Company to the capital of TIW Asia net of the amount owed to the Company by TIW Asia and the Company’s proportionate share of such amount is recorded as an accrued liability and amounts to $5.0 million [$4.8 million in 2001].

[b] Business acquisitions and divestitures

Central/Eastern Europe — Cellular

CLEARWAVE

On February 14, 2001, TIW issued 43,809,335 units. Each Unit consisted of one class A Subordinate Voting Share of ClearWave and five Units entitled the holder to acquire one Subordinate Voting Share of TIW at anytime prior to June 30, 2002. TIW’s interest in ClearWave was held through the Company and consequently, on February 14, 2001 the Company sold the shares included in the Units to TIW at their fair value for total proceeds for $272.5 million. This transaction resulted in a gain on disposal of $205.2 million.

MOBIFON

In June 2000, ClearWave acquired 4.23% of MobiFon’s outstanding shares from a minority shareholder for an aggregate purchase price of $32.2 million. Of this amount, $17.0 million was paid in cash and $6.1 million through a forgiveness of debt. The remaining $9.1 million of the balance payable was paid through an issue of TIW’s shares. Subsequently in 2001, ClearWave sold 25.0% of the acquisition for proceeds equal on a pro rata basis to the consideration paid by ClearWave. The acquisition was accounted for using the purchase method, net of shares subsequently sold. As a result of the acquisition, $19.5 million of goodwill has been recorded and ClearWave’s equity interest increased from 54.7% to 58.9%.

On February 15, 2001, ClearWave acquired 5.7% of MobiFon’s outstanding shares from certain minority shareholders for an aggregate purchase price of $40.5 million. Of this amount, $23.2 million was paid cash, $12.3 million through the issuance by TIW of Units and $5.0 million through a forgiveness of debt. They were accounted for using the purchase method and goodwill amounting to $31.0 million was recorded on this transaction and ClearWave’s equity interest in MobiFon increased from 58.9% to 63.5%.

During 2002, as a result of dividends declared and paid by MobiFon, $10.1 million was paid to minority interests. On October 30, 2002, the shareholders of MobiFon approved distributions of up to $38.8 million by means of a share repurchase. Shareholders can tender their shares between October 30, 2002 and June 30, 2003 in order to realize their pro-rata share of this distribution amount of which ClearWave’s share is $24.6 million. In the event not all MobiFon shareholders exercise their options to sell their entire pro-rata portion, any of the MobiFon shareholders shall have the right to buy-back the shares sold to MobiFon at the same purchase price by December 31, 2003. A first distribution of $16.6 million was paid on October 30, 2002, of which $15.8 million was paid to ClearWave. A further distribution of $8.8 million was paid to ClearWave on December 19, 2002. The effect of these distributions was to decrease the Company’s ultimate equity interest in MobiFon from 28.9% to 28.4%. MobiFon’s shareholders are not required to participate pro-rata in the share repurchase.

Assuming that TIW Czech NV will have 15 million shares outstanding when the Events will occur, 450,000 shares were reserved to be issued under the plan. During 2002, 123,593 options were granted and each option, following a vesting period of up to 4 years and the occurrence of the Events, will allow its holder to acquire one share of TIW Czech NV at a price of $20.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 5
Investments (Cont’d)

MOBIFON

Accordingly, ClearWave ownership of MobiFon may vary between 62.4% and 63.5%, respectively, throughout the tender period, depending on the timing and the extent of each shareholder’s participation in the repurchase. As it is not determinable that all shareholders of MobiFon will participate pro-rata in the share repurchase, pending expiration of the tender period, distributions made through share repurchases have been accounted for in a manner similar to dividends declared by a subsidiary and the amount of $13.4 million that MobiFon is committed to distribute to minority interests is presented within current liabilities.

On December 18, 2002 the Company reached an agreement for the sale of 11.1 million shares of MobiFon, currently owned by ClearWave, representing 5.7% of the then issued and outstanding share capital of MobiFon for a total cash consideration, of $42.5 million. The transaction closed on March 19, 2003 and consequently, Clearwave will record a gain on disposal of such shares in the first quarter of 2003. As a result of the above transactions, ClearWave ownership in MobiFon will reduced from the pre share repurchase level of 63.5% down to between 56.6% and 57.7% depending on the outcome of the share repurchase.

In the event there has not been an initial public offering of the shares of MobiFon by October 1, 2004, certain minority shareholders of MobiFon, having a 15.9% interest in Mobifon, may require TIW or ClearWave, at TIW’s option, to make an offer to acquire the minority shareholder’s shares. The purchase price of such shares would be the then fair market value as determined by an independent evaluator and shall then be payable in cash or, at TIW’s option, in shares of TIW. The share ownership sold on March 19, 2003 is subject of a similar arrangement.

ČESKÝ MOBIL

In January 2000, TIW Czech, exercised its right to acquire an additional 34.5% interest in Český Mobil for $3.0 million pursuant to call option agreements with a minority shareholder of Český Mobil. As a result of this transaction TIW Czech’s equity interest in Český Mobil increased from 51.0% to 85.5%. This acquisition was accounted for using the purchase method, and the excess of the purchase price over the fair value of the identifiable net assets acquired resulted in the creation of goodwill in an amount of $5.6 million.

Following the capital calls of Český Mobil, in 2000, 2001 and 2002 in which the shareholders other than the Company’s subsidiary did not participate, the equity interest of TIW Czech in Český Mobil, increased from 85.5% to 94.1% and 95.5% at December 31, 2001 and 2002, respectively and further increased to 96.3% on January 17, 2003 as a result of the registration of the shares issued pursuant to the December 2001 and March and June 2002 calls. No goodwill resulted from these transactions.

As part of the creation of Český Mobil, a minority shareholder was given a put option and, as a result, TIW Czech, may be required to purchase the Český Mobil shares owned by this minority shareholder for an amount equal to the amount paid, in Czech Koruna, for such shares by the minority shareholder plus interest of 7.0% per annum. This put option is exercisable during a period of two years beginning in October 2001. As at December 31, 2002, this minority shareholder has contributed $13 million to the equity of Český Mobil and this amount is included with minority interests on the balance sheet. ClearWave’s share of this commitment, if exercised, is $4.6 million as at December 31, 2002.

On December 11, 2002, the Supervisory Board of TIW Czech, approved a stock option and stock appreciation rights plan for employees of Český Mobil and the grant of options thereunder. After a vesting period, options issued in connection with this plan will allow, subject to an Initial Public Offering or a change of control of TIW Czech (the “Events”) or Český Mobil, holders to acquire in aggregate approximately 0.8% of the shares of TIW Czech or the cash equivalent thereof at a price which is not lower than the fair value as of December 31, 2002. The Company will record an expense, if any, in the period in which the Events become probable.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

NOTE 5
Investments (Cont’d)

OTHER

On April 7, 2000, the Company sold its shares in CallMax B.V., its paging operations in The Netherlands, for a nominal amount. A loss of $6.6 million was recognized.

On April 14, 2000, the Company’s Chinese investee sold all its assets for 209.1 million Chinese Renminbi [$23.4 million]. This transaction resulted in a gain of $8.3 million, of which $4.4 million and $3.9 million were recognized in 2001 and 2000, respectively.

On June 29, 2000, the Company sold its wholly-owned subsidiary, TIW UMTS UK Ltd., to Hutchison 3G UK Holdings Ltd. [3G UK Holdings], for a nominal amount and no gain or loss resulted from this transaction. On July 12, 2000, the Company waived its right to acquire 3.5% of the outstanding shares of 3G UK Holdings, for a net cash consideration of £51.1 million [$75.4 million] and recognized a corresponding gain.

On September 27, 2001, the Company sold its interest in W-Aura, a wireless internet joint venture in Brazil and realized a loss on sale of investment of $9.3 million.

On December 24, 2001, the Company decided to dispose of its paging in Mexico and has relinquished its joint control of the investment. A loss of $5.6 million has been recognized as a result of these actions.

The gain on disposal of investments in 2001 includes the Brazilian joint ventures cellular operations net gain of $106.1 million from the sale on March 31, 2001 of the Company’s 16.3% equity interest in its two Brazilian B-Band joint ventures, for cash proceeds of $153.3 million.

[c] Cumulative Translation Adjustment

The increase in the cumulative translation adjustment amount of $78.4 million, reported as a component of shareholders’ deficiency, resulted mainly from the appreciation of the Czech Koruna of $3.3 million, less $34.7 million related to the devaluation of the Brazilian real during the year and the realization of the cumulative translation losses related to Brazil of $118.5 million. The exchange rate was 35.587 Czech Koruna for one U.S. dollar and 30.120 Czech Koruna for one U.S. dollar as at December 31, 2001 and December 31, 2002, respectively. The exchange for the Brazilian real was 2,310 for one U.S. dollar and 3.540 for one U.S. dollar as at December 31, 2001 and December 31, 2002, respectively.

Note 6
Financing Arrangements

The Company’s short-term credit facilities consist of the following:

CORPORATE CREDIT FACILITY

The Company’s is a co-borrower with TIW in the Corporate Credit Facility. The Corporate Credit Facility’s maturity was extended from December 15, 2002 to June 30, 2003. In connection with the extension, TIW agreed to repay $5.0 million by March 31, 2003. The facility is collateralized by substantially all assets of the Company and bears interest at U.S. base rate plus a margin of 9.36% or LIBOR plus a margin of 10.0%. Under the terms of the facility, any amount received by TIW and flowing from dividends paid by its Central and Eastern European operations, other than amounts representing operational and investment requirements of the Company and ClearWave to June 30, 2003, will be used to further reduce the amount outstanding on the corporate facility. As at December 31, 2002, the amount drawn by TIW and available was $47.4 million [$83.5 million as at December 31, 2001]. The weighted average rate of interest was 11.8% in 2002 [15.0% — 2001]. The affiliates of two significant shareholders of TIW have committed an aggregate 57% of the principle amounts available under the corporate credit facility. (See Note 16).

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Cont’d)

OPERATING CREDIT FACILITY OF OPERATING SUBSIDIARIES

As at December 31, 2002, MobiFon and Český Mobil have available uncommitted operating credit facilities totaling $20 million and € 10.0 million [$10.5 million] respectively, none of which were drawn as at December 31, 2002 and December 31, 2001. The €10.0 million facilities consist of a € 7.0 million and a € 3.0 million facility. The € 7.0 million facility bears interest when drawn as a term loan, at a rate of EURIBOR, PRIBOR or LIBOR plus 0.6% per annum for EURO, Koruna and U.S. dollar drawings, respectively and the € 3.0 million facility bears interest at a rate of EURIBOR or PRIBOR, plus 0.7% to 0.8% per annum for EURO and Koruna drawings respectively. The $20 million facilities consist of a $9.0 million overdraft facility and $1.0 million for issuance of letters of guarantee to third parties and a second $10 million facility. The $9.0 million overdraft facility can be drawn in U.S. dollars bearing interest of LIBOR plus 1.5% per annum or in Romanian Lei bearing interest at the rate of the bank’s cost of funds plus 5% per annum. The second $10 million facility is repayable on demand and bears interest at the rate of the lender’s U.S. dollar prime rate plus 3.05% per annum.

The amounts due to related parties have no redemption scheme and consist of the following loans:

	2002		2001
	$		$
Balance as at December 31,
TIW (interest free)		8,342		181,968
Telesystem (Antilles) Corporation N.V. (interest 13.875%)		81,588		83,302
Telesystem (Antilles) Corporation N.V. (interest free)		853,225		679,531
Telesystem (Antilles) Corporation N.V. (Other)		27		9,797
		943,182		954,598

Long-term debt consists of the following:

	2002		2001
	$		$
As at December 31,
MobiFon — Syndicated senior credit facility
Original facility		—		158,825
Expansion facility		—		71,963
2002 Facility		255,000		—
		255,000		230,788
Subordinated loans, including accrued interest of $7,726 as at December 31, 2001		—		17,726
Sale and lease back financing, option expected to be exercised in July 2004		12,700		12,700
		267,700		261,214

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Cont’d)

		2002		2001
		$		$
As at December 31,
Český Mobil — Syndicated senior credit facility
Tranche “A” [€236.8 million and Koruna 3.3 billion - 2002, €179.4 million and Koruna 2.5 billion - 2001]			358,191		229,902
Tranche “B” [€26.6 million and Koruna 1.7 billion - 2002 and 2001]			84,910		71,902
			443,101		301,804
Financing under supply contracts to be refinanced by the syndicated senior credit facilities [€25.6 million - 2002, €65,8 million - 2001]			27,180		58,505
			470,281		360,309
Brazilian activities held for sale [Notes 13 and 16]
Term loans of investees and others Denominated in U.S.$			—		126,178
	Denominated in R$ [R$485.7 million - 2001]		—		103,001
			—		229,179
			737,981		850,702
Less current portion			—		77,297
			737,981		773,405

MOBIFON

On August 27, 2002, MobiFon closed a $300 million senior loan facility. This new facility is composed of two tranches. Tranche I consists of a term loan of $238 million, fully drawn as at December 31, 2002, for which the proceeds were used to repay the interest and principal balance of the syndicated senior credit facilities entered into in 1997 and 1999 and the subordinated loans. A loss on extinguishment of debt of $10.1 million was recognized on early payment. Tranche II consists of a term loan of up to $62 million of which $17 million was drawn as at December 31, 2002. Each tranche is repayable in quarterly installments starting in January 2004 and maturing in October 2008. The interest rate on the facility is LIBOR + 3.5% up to December 31, 2003. Thereafter, the interest rate will range from LIBOR + 2.5% to LIBOR + 4.0% depending on certain financial ratios, including debt and capital ratios. As permitted by the loan agreement, the LIBOR portion of the interest rates on $87.3 million of Tranche I and $6.2 million of Tranche II have been fixed at 3.64% and 3.52% respectively.

The facility allows for distributions of cash provided from operations net of capital expenditures and scheduled debt service subject to MobiFon meeting certain financial ratios and maintaining minimum cash balances. To the extent such ratios are not met, a portion or all of these cash flows may be required to be used for mandatory prepayments of the facility. The facility is collateralized by a pledge of the Company’s and of the minority interests’ shares in MobiFon and by substantially all of the assets of MobiFon. A commitment fee of 1% per annum is applicable to the unused Tranche II facility [$45 million at December 31, 2002] up to December 31, 2003 when the unused facility will expire under the credit agreement.

MobiFon entered into interest rate swap arrangements on notional principal amounts of $100 million and $30 million whereby the LIBOR portion of the interest on the related loan principal has been effectively fixed at 3.6% and 3.7%, respectively, The weighted average effective interest rate on the balance outstanding on this facility at December 31, 2002 is 6.9%.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Cont’d)

ČESKÝ MOBIL

The amounts due under supply contracts with two telecommunication network equipment suppliers have been classified as long-term debt as they will be financed by the senior credit facility. These amounts are not subject to interest.

The syndicated credit facility is composed of two tranches. Tranche A is in the form of a committed revolving credit facility converting to a term loan of up to €269.1 million and Koruna 3.8 billion, [totaling $407.0 million] carrying interest at a rate of EURIBOR plus 1.75% for Euro drawings and PRIBOR plus 1.75% for Koruna drawings, reimbursable by installments determined as a percentage of amounts drawn under the facility until June 2004 which will continue to be repaid until the maturity in December 2008. Tranche B consists of a term loan of up to €26.6 million and Koruna 1.7 billion, [totaling $84.9 million] carrying interest at EURIBOR plus 2.25% for Euro drawings and PRIBOR plus 2.25% for Koruna drawings, reimbursable by installments determined as a percentage of amounts drawn under the facility starting in December 2008 until the maturity in December 2009. Drawings under either tranche must be on a dollar-for-dollar basis with the other tranche. A significant shareholder of the Company and TIW Czech has committed 12.1% of the syndicated credit facility.

The facility is collateralized by a pledge of TIW Czech’s shares in Český Mobil and of substantially all of the assets of Český Mobil. As a result, the majority of the net assets of Český Mobil are restricted from distribution to the Company, unless waivers are obtained. Drawings under this credit facility are subject to certain financial tests and ratios.

Český Mobil entered into interest rate and currency swaps arrangements pursuant to which €116.3 million [$122.0 million] of the Euro based borrowings as at December 31, 2002 are effectively Koruna based and, together with an additional 3.0 billion Koruna [$98.6 million] have effective fixed interest rates ranging from 8.59% to 9.98% until November 2005. Swaps have also been entered into on €71.7 million [$75.3 million] drawn which has the effect of fixing the Euro to Koruna conversion rate on the interest payments and changing the referenced interest rate from Euribor to Pribor. Interest on this €71.7 million draw has also been capped through the use of option agreements, which are detailed as follows. €21.5 million [$22.6 million] and a further 287.6 million Koruna [$9.5 million] are subject to interest rate option agreements which provide that the PRIBOR component of the interest rate on these borrowings will not exceed 8.61%, until November, 2005; €50.2 million [$52.7 million] and 701.2 million Koruna [$23.3 million] are subject to interest rate option agreements which provide that the interest rate on these borrowings will not exceed 9.99%, until November, 2005. The effective weighted average interest rate on this credit facility is 7.0% at December 31, 2002 [8.0% in 2001]. Český Mobil also entered into a 6-month Euro to Koruna cross currency swap arrangement for € 60.0 million ($63.0 million) on May 11, 2002. Upon expiration, the Company entered into a similar swap arrangement for a further 6 months.

The risk of non-performance by counter-parties to the swap and option agreements in MobiFon and Český Mobil is low, as the agreements have been concluded with large, credit worthy financial institutions. Derivative financial instruments’ position amount to $11.3 million and $9.5 million as at December 31, 2002 and 2001, respectively, and is included with other non current liabilities.

Minimum annual principal repayments of long-term debt during the next five years as at December 31, 2002 are as follows:

	$
2003		—
2004		52,169
2005		93,770
2006		124,429
2007		167,625

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 6
Financing Arrangements (Cont’d)

COVENANTS

Under the debt agreements and credit facilities described above, the Company is committed to respect certain financial covenants including debt to operating cash flows and certain negative covenants including limitations on the ability to incur indebtedness, pay dividends, use proceeds from sale of assets, make certain other payments, create liens, sell assets and engage in mergers.

Limitations also exist with respect to the ability of certain subsidiaries or investees to transfer funds in the form of dividends, loans or otherwise to the Company. The corporate credit facility and the 14% Notes, to which the Company is the guarantor, have cross default provisions which, under certain circumstances, could accelerate their reimbursement if the reimbursement of other loans of the Company is accelerated as a result of default.

Note 7
Shareholders’ Deficiency

AUTHORIZED

The total authorized share capital of the Company amounts to Euro 158,8 million divided into 35 billion shares of Euro 0.00454 each.

ISSUED AND OUTSTANDING

As per December 31, 2002 and 2001 the total issued and paid-up capital is Euro 43,855,615.

CHANGES IN SHAREHOLDERS’ DEFICIENCY

									Foreign
									currency
	Share			Share					translation
	capital			premium		Deficit			reserve
Balance as at December 31, 2002		47,611			281,397		(1,044,443	)		(2,569	)
Loss for the year		—			—		(205,999	)		—
Exchange difference on conversion of par value of share capital and share premium		7,247			—		—			(7,247	)
Changes in foreign currency translation reserve [Notes 13 and 16]		—			—		—			85,645
Balance as at December 31, 2001		40,364			281,397		(838,444	)		(80,967	)
Loss for the year		—			—		(233,370	)		—
Exchange difference on conversion of par value of share capital and share premium		(2,386	)		—		—			2,386
Changes in foreign currency translation reserve [Notes 13 and 16]		—			—		—			69,999
Balance as at December 31, 2000		42,750			281,397		(605,074	)		(153,352	)

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 8
Segmented Information

The Company has three reportable segments: cellular operations in Brazil, in Romania and in the Czech Republic. The Company’s reportable segments are strategic business units that operate in different countries. They are managed separately because each business requires different marketing strategies. As discussed in Note 13 and 16, the Company has ceased to proportionately account for the cellular Brazilian operations and accounts for its investment using the equity method starting July 1, 2002.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on service revenues, operating income (loss) and operating income (loss) before depreciation and amortization.

Information about the reportable segments, which is reconciled to consolidated operating income (loss), acquisitions of and carrying value of tangible assets, goodwill, licenses and total assets, is summarized as follows:

	Brazilian
	Cellular				Czech
	[Notes 13		Romania		Republic			Corporate
For the year ended December 31, 2002, 6	and 16]		Cellular		Cellular			and other			Total
months ended June 30, 2002 for Brazilian Cellular	$		$		$			$			$
Revenues
Services		134,737		425,567		227,342			—			787,646
Equipment		9,916		21,214		20,331			—			51,461
		144,653		446,781		247,673			—			839,107
Cost of services		39,119		81,462		122,741			—			243,322
Cost of equipment		13,712		39,160		25,594			—			78,466
Selling, general and administrative expenses		39,910		94,613		79,143			812			214,478
Operating income (loss) before depreciation and amortization		51,912		231,546		20,195			(812	)		302,841
Depreciation and amortization		33,084		89,439		67,647			—			190,170
Operating income (loss)		18,828		142,107		(47,452	)		(812	)		112,671
Acquisition of tangible assets and licenses including non-cash items		7,968		100,336		106,560			—			214,864
Tangible assets, goodwill and licenses as at December 31, 2002		—		553,222		613,018			6			1,166,246
Total assets as at December 31, 2002		—		667,806		663,984			80,650			1,412,440
For the year ended December 31, 2001
Revenues
Services		287,272		359,868		125,928			9,434			782,502
Equipment		31,260		12,475		18,037			483			62,255
		318,532		372,343		143,965			9,917			844,757
Cost of services		80,880		69,835		97,275			4,129			252,119
Cost of equipment		36,519		27,236		22,323			747			86,825
Selling, general and administrative expenses		87,087		88,836		65,921			13,023			254,867
Operating income (loss) before depreciation and amortization		114,046		186,436		(41,554	)		(7,982	)		250,946
Depreciation and amortization		63,742		77,791		42,562			1,482			185,577
Operating income (loss)		50,304		108,645		(84,116	)		(9,464	)		65,369
Acquisitions of tangible assets and licenses including non-cash items		86,406		122,360		109,211			—			317,977
Tangible assets, goodwill and licenses as at December 31, 2001		450,496		537,739		483,604			17			1,471,856
Total assets of continuing operations as at December 31, 2001		652,482		648,946		542,159			1,997			1,845,584

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 8
Segmented Information (Cont’d)

	Brazilian
	Cellular					Czech
	[ Notes 13			Romania		Republic			Corporate
	and 16]			Cellular		Cellular			and other			Total
	$			$		$			$			$
For the year ended December 31, 2000
Revenues
Services		296,152			299,470		21,508			11,229			628,359
Equipment		65,245			8,097		12,529			955			86,826
		361,397			307,567		34,037			12,184			715,185
Cost of services		89,281			62,366		36,654			3,705			192,006
Cost of equipment		72,567			18,347		15,969			1,251			108,134
Selling, general and administrative expenses		124,726			96,735		63,418			17,689			302,568
Operating income (loss) before depreciation and amortization		74,823			130,119		(82,004	)		(10,461	)		112,477
Depreciation and amortization		75,949			65,965		22,056			1,712			165,682
Operating income (loss)		(1,126	)		64,154		(104,060	)		(12,173	)		(53,205	)
Acquisitions of tangible assets and licenses including non-cash items		142,330			92,510		345,962			719			581,521

Note 9
Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

		2002			2001
		$			$
Deferred tax assets
	Loss carryforwards — ClearWave and its subsidiaries		53,460			53,945
	Carrying value of liabilities in excess of their tax value		3,506			9,063
	Tax value of assets in excess of their carrying value		45,920			8,410
	Net deferred tax asset related to assets to be disposed of		—			18,029
Total deferred tax assets before valuation allowance			102,886			89,447
	Valuation allowance		(99,380	)		(67,870	)
Deferred tax assets			3,506			21,577
Deferred tax liabilities Carrying value of assets in excess of their tax value			(7,707	)		(3,548	)
Net deferred tax assets (liabilities)			(4,201	)		18,029

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 9
Income Taxes (Cont’d)

As at December 31, 2002, Český Mobil had net operating loss carryforwards which are available to reduce taxable income in future years, as follows:

	$
Losses expiring
2006		6,400
2007		90,700
2008		65,200
2009		10,100
Total		172,400

The net deferred tax assets related to Český Mobil have been fully offset by a valuation allowance, due to the limited operating history of Český Mobil a.s. The components of consolidated net income (loss) before income taxes and minority interest were as follows:

	2002			2001			2000
	$			$			$
Corporate and other		(13,004	)		133,389			60,944
Romania		106,908			75,027			25,654
Czech Republic		(73,973	)		(95,224	)		(96,566	)
Brazilian activities to be disposed of		(210,996	)		89,645			(44,061	)
		(191,065	)		202,837			(54,029	)

The reconciliation of income tax computed at the statutory tax rates in the Netherlands with income tax expense is as follows:

	2002			2001			2000
	$			$			$
Tax statutory rate of 35%		66,872			(70,993	)		18,910
Differences in effective rate attributable to income taxes of other countries		7,995			3,694			(1,306	)
Differences related to assets and liabilities re-measured from local currency into the functional currency and other permanent differences		(13,173	)		(7,177	)		(16,941	)
Net differences related to Brazilian activities to be disposed of		—			(13,686	)		(12,905	)
Non taxable gain on investment		—			92,176			30,629
Valuation allowance		(94,237	)		(11,447	)		(16,660	)
Income tax recovery (expense)		(32,543	)		(7,433	)		1,727

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 10
Supplementary Information

1) Consolidated Statements of loss

	2002		2001		2000
	$		$		$
For the years ended December 31,
Depreciation and amortization
Tangible assets		146,111		110,988		80,820
Goodwill and licenses		10,975		10,847		9,083
Brazilian activities to be disposed		33,084		63,742		75,779
		190,170		185,577		165,682
Interest expense
Interest on long-term debt		52,800		51,246		31,076
Interest and financial charges		4,591		6,130		—
Brazilian activities to be disposed		18,410		24,652		50,537
		75,801		82,028		81,613
Other information
Bad debt expense		7,368		25,292		10,267
Advertising costs		29,390		34,619		28,873

License amortization for the next five years is expected to be $8.0 million per year.

The change in allowance for bad debt accounts, excluding discontinued operations and those to be disposed of are as follows.

	2002			2001			2000
	$			$			$
Allowance for doubtful accounts:
Balance, beginning of year		8,510			8,888			4,963
Addition: bad debt expenses		7,368			10,495			10,267
Deduction: uncollectible accounts write-off, net of recovery		(8,375	)		(10,873	)		(6,342	)
Balance, end of year		7,503			8,510			8,888

2) Consolidated Statements of Cash Flows

Significant non-cash investing and financing activities Acquisition of tangible assets financed under supply contracts		27,180	58,505	106,472
Other cash flow information, excluding Brazilian activities to be disposed of:
	Interest paid	65,132	52,345	30,857
	Income tax paid	24,431	—	—

Note 11
Other Commitments and Contingencies

CORPORATE GUARANTEE

On September 19, 2001, TIW completed the exchange of $379.5 million of 13-1/4% Senior Discount Notes due 2007 ($324.5 million of accreted value) and $167.0 million of 10-1/2% Senior Discount Notes due 2007 ($148.5 million of accreted value) for $50 million of cash and $194.8 million of 14% Senior Guaranteed Notes (the “14% Notes”) due December 30, 2003. As a result of this exchange, an aggregate of $0.6 million [$0.5 million as at December 31, 2001] of 13-1/4% and 10-1/2% Senior Discount Notes remain outstanding.

The 14% Notes mature on December 30, 2003. Interest on the 14% Notes accrues at a rate of 14% per annum and is payable semi-annually on June 30 and December 30. The interest payments on December 30, 2001 and June 30, 2002 were made by the issuance of $6.7 million and $14.1 million of additional 14% Notes. TIW has the option to redeem the 14% Notes, at any time, in whole or in part, at a price equal to 100% of the principal amount plus accrued and unpaid interest. The 14% Notes are guaranteed by the Company, [the “Guarantor”]. The guarantee is secured by a lien on the capital stock of Telesystem International Wireless (Latin America) Inc., [“TIW Latin America”] a holding company which holds the Company’s investments in its cellular operations in Brazil and by a lien on the capital stock of ClearWave held by the Guarantor. The liens granted by the Guarantor in favor of the holders of the 14% Notes rank second in priority to the lien it granted to the lenders under the corporate credit facility. The 14% Notes have negative covenants, which, among other things, limit the company’s ability to incur indebtedness and create liens. In addition, the 14% Notes prohibit the Company to reduce, under certain conditions, its ownership in ClearWave N.V. (See Note 16).

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 11
Other Commitments and Contingencies [Cont’d]

COMMITMENTS UNDER LONG-TERM OPERATING LEASES

The future minimum lease payments for the next 5 years under operating leases substantially all of which are denominated in currencies other than the U.S. dollar and relate primarily to properties and sites are as follows:

	$
2003		16,600
2004		14,000
2005		13,000
2006		12,600
2007		12,000
Total		68,200

Not included in the above are annual line lease payments and annual microwave lease payments of approximately $5.9 million and $2.6 million, respectively, the contracts for which can be terminated, subject to a 6 month lease payment penalty. Rental expenses amounted to $14.1 million, $12.4 and $13.4 million for the years ended December 31, 2002, 2001 and 2000, respectively.

In addition, according to the lease agreements with certain lessors, MobiFon is committed to issue bank guarantees in aggregate value of $1.8 million in 2003, to cover the lessor against any proven claims for the Company’s non-performance of its contractual obligations during the building construction period and lease term.

The Company’s operating subsidiaries have purchase commitments of approximately $14 million with network equipment and systems support providers.

As of December 31, 2002, MobiFon is also committed to a frame leasing agreement with a national power supplier for 17 years or the end of the GSM license period which ever is shorter commencing in 2003, whereby the power supplier agreed to lease out 2 fiber optic strands over certain voltage poles and technical space to the Company, and the Company agreed to lease out communication capacity to the power supplier over a minor portion of the capacity of the enabled fiber. The leases payments and receipts, which individually are estimated to reach $5 million per annum by the end of the contract, are expected to offset one another such that minimal cash payments, if any, will be made by either party. The estimated cost to MobiFon to enable the entire leased fiber to be utilized is $8.5 million of which $3.4 million has been incurred as at December 31, 2002.

LICENSE AGREEMENTS

The Company’s operational subsidiaries are committed to pay minimum annual spectrum fees of approximately $10.0 million. Starting in 2003, the new Romanian regulatory act will provide for other fees based on a percentage of revenue and other basis that have yet to be determined. The conditions to the various license agreements require the Company’s operational subsidiaries to substantially meet the deployment plans set out in their license agreements and, in certain instances, to provide a specified level of services in their respective coverage areas.

REGULATORY CLAIMS

In the normal course of business, the Company’s operational subsidiaries’ actions are subjected to scrutiny by various regulatory agencies, which, from time to time, will initiate administrative proceedings against the Company for alleged breaches to different regulations including arrangements for interconnection fees. The Company believes that the ultimate outcome of any of such proceedings currently in progress will not be materially adverse to the Company.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 12
FINANCIAL INSTRUMENTS

FAIR VALUE

The carrying amounts of cash and cash equivalents, trade debtors, trade creditors and accruals, income and value added taxes payable approximate their fair values due to the short-term maturity of these instruments. The fair value of distribution payable to minority interests is not determinable because of the uncertainty as to the timing of payment and the extent of participation of non-controlling parties in the MobiFon share repurchase. The fair value of the amount due to parent and affiliated companies is not determinable because it cannot be determined when it will be reimbursed.

The fair value of the portion of the MobiFon’s secured senior credit facility for which the interest rate has been fixed approximates $94.8 million. The fair value of the sale and lease back financing in MobiFon is not determinable because of the rarity of similar transaction in Romania. The carrying amounts of other long-term debt approximate their fair values because their interest rates fluctuate with market interest rates or are similar to interest rates currently available to the Company.

CREDIT RISK

The concentration of credit risk with respect to trade debtors is limited due to the composition of the customer base, which includes a large number of individuals and businesses. Cash and cash equivalents are contracted with a limited number of financial institutions. However, risk of losses is managed by the Company through a policy of dealing only with large, creditworthy financial institutions.

CURRENCY RISK

MobiFon operates in a developing economy with high rates of inflation and significant currency devaluation. There is a consequent risk of loss in value in respect to net monetary assets held in Romanian Lei. As at December 31, 2002, the net monetary position held in Romanian Lei and expressed in U.S. dollars was $13.3 million [$7.8 million as at December 31, 2001].

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations

1) Brazilian activities to be disposed of (see Note 16)

On March 5, 2002 TIW adopted a formal plan to dispose of its Brazilian cellular operations by way of a sale of its equity interest within the next twelve months. However, in light of deterioration of the market conditions that existed at the date of the adoption of the formal plan to dispose, the horizon for disposal has been extended by an additional twelve months. The proceeds from the sale will mainly be used to reimburse the TIW’s corporate debt. The Company recorded an impairment of investment of $36.5 million in 2001 related to its Brazilian activities to be disposed of. This impairment includes partial realization of the cumulative translation accounts of $27.2 million as the Company estimates that such amount will not be recovered from the sale of the Company’s A-Band joint venture operations in Brazil. Subsequent to March 31, 2002, there has been a significant deterioration in the value of the Brazilian real relative to the U.S. dollar and in the trading value of shares of the Company’s Brazilian cellular operations and those of other wireless telecommunications companies in Brazil. In light of these sustained declines up to December 31, 2002 and the subsequent disposal of its investment for $70 million as described in Note 16 the Company recorded an additional impairment of investment of $211.0 million in 2002. Of this amount, $ 155.3 million consists of foreign exchange translation losses related to these investments of which $85.2 million were already recorded as a reduction of shareholders’ equity as of December 31, 2001.

Several legal proceedings related to the Company’s Brazilian activities has been ongoing since July 2000 when the Company and other partners initiated legal proceedings in order to invalidate certain changes to the ownership structure of Telpart effected by one of the partners which, according to the Company and other partners, contravened the general telecommunications law and breached certain agreements. Although, the Company occupies one of three seats on Telpart’s Board of Directors, the Company ceased to have board representation at Telpart’s subsidiaries as a result of legal proceedings which the Company is vigorously contesting. The Company maintains that is has the legal right to joint control over these investments and is still pursuing legal proceedings to enforce this right but for which final judgments have not yet been issued. In light of these changes, the Company has ceased to proportionately account for these operations and accounts for its investment using the equity method starting July 1, 2002.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations (Cont’d)

The consolidated balance sheets as of December 31, 2001 include the following amounts related to the Company’s proportionately consolidated Brazilian joint ventures to be disposed of:

	2001
As at December 31,	$
Current Assets
Cash and cash equivalents		110,168
Trade debtors		43,349
Prepaid and other current assets		28,530
		182,047
Non-current Assets
Tangible assets, licenses and goodwill		450,502
Other non-current assets		19,541
		470,043
Current Liabilities
Trade creditors and accrued liabilities		54,880
Other current liabilities		10,724
Current portion of long-term debt		36,045
		101,649
Non-current Liabilities
Long-term debt		193,134
Minority interest		173,598
Other non-current liabilities		14,700
		381,432

The revenues, operating income (loss) and cash flow captions from proportionately consolidated Brazilian joint venture are as follows:

	2002
Proportionately consolidated Brazilian joint ventures	[6 months]			2001			2000
Revenues		144,563			318,532			361,133
Operating income (loss)		18,829			(50,304	)		(1,277	)
Operating activities		24,677			46,960			165,473
Investing activities		(7,968	)		(83,515	)		(139,506	)
Financing activities		(16,709	)		37,182			19,503

2) DISCONTINUED OPERATIONS

ESMR/SMR OPERATIONS

On July 27, 2001, Dolphin and certain of its subsidiaries initiated legal proceedings to reach compromises with its creditors with the intent to utilize this process to restructure its balance sheet and to propose company voluntary arrangements to creditors. An administration order was made by the court and representatives from the firm Kroll Phillips have been appointed administrators of Dolphin. The financial position and results of operations of Dolphin up to July 27, 2001 have been reported in these financial statements as discontinued operations.

The proceedings had no legal implications on the Company or its continuing cellular operations, which are conducted by separate subsidiaries. The Company has taken the necessary steps and obtained the necessary amendments to avoid cross defaults under its own financing arrangements from any defaults by Dolphin or any of its subsidiaries.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 13
Brazilian Activities to be Disposed of and Discontinued Operations (Cont’d)

The revenues and operating loss from discontinued operations are as follows:

	2002		2001			2000
For the years ended December 31,	$		$			$
ESMR/SMR Operations
Revenues		—		45,834			90,694
Operating loss		—		(425,377	)		(284,092	)

Note 14
U.S. GAAP

These financial statements were prepared in accordance with Dutch GAAP. The following material adjustments to these Consolidated Financial Statements would be required to conform with U.S. GAAP.

1) RECONCILIATION OF NET LOSS

	2002			2001			2000
For the years ended December 31,	$			$			$
Net loss under Dutch GAAP		(205,999	)		(233,370	)		(273,838	)
Gain on disposition of ClearWave shares [d]		—			(205,172	)		—
Amortization of goodwill [f]		2,800			—			—
Minority interest [f]		(1,526	)		—			—
Discontinued operations – Brazil [e]		(36,483	)		36,483			—
Net loss under U.S. GAAP		(241,208	)		(402,059	)		(273,838	)

2) RECONCILIATION OF CONSOLIDATED CASH FLOWS CAPTIONS

		2002			2002			2002			2001			2000
		Dutch
		GAAP			Adjustment			U.S. GAAP			U.S. GAAP			U.S. GAAP
For the years ended December 31,		$			$			$			$			$
Cash provided by (used in):
	Operating activities		156,459			(24,677	)		131,782			187,384			62,455
	Investing activities		(250,861	)		7,968			(242,893	)		(151,635	)		(434,300	)
	Financing activities		76,836			16,709			93,545			117,213			794,233
Discontinued operations			—			—			—			(216,751	)		(328,443	)
Net effect of exchange rate translation			721			—			721			(2,666	)		2,695
Net effect of Brazilian activities to be disposed of			(103,576	)		103,576			—			—			—
Increase (decrease) in cash and cash equivalents			(120,421	)		103,576			(16,845	)		(66,455	)		96,640

Except for the method of accounting for the Company’s investments in joint venture as explained in (a), there are no significant differences between Dutch GAAP and U.S. GAAP which affect the cash flow captions indicated above.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 14
U.S. GAAP (Cont’d)

3) RECONCILIATION OF CONSOLIDATED BALANCE SHEETS

				2002			2002				2001			2001
				Dutch GAAP			U.S. GAAP				Dutch GAAP			U.S. GAAP
As at December 31,				$			$				$			$
Assets
Current assets
	Cash and cash equivalents				46,631			46,629		[a]		167,052			56,884
	Trade debtors				53,865			54,074		[a]		90,106			46,757
	Inventories				10,248			10,248				26,032			15,385
	Prepaid expenses				21,115			21,108		[a]		22,668			22,668
	Deferred income tax				1,010			1,930		[c]		3,548			3,548
	Other current assets				14,346			14,348		[a]		18,882			9,740
Total current assets					147,215			148,337				328,288			154,982
	Goodwill				49,806			52,606		[f]		189,658			52,606
	Tangible assets and licenses				1,116,440			1,116,440				1,282,198			968,753
	Investments and other assets				79,990			75,516		[a]		9,067			176,641
		Deferred income tax assets			—			—				18,029			—
	Deferred financing costs				18,989			18,989				18,344			16,851
Total assets					1,412,440			1,411,888				1,845,584			1,369,833
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
	Trade creditors and accruals				114,966			114,786		[a]		166,352			95,835
	Income and value added taxes payable				5,459			5,459				1,465			1,465
	Deferred revenue				38,468			38,468				34,002			32,370
	Distribution payable to minority interests				13,400			13,400				—			—
	Amounts due to related parties				943,182			943,182				954,598			954,598
	Current portion of long-term debt				—			—				77,297			41,252
Total current liabilities					1,115,475			1,115,295				1,233,714			1,125,520
	Long-term debt				737,981			737,981				773,405			580,271
	Share of liabilities of certain investees				4,096			—		[a]		5,317			5,317
	Deferred income taxes liabilities				5,211			5,211				—			—
	Other non-current liabilities				11,349			46,751		[a][c]		7,370			20,625
	Minority interests				—			227,655		[c]		—			229,493
Shareholders’ deficiency Share capital					47,611			42,560				40,364			42,560
	Share premium				281,397			281,587				281,397			281,587
	Contributed surplus				—			205,172		[d]		—			205,172
	Deficit				(1,044,443	)		(1,248,341	)	[b][f][d]		(838,444	)		(1,007,133	)
	Foreign currency translation reserve				—			—				(80,967	)		—
	Other comprehensive income (loss):
			Cumulative translation adjustment		(2,569	)		2,292		[b]		—			(110,503	)
			Fair value of derivative instrument		—			(4,275	)	[c]		—			(3,076	)
Total Shareholders’ deficiency					(718,004	)		(721,005	)			(597,650	)		(591,393	)
Minority interests					256,332			—		[c]		423,428			—
Total group deficiency					(461,672	)		(721,005	)			(174,222	)		(591,393	)
Total liabilities and shareholders’ deficiency					1,412,440			1,411,888				1,845,584			1,369,833

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 14
U.S. GAAP (Cont’d)

[a] Investment in joint ventures

The Company accounts for investments in joint ventures using the proportionate consolidation method. Under U.S. GAAP, such investments are accounted for using the equity method. This results in reclassifications of balance sheet captions, which are illustrated in the balance sheet reconciliation as presented above. Such reclassification has no impact on net loss and shareholders’ deficiency. The Company has ceased to proportionately account for the Brazilian activities as at June 30, 2002, and accounts for its investment using the equity method starting July 1, 2002. Whereas under U.S. GAAP, the equity method was used throughout the entire year.

[b] FAS 130 “Comprehensive income”

U.S. GAAP establishes standards for reporting and display of comprehensive income (loss) and its components. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Under U.S. GAAP, all components of comprehensive income must be reported in the financial statements in the period in which they are recognized. A total amount for comprehensive income shall be displayed in the financial statements where the components of other comprehensive income are reported.

	2002			2001			2000
For the years ended December 31,	$			$			$
Net loss under U.S. GAAP		(241,208	)		(402,059	)		(273,838	)
Foreign currency translation adjustment		112,795			42,849			(53,854	)
Cumulative effect of change in accounting principle for derivatives and hedging activities		—			(1,318	)		—
Change in fair value of derivative financial instruments		(1,199	)		(1,758	)		—
Comprehensive loss under U.S. GAAP		(129,612	)		(362,286	)		(327,692	)

[c] Accounting for derivative instruments and hedging activities

Effective January 1, 2001, the Company adopted FAS 133, which established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. In accordance with SFAS 133, hedges related to anticipated transactions are designated and documented at the inception of the respective hedge as cash flow hedges and evaluated for effectiveness quarterly. All derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income net of tax and minority interest and are recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. All of the Company’s derivatives, which are described in Note 6, that are designated as hedges at December 31, 2002 are designated as cash flow hedges.

For the years ended December 31, 2002 and 2001, respectively, the change in the fair value of the Company’s cash flow hedges totaled $13.9 million and $30.8 million, of which $1.9 million and $9.5 million was reflected under Dutch and U.S. GAAP in income against the change in carrying value of the related hedged foreign currency debt. The remaining change in fair value, under U.S. GAAP was reflected in Other Comprehensive Income since the Company’s assessment of the hedging relationship revealed no ineffectiveness. This remaining change, net of taxes and minority interest in 2002 and 2001 was $1.2 million and $3.1 million, including, for 2001, a cumulative effect adjustment of approximately $1.3 million as of January 1, 2001.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 14
U.S. GAAP (Cont’d)

[d] Related party transaction

Under U.S. GAAP, the transfers of non-monetary assets between parent and subsidiaries should be valued at historical cost or market if lower. Consequently, the gain recognized under Dutch GAAP on the sale of the ClearWave shares to TIW, should be precluded. The gain of $205.2 million has been treated as contributed surplus to the Company.

[e] Discontinued operations

Commencing January 1, 2002, the Company was required to adopt FASB Statement No. 144, Accounting for the impairment or disposal of Long Lived Assets (“FAS 144”). Under FAS 144, the discontinued operations of Brazilian joint ventures were continued to be reported as continuing operations until the financial statements encompassing the date the decision to dispose of the operations were issued whereas under Dutch GAAP these operations are reported as continuing operations until the date of disposal. Additionally, under U.S. GAAP future operations losses are not to be recognized on these discontinued operations until they occur, and the investment will be measured at the lower of its carrying amount or fair value less costs to sell. The decision to dispose of the remaining Brazilian joint ventures occurred on March 5, 2002, the estimated loss of operations from the measurement date to the date of disposal of $36.5 million including the loss resulting from the realization of $27.2 million on the cumulative translation adjustment were reversed under U.S. GAAP in the year ended December 31, 2001 and recognized in the year ended December 31, 2002.

[f] Amortization of goodwill

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Tangible Assets. Under the new standard, goodwill is no longer amortized. Effective January 1, 2002, the Company has adopted Statement 142 and applied its recommendations prospectively, whereas under Dutch GAAP, the goodwill is still amortized.

Note 15
Related Party Transaction and Employee Information

The consolidated financial statements include fees and costs charged to the Company for technical service provided by companies within the TIW group of related companies [the “TIW Group"]. These fees and costs represented principally compensation of the TIW Group’s employees involved directly in the Company’s operations in areas such as engineering, information technology, marketing, human resource, finance and administration and other costs incurred by the TIW Group on behalf of the operational subsidiaries. These fees and costs included with selling, general and administrative expenses amount to $3.7 million, $10.5 million and $22.5 million in 2002, 2001 and 2000 respectively.

Advances from parent company are describe in note 6 and are repayable on demand. In 2002, interest expense of $13.2 million [$46.1 million and $5.0 million in 2001 and 2000, respectively] was charged on advances from the parent company. These interest expenses have been accreted to the amount of the related advances except for $12.9 million, which was paid in 2002.

A significant shareholder of TIW Czech N.V. and of TIW has committed 12.1% of Český Mobil’s syndicated senior credit facility which has been described in note 6.

The number of personnel employed during the year was 3,250, (5,880 in 2001).

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

Note 16

Subsequent Events

On March 26, 2003, Highlake International Business Company Ltd., an affiliate of Opportunity Fund, indirectly acquired the Company’s 48.9% interest in Telpart. Outstanding litigation between the Company and the Opportunity group of companies has also been settled as part of this transaction. The total cash consideration received by the Company was $70 million of which $5 million was paid by Telemig and Tele Norte for release of claims for technical services. The proceeds were returned to the parent company as a repayment of intercompany indebtedness. In accordance with the terms of TIW’s corporate credit facility for which the Company acts as co-borrower and the indenture governing its Senior Guaranteed Notes, TIW applied a portion of the net proceeds from the transaction to repay the indebtedness outstanding under the corporate credit facility and the remainder to redeem outstanding Senior Guaranteed Notes bringing the principal outstanding on such notes to $172.6 million.

On June 25, 2003, the Company’s indirect subsidiary MobiFon Holdings B.V., (“Holdings”) which holds the Company’s equity interest in MobiFon entered into an agreement whereby it agreed to issue $225 million aggregate principal amount of 12.50% senior notes due July 31, 2010 at 97.686% of face value for gross proceeds of $219.8 million. Interest on the notes will accrue from the date of their issuance and will be payable in cash semi-annually in arrears on each January 31, and July 31 beginning January 2004. The notes will be unsecured obligations except to the extent of a security interest in a debt service reserve account which will initially be funded with $28.1 million for the benefit of the noteholders. The notes will contain customary restrictive covenants and will rank senior in right of payment to Holding’s future subordinated indebtedness and pari passu in right of payment with all of Holding’s existing and future unsecured senior indebtedness.

The net proceeds after funding the debt service reserve account will be primarily used to repay intercompany indebtedness to ClearWave. ClearWave intends to use the money received from MobiFon Holdings B.V., to make a distribution to its shareholders and to repay its indebtedness to the Company. The Company intends to use the proceeds to repay a portion of its intercompany indebtedness with TIW which will use the proceeds received by it and other available cash resources to repay its 14% senior guaranteed notes.

Note 17

Comparative Figures

Certain comparative figures were reclassified to conform to the presentation adopted in 2002.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED BALANCE SHEETS
AFTER APPROPRIATION OF NET RESULT

December 31, 2001 and 2000
[ALL TABULAR AMOUNTS ARE IN THOUSANDS OF U.S. DOLLARS UNLESS OTHERWISE INDICATED]

As at December 31,		2002			2001
[in thousands of U.S. dollars]		$			$
ASSETS
Non-current assets
	Financial fixed assets [Note 2]		232,421			339,459
	Tangible fixed assets [Note 3]		—			10
Total non-current assets			232,421			339,469
Current assets
	Cash and cash equivalents		219			1,172
	Amounts due from related parties [Note 9]		1,728			13,656
	Prepaid expenses and other current assets		30			2,811
Total current assets			1,977			17,639
Total assets			234,398			357,108
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
Liabilities
	Trade creditors and accruals		10,398			160
	Amounts due to related parties [Note 9]		942,004			954,598
Total liabilities			952,402			954,758
Shareholders’ equity (deficiency) [Note 4]
	Share capital		47,611			40,364
	Share premium		281,397			281,397
	Deficit		(1,044,443	)		(838,444	)
	Cumulative translation adjustment		(2,569	)		(80,967	)
Total shareholders’ deficiency			(718,004	)		(597,650	)
Total liabilities and shareholders’ deficiency			234,398			357,108

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED STATEMENT OF LOSS
AFTER APPROPRIATION OF NET RESULT

For the years ended December 31,	2002			2001			2000
[in thousands of U.S. dollars]	$			$			$
Operating expenses		855			638			627
Operating loss		(855	)		(638	)		(627	)
Interest revenue from affiliated companies [Note 9]		14,330			8,964			13,788
Interest expense to affiliated companies [Note 9]		(13,126	)		(45,406	)		(5,033	)
Other Interest revenue		6			158			426
Income (loss) from continuing operations before the under noted items		355			(36,922	)		8,554
Shares of income (loss) of affiliated companies [Note 2]		6,338			(17,775	)		(28,060	)
Gain on disposals of investments [Note 5]		(1,700	)		299,842			15,805
Impairment of investment [Note 6]		(210,996	)		(36,483	)		—
Exchange gain (loss)		4			4			(546	)
Income (loss) before income taxes		(205,999	)		208,666			(4,247	)
Income taxes expense (recovery) [Note 7]		—			—			(1	)
Income (loss) from continuing operations		(205,999	)		208,666			(4,246	)
Income (loss) from discontinued operations net of applicable income tax expense (recovery) of ($23,264) and ($11,356) in 2001 and 2000		—			(442,036	)		(269,592	)
Net loss		(205,999	)		(233,370	)		(273,838	)

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CONDENSED UNCONSOLIDATED STATEMENTS OF CASH FLOWS
AFTER APPROPRIATION OF NET RESULT

Year ended December 31,		2002			2001			2000
(in thousands of U.S. dollars)		$			$			$
OPERATING ACTIVITIES
Income (loss) from continuing operations			(205,999	)		208,666			(4,246	)
Depreciation and amortization			10			9			15
Share of losses income of affiliated companies			(6,338	)		17,775			28,060
Gain on disposal of investments			1,700			(299,842	)		(15,805	)
Impairments of investment			210,996			36,483			—
Changes in operating assets and liabilities
	Amounts due from related parties		(676	)		(11,345	)		(14,378	)
	Prepaid and other current assets		(27	)		14,671			(17,474	)
	Trade creditors and accruals		(70	)		1			5,051
	Deferred income		—			(2,836	)		2,836
Cash provided by (used in) operating activities			(404	)		(36,418	)		(15,941	)
INVESTING ACTIVITIES
Proceeds from sales of investments			—			153,311			—
Investments and advances to affiliated companies			25,588			(55,163	)		(185,857	)
Cash provided by (used in) investing activities			25,588			98,148			(185,857	)
FINANCING ACTIVITIES
Net advance from parent companies			(26,137	)		154,452			529,263
Cash provided by financing activities			(26,137	)		154,452			529,263
Cash provided by continuing operations			(953	)		216,182			327,465
Cash used in discontinued operations			—			(216,751	)		(328,443	)
Decrease in cash and cash equivalents for the year			(953	)		(569	)		(978	)
Cash and cash equivalents, beginning of year			1,172			1,741			2,719
Cash and cash equivalents, end of period			219			1,172			1,741

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
(All tabular amounts are in thousands of U.S dollars unless otherwise indicated)

Note 1

Significant Accounting Policies

This Condensed Unconsolidated Financial Information has been prepared by management on the basis of accounting principles generally accepted in the Netherlands. Investments over which the Company has control are accounted for using the equity method. This Condensed Unconsolidated Financial Information should be read in conjunction with the Company’s consolidated financial statements.

Significant differences between Dutch and United States generally accepted accounting principles affecting the determination of shareholders’ equity at December 31, 2002 and 2001 and the determination of net loss for each of the years in the three-year period ended December 31, 2002 are summarized in Note 14 of the consolidated financial statements of the Company.

As disclosed in Note 1 to the Consolidated Financial Statements, as at December 31, 2002, due to the short-term maturity of its corporate credit facility, the committed cash obligations of TIW, the parent Company of TIWC, for the upcoming twelve months exceed the committed sources of funds and TIW’s cash and cash equivalents on hand. In addition, it will be necessary for TIW to comply with the covenants to have access to its financing arrangements according to the terms of the related agreements. As a result, there is significant uncertainty as to whether TIW will have the ability to continue as a going concern. Since the Company depends on continued support from TIW, acts as co-borrower in the corporate credit facility and as Guarantor of 14% Senior Guaranteed notes issued by TIW, there is significant uncertainty as to whether the Company will have the ability to continue as a going concern. TIW continues to review opportunities to refinance debt, amend the terms of its corporate credit facility, raise new financing and sell assets.

The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the ordinary course of business. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company not be successful in its efforts to refinance or amend the terms of its corporate credit facility.

Note 2

Financial Fixed Assets

Investments and loans made to the Company’s investees are as follows and are described in the Note 5 in the consolidated financial statements:

	Shares			Loans			Total
Balance as at December 31, 2002		124,010			108,411			232,421
Additions (Reductions)		(193,769	)		(5,252	)		(199,021	)
Share of income		6,338			—			6,338
Exchange rate movements		85,645			—			85,645
Balance as at December 31, 2001		225,796			113,663			339,459
Additions (Reductions)		(184,450	)		51,297			(133,153	)
Share of losses		(17,775	)		—			(17,775	)
Exchange rate movements		69,999			—			69,999
Balance as at December 31, 2000		358,022			62,366			420,388

The intercompany loans include $88.1 million demand loan bearing interest at 14%. The remaining portion is interest fee.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
(All tabular amounts are in thousands of U.S dollars unless otherwise indicated)

Note 3

Tangible Fixed Assets (Cont’d)

An analysis of activity in the Company’s tangible fixed assets was as follows for the period ending December 31, 2002:

				Accumulated			Net Book
	Cost			Depreciation			Value
Balance as at December 31, 2002		76			(76	)		—
Depreciation		—			(10	)		(10	)
Addition during the year		—			—			—
Balance as at December 31, 2001		76			(66	)		10
Depreciation		—			(7	)		(7	)
Addition (reduction) during the years		(50	)		—			(50	)
Balance as at December 2000		126			(59	)		67

Note 4

Shareholders’ Equity

The share capital of the Company, together with the changes in shareholders’ equity for 2002 and 2001 are described in the Notes to Consolidated Financial Statements.

Note 5

Gain on Disposal of Investments

During 2002, the Company took an allowance for bad debt of $1.7 million on a loan in relation with the ESMR/SMR operations.

On February 14, 2001, TIW issued 43,809,335 units. Each Unit consists of one class A Subordinate Voting Share of ClearWave and five Units entitle the holder to acquire one Subordinate Voting Share of TIW at anytime prior to June 30, 2002. TIW’s interest in ClearWave was held through the Company and consequently, on February 14, 2001, the Company sold the shares included in the Units to TIW at their fair value for total proceeds for $272.5 million. This transaction resulted in a gain on disposal of $205.2 million. [See Note 10].

The gain on disposal of investments includes the Brazilian joint ventures cellular operations net gain of $106.1 million from the sale on March 31, 2001 of the Company’s 16.3% equity interest in its two Brazilian B-Band joint ventures, for cash proceeds of $153.3 million.

On December 24, 2001, the Company decided to dispose of its paging operation in Mexico and has relinquished its joint control of the investment. A loss of $5.6 million has been recognized as a result of these actions.

During 2001, the Company disposed others small investments resulting in a loss of $5.8 million.

Note 6

Impairment of Investment

As described in Note 13 and 16 of the consolidated financial statements, the Company recorded impairments of investment of $211.0 million and $36.5 million in 2002 and 2001 respectively related to its Brazilian activities to be disposed of. These impairments include realization on the cumulative translation accounts of $155.3 million and $27.2 million in 2002 and 2001 respectively, as the Company estimates that such amount will not be recovered from the sale of the Company’s A-Band joint venture operation in Brazil.

Note 7

Income Taxes

Deferred tax was not accounted for in the balance sheet as at December 31, 2002. As it is uncertain that the tax losses can be utilized reasonably in the near future. Therefore, the deferred tax asset due to the loss carry forward has been fully offset by a valuation allowance and no taxable income was recorded in the profit and loss account.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
(All tabular amounts are in thousands of U.S dollars unless otherwise indicated)

Note 8
Commitments

The Company has certain commitments with regard to its investing activities and they described in the Notes 11 of the Consolidated Financial Statements.

Note 9
Related Party Transaction and Employee Information

Amount due from related party consist mainly ($1.4 million) of interest on demand loan. The amount payable to related party consist of $81.6 million demand loan bearing interest at 13.875% and $860.4 million interest fee loan. In 2002, interest revenues of $14.3 million [$9.0 million and $13.8 million in 2001 and 2002, respectively] was charged on advances to subsidiaries and the interest expense of $13.1 million [$45.4 million and $5.0 million in 2001 and 2000, respectively] was charged on advances from the parent company.

Besides its two managing directors, the Company had no employee in 2002. Remuneration of the managing directors amounted to $186,000 — ($200,000 in 2001).

Note 10
Subsequent Events

Significant events subsequent to December 31, 2002 are described in the Notes 16 of the Consolidated Financial Statements.

Note 11
Comparative Figures

Certain comparative figures were reclassified to conform to the presentation adopted in 2001.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001
(All tabular amounts are in thousands of U.S dollars unless otherwise indicated)

Managing Directors   (signed)	Supervisory Directors   (signed)
Yves Normand	André Gauthier
(signed) Cornelis van Ravenhorst	(signed) Margriet Zwarts
	(signed) Mario Bertrand
	(signed) James J. Jackson

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

AUDITOR’S REPORT

Introduction

We have audited the financial statements of Telesystem International Wireless Corporation N.V., Rotterdam, for the year 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

scope

We conducted our audit in accordance with auditing standards generally accepted in the Netherlands. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at December 31, 2002 and of the results for the year then ended in accordance with accounting principles generally accepted in the Netherlands and comply with the financial reporting requirements included in Part 9 of Book 2 of the Netherlands Civil Code.

emphasis of matter

Without qualifying our opinion above, we draw attention to Note 1 to the financial statements which refer to the uncertainty as to the Company’s ability to continue as a going concern. However, the explanation provided shows that it is not impossible that the business operations will be maintained in the longer term. As a consequence, the accounting principles applied are based on the assumption that the Company will be able to continue as a going concern.

Rotterdam, June 26, 2003

(signed)

Ernst & Young Accountants

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

Appropriation of Net Profit

According to Article 31 of the Company’s Articles of Association, the following appropriation (abbreviated) of the Company’s net profit is applicable:

• If and insofar as the net profits shown in the income statement so allow, dividends will be distributed to the common shares.

• The Supervisory Board may authorize distributions out of non-distributed profits and other freely distributable reserves and the distribution of interim dividends.

• Profit distribution and distribution of the reserves may only be done up to the amount of the distributable reserves and after adoption of the balance sheet and income statement

• If there is a loss, which cannot be covered by the reserves or compensated for in another manner, no profit shall be distributed in any subsequent year, as long as the loss has not been recovered.

The Managing Directors propose that the result for the year be added to the deficit. This proposal has been included in the financial statements.

Financial Statements of Telesystem International Wireless (Latin America) Inc.

Presented below are the Consolidated Financial Statements of Telesystem International Wireless (Latin America) Inc., including the notes thereto, as of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001 and 2000, together with the auditors’ report thereon.

REPORT OF INDEPENDENT AUDITORS

To the shareholder and board of directors of
Telesystem International Wireless (Latin America) Inc.

We have audited the accompanying consolidated balance sheets of Telesystem International Wireless (Latin America) Inc. as of December 31, 2002 and 2001, and the related consolidated statements of loss and comprehensive loss, cash flows and shareholder’s equity for the years then ended. These financial statements are the responsibility of Telesystem International Wireless (Latin America) Inc.’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Telesystem International Wireless (Latin America) Inc., as at December 31, 2002 and 2001 and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Barbados	/s/Ernst & Young
February 28, 2003

(except for Note 5 as to which the date is March 26, 2003)

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED BALANCE SHEETS

As at December 31,
(in thousands of U.S. dollars)

		2002			2001
		$			$
ASSETS
Current assets
	Cash		66			81
	Other assets		16			—
Total current assets			82			81
Investment held for sale [Notes 3 and 5]			70,000			185,468
Capital assets			50			52
			70,132			185,601
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities
	Accounts payable and accrued liabilities		8			31
	Accounts payable to TIW group		150			1,050
Total current liabilities			158			1,081
SHAREHOLDER’S EQUITY
Common shares, without par value, unlimited number authorized, 388,552,049 and 386,827,049 issued and outstanding as at December 31, 2002 and 2001, respectively			388,552			386,827
Deficit			(318,578	)		(90,324	)
Accumulated other comprehensive loss:
Cumulative translation adjustment			—			(111,983	)
Total shareholder’s equity			69,974			184,520
			70,132			185,601

Subsequent Events [Note 5]

See accompanying notes

On February 28, 2003, the Board of Directors authorized these financial statements for issue.

(Signed)

Courtney Springer
Director

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Years ended December 31,
(in thousands of U.S. dollars)

	2002			2001
	$			$
Costs
General and administrative expenses		803			1,079
Operating loss		(803	)		(1,079	)
Loss on investment held for sale, including impairment and share of loss		(227,451	)		(5,275	)
Net loss		(228,254	)		(6,354	)
Translation adjustment		111,983			(33,881	)
Comprehensive loss		(116,271	)		(40,235	)

SEE ACCOMPANYING NOTES

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31,
(in thousands of U.S. dollars)

		2002			2001
		$			$
OPERATING ACTIVITIES
Net loss			(228,254	)		(6,354	)
Adjustments to reconcile net loss to cash used in operating activities:
	Loss on investment held for sale		227,451			5,275
	Other assets		(20	)		94
	Accounts payable and accrued liabilities		(17	)		(27	)
Cash used in operating activities			(840	)		(1,012	)
FINANCING ACTIVITIES
	Issuance of shares		1,725			—
	Accounts payable to TIW group		(900	)		985
Cash provided by financing activities			825			985
Decrease in cash and cash equivalents			(15	)		(27	)
Cash and cash equivalents, beginning of year			81			108
Cash and cash equivalents, end of year			66			81

SEE ACCOMPANYING NOTES

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

								Accumulated
								Other			Total
	Common		Common					Comprehensive			Shareholder's
For the years ended December 31	Shares		Shares		Deficit			Loss			Equity
(in thousands of U.S. dollars)	#		$		$			$			$
Balance as at December 31, 2000		386,827,049		386,827		(83,970	)		(78,102	)		224,755
Net loss		—		—		(6,354	)		—			(6,354	)
Translation adjustment		—		—		—			(33,881	)		(33,881	)
Balance as at December 31, 2001		386,827,049		386,827		(90,324	)		(111,983	)		184,520
Issuance of shares for cash		1,725,000		1,725		—			—			1,725
Net loss		—		—		(228,254	)		—			(228,254	)
Translation adjustment		—		—		—			111,983			111,983
Balance as at December 31, 2002		388,552,049		388,552		(318,578	)		—			69,974

See accompanying notes

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1
DESCRIPTION OF BUSINESS

The Company’s 48.9% equity investment in Telpart Celular Participações S.A. (“Telpart”) was made to acquire interests in cellular operations in Brazil. On July 29, 1998, Telpart acquired a 51.9% voting interest and a 19.3% equity interest in each of Telemig Celular Participações S.A., (“Telemig”) and Tele Norte Participações S.A., (“Tele Norte”). Telemig and Tele Norte operate, through their subsidiaries, A-Band cellular telecommunications networks in the States of Minas Gerais and in five northern states of Brazil.

The Company is incorporated under the Laws of Barbados and licensed under the International Business Companies Act. It is a wholly-owned subsidiary of Telesystem International Wireless Corporation N.V. (“TIWC”), a company incorporated in the Netherlands. The Company’s ultimate parent is Telesystem International Wireless Inc. (“TIW”), a company incorporated in Canada. The Company acts as a holding Company that indirectly holds TIW’s participation in A-Band cellular operations in Brazil.

The Company’s investment in Telpart is owned through TIW do Brasil Ltda, the shares of which have been pledged to lenders of TIW. On March 5, 2002 the Company adopted a formal plan to dispose of its Brazilian cellular operations by way of a sale of its equity interest which has been completed on March 26, 2003 for a total cash consideration of $70 million (See Note 5).

NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States [“U.S. GAAP”]. The preparation of financial statements by management in accordance with generally accepted accounting principles requires the selection of accounting policies from existing acceptable alternatives. The summary of significant accounting policies is as follows:

INVESTMENTS

The Company consolidates TIW do Brasil Ltda., a wholly-owned holding Company.

The Company accounts for its investment held for sale in Telpart, in which TIW do Brazil has a 48.9% interest, at the lower of equity value and net realizable value.

USE OF ESTIMATES

The preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles in the United States requires management to use estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

INCOME TAXES

The Company follows the liability method in accounting for income taxes. Future tax balances reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. Valuation allowances are established when it is more likely than not that future tax assets will not be realized.

The Company is licensed under the International Business Companies Act. The Company is not subject to tax liability for gains, which could result from the sale of certain assets, including its investment in Telpart. As a result, no deferred tax asset was recorded.

TELESYSTEM INTERNATIONAL WIRELESS (LATIN AMERICA) INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONT’D]

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the Company’s functional currency. Transactions arising in foreign currencies are translated into U.S. dollars at the exchange rate at the transaction dates. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the year-end rates of exchange. The resulting translation gains or losses are recognized in the consolidated statements of loss.

Results of operations from subsidiaries and joint ventures, which report in currencies other than U.S. dollars, are translated using the monthly average exchange rates, while assets and liabilities are translated using the current rates at each balance sheet date. The resulting exchange gains or losses are accumulated in the cumulative translation adjustment account included as a component of shareholder’s equity.

NOTE 3
INVESTMENT HELD FOR SALE

Continuity of investment in Telpart

	2002			2001
	$			$
Investment at equity, beginning of year		185,468			224,624
Funds invested and related costs		—			-
Loss on investment including impairment and share of loss		(227,451	)		(5,275	)
Translation adjustment		111,983			(33,881	)
Investment at lower of equity and net realizable value; end of year		70,000			185,468

NOTE 4
FINANCIAL INSTRUMENTS

FAIR VALUE

The carrying amounts of cash and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these instruments.

NOTE 5
SUBSEQUENT EVENTS

On January 20, 2003, the Company transferred its shares of TIW Do Brazil to TPSA Investment Corporation, a newly formed wholly-owned subsidiary incorporated in Barbados on August 23, 2002.

On March 26, 2003, Highlake International Business Company Ltd., an affiliate of Opportunity Fund, indirectly acquired the Company’s 48.9% interest in Telpart through the 100% acquisition of TPSA Investment Corporation. Outstanding litigation between the Company and the Opportunity group of companies has also been settled as part of this transaction. The total cash consideration received by the Company is $70 million of which $5 million was paid by Telemig and Tele Norte for release of claims for technical services. The proceeds were returned to TIW through a capital reduction and were applied against TIW’s senior indebtedness for which the shares of the Company were collateral for the senior guaranteed notes. The expenses incurred in connection with the sale were not reflected in the Company’s financial statements as they were paid by TIW and would not be recharged to the Company.

NOTE 6
COMPARATIVE FIGURES

Certain comparative figures were reclassified to conform to the presentation adopted in 2002.

Financial Statements of ClearWave N.V.

The audited Consolidated Financial Statements of ClearWave N.V., including the notes thereto, as of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001 and 2000, together with the auditors’ report thereon, contained in the ClearWave’s 2002 Annual Report to Shareholders filed with the United States Securities and Exchange Commission on Form 6-K and attached hereto as Exhibit 11.1, are incorporated herein by reference and are an integral part of this Form 20-F.

ITEM 19 – EXHIBITS

EXHIBITS

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

Exhibit
Number	Description
1.1	Articles of Incorporation of Telesystem International Wireless Corporation N.V. (Incorporated by reference to Exhibit 3.3 to Form F-4, filed on March 4, 2002).
2.1	Indenture dated September 18, 2001, among Telesystem International Wireless Inc., Telesystem International Wireless Corporation N.V. and The Bank of Nova Scotia Trust Company of New York providing for the issuance of 14% Senior Guaranteed Notes due December 30, 2003. (Incorporated by reference to Exhibit 4.1 to Form F-4, filed on March 4, 2002).
4.1	Mutual Release dated March 26, 2003 by and among Telesystem International Wireless Inc. and certain of its subsidiaries, Opportunity Fund, CVC/Opportunity Equity Partners L.P. and Highlake International Business Company. (Incorporated by reference to Exhibit 4.1 to Form 20-F of Telesystem International Wireless Inc. filed May 20, 2003).
4.2	Loan Agreements between ClearWave N.V. and TIW, and ClearWave N.V. and TIWC. (Incorporated by reference to Exhibit 4.2 to Form 20-F of ClearWave N.V. filed May 17, 2002).
4.3	Exit Deed dated March 19, 2003 among an affiliate of Emerging Market Partnership, ClearWave N.V., Telesystem International Wireless Corporation N.V. and Telesystem International Wireless Inc. (Incorporated by reference to Exhibit 4.2 to Form 20-F of ClearWave N.V. filed May 20, 2003).
4.4	English translation summary of License awarded to Český Mobil to establish and operate a public mobile telecommunication network according to the GSM standard dated June 17, 2002. (Incorporated by reference to Exhibit 4.3 to Form 20-F of ClearWave N.V. filed May 20, 2003).
4.5	English translation summary of License awarded to Český Mobil to establish and operate a public mobile telecommunication network according to the VmTS standard dated June 20, 2002. (Incorporated by reference to Exhibit 4.4 to Form 20-F of ClearWave N.V. filed May 20, 2003).
4.6	Loan Agreement between MobiFon S.A. and European Bank for Reconstruction and Development dated August 27, 2002 (Incorporated by reference to Form 6-K of ClearWave N.V., filed November 13, 2002).
4.7	Loan Agreement between MobiFon S.A. and Nordic Investment Bank dated August 27, 2002 (Incorporated by reference to Form 6-K of ClearWave N.V., filed November 13, 2002).
4.8	Loan Agreement between MobiFon S.A. and Export Development Bank Canada dated August 27, 2002 (Incorporated by reference to Form 6-K of ClearWave N.V., filed November 13, 2002).
4.9	Share Retention and Subordination Deed between MobiFon S.A., certain of its direct and indirect shareholders, Export Development Canada, Nordic Investment Bank and European Bank for Reconstruction and Development dated August 27, 2002. (Incorporated by reference to Exhibit 4.8 to Form 20-F of ClearWave N.V. filed May 20, 2003).
8	Subsidiaries of the Registrant.
11.1	ClearWave N.V.’s 2002 Annual Report to Shareholders. (Incorporated by reference to ClearWave N.V.’s Form 6-K, filed May 20, 2003).
11.2	Certification pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes Oxley Act of 2002.

SIGNATURE

     Telesystem International Wireless Corporation N.V. hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

By: (signed)
Name: Cornelis van Ravenhorst
Title: Managing Director

Dated: June 27, 2003

TELESYSTEM INTERNATIONAL WIRELESS CORPORATION N.V.

CERTIFICATION

     I, Cornelis van Ravenhorst, Managing Director of Telesystem International Wireless Corporation N.V., certify that:

     1.     I have reviewed this annual report on Form 20-F of Telesystem International Wireless Corporation N.V.;

     2.     Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

     c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

     a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.     The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

June 27, 2003

(signed)

Cornelis van Ravenhorst
Managing Director
(Principal Executive Officer and Principal Financial Officer)
Telesystem International Wireless Corporation N.V.

* * *

EX-8 3 m10201orexv8.htm LIST OF SIGNIFICANT SUBSIDIARIES

Exhibit 8

LIST OF SIGNIFICANT SUBSIDIARIES

The following table lists the Registrant’s significant subsidiaries, as defined in Rule 1-02(w) of Regulation S-X, as at December 31, 2002. The table includes the legal name of the subsidiary, its jurisdiction of incorporation and the name under which it does business. The table omits certain holding companies.

	JURISDICTION OF	NAME UNDER WHICH IT
COMPANY NAME	INCORPORATION	IS DOING BUSINESS
ČESKÝ MOBIL a.s. MOBIFON S.A.	Czech Republic Romania	Oskar Connex

EX-11.2 4 m10201orexv11w2.htm CERTIFICATION

Exhibit 11.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report on Form 20-F (the “Form 20-F”) of Telesystem International Wireless Corporation N.V., a Netherlands corporation (the “Company”), for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1.	the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 27, 2003:	(signed)
	Kees van Ravenhorst Managing Director (Principal executive officer and principal financial officer)

     A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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EX-8

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EX-11.2

exv11w2