20-F

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TABLE OF CONTENTS
WAVECOM S.A. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 20-F

ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

Commission file number: 000-30078

WAVECOM S.A.
(Exact name of Registrant as specified in its charter)

France
(Jurisdiction of Incorporation or Organization)

12 boulevard Garibaldi
92442 Issy-Les-Moulineaux Cedex,
France
Tel. 011 33 1 46 29 08 00
(Address of Principal Executive Offices)

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

Title of each class	Name of each exchange on which registered
Shares, nominal value €1.00 each* American Depositary Shares, evidenced by American Depositary Receipts, each representing one Share.	NASDAQ National Market

*

The Shares are not traded on the NASDAQ National Market but are registered only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

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

None

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.

Shares	15,107,890
American Depositary Shares	1,649,730

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

Yes ý    No o

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

Item 17 o    Item 18 ý

TABLE OF CONTENTS

	PART I
Item 1:	Identity of Directors, Senior Management and Advisors
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:	Market Risk
Item 12:	Description of Securities Other Than Equity Securities
	PART II
Item 13:	Defaults, Dividend Arrearages and Delinquencies
Item 14:	Use of Proceeds
Item 15:	Controls and Procedures
Item 18:	Financial Statements
Item 19:	Exhibits

PRESENTATION OF INFORMATION

        Unless the context otherwise indicates, references to "Wavecom," "we" or us include Wavecom S.A. and its subsidiaries. References to "U.S. dollars" or "$" contained herein are to the lawful currency of the United States, and references to "euro" or "€" are to are to the currency of the European Monetary Union.

FORWARD LOOKING STATEMENTS

        This annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of Wavecom's future operational or financial performance and are subject to risks and uncertainties. Actual operational and financial results may differ materially from Wavecom's expectations contained in the forward-looking statements as a result of various factors. Factors that may cause such differences include, but are not limited to, factors discussed in "Item 3—Key Information—Risk Factors" and "Item 5—Operating and Financial Review and Prospects."

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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 selected financial data for the five years ended December 31, 2002 are derived from the consolidated financial statements of Wavecom, which have been prepared in accordance with U.S. GAAP and have been audited by Ernst & Young Audit, independent auditors. The data should be read in conjunction with "Operating and Financial Review and Prospects," the consolidated financial statements, related notes and other financial information included in this annual report. We derived the amounts shown below from our consolidated financial statements, which for the year ended December 31, 1998 we have translated into euro using the exchange rate fixed for French francs and euro on January 1, 1999.

			Years ended December 31,
			1998			1999			2000			2001			2002
			(in thousands, except share and per share amounts)
Consolidated statements of operations data:
Revenues:
	Product sales		€	12,796		€	34,563		€	63,055		€	317,571		€	549,543
	Technology development and other services			5,780			1,853			2,518			5,093			1,546
	License fees and royalties			998			144			—			—			—
		Total revenues		19,574			36,560			65,573			322,664			551,089
Cost of revenues:
	Cost of goods sold			10,562			26,236			51,457			254,658			371,919
	Cost of services			3,741			2,148			4,522			4,718			4,709
		Total cost of revenues		14,303			28,384			55,979			259,376			376,628
Gross profit				5,271			8,176			9,594			63,288			174,461
Operating expenses:
	Research and development			7,851			11,913			16,133			32,634			64,093
	Sales and marketing			2,088			3,412			5,836			12,416			26,600
	General and administrative			1,962			3,070			5,598			13,297			26,163
	Amortization of goodwill			—			—			47			278			—
	Deferred compensation amortization			126			1,608			1,758			1,711			1,587
	Provision for loss—ICO Development contract			—			2,607			—			—			—
		Total operating expenses		12,027			22,610			29,372			60,336			118,443
Operating income (loss)				(6,756	)		(14,434	)		(19,778	)		2,952			56,018
Interest and other financial income (expense), net				(364	)		(207	)		3,734			3,969			(7,698	)
Provision for loss on long-term investment				—			—			—			(716	)		—
Beneficial conversion feature of convertible debt				—			(1,072	)		—			—			—
Income (loss) before minority interests and income taxes				(7,120	)		(15,713	)		(16,044	)		6,205			48,320
Minority interest				—			—			6			804			323
Income (loss) before income taxes				(7,120	)		(15,713	)		(16,038	)		7,009			48,643
Income tax expense (benefit)				(813	)		(736	)		(1,534	)		(2,299	)		6,556
Net income (loss)			€	(6,307	)	€	(14,977	)	€	(14,504	)	€	9,308		€	42,087
Basic net income (loss) per share(1)			€	(0.63	)	€	(1.26	)	€	(1.03	)	€	0.63		€	2.82
Diluted net income (loss) per share			€	(0.63	)	€	(1.26	)	€	(1.03	)	€	0.61		€	2.74
Cash dividends declared per share(2)			€	0.015			—			—			—			—
Number of shares used in computing basic net income (loss) per share				10,000,000			11,922,770			14,081,178			14,726,647			14,943,048
Number of shares used in computing diluted net income (loss) per share				10,000,000			11,922,770			14,081,178			15,359,226			15,348,985

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	December 31,
	1998		1999	2000	2001	2002
Consolidated balance sheet data:
Total current assets	€11,322		€34,957	€138,323	€227,028	€270,308
Total assets	15,843		41,462	158,298	259,947	332,034
Total current liabilities	18,274		15,927	48,957	137,064	164,890
Total long-term liabilities	1,414		879	166	638	287
Total shareholders' equity (deficit)	(3,845	)	24,656	108,010	121,884	166,819

(1)

Net income (loss) per share amounts are computed using the weighted average number of shares outstanding. It excludes options and warrants, and reflects only the actual ordinary shares outstanding.

(2)

We do not expect to pay any cash dividends on our shares in the foreseeable future.

Exchange Rate Data

        Since January 1, 1999 our functional currency has been euro, the currency of the European Monetary Union, of which the Republic of France is a member. The exchange rate for conversion of euros into U.S. dollars (using the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York) on May 14, 2003 was $1.1531 = €1.00. Fluctuations in the exchange rate between the euro and the dollar will affect the dollar amounts received by owners of ADSs on conversion of dividends, if any, paid in euro on the shares and may affect the dollar price of the ADSs on the Nasdaq National Market.

        The following table shows the noon buying rates for the number of U.S. dollars per euro for the period since January 1, 1999. The average is computed using the noon buying rate on the last business day of each month during the period indicated.

Month		High		Low
2003 May (through May 14)		$	1.1561	$	1.1200
	April		1.1180		1.0621
	March		1.1062		1.0545
	February		1.0875		1.0708
	January		1.0861		1.0361
2002
	December		1.0485		0.9927
	November		1.0139		0.9895
	October		0.9881		0.9708

Year ended December 31,		Average
	2002	$	1.0485
	2001		0.8952
	2000		0.9234
	1999		1.0667

        Since the euro did not exist prior to January 1, 1999, we cannot present exchange rates between the euro and the U.S. dollar for 1998. Our functional currency during 1998 was the French franc. The average noon buying rate for the French franc per $1.00 was FF5.90 for 1998, computed using the noon buying rate on the last business day of each month during 1998.

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Risk Factors

In addition to the other information contained in this annual report, the following risk factors should be carefully considered in evaluating us and our business. These statements are intended to highlight the material risk factors that may affect our results.

We rely heavily on a small number of major customers. The loss of one or more of these customers, or a reduction of purchases by one or more major customers, may adversely affect our sales, operating profit and cash flow

        Although the global handset market experienced a downturn in 2001 and 2002, we experienced substantial growth during those periods as the market for mobile telephones in East Asia, and particularly in China, expanded rapidly. Our customers in the East Asian market have been particularly successful in building market share in that expanding market. However, if the Chinese and other markets in which our customers sell their products should experience a downturn, or if our customers are unable to remain competitive in their local markets or are unable to increase their market share, or if we are unable to win new customers, our revenues may not continue to grow and may even decline.

        We believe that a small number of manufacturers will continue to dominate the worldwide market for mobile telephones. Our performance currently depends on a small number of customers who place significant orders with us. Because our relationships with these major customers are very important to us, we may find it necessary from time to time to accept cancellations or order delays from such customers on relatively short notice. In December 2002, we experienced for the first time such a cancellation of orders by TCL Communication (HK) Company Ltd., by far our largest single customer in 2002.

        In order to decrease our dependence on a few major Asian customers, we have expanded our worldwide sales and marketing organization and significantly expanded our operations in the non-Asian markets. However, the dynamics of the mobile telephone markets in Europe, North America and Asia are all very different, and we cannot assure you that the strategies that have enabled us to grow quickly in the Asian handset supply market will work in those other markets, or that we will have any success in serving those markets.

        The following table sets forth revenues from our largest customers for the past three years:

	2000		2001		2002
Percentage of total revenues represented by the five largest customers	45.8	%*	80.4	%**	83.9	%***
Percentage of total revenues represented by the ten largest customers	68.4	%	88.1	%	90.1	%

*

In 2000, sales to Sewon Telecom represented 14.7% of total revenue.

**

In 2001, sales to Sewon Telecom represented 35.4% of total revenue; sales to Amtal International Ltd., agent for TCL Mobile Communication (HK) Company Ltd., represented 32.9% of total revenue.

***

In 2002, sales to TCL Mobile Communication, either directly or through Amtal International Ltd., represented 67% of total revenue.

The wireless communication market in which we operate is characterized by rapidly changing and increasingly complex technologies. If we are unable to keep pace with these new technology trends, our product offerings may not remain competitive and we may lose customers

        The wireless communication markets in which we sell our products are developing new types of products and new versions of existing products regularly. Manufacturers who purchase our WISMO modules and wireless modems for use in their mobile telephones and other applications compete with

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other manufacturers and, to be competitive, must offer products that satisfy consumer demand for smaller, less expensive products with more features. To meet our customers' needs, we must continuously update and enhance our products, shortening their life cycles so that they meet the latest standards and include up-to-date features.

        To develop these enhancements, new designs and technologies we must spend time and significant amounts on research and development. These investments are generally made before commercial viability for such enhanced products is ensured and we may not receive any significant revenues from these products if we misjudge the market or miss a product life-cycle window. We may lose market share if our competitors, most of which are larger and have greater resources than we do, are more successful or faster than we are in updating and improving products and technology.

        In addition, several of our products rely on unproven or evolving technologies that may cause defects or quality or performance problems, which may harm our reputation and increase our costs.

Lack of growth in the markets for new wireless applications could have a significant adverse impact on our ability to grow our business

        Our prospects depend upon continued development and growth of markets for wireless communications products. Although we anticipate that the market for mobile telephones will continue to grow in the future, we believe that a significant potential for growth in the demand for our products will be in new wireless applications. These notably include:

•

hand-held portable devices, such as personal digital assistants and computer notebooks;



•

automatic vehicle location systems, which provide vehicle tracking and navigation capabilities; and



•

devices that require the measurement and transmission of data, such as vending machines, utility meters and security systems.

        The markets for most of these types of products are still in their formative stages. We may not be successful if these and other potential markets for our products do not develop.

Declining sales prices of mobile telephones and other wireless products could affect our operating profit adversely

        The prices of mobile telephones have tended to decrease steadily over time. We believe that the prices of other wireless communications products will also decrease over time. As a result, prices for our WISMO modules and wireless modem products have declined and are likely to continue to decline. More importantly, in order for us to address a larger market, and in order for our customers to introduce attractively priced products, we believe we must continue to reduce our selling prices. We will be unable to maintain profitability unless we can offset these price decreases with increases in unit volume or reductions in per unit costs.

Our sales and operating profits could be adversely affected if the third parties on whom we rely for the supply, assembly and manufacture of our components and finished products are unable to meet our supply, quality or manufacturing requirements

        We rely primarily on third parties to supply components for our products and to assemble and to test our products. Suppliers such as Philips, Intel, ST Micro, Silicon Labs and RF Micro Devices currently manufacture key components of our products. We also currently use three subcontractors, Solectron (Romania), Elcoteq (China) and Thales Microelectronic (France), to assemble and test our products. Using third parties to manufacture key components of our products and to assemble and test our products reduces our control over product delivery schedules, quality assurance, manufacturing

6

yields and costs. The third parties who manufacture, assemble and test our products also have other customers and may not have sufficient capacity to meet all of our manufacturing, assembly and testing needs during periods of excess demand. They may experience financial difficulties, or delays or disruption to their production, or may fail to meet our specified requirements, notably our quality standards.

        We believe that a number of our suppliers are sole sources for key components. These key components are complex and difficult to manufacture and require long lead times. We work with our suppliers on a twelve-month rolling forecast basis and we currently believe that we have secured adequate supply based on our production forecasts for the next twelve months. To reduce such uncertainty, we have developed a proprietary base band chipset and intend to continue developing other key components for our products, but we still run a risk in subcontracting the production of these chipsets. In the event of a reduction or interruption of supply, or a degradation in quality, a number of months could be required before we could begin receiving adequate supplies from alternative sources. Supply interruptions could delay product shipments, causing our revenues and operating results to decline.

We need to attract, retain and develop key personnel who are skilled in our business and technology to remain competitive and properly manage our growth

        It is important to our success that we retain our highly skilled product development, sales and marketing employees and continue to attract and motivate additional skilled employees. We rely to a large extent on independent contractors who work for consulting firms. In the future, it may become more difficult to recruit and retain the employees and independent contractors that we would need to continue to grow. Any failure to attract, hire or retain personnel could delay our research and development projects and consequently affect our ability to bring new products to market successfully or on a timely basis.

        Change in our market and growth in our business have placed and will continue to place a significant strain on our management systems and resources. We will need to continue to improve our operational and information systems and managerial controls and procedures and expand, train and manage our workforce. We will have to maintain close coordination among our technical, accounting, marketing, sales and research and development departments. If we fail to effectively face changes in our market and manage our growth to address the above concerns, it could affect our operating profit and ability to pursue business opportunities and expand our business.

Destabilizing events in Asia, particularly in China, could hurt our revenues

        In 2000, 2001 and 2002, sales to Asian customers represented 33.9%, 83.6% and 82.3%, respectively, of revenues reflecting shipments pursuant to large contracts with customers in China, Taiwan and Korea. We expect that, for the foreseeable future, a significant portion of our revenues will be generated from Asian customers, and in particular from customers based in China or serving the Chinese market. A new financial crisis in Asia, particularly in China, could substantially reduce our revenues from Asian customers or customers selling to end users in Asia. In addition, political upheaval in China or a change in the political climate, making China a less favorable environment for foreign businesses, could substantially reduce our revenues.

SARS Virus

        The recent outbreak of the SARS virus in parts of China has caused travel and business disruption throughout Asia since early 2003. In response to the outbreak, we have curtailed business travel between our European and Asian offices. Personnel shortages and logistics problems resulting from the outbreak have caused delays in deliveries of vital electronic components from Asia to many companies

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worldwide, impairing their ability to meet commitments to their own customers. While the SARS outbreak has not yet directly affected production of our products or delivery of components to our contract manufacturers' facilities, a protracted or more widespread epidemic of the SARS virus, or of another communicable disease, could affect the production or the distribution of our products, which could materially harm our business.

Adherence to technical requirements or legal regulations may increase the Company's cost base

        The implementation of new technical requirements or legal or environmental regulations, such as the European Union's recent directive mandating recycling of used electronic components, may adversely affect the timing and costs of introduction of our products. This could ultimately impair the success of our business even though these regulations may not directly apply to our company or industry.

Our costs may increase or we may have to redesign our products if they infringe other companies' intellectual property rights

        Other companies have patents, copyrights, trade secrets and other intellectual property rights covering technology used in the wireless communications industry. Currently, we have licenses to use only some of these rights. If any of our products were found to infringe on protected technology, we could be required to redesign them, to obtain licenses for this technology or to pay royalties or damages to its owner. The resulting costs would harm our business. If we were unable to obtain these licenses or to redesign infringing products, we could be prohibited from marketing them.

Our business could be hurt by the unauthorized use of our technology

        We rely on a combination of patents, copyrights, trade secrets, trademarks and proprietary information to maintain and enhance our competitive position. We might, however, have difficulty taking effective legal action against a competitor who copied important parts of the technology we use in our products and processes. If we were unable to prevent a competitor from using our designs and techniques to produce competing products, our business would be adversely affected.

We may not be able to sell our products under the Wavecom name in the United States

        We have not registered the Wavecom name in the United States. Several other companies, some of which are in businesses similar to our own, use the word Wavecom or a similar word as either a trade name or as a brand name for their products. This could cause confusion in the marketplace and harm our sales. If one of these other companies were to take effective legal action to prohibit us from continuing to use the name Wavecom in the United States, we could be forced to use a different name and, as a result, it would be more difficult for customers to identify us and our sales might suffer.

Our quarterly revenues fluctuate significantly and may affect the price of our shares and ADSs

        Our revenues and operating results fluctuate significantly from quarter to quarter. The many factors that could cause our quarterly results to fluctuate include:

•

any delay in our introduction of new products or product enhancements;



•

the size and timing of customer orders and our product shipments;



•

any delay in shipments caused by component shortages or other manufacturing problems;



•

the loss of a major customer or a reduction in purchases by a major customer;



•

a reduction in the selling price of our products;

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•

the impact of seasonal variations in demand linked to the timing of holiday buying seasons, such as the Chinese New Year; and



•

customer responses to announcements of new products and product enhancements by our competitors; and



•

foreign exchange rate fluctuations, primarily between the Euro and the US dollar.

        Due to these and other factors, our results of operations could fluctuate substantially in the future and quarterly comparisons may not be reliable indicators of future performance. Because many of our expenses for personnel, facilities and equipment are relatively fixed in nature, we may not be able to reduce expenses quickly to balance a decline in our revenues and could experience net losses during extended periods. These quarterly fluctuations may have a negative effect on the price of our shares and ADSs. It is possible that in some future quarter our results of operations will be below the expectations of public market analysts and investors, in which case the price of our shares and ADSs could fall.

Our U.S. shareholders could suffer adverse tax consequences if we are characterized as a passive foreign investment company

        If, for any taxable year, our passive income or our assets that produce passive income exceed levels provided by law, we may be characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. This characterization could result in adverse U.S. tax consequences to our shareholders who are subject to U.S. taxation. U.S. persons should consult with their own U.S. tax advisors with respect to the U.S. tax consequences of investing in our shares or our ADSs. See "Item 10—Additional Information—Taxation—United States Taxation—Passive Foreign Investment Company".

Fluctuation in the rate of exchange between our reporting currency the euro and the US dollar can affect our net sales and costs

        We incurred foreign exchange losses in 2002 and we may incur such losses again in the future. Although the functional currency of Wavecom S.A. is the euro, a significant portion of our revenues is recorded in U.S. dollars. At the same time, most of our components are purchased in U.S. dollars and a significant portion of our operating expenses is in U.S. dollars. A strengthening of the euro against the U.S. dollar could reduce our reported revenues and negatively affect our reported operating and net results.

        Beginning in January 2003, we put in place a program to hedge our currency risk through the use of forward contracts and put and call options. The objective of this program is to minimize our risk, but will never be able to eliminate the risk.

Events anticipated in forward-looking statements in this annual report may not occur

        This annual report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are usually accompanied by words such as "believe," "anticipate," "plan," "expect" and similar expressions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including the risks faced by us described above and elsewhere in this annual report.

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Item 4. Information on the Company

Business Overview

        Wavecom develops, markets and sells technology solutions for a wide variety of wireless communication applications. The company's primary source of revenue is a line of digital wireless standard modules, known as WISMO modules, for use in mobile telephones and other wireless applications based on the Global System for Mobile Communications ("GSM") and Global Packet Radio Standard ("GPRS") services. Following our acquisition of Iconn Wireless, Incorporated, a San Diego-based Code Division Multiple Access ("CDMA") technology company, in December 2001, we have also begun to manufacture and sell CDMA modules. We are in the process of developing WISMO modules based on Wideband-Code Division Multiple Access (W-CDMA) (commonly known as "third generation" or "3G" technology) and EDGE, Enhanced Data GSM Environment, a faster version of GSM wireless service. We are now able to offer WISMO modules in GSM, GPRS, CDMA and, in the future, W-CDMA and EDGE versions which will allow us to address virtually all the world's principal wireless markets.

WISMO modules are compact devices that include substantially all of the hardware, software and other technology needed to enable wireless communications. WISMO modules offer a quick and simple way to integrate digital wireless communications in mobile telephones, wireless modems and a wide range of other applications requiring wireless communications in our target markets: automotive, machine-to-machine and personal communication devices. Examples of these applications include automotive navigation and interactive information systems, personal digital assistants with wireless communication functions and devices enabling communication between vending machines or utility meters and central control centers. We believe that, in the future, wireless communication applications will allow all enterprises to effectively and efficiently monitor and manage most of their assets via links to the enterprise IT system. We provide our customers with the services and expertise required to integrate WISMO modules into their mobile telephones and other wireless applications. We also sell wireless stand-alone and integrated modems that incorporate WISMO modules.

        The principal advantages of our WISMO solutions for our customers are that:

•

The customer can acquire digital wireless technology without significant internal research and development investment. This reduces product development and field-test time, resulting in a reduced time to market.



•

The small size of the WISMO module, particularly the recently announced WISMO Pac line, provides our customers with significant flexibility in designing their wireless applications.



•

WISMO modules are pre-tested by authorized type approval certification laboratories, which results in a stream-lined regulatory approval, and which allows our customers to more easily confirm compliance with regulatory requirements.



•

We assist our customers in performing field tests in their target markets to ensure that their applications operate properly with each wireless network for which they are intended to be used.



•

By integrating all of the key electronic components, including the sensitive radio frequency components, into our products, we can help our customers achieve higher yields in their production process since we have already addressed most technical quality issues during our own production.



•

A customer who has integrated a WISMO module into a product based on one technology (GSM/GPRS) can rapidly integrate a WISMO module based on another technology (CDMA) into the same product, providing rapid access to new markets.

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•

Unlike some other suppliers of digital wireless technology, we are an independent supplier and do not compete with our customers who manufacture products for the end user market.

        Our products incorporate digital wireless technology that we have developed since 1993, when Wavecom was founded. Our product development calls for highly specialized technical know-how and experience in digital and radio frequency circuit design and microchip architecture, the design of real-time software and, most importantly, the optimal integration of these technologies. Between 1993 and 1996, we focused mainly on providing engineering services for our clients' customized digital wireless products. Building on engineering expertise developed during this period, we commercially introduced the first version of the WISMO module in January 1997. We were the first company to commercialize GSM technology in the form of a standard module and believe that our current WISMO Quik and WISMO Pac modules are among the smallest wireless standard modules available.

        In March 2000, we began mass production of two dual-band versions of our WISMO Quik 2300 series module. In the fourth quarter of 2001, we commenced mass production of our WISMO Pac 3100 series module in two dual-band versions. The WISMO Quik modules are designed with a connector for easy manual installation, while the WISMO Pac module is more compact and uses packaging technology that allows our customers to solder these modules onto the printed circuit board of the mobile telephone or other wireless application using automated "pick and place" assembly processes. The WISMO Quik and WISMO Pac modules are now designed to operate on both GSM and GPRS networks.

        We began production of a number of new WISMO modules during 2002. In the second quarter, we launched mass production of the thinner, lighter-weight WISMO Quik 2400 series module. A CDMA version of the WISMO Quik module will go into mass production in the second quarter of 2003. In the fourth quarter, we introduced a quad-band version of the WISMO Pac 5186 module that will operate on all four GSM/GPRS frequencies (900MHz and 1800MHz for the European and Asian markets and 1900MHz and 850MHz for the North and South American GSM and GPRS markets). The WISMO Pac 5186 module is expected to go into mass production by mid-2003.

        In order to address a larger market segment, we announced plans in early 2003 to launch an open version of the WISMO technology which we call the WISMO Flex. The new product line will combine Wavecom's proprietary baseband chipset design, radio frequency components co-developed with a third party and recommended memory alternatives, and will allow the customer to choose the amount and type of memory required for each specific telephone model or other application developed around the WISMO Flex technology. We will continue to offer complete solutions, but our customers will have greater flexibility in developing a wide variety of models ranging from high end feature phones to market entry starter phones. By allowing the customer to create more of the product specifications themselves, they will be able to determine the choice of some of the costliest hardware components such as flash memory and random access memory. We expect this new offer to be available in the fourth quarter of 2003, thus allowing us to compete more effectively with reference design providers, while still maintaining Wavecom's key competitive advantages of time to market, guaranteed production yields, and ease of implementation.

        In early 2003, we introduced the Wireless Open Workshop offering. Wireless Open Workshop allows our customers to design unique products by selecting among the various Wismo hardware platforms and Software Suites (hardware components plus associated software that allows the hardware to operate on the GSM, GPRS or CDMA standard), development tools and services offered by Wavecom. Wireless Open Workshop allows our customers to create a unique look and feel for each product by adapting the man-machine-interface (MMI) and appropriate hardware platforms to meet their specific needs, and to then bring the resultant product to market quickly. Wavecom calls this combination of hardware platform, software, development tools and services a "Development Lab." Currently, we have seven different Development Labs for specific types of end-products: three Development Labs for portable telephones and four Development Labs for mobile computing,

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automotive, and PDAs or machine-to-machine applications. As the demand for new applications grows, we intend to add new Development Labs to the Wireless Open Workshop.

Background of the wireless communications industry

        The wireless communications industry has grown rapidly over the past several years as wireless communications products and services have become widely available and increasingly affordable. Technological advances, changes in telecommunications regulations and the allocation and licensing of additional radio spectra have helped fuel this growth worldwide and have led to the development of competing wireless communications services. At the same time, consumer demand for increased mobility has led to the use of wireless technology both in products that were previously available only in "wired" versions and in completely new applications.

Transmission standards

        The wireless communications market is characterized by a proliferation of transmission standards in different parts of the world, including first generation analog standards, second generation digital standards, such as GSM, and so-called "2.5 generation" standards, as well as GPRS and CDMA 1xRTT. Digital wireless systems generally operate on the 850MHz, 900MHz, 1800MHz or 1900MHz frequency bands. GSM is currently the dominant standard in Europe for both voice and data transmission.

        The wireless communications industry is currently developing specifications for third generation ("3G") standards to accommodate increased capacity and to allow for faster data transmission. W-CDMA, the primary proposed 3G transmission standard, was introduced commercially in a limited geographic area in Japan in 2001. Its commercial introduction in Europe and in the rest of Asia has experienced delays, and networks operating on this standard are generally not expected to be commercially operational until sometime after 2004. The increased capabilities of W-CDMA are expected to attract subscribers from other wireless standards in use around the world. To enable the introduction of broadband wireless services, which enable faster data transmissions, prior to the widespread availability of W-CDMA, the wireless industry is deploying interim "2.5 generation" solutions based on existing second generation technology, including GPRS, CDMA and EDGE. EDGE enables data to be delivered at rates up to 384 Kbps on a broadband. These new standards are being designed to enable a more efficient use of a wireless communications network and provide faster transmission speeds. Telecommunications networks operating on the GSM/GPRS standards became widespread in Europe, parts of Asia (including China) and the US during 2002. The first networks

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utilizing the CDMA 1xRTT standard also became operational during 2002 in Asia and the United States. EDGE is expected to be introduced in U.S. by 2004.

        Gartner, a market research firm, projects that worldwide users of wireless communications services will increase from approximately 1.15 billion subscribers in 2002 to approximately 1.7 billion subscribers in 2006, with handset sales increasing from 420 million units in 2002 to approximately 530 million units in 2006. Gartner also projects that GSM/GPRS handset sales will increase from approximately 255 million in 2002 to approximately 330 million in 2006, which would represent 63% of the total estimated worldwide market for wireless handset sales. CDMA and CDMA 1xRTT subscriptions represented nearly 19% of new subscribers in 2002 and are expected by Gartner to represent more than 22% of new subscribers in 2006. Gartner expects the W-CDMA standard, which Wavecom intends to introduce in future products, to represent more than 13% of new subscribers in 2006.

Wireless terminals

        A typical wireless terminal, such as a mobile telephone, contains baseband, digital and radio frequency hardware components and related software. Baseband components process analog signals and convert signals from analog to digital or from digital to analog. Digital components control the wireless device's circuitry and send data to and receive data from the network through the terminal's radio frequency components. They also process all of the information within the device and manage information going to and from the user. Radio frequency components amplify, transmit and receive the high frequency analog signals that carry the information being communicated. Typically, up to two-thirds of the development effort for a wireless communications application consists of writing software that integrates and manages the hardware components. The wireless applications designed for each band and transmission standard generally require different hardware and software.

        Currently, prior to being placed in service, each new wireless communications device must satisfy a series of technical tests meeting the requirements of the relevant regulatory authority (for example, the Federal Communications Commission in the United States). The process, commonly known as "full type approval," can take up to 6 weeks, depending on the experience of the applicant and the familiarity of the regulator with the particular product. In European Union countries, a recent directive is being implemented which provides that sales of wireless communication products into the European Union will no longer require full-type approval provided that the manufacturer makes a declaration of conformity with the requirements of the directive.

        In addition to testing to confirm compliance with regulatory requirements, prior to commercialization, each new wireless application must be field tested in its target markets to ensure that it operates properly with each wireless network for which it is intended to be used. These networks all vary due to different infrastructure design and the ongoing evolution of GSM/GPRS network software, which is managed independently by each network operator.

Our market

        The market for wireless communications terminals has generally been characterized by rapid growth, evolving industry transmission standards and the frequent introduction of new applications. Manufacturers of mobile telephones must continually re-design their products to meet consumer demands for an increased number of functions such as color screens, digital cameras, messaging capabilities and internet access, as well as a wider variety of styles, smaller and lighter equipment, longer battery life and greater reliability, all at reduced costs. With the slowing of demand in 2001 and 2002, mobile telephone manufacturers are under increased pressure to achieve profitability. Manufacturers of many other wireless communications products must offer compact, cost-effective products that provide a wide range of functionality and can be quickly brought to market. As segments

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of the wireless communications market evolve, the industry must offer a wider range of products to better meet the specific needs of individual consumers.

        These market demands have made it increasingly difficult for manufacturers to develop and supply all the technology they need for new wireless applications, to meet regulatory requirements and to complete field testing, all in a timely and cost-effective manner. Developing and producing the software, chip sets and other integrated components in a compact wireless communications product requires significant expertise. Some manufacturers of products for the wireless market choose not to develop this technology in-house, preferring to rely on a third party supplier. Other consumer products companies do not have the financial means or technical resources to develop their own wireless technology. As a result, many manufacturers rely increasingly on subcontractors to develop and supply critical digital wireless components.

Strategy

        We believe that as the wireless communications industry matures, it will evolve from a model where providers of wireless applications manufacture all of the technology in the end product to a model where each provider of the end product focuses on branding, marketing, distribution and product design, favoring a trend toward outsourcing the wireless communication technology function.

        Wavecom's solutions are designed to enable product manufacturers to incorporate advanced digital wireless technology quickly and efficiently into their applications. We strive to maintain technological leadership and to be a leading independent vendor of wireless standard software features and functionalities, hardware platforms (including modules and modems), customization tools and services for our products' integration in consumer and business digital wireless applications.

        Key elements of our strategy include:

Expanding the use of Wavecom solutions in mobile telephones and new wireless applications

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Mobile Telephones:  We believe that there is a significant opportunity for us to supply technology solutions both to new entrants in the mobile telephone market, as well as to established manufacturers who are increasingly looking to outsource wireless technology.



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New wireless applications.  Wireless communications allow many types of equipment that are currently tied to wired telephone networks to be freed of fixed-location constraints and the need for costly infrastructure investment. Wireless communications can also be used to enhance such products as portable computers by enabling them to send and receive data without being attached to a landline. Our strategy is to expand the use of our products in a broad range of wireless applications.

        Adapting our technology for use with evolving digital transmission standards.    The current versions of Wavecom solutions are based on GSM/GPRS and CDMA 1X RTT technology. We intend to introduce products addressing new wireless communications standards as they become mainstream. We are also focusing our research and development efforts on products for the W-CDMA and EDGE standards.

        Working closely with customers in the early stage of product development.    Our success to date has been based on our technical expertise and collaboration with a number of strategic customers. We will continue to work with customers early in their product design stage in order to help them develop applications in a way that will easily support the integration of the wireless technology. We believe that early collaboration allows customers to lower their development costs and reduce the time required to introduce new products and enter new markets. It also enables Wavecom to better anticipate and meet its customers' future wireless technology requirements.

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        Pursuing strategic acquisitions.    We intend to explore opportunities for acquisitions of businesses, products, services and technologies that are complementary to our existing business in order to expand our position in the wireless communications market. Although we have no present commitments or agreements regarding any acquisitions, we believe that there are acquisition candidates that could enhance our position in this market. A likely goal of any such acquisitions would be to acquire technology that would allow us to achieve our research and development objectives more quickly or efficiently.

        Expanding sales to additional geographic markets.    We are expanding our sales and marketing capabilities in order to address the worldwide market for our products. We increased our direct sales capabilities from 16 sales people at the end of 2001 to 29 people at the end of 2002. We increased our distributor network from 25 at the end of 2001 to 40 at the end of 2002. We opened offices in Tokyo (April 2000), Seoul (January 2001), Darmstadt, Germany (October 2001), Taipei (February 2002) and Beijing (October 2002). Most recently, we opened a subsidiary in the UK near London (March 2003). We intend to add direct sales staff in all three regions and to continue to expand indirect channels by adding more distributors.

Products and services offering

        We offer a diverse array of hardware and software products, services and technical support to our customers. Our principal products are WISMO modules, combining various hardware and software features. We provide services and technical support only as an adjunct to the sale of WISMO modules and the devices into which they are incorporated. We recently introduced a new product design platform that we call Wireless Open Workshop, which gives our customers greater flexibility in the design of their own products by allowing them to select from a range of our hardware, software and service offerings.

WISMO hardware platforms

        The WISMO Quik line of modules currently consists of the WISMO Quik 2400 series, which has been in production since June 2002. The Q2400 series is available in GSM/GPRS in two dual-band versions and that operate either on the 900MHz/1800MHz bands or the 850MHz/1900MHz bands (WISMO Quik 2406 for 900/1800 MHz, and WISMO Quik 2426 for 850/1900 MHz), each existing in GPRS class 2 and class 10, and measures 58x32x3.9 mm and weighs 11g. The WISMO Quik is also available for single and dual band CDMA 1X RTT.

        The WISMO Pac line currently comprises the WISMO Pac 3200 series (an update of the WISMO Pac 3100 series introduced in 2001) and WISMO Pac 5100 series. The P3200 series, like the Q2400 series, is available in GSM/GPRS in two dual-band versions that operate either on the 900MHz/1800MHz bands or the 900MHz/1900MHz bands and two GPRS classes (class 2 and class 10).The P3200 series has an area of less than 15cm², a thickness of 5.1mm and a weight of 11g. We commenced mass production of WISMO Pac 3200 in the third quarter of 2002. The WISMO Pac 5100 series introduces a new form factor with what we believe is the smallest footprint available today on the market for cellular digital communication modules measuring just 25.4x32.4x4.75mm (roughly half the size of a WISMO Pac 3200) and weighing less than 5 grams. Its product features are very close to the WISMO Pac 3200 except for the baseband chipset that comes from proprietary Wavecom technology. We believe it is the first module commercially available covers the four commercial bands (850/900/1800/1900 MHz), thus offering worldwide coverage. The WISMO Pac 5100 series was launched in February 2003 and is expected to go into mass production by mid-year 2003.

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Wireless modems

        In addition to the WISMO module product line, we offer a GSM-based external stand-alone wireless modem, the FASTRACK, designed for data, fax, short message service and voice applications. In response to customer demand for smaller modems which can be more easily integrated into a product, we introduced an integrated wireless modem, the INTEGRA, in the second quarter of 2000 that is intended to be soldered onto a printed circuit board. Our wireless modems have full type approval and therefore can be used off-the-shelf. This enables a customer to incorporate immediately wireless connectivity in its own application without any delays related to type approval. Typical uses for wireless modems include vehicle fleet management and remote measuring and reporting of information in such applications as utility meters, vending machines or security systems. Whereas WISMO modules are typically purchased by product manufacturers for integration into mobile telephones, personal digital assistants and other high volume products, wireless modems are more commonly purchased by customers seeking an off-the-shelf wireless solution for relatively small volume applications where size is not a critical factor. In 2002, our average sale price for wireless modems was €113 compared to €136 in 2001, although prices may vary significantly depending on volume. Sales of wireless modems represented 36.8% in 2000; 9.9% in 2001 and 6.6% in 2002.

Software

        We have developed a wide range of software features adapted to different types of wireless applications.

We currently offer the following software features for mobile phones:

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Worldwide wireless coverage



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State of the art interface



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Advanced wireless internet connectivity



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Optimal color gaming engine



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Unified messaging



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Latest multimedia technology (camera for picture snap shot, display)



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Multimedia card storage: MMC, SD, Internal Flash



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Support for up to 64 ring tones

        We currently offer the following software features for M2M, automotive, mobile PDA and mobile computing devices:

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Worldwide wireless coverage (CDMA 1xRTT/AMPS, Dual/Quad Band (850/900/1800/1900) GSM/GPRS Cl 10, HR, FR, EFR, AMR)



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Embedded IP connectivity for M2M protocols



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Embedded protocols for Mobile Computing and Mobile PDA



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Embedded protocols for automotive

        We also assist our customers by providing them with software development tools. Our MUSE Platform™, or Modular User Software Environment™, is an open software environment that allows our customers' software engineers to easily develop and embed wireless applications directly onto WISMO modules and modems. Our first product available based on the MUSE Platform, Open AT, is designed for vertical applications such as telemetric, automotive and multimedia systems. Relying on AT commands to drive the WISMO, Open AT lets developers take advantage of available processing

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capacity and intelligence of WISMO modules and modems. Open AT allows our customers to have more autonomy and flexibility when developing their wireless applications. We introduced our second MUSE platform offer, Open MMI, in the third quarter of 2002 that is designed for use in developing handsets.

Services and technical support

        We believe that providing customers with comprehensive product service and support is critical to maintaining a competitive position in the wireless communications market. Our support services enable the customer to pass rapidly through the development phase and to begin production. Services include:

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product design assistance and support;



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development of application specific software;



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validation and field testing;



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assistance in obtaining full type approval where required;



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provision of production and diagnostics test tools; and



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assistance in on-line production

        We believe that close contact with our customers improves their level of satisfaction and provides us with insights into their future product development plans. To expand our customer base, we offer WISMO modules as part of starter kits, enabling potential customers to perform initial feasibility studies.

Wireless Open Workshop:

        Wireless Open Workshop brings together all of Wavecom's existing technology, service and market expertise to provide a wide range of design options and to enable customers to quickly take their products from the drawing board to implementation. Wireless Open Workshop is a complete suite of hardware and software (including development tools and services) in an open and integrated environment.

        Wireless Open Workshop consists of a series of Development Labs tailored to the different needs of specific industry segments. Each Lab includes a range of software options, from wireless communications standards and protocols to a catalog of market-specific interfaces, protocols and support for operating systems and peripheral devices. Each Lab includes a choice of Wismo Platform hardware options (Wismo Quik, Wismo Pac and Wismo Flex), MUSE (Modular User Software Environment) Platform development tools (Open AT and Open MMI), and services adapted to different types of customers and applications.

Applications and customers

        We are an established third-party supplier of digital wireless modules for the mobile telephone market and for new and emerging wireless applications markets. We are targeting three wireless applications markets that we believe will generate the most significant demand for our products over the next three to five years. In the revenues figures shown below for each of our four applications markets, we have included our direct product sales by wireless application as a percentage of total product sales for 2001 and 2002. Most indirect sales to our distributors constitute sales of modems, which we believe are used mainly for machine-to-machine applications. In 2002, product sales to our distributors accounted for 11.3% of our total product sales (13.2% in 2001).

Personal Communication Devices (PCD)

        We market the WISMO module to mobile telephone and Personal Digital Assistant (PDA) manufacturers. The WISMO module allows these manufacturers to introduce a product to the market

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quickly, to minimize their internal research and development costs and to focus their efforts on product design, marketing and distribution. Our customers typically assemble their own mobile telephones and PDAs using a WISMO module. For certain customers we tailor the WISMO module to meet their needs. Companies that have integrated or are in the process of integrating our products or technology into their mobile telephones include Chinese manufacturers: TCL Mobile Communications Co. Ltd., and Guangzhou Southern High-tech Co., Ltd. ("Soutec") as well as South Korean manufacturers like Sewon Telecom Co., Ltd., Pantech, Everkom, ASE, Giga, Nixxo (via our U.S. subsidiary) and most recently Curitel.

WISMO modules can enable personal digital assistants, smart phones, notebook computers and other portable devices to be connected to a wireless communications network. We believe that the introduction of the GPRS standard, with its increased speed and efficiency, will accelerate the demand for these applications, by allowing easier access to e-mail and the Internet. During 2002, we sold WISMO modules to Handspring Inc. for integration into its Treo line of wireless personal digital assistants.

        In 2002 revenues from direct product sales for PCD applications were 82.2% of total product sales (79.1% in 2001).

Automotive

        Automotive applications combine digital wireless technology with global positioning system technology that together provide interactive information regarding traffic, emergency assistance, routing, local businesses and places of interest. Automotive applications could also include an emergency assistance feature that would provide information, including vehicle location, in the case of accidents or theft. These applications also include the provision of a wireless telephone as a standard equipment option in an automobile. We are supplying WISMO modules to Autoliv, SiemensVDO and Magneti Marelli, three of Europe's largest automotive equipment suppliers.

        This category also includes applications for fleet management. Digital wireless technology in combination with global positioning system technology allows the location of trucks, taxis, and other vehicles to be monitored from a central location. We are supplying WISMO modules to Trimble for integration into a fleet management product.

        In 2002 direct product sales for automotive applications accounted for 3.0% of total product sales (2.3% in 2001).

Machine-to-Machine

        Telemetry, better known as "machine-to-machine communication", is the use of communications networks to obtain information from remote locations. The use of WISMO modules makes machine-to-machine communication possible where the installation of landlines is not practical. Applications include remote meter reading by utility companies, real-time updating of information on electronic billboards, credit card authorization for mobile payment terminals and remote messaging from vending machines to report inventory levels or maintenance requirements. Falcom GmbH, a German integrator of wireless products, has built WISMO modules into terminals for specialized applications in vending machines, hospitals, high technology companies, homes and other market sectors. Necta (formerly Zanussi) has incorporated WISMO modules into its vending machines. In addition, utilities in Australia and Finland use our modems for remote reporting of electric power consumption. In March 2003, we announced that Grundig would be incorporating WISMO modules in their products to be used for a wireless toll collection project in Germany.

        In February of 2003, Wavecom and IBM jointly announced a business partnership for the development of enterprise machine-to-machine applications. These applications will help to link (via

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wireless transmission of data using the WISMO module) remote assets into a user's central information management system, providing company management with a powerful information tool to maximize day-to-day operational efficiency.

        In 2002 direct product sales for machine-to-machine communication applications accounted for 3.5% of our total product sales (5.4% in 2001).

Sales, marketing and distribution

        We rely primarily on our direct sales force to sell our line of WISMO modules and to market related services. To sell wireless modems, we use both our direct sales force and value-added distributors. Because modems are sold as a finished product, they can normally be integrated into an end-user application without Wavecom's technical expertise (unlike WISMO modules). We currently work with distributors serving approximately 60 countries in Europe, the Asia-Pacific region and the Americas. Our sales, marketing and distribution efforts are organized into three geographical areas: Europe, Middle East and African (EMEA), Asia-Pacific and the Americas. We recently appointed a new group vice president to head up the EMEA region and have generally strengthened our sales efforts in that region. Our San Diego office is responsible for the Americas region, while our Hong Kong office is responsible for the Asia-Pacific region, including overseeing our offices and subsidiaries in Tokyo, Seoul, Taipei and Beijing. At December 31, 2002, we had 78 sales and marketing staff worldwide of which 76 are salaried full-time equivalent employees and 2 are independent contractors (47 full-time equivalents and independent contractors in 2001).

Manufacture and assembly

        We use a fabless business model in which we outsource the manufacture, assembly and most testing of our products. By using third-party manufacturers, we gain access to up-to-date facilities and processes without significant capital outlay and are able to focus our resources on research and development, product design, quality assurance, marketing and customer support. Through our third-party manufacturers, we order components for our products from microchip foundries, including Philips, Toshiba, Intel, ST MicroElectronics, Silicon Labs, Skyworks and RF Micro Devices. Non-standard components are based on our design. We intend to outsource production of our newly developed baseband. In January 2001, we added personnel to our purchasing staff and since then we negotiate directly with the component suppliers. We work with our manufacturers on a twelve-month rolling forecast basis with firm orders placed one to two months in advance. In addition, our sales contracts generally require our customers to place orders three to four months in advance and to provide us with a six- to twelve-month product purchasing forecast that we use as the basis for preparing our own forecasts and negotiations with suppliers to secure the supply of components for our products. Late in 2002, due to market conditions, this forecast period become shorter and by early 2003 many customers were placing orders only two months before delivery, giving us very little forward visibility.

        We use two high-volume third-party manufacturers to assemble the majority of our WISMO modules and to test our products: Solectron Corporation, which manufactures our products in Timisoara, Romania, and Elcoteq, which began manufacturing our products near Beijing, China, during the third quarter of 2002. A third contract manufacturer, Thales, near Rennes, France, is used as a platform for new product introductions, as well as providing additional production capacity when needed.

        These two high-volume contract manufacturers are certified to applicable ISO 9000 and 14,000 series specifications, which means that their operations have in each case been determined by independent examiners to comply with internationally developed quality control standards. Solectron, Elcoteq and Thales are important suppliers for us, and should any of them fail to meet our

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requirements, we may have difficulty meeting customer demand in the short-term. We have, however, identified other manufacturers that could replace them.

        In 1999, we entered into a contract for manufacturing and related services with Solectron-France S.A. Pursuant to this agreement, Solectron manufactures, assembles and tests our WISMO module lines. The term of the agreement was for one year and is automatically renewed for additional terms of one year each, unless written notice to the contrary is sent by one of the parties at least 90 days before the anniversary date of the agreement. The total term of the agreement was not to exceed three years. We renegotiated an extension of the contract with Solectron during 2002. Formal contracts were signed with Thales in early 2002 and with Elcoteq in July 2002.

        Our arrangements with Solectron, Elcoteq and Thales call for us to purchase the tested finished products. Component procurement is the responsibility of the third-party manufacturer. The third-party manufacturer issues purchase orders to the component suppliers based on the quantities of finished goods ordered by Wavecom. In general, components need to be ordered two to four months before they enter the production process. In the event that we initiate an engineering change that results in the obsolescence of components specific to our products, the third-party manufacturer may invoice Wavecom for the cost of these unusable components.

        Wavecom owns all testing equipment related to the manufacturing of its products and could transfer it to a different manufacturer if necessary. We conduct our own quality control at the premises of our third-party manufacturers. As of December 31, 2002 we had 112 full time equivalent employees and 45 independent contractors in production oversight, manufacturing, purchasing and quality assurance (108 full-time equivalents and independent contractors in 2001).

Research and development

        To keep pace with rapid technological changes and market pressures in our industry, we maintain a substantial program of research and product development. This program focuses primarily on developing new products that are progressively smaller and lighter, with higher performance levels and enhanced features and functions, as well as adapting our products to evolving and new transmission standards.

        We intend to continue internal product development to further reduce the size of the WISMO modules, to reduce their power consumption and to enhance their functionality. During 2002, we launched two new dual band GSM/GPRS modules and a CDMA version of the WISMOQuik module. Our current projects include the introduction of the first generation of the WISMO Flex product line, which targets customers who have considerable experience with large volume production. Customers will be able to create a wider variety of telephone handsets from entry-level price points to top-of-the line feature phones. This product offer is expected to be available during the fourth quarter of 2003.

        During 2002 we announced the introduction of the WISMO Pac 5186 module, which integrates our proprietary baseband chipset design. The WISMO Pac 5186 enhances the choice of WISMO hardware platform options within Wavecom's Wireless Open Workshop. The WISMO Pac 5186 platform supports high-resolution color displays, GPRS Class 10, MMS and a variety of multimedia peripherals. Interfaces and software plug-ins, including Java and Bluetooth, provide support for on-line gaming, multimedia messaging and Web downloads. The WISMO Pac 5186 platform can also be coupled with a co-processor for high-end phones offering additional features and peripherals. Measuring 25.4 × 32.4 × 4.75 mm, with a weight of 5.2 g, the WISMO Pac 5186 operates in the 850, 900, 1800 and 1900 MHz bands for global roaming. The WISMO Pac 5186 is expected to be in mass production and begin shipping to customers by the end of the second quarter 2003.

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        We also intend to continue to maintain research and development efforts on the 3G W-CDMA and EDGE, standards. Our research and development efforts in this area will be timed to develop in-line with our expectations of when this standard will be commercially available. We currently do not expect this to happen before the end of 2004.

        Wavecom's research and development expenditures totalled approximately €16.1 million in 2000 (24.6% of revenues), €32.6 million in 2001 (10.1% of revenues) and €64.1 million (11.6% of revenues) in 2002. We intend to maintain a substantial research and development program and expect research and development expenses to increase in the future although not at the same pace as in the past. As of December 31, 2002, our research and development staff included approximately 535 people, of which 387 were salaried full time equivalents and 148 were independent contractors most of whom work in France. We use independent contractors to gain access to their specialized expertise and to give us greater flexibility in staffing particular projects.

Competition

        Competition in our markets is intense. While we believe we are one of the largest suppliers of complete modular solutions, we face competition from historical chipset firms and software providers, such as Texas Instruments, Infineon, Agere, Analog Devices partnering with TTP Com, and Skyworks and new entrants such as Ericsson Mobile Platform and Motorola, as well as from pure module manufacturers like Sagem and Siemens. We believe that our ability to compete successfully in the wireless communications market depends upon a number of factors within and outside our control, including price, quality, availability, product performance and features; the timing of new product introductions by us, our customers and competitors; and customer service and technical support.

Intellectual property

        The European Telecommunications Standards Institute ("ETSI") has a policy that allows third parties to disclose intellectual property rights which they believe are essential to the use or operation of GSM/GPRS-based equipment. Once an owner of such a right gives notice to ETSI, it must grant irrevocable licenses to third parties on fair, reasonable and non-discriminatory terms and conditions to allow the manufacture and sale of equipment. Some owners of GSM/GPRS-related patents may not have notified them to ETSI.

        In order to produce and market our GSM/GPRS-based WISMO modules and wireless modems, we must assess whether licenses from third-party patent owners are required. Because of the intense competition in our industry, there may be a substantial number of patents to consider and it is difficult to identify all those which may have an impact on our products. We believe that most of the patents important to us are the GSM/GPRS patents covered by ETSI's policy. These include patents of Motorola, Siemens, Philips, Nokia, Ericsson, Mitsubishi, NEC, and Alcatel. At this time, we have licenses (or equivalent arrangements) to use the GSM/GPRS-essential patents of Motorola, Siemens, Philips and NEC and are currently negotiating licenses or other arrangements with other patent holders. As we identify other potentially essential patents, we may need to enter into additional license agreements. Should we fail to identify all patents needed to produce our products or to obtain the required license agreements, we could be found to have infringed the patent rights of third parties. In addition, as new digital transmission standards develop, we will have to acquire additional licenses for new essential patents.

        In January 1999 we entered into a cross license agreement with Motorola Inc. Under this agreement, Motorola and Wavecom each grant to the other a license to use the intellectual property rights it owns or develops for the GSM standard. In addition, the agreement requires us to pay to Motorola a license fee for each GSM product we sell. The agreement remains effective as long as both Motorola and Wavecom continue to manufacture products which use the GSM standard and as long as the licensed GSM/GPRS essential patents remain in force.

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        In September 2001, we entered into a cross license agreement with Philips N.V. whereby Philips has granted us a license to use GSM/GPRS essential patents that Philips owns or develops for the GSM/GPRS standard in consideration for our payment to Philips of a fixed fee covering all past and future royalties due. In addition, under this agreement, we have granted Philips a royalty bearing license to use GSM/GPRS essential patents that we own or develop for the GSM/GPRS standard. The agreement remains in effect for so long as the licensed GSM/GPRS essential patents remain in force.

        In January 2002, we entered into a cross license agreement with Siemens A.G. whereby Siemens has granted us a license to use GSM/GPRS essential patents that Siemens owns or develops for the GSM/GPRS standard in consideration for our payment to Siemens of a fixed fee covering past royalties due and a royalty percentage based on each GSM/GPRS product we sell in the future. In addition, under this agreement, we have granted Siemens a royalty free license to use GSM/GPRS essential patents that we own or develop for the GSM/GPRS standard. The agreement remains in effect for so long as the licensed GSM/GPRS essential patents remain in force.

        In November 2002, we entered into a patent non assertion agreement with NEC Corporation whereby NEC has agreed not to assert any NEC GSM/GPRS essential patent against Wavecom, its affiliates, manufacturing partners or customers, in consideration for our payment to NEC of a fixed fee covering past royalties due and a royalty percentage based on each GSM/GPRS product we sell in the future. In addition, under this agreement we agree not to assert any of our GSM/GPRS patents against NEC, its affiliates, manufacturing partners or customers, and to grant a nonexclusive, royalty-free and worldwide license to NEC and its affiliates under three WAVECOM patents issued in relation to a current and/or future telecommunication standard selected by NEC within two (2) years from the effective date of the agreement. The agreement remains in effect until the expiration of the last patent subject of the agreement.

        In May 2003, Wavecom entered into a license agreement with Thomson Licensing S.A., as exclusive agent for Alcatel, granted us a license to use GSM/GPRS essential patents that Alcatel owns or develops for the GSM/GPRS standard in exchange for our payment to Thomson of a fixed fee covering all past and future royalties due up until December 31, 2008.

        In order to produce and market CDMA-based WISMO modules and wireless modems, we entered into a cross license agreement with Qualcomm in May 2002. Under this agreement, Qualcomm has granted us a license to use CDMA essential patents that Qualcomm owns or is able to license for the CDMA standard in consideration for our payment to Qualcomm of an up-front fee and a royalty percentage based on each CDMA product we sell in the future. In addition, under this agreement, we have granted Qualcomm a royalty free license to use CDMA essential patents that we own or develop for the CDMA standard. We have been granted an option to include WCDMA and/or TD-SCDMA at Qualcomm's then-standard terms and conditions for a license to such standard.

        To protect the intellectual property we have developed in the course of our research and development activities, we rely upon a variety of legal measures, including patents and patent applications. Our employment agreements contain provisions to protect our trade secrets by forbidding the unauthorized disclosure of confidential information. Our independent contractors are required to enter into confidentiality agreements that also assign us rights to inventions they make while engaged by us. We have also entered into non-disclosure agreements to protect our confidential information delivered to third parties in conjunction with possible collaborations and for other purposes.

        In October 1999, we established an employee patent incentive program designed to recognize employee-inventors and to encourage employee-inventors to sponsor patent applications. The patent incentive program provides employees who have developed an invention in the course of their employment with cash compensation if and when we file a patent application and a second cash payment upon the effective commercial use of the patent within five years after the filing of the patent.

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        We currently own eight French patents and one US patent expiring at various dates beginning in 2015. We have filed twenty-four other patent applications currently undergoing evaluation in France and six patent applications undergoing evaluation in the United States, and have begun proceedings for the extension of some of our patents to other jurisdictions.

        We have registered trademarks or filed applications for such registration for "WAVECOM", "WISMO", "WISMO WITHIN", "MUSE Platform" and other trademarks in France. We have also registered these trademarks or filed applications for such registration in certain other jurisdictions. We do not have the trademark "Wavecom" registered in the United States, where there are several other companies using that name.

Backlog

        At December 31, 2002 our product backlog was approximately €95 million. We include in our backlog all accepted product purchase orders for which delivery has been specified within one year, however, we do not require customers to place firm orders more than four months in advance. Product orders in our backlog are subject to changes in delivery schedules or to cancellation at the option of the purchaser without significant penalty. Our backlog may vary significantly from time to time depending upon the level of capacity of our suppliers and subcontractors available to satisfy unfilled orders. Accordingly, although useful for scheduling production, backlog as of any particular date may not be a reliable indicator of sales for any future period.

Capital expenditures

        Wavecom's capital expenditures relate primarily to the purchase of laboratory, testing and computer equipment, principally at our headquarters in France. Total expenditures on property and equipment were €8.4 million in 2000, €10.3 million in 2001 and €27.3 million in 2002. All capital expenditures during these three years were internally financed.

Corporate Information

        Wavecom S.A. is a société anonyme, or limited liability company, organized under the laws of France in 1993 with authorization to operate for a period of 99 years, which period may be extended by vote of the shareholders. Our registered offices are at 12 boulevard Garibaldi, 92442 Issy-Les-Moulineaux Cedex, France and our telephone number is +33 (0)1 46 29 08 00. Our principal offices in the United States are at 4810 Eastgate Mall, 2^nd Floor, San Diego, CA 92121, and our telephone number at that address is +1 858 362 0101.

        Wavecom S.A. owns majority interests in six subsidiaries:

        Wavecom Asia Pacific Limited, Hong Kong, People's Republic of China (wholly owned)

        Wavecom Inc., San Diego, California, United States (wholly owned)

        Wavecom Korea Co., Ltd., Seoul, South Korea (wholly owned)

        Wavecom Deutschland GmbH, Darmstadt, Germany (wholly owned)

        Wavecom Northern Europe, Ltd, Guilford, United Kingdom (wholly owned)

        Arguin Inc., San Diego, California, United States (37.77% owned, 61.88% of voting rights
        controlled)

Property, Plant and Equipment

        Our headquarters are located in Issy-les-Moulineaux, a suburb of Paris, France, where we occupy approximately 15,000 square meters of leased facilities. We also have long-term leases covering a total of approximately 10,000 square meters in two other buildings in Issy-les-Moulineaux, where we had our

23

headquarters until early 2003. We are actively looking for subtenants for these premises. The leases for the former premises will terminate at various times through May 2008. Remaining operating lease commitments for these vacated premises totaled approximately €16 million at December 31, 2002. We also currently lease office space in Rennes (France), San Diego (United States), Tokyo (Japan), Hong Kong (China), Seoul (Korea), Taipei (Taiwan), Darmstadt (Germany), Beijing (China) and Guilford (United Kingdom).

Item 5. Operating and Financial Review and Prospects

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes, and the other financial information included elsewhere in this annual report. Our consolidated financial statements and our quarterly financial results included in this discussion have been prepared in accordance with U.S. GAAP. This discussion includes forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those contained in the forward-looking statements.

Background

        Wavecom develops, markets and sells technology solutions for a wide variety of wireless communication applications. The company's primary source of revenues is a line of wireless standard modules, known as WISMO modules for use in mobile telephones and other wireless applications based on GSM,GPRS and CDMA mobile communications standards. Our products incorporate digital wireless technology that we have developed since June 1993, when Wavecom was founded.

        We began commercial production and sales of the WISMO module in January 1997 and over the years we have introduced new generations of our WISMO modules, progressively reducing the size, weight and cost, while increasing functionality. Different geographic regions have different telecommunications standards and we have developed WISMO modules to meet those different standards. As telecommunications standards have changed, we have developed new WISMO modules that operate in accordance with those new standards. Where possible, we utilize the same technology for modules operating on different standards. For example, the GSM and GPRS versions of WISMO modules both use the same hardware, but require the download of different software onto the WISMO module. This allows us to manufacture the WISMO modules and determine just prior to shipment whether the product will be GSM or GPRS.

        By mid-2003, we expect to commence mass production of a quad-band version of the WISMO Pac module (WISMO Pac 5186), which will operate on the 850MHz, 900MHz, 1800MHz and 1900MHz bands. In addition to WISMO modules, we currently sell both an external, stand-alone wireless modem and an integrated wireless modem that is intended to be soldered onto a printed circuit board. Both wireless modems incorporate the WISMO module. We sell wireless modems, which have regulatory approval, as finished products. The external wireless modem was introduced in late 1997 and the integrated wireless modem was introduced in mid-2000.

        The WISMO module is designed to be used not only in mobile telephones and wireless modems, but also in other wireless applications. We believe that great growth potential for the WISMO module is in applications other than mobile phones, such as automatic vehicle location systems, handheld electronic devices, such as personal digital assistants, machine-to-machine applications where the measurement and transmission of data is necessary. None of these new markets is well established, however, and we cannot be certain that they will develop.

        In 2000, we believe that our average sales prices declined at a faster rate than the general industry as we moved from small volume, higher priced contracts in the first half of the year, to high volume, lower priced contracts beginning in the third quarter. In 2001, our average sales price declined 17.4% from the fourth quarter of 2000 to the fourth quarter of 2001. In 2002, average selling prices for WISMO modules continued to trend down, decreasing by 20.1% from fourth quarter 2001 to fourth

24

quarter 2002. We believe that downward pressure on the prices of mobile telephones may continue in the future and that similar pressure will affect the newer types of wireless communications applications in which our products are used or may be used. We therefore expect a continuing decline in the sales prices of our products. In 2002, the average price of a WISMO module was €60 compared to €76 in 2001. The actual price we charge for WISMO modules varies considerably and depends on the application for which they are used, the amount of software customization required and the volume ordered. In 2002, our average sale price for wireless modems was €113 compared to €136 in 2001. As with WISMO modules, the prices may vary significantly depending on volume.

        We also provide services to customers to help them to integrate the WISMO module into their applications. However, we currently expect that service revenues will continue to decrease as a percentage of our revenues.

        In 2002, 2001 and 2000, our operating costs increased substantially, largely due to increased research and development spending, although selling, general and administrative expenses increased as well as we added headcount to meet the expanding volume of business. All research and development costs are expensed as incurred. Research and development spending increased from €16,133,000 in 2000, to €32,634,000 in 2001 and to €64,093,000 in 2002. Selling and marketing expenses increased as we reinforced our marketing team, added sales personnel and distributors and increased promotional spending in an effort to increase recognition of Wavecom by prospective customers. We also added management and administrative infrastructure costs to manage our growth as we increased the volume of activity and expanded internationally. We recorded operating income of €56.0 million in 2002, of €3.0 million in 2001 and an operating loss of €19.8 million in 2000, and we generated cash from operating activities of €41.9 million in 2002 and, €50.0 million in 2001 (while we used €8.6 million in 2000).

        Our customer base is predominantly international, with the majority of our revenues coming from Asia and from European customers outside of France, including Germany, Italy, Spain and the United Kingdom. Revenues from Asia represented 82% of our sales in 2002, 84% of our sales in 2001 and a third of our sales in 2000. In order to better serve the Asian markets, we established subsidiaries in Hong Kong, PRC and Seoul, Korea, a branch office in Tokyo, Japan and representative offices in Taipei, Taiwan and Beijing, PRC. We also have subsidiaries based in San Diego, California, Darmstadt, Germany and Guilford, UK (March 2003) We are considering opening representative offices in other locations in 2003.

Critical Accounting Judgments and Estimates

        In response to the SEC's Release No. 33-8040, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies," we have identified the most critical accounting principles upon which our financial status depends and that involve the most complex or subjective judgments and estimates. Our judgment used to determine the appropriate assumptions and to make estimates is based on our historical experience, terms of existing contracts, our observation of trends in the industry, information provided by our customers and information available from other outside sources. We believe that our most critical accounting estimates are:

•

Provision for warranty services:  We provide for the estimated cost of product warranty service at the time the revenue is recognized. While we have put in place extensive product quality programs and processes, our warranty obligation is affected by product failure rates, our ability to repair defective products and service delivery costs incurred in correcting a product failure. Should actual product failure rates, repair rates or service delivery costs differ from our estimates, revisions to the estimated warranty accrual would be required.



•

Provision for royalty payment for intellectual property rights:  Our products are designed to conform to wireless industry standards which are based on certain patented technologies that we use. We have concluded license agreements with four patent holders, under which we pay royalties. We

25

are in the process of negotiating with other patent holders. We record a provision for royalty payments that we estimate will be due to these patent holders once we conclude license agreements with them. The provision is based on a percentage of consolidated product revenues and is recorded at the time revenue is recognized. Should the actual royalties to be paid under license agreements signed in the future differ from our estimates, the royalty provision would have to be revised.

        Both of these provisions have an impact on the determination of cost of goods sold. Both are recorded in "other accrued expenses" on the balance sheet and are described more fully in the footnotes to our annual consolidated financial statements.

•

Allowance for deferred tax assets:  We estimate our actual current tax exposure together with our temporary differences resulting from differing treatment of items, for tax and accounting purposes. These temporary differences result in deferred tax assets and liabilities. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must include and expense the allowance within the tax provision in the statement of operations. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

Results of Operations

Fiscal year 2002 compared to fiscal year 2001

Revenues

        Total revenues increased 70.8% to €551,089,000 in 2002 from €322,664,000 in 2001. The increase reflects a €231,972,000 increase in product sales offset by a €3,547,000 decrease in service revenues.

        Most of our revenues are from export sales. Customers in Asian countries accounted for 82.3% of our revenues in 2002 (compared to 83.6% in 2001). In 2002, 9.3% of our revenues were from customers in European countries excluding France, particularly Germany and Italy, compared to 11.7% in 2001. French customers made up 1.7% of total revenues in 2002 (compared to 1.9% in 2001), 4.6% came from customers in the Americas (compared to 1.1% in 2001) and 2.1% came from customers in the rest of the world (compared to 1.7% in 2001).

        Product sales.    Revenues from sales of our products totaled €549,543,000 in 2002 compared to €317,571,000 in 2001. Sales of WISMO modules accounted for 93% of total product sales in 2002, while 7% was from sales of wireless modems. The increase in product revenues in 2002 was due principally to increased sales of WISMO modules for personal communication device applications, but in absolute terms sales in all our target markets (automotive and machine-to-machine as well as personal communication devices) increased.

        Technology development and other services.    Revenues from services decreased from €5,093,000 in 2001 to €1,546,000 in 2002. This decrease reflects the Company's ongoing efforts to ease the process of integrating the WISMO module into customers' products and therefore reduce the amount of services needed from Wavecom. We recognize service revenues for development work once all work is completed. At December 31, 2002, we had €1.5 million in deferred service revenue on the balance sheet relating to development services in progress.

Cost of revenues

        Cost of goods sold.    Cost of goods sold consists primarily of the cost of components and our manufacturers' charges. Our cost of goods sold increased from €254,658,000 in 2001 to €371,919,000 in

26

2002. Our gross profit on product sales in 2002 was €177,624,000 (32.3% gross profit on product revenues) compared to €62,913,000 (19.8% gross profit on product revenues) in 2001.

        In 2002, our product gross margin increased in each of the four quarters continuing the trend of sequential quarterly improvements realized throughout 2001. The improvements in gross margin resulted principally from these factors:

•

We integrated fewer components into our new products.



•

We improved oversight of our third-party manufacturers and of the manufacturing process during 2002. In early 2003 we reorganized the manufacturing, customer service and quality assurance teams combining them all under one senior operations manager. As a result of process improvements, we have continued to increase yields and, reduce production and test times, which in turn translated into lower costs and higher capacity on existing production lines.



•

During 2002, supplies of the electronic components that we use in our products remained strong and, consequently, market prices for these components declined over the course of the year. In addition to generally favorable market conditions, we benefited from the increased negotiating power accompanying the substantial growth in our production volumes (approximately 8,815,000 units sold in 2002 compared to 4,000,000 units sold in 2001). Lastly, during 2002 we reinforced our purchasing team and began negotiating more aggressively with both our third-party manufacturers and the component suppliers. We believe this had a significant favorable impact on our ability to reduce our cost of goods sold.

        Cost of services.    Our cost of providing services decreased slightly from €4,718,000 in 2001 to €4,709,000 in 2002. We realized a loss on services of €3,163,000 in 2002 compared to gross profit from services of €375,000 in 2001. The variability in gross profit or loss on services reflects the fact that we expense all development service costs as incurred, while we recognize service revenue only when the project is complete and the services have been accepted by the customer.

Operating expenses

        Research and development.    We spent €64,093,000 (11.63% of revenues) on research and development in 2002 compared to €32,634,000 (10.1% of revenues) in 2001. This 96.4% increase in our research and development spending reflects, in particular, the development efforts related to new WISMO modules as we expanded our product line with new modules based on CDMA as well as GSM/GPRS. Research and development expenses also reflect the significant resources being used to adapt our existing products for new digital wireless standards, including GPRS and W-CDMA. Research and development personnel increased from 373 at December 31, 2001 to 535 at December 31, 2002. Of the total personnel at December 31, 2002, 387 were salaried full time equivalent employees and 148 were independent contractors or temporary personnel.

        Sales and marketing.    Sales and marketing expenses in 2002 totalled €26,600,000 (4.8% of revenues) compared to €12,416,000 (3.8% of revenues) in 2001. This 114.2% increase of sales and marketing expenses in 2002 reflects an increase in headcount from 47 people in 2001 to 79 by the end of 2002, as well as increased promotional and advertising spending, particularly in the fourth quarter of 2002. As part of an effort to increase the visibility of Wavecom to prospective customers, we sponsored a golf tournament in China and ran print advertising in major publications in our main target markets for the first time We also increased the amount of sales commissions to sales personnel and to sales agents, reflecting the increased level of revenues.

        General and administrative.    General and administrative expenses increased 94% from €13,297,000 (4.1% of revenues) in 2001 to €26,163,000 (4.7% of revenues) in 2002. We increased the number of personnel in our general and administrative services (including finance, legal, corporate communications, human resources, and information systems departments from 89 at December 31, 2001

27

to 130 at December 31, 2002. Rent expense increased following the signing of a new office lease in Issy-les-Moulineaux in July 2002, with the objective of regrouping in 2003 personnel previously spread over three locations. Insurance and information technology expenses also increased significantly. These increases reflect the growth of our business and the development of our subsidiaries in Asia and in the United States. In addition, legal and patent attorney fees increased as we continued to negotiate licensing agreements with an increasing number of GSM, GPRS, CDMA and other patent and technology holders, as well as increasing the number of registrations of our own patents.

        Deferred compensation amortization.    We recorded deferred compensation expense of €7,366,000 in connection with the issuance of founders' warrants and stock options in September 1998 and February 1999. This deferred expense is amortized on a straight-line basis over the four-year vesting periods of the warrants and options. Consequently, we had amortization expense of €1,587,000 in 2002 and €1,711,000 in 2001. Deferred compensation expense related to the September 1998 grants was completely amortized at the end of September 2002, and the deferred expense related to the February 1999 grants was completely amortized at the end of February 2003.

Other income (expense)

        Interest income, net.    We recorded net interest income of €3,159,000 in 2002, compared to €3,827,000 in 2001. The decrease in net interest income results from the decline in interest rates over the course of the year, partially offset by higher average cash balances invested.

        Foreign exchange gain (loss).    We had a net foreign exchange loss of €10,857,000 in 2002 compared to a net gain of €142,000 in 2001, due primarily to changes in the value of the U.S. dollar (the primary currency other than the euro in which we invoice sales and make purchases) compared to the euro. Of the total 2002 loss, €8,415,000 was recognized during the second quarter of the year when the U.S. dollar declined significantly against the euro at the same time as we began generating significant amounts of U.S. dollar-denominated cash. Foreign exchange losses were incurred on cash balances and accounts receivable denominated in dollars, offset partly by gains on accounts payable in dollars.

        Income tax expense (benefit).    With the increased profitability of the group in 2002, we used all tax loss carryforwards remaining in France during 2002 and recorded a net tax expense of €6,556,000 for the year. The net expense reflects tax expense recognized in all jurisdictions, except the United States, net of French research tax credits totaling €449,000 in 2002. Our €2,299,000 net tax benefit in 2001 represents principally French research tax credits, offset slightly by tax expense in certain jurisdictions. Research tax credits are received in cash in the fourth year after the period in which they are recorded, if they are not used to offset income taxes payable in France prior to that time.

Fiscal year 2001 compared to fiscal year 2000

Revenues

        Total revenues increased 392% from €65,573,000 in 2000 to €322,664,000 in 2001. The increase reflects a 404% increase in product sales and a 102% increase in service revenues.

        Most of our revenues are from export sales. In 2001, 11% of our revenues were from customers in European countries excluding France, particularly Germany and Italy, compared to 52% in 2000. Customers in Asian countries accounted for 84% of our revenues in 2001 (compared to 33% in 2000), French customers made up 2% of total revenues in 2001 (compared to 3% in 2000), 1% came from customers in the Americas (compared to 3% in 2000) and 2% came from customers in the rest of the world (compared to 9% in 2000).

        Product sales.    Revenues from sales of our products totaled €317,571,000 in 2001 compared to €63,055,000 in 2000. Sales of WISMO modules accounted for 90% of total product sales in 2001, while 10% was from sales of wireless modems. The increase in product revenues in 2001 was due principally

28

to increased sales of WISMO modules for telephony applications, but in absolute terms sales in all our target markets (multimedia, automotive and telemetry as well as telephony) increased.

        Technology development and other services.    Revenues from services increased from €2,518,000 in 2000 to €5,093,000 in 2001. This increase reflects the increasing completion of product integration services for WISMO module customers. We recognize service revenues for development work once all work is completed. At December 31, 2001, we had €2.4 million in deferred service revenue on the balance sheet relating to development services in progress.

Cost of revenues

        Cost of goods sold.    Cost of goods sold consists primarily of the cost of components and our manufacturers' charges. Our cost of goods sold increased from €51,457,000 in 2000 to €254,658,000 in 2001. Our gross profit on product sales in 2001 was €62,913,000 (19.8% of product revenues) compared to €11,598,000 (18.4% of product revenues) in 2000.

        In 2001, our product gross margin increased in each of the four quarters after declining substantially in the second half of 2000. The improvements in gross margin resulted principally from three factors:

•

Our new products are integrated with fewer components.



•

We improved oversight of our third-party manufacturers and of the manufacturing process during 2001 by replacing our director of manufacturing in December 2000 and reorganizing the industrialization and logistics teams beginning in the first quarter of 2001. As a result of process improvements, we were able to increase yields and reduce production time, which in turn translated into lower costs and higher capacity on existing production lines.



•

During 2001 industry demand for electronic components slowed, resulting in an over-supply compared to the industry-wide shortage which we faced in 2000. Consequently, market prices for components we require for our products declined over the course of the year. In addition to these more favorable market conditions, we also benefited from the increased negotiating power accompanying the substantial growth in our production volumes (approximately 4,000,000 units sold in 2001 compared to 580,000 units sold in 2000). Lastly, during 2001 we reinforced our purchasing team and began negotiating more aggressively with both our third- party manufacturers and the component suppliers. We believe this had a significant favorable impact on our ability to reduce our cost of goods sold.

        Cost of services.    Our cost of providing services increased slightly from €4,522,000 in 2000 to €4,718,000 in 2001. We realized a gross profit from services of €375,000 in 2001 compared to a loss on services of €2,004,000 in 2000. The variability in gross profit or loss on services reflects the fact that we expense all development service costs as incurred, while we recognize service revenue only when the project is complete and the services have been accepted by the customer.

Operating expenses

        Research and development.    We spent €32,634,000 (10.1% of revenues) on research and development in 2001 compared to €16,133,000 (24.6% of revenues) in 2000. This 102% increase in our research and development spending reflects, in part, the development efforts related to new WISMO modules as we began to expand our product line, and to improved software interfaces and development tools. Research and development expenses also reflect the significant resources being used to adapt our existing products for new digital wireless standards, including GPRS and W-CDMA.

        Sales and marketing.    Sales and marketing expenses in 2001 totaled €12,416,000 (3.8% of revenues) compared to €5,836,000 (8.9% of revenues) in 2000. This doubling of sales and marketing expenses in 2001 reflects an increase in our presence in the Asia-Pacific and U.S. markets through our

29

local offices, as well as substantial increases in the staffing of our marketing department. We also incurred increased promotional expense related to the launches of the WISMO Pac module series and the MUSE Platform in 2001. We increased the number of direct sales personnel from 13 at the end of 2000 to 15 at December 31, 2001.

        General and administrative.    General and administrative expenses increased 138% from €5,598,000 (8.5% of revenues) in 2000 to €13,297,000 (4.1% of revenues) in 2001. We increased the number of personnel in our general and administrative services (including finance, legal, corporate communications, human resources, and information systems departments from 52 at December 31, 2000 to 77 at December 31, 2001. These increases accompanied the growth of our business and the development of our subsidiaries in Asia and in the United States. In 2001, we also more than doubled the amount of our office space (primarily with the leasing of our new 6,500 square meter corporate headquarters in France and incurred related moving costs.

        Amortization of goodwill.    In December 2001, we purchased the tangible and intangible assets of Iconn Wireless, a San Diego-based CDMA-technology company, for $4.6 million (€5.3 million) of which $4.1 million (€4.6 million) has been allocated to goodwill. In accordance with new U.S. accounting rules issued in 2001 (Statement of Financial Accounting Standards No. 142), this goodwill is not being amortized. However the ongoing value of the goodwill will be subject to review and any impairment in value will result in a write-down of the value. In October 2000, we purchased for €3,454,000 in cash a 61.88% interest in a San Diego-based software development company. As a result of this acquisition, we recorded goodwill of €1,326,000 which was being amortized over five years. The charge of €278,000 represents twelve months of amortization related to our October 2000 acquisition. The goodwill related to this acquisition will cease being amortized as of January 1, 2002.

        Deferred compensation amortization.    Deferred compensation expense of €7,366,000 was recorded in connection with the issuance of founders' warrants and stock options in September 1998 and February 1999. This deferred expense is amortized on a straight-line basis over the four-year vesting periods of the warrants and options. Consequently, amortization expense of €1,711,000 was recorded in 2001, compared to €1,758,000 in 2000.

Other income (expense)

        Interest income, net.    We recorded net interest income of €3,827,000 in 2001, compared to €2,745,000 in 2000. The increase in net interest income results from the investment of cash proceeds from our public offering in June 2000 in low-risk securities, net of interest expense related to capital leases.

        Foreign exchange gain (loss).    We had a net foreign exchange gain of €142,000 in 2001 compared to a net gain of €989,000 in 2000, due primarily to changes in the value of the U.S. dollar (the primary currency other than the euro in which we invoice sales and make purchases) compared to the euro.

        Provision for loss on long-term investment.    In October 2000, we invested approximately $1 million (€1.2 million) in a privately-owned developer of Bluetooth technology. In the fourth quarter of 2001, we recorded a provision in the amount of €716,000 for the estimated loss in value of this investment, based on the lower valuation of the company in later financing rounds (in which we did not participate).

        Income tax expense (benefit).    Our €2,299,000 net tax benefit in 2001 (€1,534,000 in 2000) represents principally French research tax credits, offset slightly by tax expense in certain jurisdictions. We recorded no tax expense in most jurisdictions, including France, due to the existence of tax loss carryforwards in excess of taxable income.

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Selected quarterly operating results

        The following table sets forth a summary of Wavecom's unaudited quarterly operating results for each of the eight fiscal quarters in the period ended December 31, 2002. We have derived this information from our unaudited interim consolidated financial statements which have been prepared on a basis consistent with our audited consolidated financial statements. The results of operations for any quarter are not necessarily indicative of results for any future period.

			Three months ended
			March 31, 2001			June 30, 2001			Sept. 30, 2001			Dec. 31, 2001			March 31, 2002			June 30, 2002			Sept. 30, 2002		Dec. 31, 2002
			(unaudited) (in thousands, except share and per share amounts)
Revenues:
	Product sales		€	51,239		€	72,421		€	88,972		€	104,939		€	108,357		€	135,752		€	170,485	€	134,949
	Technology development and other services			2,785			1,350			582			376			262			264			534		485
	Total revenues			54,024			73,771			89,554			105,315			108,619			136,016			171,019		135,434
Cost of revenues:
	Cost of goods sold			43,469			59,987			70,094			81,108			79,457			96,112			115,918		80,431
	Cost of services			849			959			1,231			1,679			1,130			712			1,431		1,436
		Total cost of revenues		44,318			60,946			71,325			82,787			80,587			96,824			117,349		81,867
Gross profit				9,706			12,825			18,229			22,528			28,032			39,192			53,670		53,567
Operating expenses:
	Research and development			6,167			7,122			9,162			10,183			12,672			14,925			14,870		21,626
	Sales and marketing			2,696			2,470			3,320			3,929			3,906			5,166			5,144		12,384
	General and administrative			2,653			3,414			3,767			3,464			4,735			5,984			6,632		8,811
	Amortization of goodwill			66			74			69			69			—			—			—		—
	Deferred compensation amortization			431			431			431			418			428			428			428		304
		Total operating expenses		12,013			13,511			16,749			18,063			21,741			26,503			27,074		43,125
Operating income (loss)				(2,307	)		(686	)		1,480			4,465			6,291			12,689			26,596		10,442
Interest and other financial income (expense), net				244			923			2,194			607			814			(7,726	)		1,768		(2,552	)
Provision for loss on long-term investment				—			—			—			(716	)		—			—			—		—
Income (loss) before minority interests and income taxes				(2,063	)		237			3,674			4,356			7,105			4,963			28,364		7,890
Minority interests				118			132			324			230			7			46			242		28
Income (loss) before income taxes				(1,945	)		369			3,998			4,586			7,112			5,009			28,606		7,918
Income tax expense (benefit)				(399	)		(64	)		(223	)		(1,613	)		(690	)		(741	)		11,310		3,323
Net income (loss)			€	(1,546	)	€	433		€	4,221		€	6,199		€	7,802		€	5,750		€	17,296	€	11,241
Basic net income (loss) per share			€	(0.11	)	€	0.03		€	0.29		€	0.42		€	0.53		€	0.39		€	1.16	€	0.75
Diluted net income (loss) per share			€	(0.11	)	€	0.03		€	0.27		€	0.40		€	0.51		€	0.37		€	1.11	€	0.73
Shares used in computing basic net income (loss) per share				14,692,300			14,706,857			14,718,631			14,762,381			14,841,415			14,903,600			14,971,841		15,052,768
Shares used in computing diluted net income (loss) per share				14,692,300			15,372,319			15,384,206			15,399,691			15,444,491			15,493,759			15,530,516		15,413,783

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        We believe that period-to-period comparisons of our operating results are not necessarily meaningful. Our quarterly and annual operating results have fluctuated in the past and are likely to fluctuate significantly in the future. You should not rely on them to predict future performance. Our revenue may fluctuate due to the amount of new customer orders and the timing in beginning production and delivery of these new orders. The amount and timing of our operating expenses may fluctuate significantly in the future as a result of the timing of these orders and our development of new products and technologies. For a discussion of factors which may affect our quarterly and annual operating results, see "Item 3—Key Information—Risk Factors—Our quarterly revenues fluctuate significantly and may affect the price of our shares and ADSs."

Liquidity and capital resources

        At December 31, 2002, we had working capital of €105,418,000 and our debt and capital lease obligations (including the current portion) amounted to €501,000 compared to debt and capital lease obligations of €917,000 at the end of 2001. We had €134,528,000 in cash, cash equivalents and short-term investments at December 31, 2002.

        At December 31, 2002 we had a multi-currency overdraft facility with a French bank allowing for borrowings of up to €1,000,000. The overdraft facility bore interest based on a market rate (Fed Funds) plus a margin of 1.5% from January to September 2002 and 0.85% for the fourth quarter of 2002. No amounts had been drawn on this facility at December 31, 2002. The overdraft facility does not have a fixed term.

        At December 31, 2002, we had a €15,978,000 dedicated line of credit used for the issuance of bank guarantees to secure lease payments under office leases signed in December 2000 and July 2002. These lines were secured by pledged certificates of deposit in the amount of €13,671,000 at December 31, 2002 recorded as long-term assets, rather than as cash or short-term investments, because the guarantee has a term greater than one year.

        The average rate on our overdraft facilities corresponded to an effective rate of 4.29% at December 31, 2002 and an average rate of 4.45% for the year ended December 31, 2002. The dedicated lines of credit were remunerated by a fixed fee rather than by interest.

        At December 31, 2002, we had no material commitments for capital expenditures during 2003. Our future capital requirements, the timing and amount of expenditures, and the adequacy of funds available to us will depend on our success in developing and selling new and existing products, on technological and market developments in the wireless communications industry and on other factors. Based on our current plans, we believe that existing cash and cash flows generated by operations will be adequate to satisfy our capital requirements at least through 2003.

        The company's contractual obligations consist principally of obligations under capital leases, operating leases, and other short-term obligations.

	Payments due by period (amounts in millions)
Contractual obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Capital lease obligations	€	0.5	€	0.2	€	0.3
Operating leases	€	76.1	€	11.4	€	20.8	€	19.4	€	24.5
Total contractual cash obligations	€	76.6	€	11.6	€	21.1	€	19.4	€	24.5

        Our contractual obligations under operating leasing as of December 31, 2002 include approximately €16 million related to two leases, expiring in March 2005 and May 2008, for office space which we intend to vacate by mid-2003 following the consolidation of all personnel in Issy-les-Moulineaux in one building We are actively looking sub-lessors for this office space.

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        At December 31, 2002, we had purchase commitments with our third-party manufacturers for future deliveries of products principally during the first quarter of 2003. These purchase commitments totaled approximately €45.4 million.

Interest rate risk

        At December 31, 2002, €92,826,,000 in cash equivalents were invested in short-term money-market accounts bearing variable rates of interest. We had no variable rate debt at December 31, 2002.

Impact of currency fluctuations

        We publish our consolidated financial statements in euro and the functional currency of Wavecom S.A. is the euro. In 2002, we recorded 86% of our total revenues in U.S. dollars, with virtually all the rest in euro. We purchase many of our components for U.S. dollars and the operating expenses of our U.S. subsidiaries are in U.S. dollars. The operating expenses of our Hong Kong subsidiary are primarily in Hong Kong dollars, which are closely tied to the U.S. dollar. Most of our other operating expenses are in euros. Dollar purchases and expenses represented approximately 77% of our cost of revenues and operating expenses in 2002. A strengthening of the euro against the U.S. dollar and other currencies in which we receive revenues could reduce our reported revenues and our reported operating and net results. We incurred a net foreign exchange loss of €10,857,000 in 2002 and net foreign exchange gains of €142,000 in 2001 and €989,000 in 2000.

        We have not previously engaged in significant or speculative currency hedging transactions. From time to time, we have entered into short-term currency swap agreements in order to hedge specific transactions. In January 2003, we began to use a combination of options and forward exchange contracts in order to minimize the risk to our net dollar position over the coming months. Because these financial instruments do not always hedge specific transactions, they may be accounted for as speculative transactions, with the fair market value of the instruments being recorded on our balance sheet and marked to market at the end of each accounting period.

Item 6. Directors, Senior Management and Employees

Board of directors and executive officers

        Our business is managed by our board of directors (Conseil d'Administration) and by our Chief Executive Officer (Directeur Général). French law governing a société anonyme and our by-laws provide that the general management of the company is performed either by the chairman of the board of directors or by another individual, elected by the board of directors and bearing the title of chief executive officer. At its meeting held on October 21, 2002, the board of directors opted for a dual management structure and appointed Mr. Michel Alard as Chairman of the board of directors and Mr. Aram Hékimian, who previously held the position of Deputy Chief Executive Officer and who is also a member of the board of directors, as our Chief Executive Officer.

        Mr. Hékimian is vested with extensive powers to act under most circumstances on behalf of the company, within the limits set out by the corporate by-laws, and has capacity to act on the company's behalf. As the chief executive officer, subject to the prior authorization of the board of directors for certain decisions, he therefore has full authority to manage Wavecom's affairs. The chief executive officer may be removed by the board of directors at any time. However, in case of removal without cause, he may be entitled to damages.

        The chairman of the board of directors represents the board and organizes its work. In addition, the chairman is responsible for the proper functioning of the company's managing bodies and, in particular, has to verify the ability of the board members to perform their mission.

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        Under our by-laws, each director is elected by the shareholders at an ordinary general meeting for a maximum three-year term. Each director must own at least one Wavecom share. Under French law, a director may be an individual or a corporation. Our board currently has five directors. Directors may resign at any time and their functions as members of the board of directors may be terminated at any time by the shareholders at a general meeting. Directors must resign at the age of 65. A director does not need to be a French national and there is no limitation on the number of terms that a director may serve. In case of removal without cause, members of the board of directors are not entitled to damages, except in certain circumstances.

        Under French law, our board of directors defines the orientations of the company's activity and supervises their implementation. Within the limits set out by the corporate by-laws, and the powers expressly granted by law to the general shareholders meetings, the board of directors may deliberate upon the business of the company and take any decision in this regard. In addition, the board of directors is responsible, among other things, for presenting financial statements to our shareholders and convening shareholders' meetings.

        Directors are required to comply with applicable law and with our by-laws. Our directors may be jointly and severally responsible for actions that they take contrary to Wavecom's interests.

        Under French commercial law and our by-laws, any transaction we enter into (either directly or indirectly or through an intermediary) in which a member of our board of directors, or our chief executive officer, or one of our shareholders holding more than 5% of the voting rights (or, if it is a company, the company controlling it) has a direct or indirect interest and that is not in the ordinary course of business and/or is not at arm's-length is subject to the prior consent of our board of directors. The same applies for transactions between the company and another company, whenever one of our directors or our chief executive officer is the owner, a partner with unlimited liability, a manager, director, chief executive officer, member of the directorate (directoire) or supervisory board (conseil de surveillance) of such company. Such transactions have to be reported to the chairman by the concerned person. Furthermore, the types and the purposes of these transactions must be communicated by the chairman to the board of directors and to the statutory auditors. The interested director is not taken into account for the quorum calculation and his or her vote is not taken into consideration for the calculation of whether the transaction has been approved by the board of directors. Any such transaction concluded without the prior consent of our board of directors can be nullified if it causes prejudice to us. The interested director, or chief executive officer, can be held liable on this basis. Our statutory auditor must be informed of the transaction within one month following its conclusion and must prepare a special report to be submitted to our shareholders for approval at their next meeting. In the event the transaction is not ratified by our shareholders at a shareholders' meeting, it will remain enforceable by third parties against us, but we may in turn hold the interested director or chief executive officer, as the case may be, and, in some circumstances, the other members of the board of directors, liable for any damages we may suffer as a result. In addition, the transaction may be cancelled if it is fraudulent. Moreover, certain transactions between a corporation and a member of its board of directors who is a natural person and/or its managing directors, chief executive officer or deputy chief executive if any, are prohibited under French commercial law. Such prohibition also applies to natural persons representing a company acting as board member.

        The following table sets forth the names of the directors of Wavecom, their current positions with Wavecom, the dates of their initial appointment as directors and the expiration dates of their current term. Dates specified for directors representing corporations relate to the entity represented. Each of

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our director's terms expires on the date of the annual general meeting of shareholders that approves our accounts for the year indicated in the table below. Cumulative voting is not permitted.

Name	Age	Current position	Initially appointed	Term expires
Michel Alard	48	Chairman of the Board of Directors	1993	2004
Aram Hékimian	47	Director, Chief Executive Officer	1993	2004
Delphis S.A. represented by Marc Fourrier	49	Director	1997	2003
Bernard Gilly	46	Director	1999	2005
Stephen Imbler	51	Director	2000	2005

Six board meetings were held in 2002.

        The day-to-day operations of Wavecom are managed by our team of executive officers, managed by our Chief Executive Officer The following table sets forth the name and current position of each of our executive officers as of the date of this report:

Name	Age	Current position	Current position since	Joined Wavecom
Michel Alard	48	Chairman of the Board of Directors	1993	1993
Aram Hékimian	47	Chief Executive Officer	1993	1993
Marc Cases	40	Group VP Operations	2000	2000
Deborah Choate	39	Group VP Finance and Administration, Chief Financial Officer	1998	1998
Didier Dutronc	43	Group VP Asia Pacific, Managing Director Wavecom Asia Pacific Ltd	2003	2003
Hervé Gagnard	38	Group VP Corporate Development, Marketing and Communications	2000	1997
Philippe Guillemette	37	Group VP Chief Technology Officer	2003	2000
Etienne Menut	52	Group VP Human Resources	2003	2002
Vincent Mouret	44	Group VP Research & Development	2003	2002
Hany Neoman	41	Group VP The Americas, President Wavecom Inc.	2000	2000
Pierre Piver	43	Group VP Europe, Middle East and Africa	2003	2003

        There are no family relationships between any of the directors or executive officers or of Wavecom.

Directors

Michel Alard has served as Chairman of the Board since he co-founded Wavecom in 1993. From 1988 to 1993, Mr. Alard was GSM project manager for Matra Communications, a telecommunications equipment company. Before joining Matra, Mr. Alard was joint head of research and development for CCETT, a joint telecommunication research center of France Telecom and TéléDiffusion de France (TDF). From 1979 to 1982, Mr. Alard was a research engineer at SFP (Société Française de

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Production) and TDF, and was involved in television broadcasting. Mr. Alard has engineering degrees from the Ecole Polytechnique and the Ecole Nationale Supérieure des Télécommunications. Mr. Alard also serves on the board of directors of ILOG, S.A., a French software company listed on Nasdaq and the Euronext Nouveau Marché. Other Wavecom group directorships: Wavecom Inc. (US); Wavecom Asia Pacific Ltd. (Hong Kong); Arguin Communications Inc. (US); and Wavecom Korea Co. Ltd. (Korea).

Aram Hékimian, a co-founder of Wavecom, has served as a director since 1993 and is currently the Chief Executive Officer (Directeur Général). He was head of the software department for Matra Communications from 1984 until 1993. Prior to joining Matra, he was a software engineer at Marben, a software engineering company, and CS Telecom, a company active in the field of telecommunications and railway signaling systems. Mr. Hékimian has a masters degree in science and technology from the University of Paris XII. Other Wavecom group directorships: Wavecom Inc. (US); Wavecom Asia Pacific Ltd. (Hong Kong); Arguin Communications Inc. (US); Wavecom Korea Co. Ltd (Korea); Wavecom Northern Europe Ltd (UK); and Wavecom Deutschland GmbH (Germany).

Marc Fourrier served as a director of Wavecom individually from 1993 to 1997 and since 1997, on behalf of Delphis, a company that specializes in the creation and development of high technology companies. Since 1988, Mr. Fourrier has served as President and Chief Executive Officer of Delphis. Mr. Fourrier received engineering degrees from the Ecole Polytechnique and the Ecole Nationale des Ponts et Chaussées, and an M.S. from the Massachusetts Institute of Technology. Mr. Fourrier also serves on the board of directors of ILOG, S.A., a French software company listed on Nasdaq and the Euronext Nouveau Marché. Other outside directorships include: High Deal, a privately-held French company, and, as representative of Delphis, Dexem, a privately-held French company; and Kiala, a privately-held Belgian company.

Bernard Gilly has served as a director of Wavecom since April 1999. He is a partner in the Life Sciences team of Sofinnova Partners, a European venture capital fund, having joined them in December 2000. From 1992 to 2000, he served as Chief Executive Officer of Transgene, a French biotechnology company listed on Nasdaq and the Euronext Nouveau Marché. From 1994 to June 1997, Dr. Gilly also served as Research Director of bioMérieux. Prior to that, he served in various capacities at Pasteur Mérieux, including that of Vice President, Research and Development, from 1990 to 1994. He received his doctoral degree in bioeconomics from the University of Rennes, and holds an AMP from INSEAD. Other outside directorships include: High Deal, a privately-held French company; Noxxon Pharma, a privately-held German company; Web'Surg a privately-held French company; Carex, a privately-held French company; Faust Pharmaceuticals, a privately-held French company; INSERM, a French public institute; CNRS, a French public institute; and ENS Lyon, a French school.

Stephen Imbler has served as a director of Wavecom since March 2000. He served as President and Chief Financial Officer of Liquid Audio Solutions until March 2003. He served as President and Chief Operating Officer of Hyperion Solutions through the end of 2001, and as Advisor to the company through August, 2002. Prior to the 1998 merger between Arbor Software and Hyperion Software that created Hyperion Solutions, Mr. Imbler held the position of Senior Vice President and Chief Financial Officer at Arbor Software for three years. Prior to joining Arbor Software in 1995, Mr. Imbler served as Senior Vice President of Finance and Operations and Chief Financial Officer for Gupta Corporation, a software company. Mr. Imbler previously served as Vice President and Chief Financial Officer of Quick Response Services, Inc.; Vice President, U.S. Finance and Operations, and Vice President, Finance (Oracle Corporate) at Oracle Corporation; and Senior Tax Manager at Peat Marwick, San Francisco. Mr. Imbler received a master's degree in public accounting from the University of Texas and a bachelor's degree in piano performance from Wichita State University. Other outside directorships include: Liquid Audio Inc, a US company listed on NASDAQ.

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Executives officers

Marc Cases has served as Wavecom's Group VP of Operations since January 2003 and previously as Group VP of Manufacturing since December 2000. He is a member of the Executive Committee of Wavecom group. Prior to joining Wavecom, Mr. Cases was Manager of Corporate Sourcing at the research and development headquarters in Italy of Magneti Marelli, a Fiat subsidiary, from 1995 to 2000. From 1992 to 1995, he was an electronic components purchasing manager for Magneti Marelli. His experience prior to Magneti Marelli included various positions at Sextant Avionique in France. Mr. Cases has an engineering degree from the Conservatoire National des Arts et Métiers and a business degree from the Institut Administration des Entreprises.

Deborah Choate has served as Wavecom's Group VP Finance and Administration and Chief Financial Officer since August 1998. She is a member of the Executive Committee of the Wavecom group. Prior to joining Wavecom, Ms. Choate was a partner of Ernst & Young Audit in Paris. From 1984 until she joined the Paris office in 1991, Ms. Choate worked in Ernst & Young's San Francisco office and its national headquarters in Cleveland, Ohio. Ms. Choate has a B.S. in business administration from the University of California at Berkeley. Wavecom group directorships: Arguin Communications Inc. (US); Wavecom Korea Co. Ltd (Korea); and Wavecom Northern Europe Ltd (UK).

Didier Dutronc, Group VP for the Asia-Pacific region and Managing Director of Wavecom Asia Pacific Ltd, joined Wavecom in March 2003. He is a member of the Executive Committee of the Wavecom group. Prior to joining Wavecom, he served as Worldwide VP Sales and Marketing for Alcatel Optronics and served as President and CEO of Alcatel Optronics, Inc., in Dallas, Texas (from August 1997 to June 2000 as VP sales and Marketing and from June 2000 to February 2003 as President and CEO). Prior to Alcatel he also worked for Analog Devices from August 1984 to August 1987 and Texas Instruments from September 1987 to August 1997. Mr. Dutronc holds a degree in electrical engineering from ESME in Paris and received an MBA from IAE in Paris. Wavecom group directorships: Wavecom Asia Pacific Ltd. (Hong Kong) and Wavecom Korea Co. Ltd (Korea).

Hervé Gagnard, Wavecom's Group VP Corporate Development, Marketing and Communications, joined Wavecom in January 1997. From January 1997 until December 1999 he served as Director of Marketing and was named Director of Corporate Development and Communications on January 1, 2000. He is a member of the Executive Committee of the Wavecom group. From 1994 until the end of 1996, Mr. Gagnard was the head of product marketing at TDR, a French paging services company. From 1991 to 1993, Mr. Gagnard was business development manager at Motorola Codex, the French telecommunications subsidiary of Motorola. From 1987 until he joined Motorola Codex, Mr. Gagnard worked in commercial engineering and marketing positions at Fininfo and Line Data, French information technology companies. Mr. Gagnard has an engineering degree from the Ecole Nationale Supérieure des Arts et Metiers.

Philippe Guillemette has been Group VP Technology since January 2003. From December 2000 to December 2002, Mr. Guillemette was Group VP of Research and Development. Mr. Guillemette was Assistant Director of Research and Development during 2000, and from June 1995 until December 1999 he was Director of Software Development. He is a member of the Executive Committee of the Wavecom group. Prior to joining Wavecom in 1993, Mr. Guillemette was a software engineer at Nortel Networks. He has an engineering degree from the Ecole d'Ingenieurs en Electronique et Electrotechnique.

Etienne Menut, Group VP for Human Resources joined Wavecom in July 2002 as a consultant and was appointed to his current position in January 2003. He is a member of the Executive Committee of Wavecom group. Prior to joining Wavecom, he was Human Resources Director of Microsoft France from1992-1999. Mr. Menut also has worked with companies such as Cogema and Matra from 1977-1990. Mr. Menut holds a master's degree in Business Law from the University of Angers (France).

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Vincent Mouret was appointed Group VP Research and Development in January 2003. From July 2002 to December 2002, he served as Group VP Marketing. He is a member of the Wavecom Executive Committee. Prior to joining Wavecom, Mr. Mouret was Vice President and Managing Director of Alcatel Microelectronics Wireless Business Division from 1999 to June 2002. Mr Mouret started his career at Matra Communication in 1980 as a component engineer. He then joined Texas Instruments in 1984 where he held various marketing and international sales management positions. In 1993 he worked for Motorola as technical and marketing director, before joining Alcatel in 1999. Mr. Mouret holds a degree in Physics from Paris University.

Hany Neoman has been Wavecom's Group VP of the Americas region and the president of our U.S. subsidiary, Wavecom, Inc., since October 2000. He is a member of the Executive Committee of the Wavecom group. From 1997 until joining Wavecom, he was first a General Manager of the Southern European division, and then Marketing Vice President, of Sterling Commerce. From 1994 to 1997, Mr. Neoman was president and chief executive officer of NeoSystems Inc., a start-up based in London and New York that specialized in modular digital applications, which he founded. From 1990 to 1992 he was Head of Sales for Western Europe for Intel's Business Communications Division. Mr. Neoman has a degree in Design Engineering from the University of Turin, Italy, and an MBA from Strathclyde University in Glasgow, UK. Wavecom group directorships: Wavecom Inc. (US).

Pierre Piver has served as Wavecom Group's Vice President Europe, Middle East and Africa Region since January 2003. He serves on the Executive Committee of Wavecom group. Before joining Wavecom, Mr. Piver was the Managing Director of Infineon Technologies France which he joined in September 1996 when it was the Semiconductor division of Siemens in France. Previously, Mr. Piver had occupied various positions in Sales and in Product Marketing from 1985 to 1989 at RTC Compelec (Philips) in Caen (France) and, from 1989 to 1996, at Texas Instruments in Vélizy (France) and Freising (Germany). Mr. Piver holds a degree in Electronic Engineering from ESME (Ecole Spéciale de Mécanique et d'Electricité—Paris) and a Master in Business Administration from EM Lyon. Wavecom group directorships: Wavecom Northern Europe Ltd, (UK).

        Since the beginning of 2002, two executive officers left Wavecom: Patrick Guérillot, former Group VP and Chief Technology Officer (December 2002) and Jean-Charles Andreani, former Group VP Asia Pacific (January 2003).

Committees of the Board of Directors

        The board of directors has established the following committees with a view to assisting the directors in their duties and ensuring that the company acts at all times in accordance with the highest standards of conduct and transparency:

Audit Committee

        The Audit Committee provides assistance to the board of directors in fulfilling its oversight responsibility to the Wavecom shareholders, potential shareholders, the investment community, and others relating to: the integrity of Wavecom's financial statements; the financial reporting process; the systems of internal accounting and financial controls; the selection and evaluation of the performance of the independent auditors; the independent auditors' qualifications and independence; and the Company's compliance with ethics policies and legal and regulatory requirements.

        The Audit Committee is directly responsible for the appointment (subject to shareholder ratification) and termination (subject to the limitations of French law regarding the six-year mandates of statutory auditors), compensation and oversight of the work of the independent auditors, including resolution of disagreements between management and the auditors regarding financial reporting. The Committee must pre-approve all audit and permitted non-audit services provided by the independent auditors. The Committee is also responsible for reviewing the audit firms' internal quality control

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procedures and for assuring, in consultation with management and the Company's independent auditors, the adequacy and effectiveness of the Company's accounting and financial controls, including Wavecom's policies and procedures to assess, monitor and manage business risk, and legal and ethical compliance programs.

        The Audit Committee must comprise at least three members, all of whom must be independent members of the Company's board of directors. The members are appointed by (and may be removed, with or without cause, by), the board of directors. The current members of the Audit Committee are Delphis SA (represented by Marc Fourrier), Bernard Gilly and Stephen Imbler (Chairman).

Fees to auditors

        The following table presents the fees paid to auditors for the year ended 2002 (in thousands of euros):

		Ernst & Young			Rouer, Bernard, Bretout (French statutory auditor)
		Amount		%	Amount	%
Audit fees		€	418	93	€142	100
Tax fees			19	4	—	—
Legal fees			11	3	—	—
	Total	€	448	100	€142	100

Nomination and Compensation Committee

        The Nomination and Compensation Committee proposes the appointment of independent directors, determines the compensation of the chairman of the board and the chief executive officer, and advises on managers' and senior officers' compensation. The Committee is also responsible for proposing the level of directors' fees. The current members of the Nomination and Compensation Committee are Bernard Gilly (Chairman) and Stephen Imbler.

Strategic Studies Committee

        The Strategic Studies Committee, which includes all members of the board as well as external experts, has the task of sharing information and strategic points of view on Wavecom's business and activities. Mr. Hékimian is the Chairman of the committee.

Compliance Committee

        The Compliance Committee assists the chairman of the board and the chief executive officer in ensuring that the Company complies at all time with all applicable laws and with all provisions of its internal Code of Ethics and Business Conduct. The members of the Compliance Committee, who are appointed by the board of directors, comprise the following members of management: Deborah Choate, Hervé Gagnard, Claire Olivier (Quality Assurance), Lionel Bochurberg (Company Secretary), Alain Chiliot (Risk Management and Internal Audit Director) and Etienne Menut. Hervé Gagnard is the Chairman of the Compliance Committee.

Corporate Governance Activities

        The board of directors has adopted the following internal rules and code of business ethics, which formalize and codify the Company's existing policies and guidelines.

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Board of directors internal rules / Corporate governance code

        The internal rules of the board of directors, also called Corporate Governance Code (the "Code"), sets out the mission and objectives of the board of directors as well as its functioning rules. The Code also incorporates guidelines relating to the duties of directors with respect to the shares they own in the company. The Code requires that at least a majority of the members of the board of directors be independent, and sets out the rules for determining independence. Among the criteria for independence, a director would not be considered independent if: he or she is, or has been during the past five years, a salaried employee or a corporate officer (mandataire social) of the company or of a company's subsidiary; he or she is related to any corporate officer (mandataire social) of the company; he or she is a client, supplier, or a bank playing a significant role for the company; he or she is a statutory auditor or non-statutory auditor of the company; or he or she holds 10% or more of the company share capital.

Code of Ethics and Business Conduct

        The Wavecom group Code of Ethics and Business Conduct (the "Code of Conduct") applies to all company directors, officers and employees, regardless of job function. The aim of the Code of Conduct is to enable the company employees and officers to decide how to proceed when faced with concrete—sometimes complex—situations by reference to clear and precise principles. It applies to conduct both within the group and with clients, suppliers and intermediaries. The Code of Conduct also incorporates an internal "whistle-blowing" procedure and defines the Compliance Committee's role and powers.

Code of Ethics for Senior Financial Management

        The Wavecom Group Code of Ethics for Senior Financial Management (the "Code of Ethics") sets forth the basic principles by which Wavecom financial management must fulfill its responsibilities for accurate, complete and timely financial reporting while at the same time safeguarding Wavecom's assets. The Code of Ethics applies to all members of "senior financial management," defined as all those with responsibility for financial statement presentation, or for decisions on key accounting policies or judgments, as well as those managers with overall responsibility for a legal or reporting entity. Senior financial management also includes those with responsibility for communicating financial information to the investment community. The Code of Ethics incorporates compliance monitoring procedures and provides for the application of sanctions in the event of any violation of its provisions.

Compensation of Directors and Officers

        We paid a total of €2,277,000 in compensation to our directors and executive officers (10 persons) during the year ended December 31, 2002. Non-salaried board members earn fees based on their attendance at board meetings; €21,000 in such board fees was earned by non-salaried board members during 2002. Under French law, the aggregate amount of attendance fees to be paid to our board members must be approved by our shareholders at a general meeting and such aggregate amount is allocated among board members by decision of the board.

        In addition to cash compensation, each of our executive officers (except Mr. Alard and Mr. Hékimian) has received stock options or founders' warrants, and two non-salaried board members have received warrants. During 2002, we granted stock options and founders' warrants to executive officers to purchase a total of 87,000 shares, with an exercise price of €39.18 per share and an expiration date of June 16, 2012. In June 2002, we granted to each of Bernard Gilly and Stephen Imbler warrants to purchase 20,000 shares, with an exercise price of €42.46 per share and an expiration date of June 16, 2007.

        Michel Alard, Chairman of the Board, received €135,000 in base salary in 2002 (€129,886 in 2001), and earned a performance-based bonus of €37,500 for 2002. Aram Hékimian, Chief Executive Officer,

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received €135,000 (€128,972 in 2001) in base salary for each 2002 and 2001, and earned a performance-based bonus of €45,000 in 2002. Both Mr. Alard and Mr. Hékimian are entitled to the use of company cars or the maintenance of one vehicle in lieu of a company car. Compensation paid to our Chairman and to our Chief Executive Officer is monitored by the Compensation and Nomination Committee and is set by our board of directors. Messrs. Alard and Hékimian do not participate in such decisions and both are excluded for purposes of the quorum and majority calculations. Performance-based bonuses for Mr. Alard and Mr. Hékimian are decided by the board of directors based on the achievement of personal and company objectives. No salaries or other compensation were paid by any group companies other than Wavecom S.A. Neither Mr. Alard nor Mr. Hékimian receive any fees related to their positions as members of the board of directors, nor are they granted warrants, stock options or founders' warrants.

Share Ownership and Option and Warrant Information

        Except as described in Item 7 below, as of March 31, 2003, each of our directors and executive officers beneficially owns less than 1% of the share capital of Wavecom S.A (and none of whom has voting rights which are different from those of our other shareholders).

        On September 21, 1998, our shareholders authorized the creation of a stock option plan and a founders' warrant plan for employees. This plan was modified at a shareholders' meeting on December 19, 2001. As of December 31, 2002, there were outstanding options, founders warrants (BCEs) and warrants (BSAs) to purchase a total of 2,779,096 shares, of which options, founders warrants and warrants to purchase 144,719 shares were held by our current directors and executive officers. As of December 31, 2002, a total of 1,111,564 shares were available for grant pursuant to the stock options and founders' warrants under the plan.

        On March 25, 2003, the board of directors granted options to purchase a total of 308,200 shares and founders' warrants to purchase a total of 348,200 shares, in each case at an exercise price of €8.07 and with an expiration date of March 24, 2013.

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        During 2002, the following ten employees were granted the largest number of stock options or founders' warrants:

Name	Position	Number of stock options or founders' warrants granted in 2002	Exercise price per shares	Final expiration date
Vincent Mouret*	Group VP Research and Development, Wavecom S.A.	25,000	€39.18	June 16, 2012
Jean-Charles Andreani**	Group Managing Director—Wavecom Asia Pacific Ltd.	10,000	€39.18	June 16, 2012
Marc Cases*	Group VP Operations, Wavecom SA.	10,000	€39.18	June 16, 2012
Siu Ching Yeung	Finance director, Wavecom Asia Pacific.Ltd.	10,000	€39.18	June 16, 2012
Deborah Choate*	Group VP Finance and Administration and CFO, Wavecom S.A.	8,500	€39.18	June 16, 2012
Hervé Gagnard*	Group VP Corporate Development, Wavecom S.A.	8,500	€39.18	June 16, 2012
Patrick Guérillot**	Group VP and CTO, Wavecom S.A.	8,500	€39.18	June 16, 2012
Philippe Guillemette*	Group VP and CTO, Wavecom S.A.	8,500	€39.18	June 16, 2012
Franck Belime	Senior manager industrial operations, Wavecom Asia-Pacific.Ltd.	8,000	€39.18	June 16, 2012
Hany Neoman*	Group VP Americas and President of Wavecom Inc	8,000	€39.18	June 16, 2012

*

Included in the group "executive officers".

**

Resigned from Wavecom during 2002

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        During 2002, the following ten employees exercised the largest number of stock options or founders' warrants:

Name	Position	Number of stock options or founders' warrants exercised in 2002	Exercise price per stock option or founders' warrant
Philippe Faurie	CEO, Arguin Communications	25,026 6,314	€2.29 €4.57
Philippe Beché	Director of Baseband Research & Development, Wavecom S.A.	18,125 6,497	€2.29 €4.57
Charles Chaussonnier	Director of sales EMEA, Wavecom S.A.	8,855 9,834	€2.29 €4.57
Christophe Seveau	Deputy Director, Engineering, Wavecom Asia-Pacific Ltd.	13,000 4,000	€2.29 €4.57
Patrick Guérillot*	Group VP and CTO, Wavecom S.A.	8,441 8,250	€2.29 €4.57
Philippe Thomasse	Research and Development Engineer, Wavecom S.A.	8,442 4,268	€2.29 €4.57
Michelle Célie	Vice President, Software, Arguin Communications	9,167 3,379	€2.29 €4.57
Philippe Calvez	Director of W-CDMA Program, Wavecom S.A.	5,625 5,005	€2.29 €4.57
Antoine Dambre	Vice President Engineering, Arguin Communications	6,883 2,816	€2.29 €4.57
Xavier De Villepin	Director of Industrial Projects, Wavecom S.A.	3,375 5,947	€2.29 €4.57

*

Formerly included in the group "executive officers" resigned from Wavecom in 2002.

        Options expire ten years after the grant date. Founders' warrants, which were issued to our French tax resident employees, expire after five years, as is required by French law. Any founders' warrants remaining unexercised at the expiration date automatically convert to stock options with a five-year term remaining. Founders' warrants were issued to French employees to take advantage of favorable tax treatment for both employees and Wavecom. These tax benefits are not available for stock options in France. Other than the expiration dates, the terms of the founders' warrants are identical to the stock options.

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        The following table sets forth information concerning outstanding options, founders' warrants and warrants at March 31, 2003.

Number of underlying shares	Exercise price per share		Expiration date
104,617	€	2.29	September 20, 2008
9,824	€	4.57	February 8, 2009
254,764	€	4.57	February 24, 2009
1,500	€	4.57	April 26, 2009
134,300	€	139.52	March 29, 2010
15,000	€	150.00	March 14, 2005
160,790	€	103.23	June 26, 2010
15,000	€	103.23	June 26, 2005
27,500	€	136.62	July 23, 2010
417,160	€	69.86	December 19, 2010
41,716	€	26.68	March 13, 2011
537,455	€	34.66	June 29, 2011
30,000	€	34.66	June 29, 2006
377,500	€	41.09	December 19, 2011
20,000	€	42.46	June 16, 2007
542,880	€	39.18	July 6, 2012
348,200	€	8.07	March 24, 2013

Employees and independent contractors

        The number of employees and independent contractors as of the end of each of the past three years is as follows:

Year ended	Employees	Independent contractors and temporary employees
December 31, 2002	666	236
December 31, 2001	421	163
December 31, 2000	225	97

        At December 31, 2002 our employees were primarily located in France, while 106 were located in Asia (2001: 42 and 2000: 11) and 73 were located in the United States (2001: 51 and 2000: 3).

        As of December 31, 2002, of our 902 employees and independent contractors, 78 were engaged in sales and marketing (2001: 47 and 2000: 33), 157 in production, assembly and quality control (2001: 108 and 2000: 51), 537 in research and development (2001: 354 and 2000: 188) and 130 in general and administrative services (2001: 76 and 2000: 52).

        We believe that the level of competency of our personnel and the spirit of team work and cooperation that exists among them are our principle resources and this allows us to have a stable environment and to attract the best talent. For this reason, we strive for employee retention through different methods, including competitive compensation and option and warrant programs. The options and warrants granted to our employees represent potentially 15.2% of our fully-diluted share capital. We believe that we have good relations with our employees and their representatives and, for this reason, we have a low rate of employee turnover: 4% in 2002 (5% in 2001 and 6.2% in 2000).

        Employment contracts with all of our employees in France are subject to the provisions of the convention collective SYNTEC, the collective bargaining agreement applicable to employees in our industry. In addition, as is required by French law, our management holds periodic meetings with employee representatives of the Workers Committee (comité d'entreprise).

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        French employers are subject to a law limiting the workweek to 35 hours. This law is implemented on the basis of two employee categories. In this respect, we established an implementation plan with respect to both categories, in 2000, for which we received final validation in 2001 by the collective bargaining organization with which we negotiated.

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

        The following table sets forth certain information regarding beneficial ownership of our shares (including ADSs) by each person known by us to own beneficially more than 5% of our outstanding shares (none of whom has voting rights which are different from our other shareholders) of March 31, 2003, based on our legal share capital of 15,107,890 shares as of that date. To our knowledge, we are not directly or indirectly owned or controlled by any corporation or by any foreign government.

	Shares beneficially owned
Name of beneficial owner
	Number	Percent
Michel Alard(1)	2,030,110	13.4
Aram Hékimian(2)	2,250,381	14.9
Delphis	1,061,961	7.0

(1)

Michel Alard's share total includes 302,968 shares owned solely by Mr. Alard; 42,358 shares jointly owned by Mr. Alard and his wife; 174,994 shares held of record by Mr. Alard's wife; 754,790 shares held of record by his son and 755,000 shares held of record by his daughter. Mr. Alard has the right to vote 671,000 of the shares held by his daughter and 671,000 of the shares held by his son. Mr. Alard disclaims beneficial ownership of the 174,994 shares owned by his wife, 84,000 shares owned by his daughter and 83,790 shares owned by his son.

(2)

Aram Hékimian's share total includes 143,495 shares held of record by Mr. Hékimian's wife and 1,400,000 shares held by his children. Mr. Hékimian has the right to vote or sell the shares owned by his children. Mr. Hékimian disclaims beneficial ownership of the 143,495 shares owned by his wife.

Major changes in ownership

        Several of our directors and executive officers sold shares in our initial public offering in June 1999, in our follow-on public offering in June 2000 and during the course of 2001 and 2002. The following table sets forth the related changes in these holdings as a percentage of our legal capital as of the given date:

Name	Percentage at December 31, 1999		Percentage at December 31, 2000		Percentage at December 31, 2001		Percentage at December 31, 2002
Michel Alard	19.4	%	16.4	%	16.3	%	13.8	%
Aram Hékimian	19.5	%	16.6	%	16.6	%	15.2	%
Delphis	10.0	%	8.6	%	7.3	%	7.2	%
André Jolivet	19.5	%	14.7	%	<5.0	%
Legal share capital used in calculation	13,423,469		14,478,623		14,717,710		14,810,614

Distribution of Shareholdings

        There were four holders of record of our ADSs and approximately 1850 beneficial holders as of April 11, 2003. ADSs held in the U.S. represented approximately 14.6% of our issued and outstanding

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shares as of April 11, 2003. Our ADSs are issued by The Bank of New York, as depositary. Each ADS evidences one share.

Related Party Transactions

        In December 2000, we entered into a consulting agreement with Delphis, a major shareholder and member of our board of directors. The agreement calls for Marc Fourrier, who represents Delphis, to provide consulting services in the areas of corporate organization, information systems and general management from time to time, for a maximum of two days per week. Such services are compensated at the rate of €1,448 per day. During the year ended December 31, 2002, Delphis invoiced €26,157 (€17,303 in 2001 and €8,826 in 2000).

        In November 2001, we loaned $200,000 to a senior employee. The loan bears a market rate of interest, is repayable in three years and is secured by a lien on the employee's residence. The loan and accrued interest were repaid in full in February 2003.

        We were not a party to any other related-party transactions during 2002.

Item 8. Financial Information

Financial Statements

        See Item 18 and the financial statements beginning on page F-1 of this annual report.

Legal Proceedings

        We were not a party to any material legal proceedings during 2002 and are not currently party to any material legal proceedings, nor are we aware of any threatened or potential material legal proceedings involving Wavecom, except as described below.

        In April 2003, we received a letter from the French company Novatec SA stating that one of the processes we use to manufacture our WISMO PAC modules violates French and European patents owned by Novatec. The letter demands that we cease manufacturing these modules until we have obtained a patent license from Novatec. We believe the claims made by Novatec in its letter to be without merit and intend to vigorously defend any action that might be brought by Novatec.

Dividends

        Wavecom did not declare any dividends in 2000, in 2001 or in 2002. We intend to retain any future earnings for investment in the development and expansion of our business and do not expect to pay any cash dividends on our shares in the foreseeable future.

Item 9. The Offer and Listing

Price Range of Shares and ADSs

        Our shares have been listed on the Euronext Nouveau Marché (7306)of the Paris Bourse since June 14, 1999 and our ADSs have been quoted on the NASDAQ National Market under the symbol

46

"WVCM" since June 9, 1999. The following table sets forth the range of high and low closing sale prices of our shares and ADSs for the periods indicated:

		Per Share				Per ADS
		High		Low		High		Low
Year ended December 31, 1999
	Second Quarter	€	13.50	€	11.40	$	14.06	$	11.75
	Third Quarter	€	18.45	€	13.11	$	18.81	$	14.13
	Fourth Quarter	€	99.00	€	14.00	$	94.75	$	15.06
Year ended December 31, 2000
	First Quarter	€	166.90	€	66.00	$	168.87	$	64.50
	Second Quarter	€	127.00	€	76.10	$	110.00	$	70.00
	Third Quarter	€	161.50	€	113.50	$	149.75	$	104.00
	Fourth Quarter	€	138.00	€	53.00	$	119.50	$	44.00
Year ended December 31, 2001
	First Quarter	€	67.00	€	17.17	$	67.13	$	15.00
	Second Quarter	€	44.20	€	16.70	$	36.60	$	15.25
	Third Quarter	€	34.00	€	16.06	$	30.00	$	15.75
	Fourth Quarter	€	45.06	€	37.51	$	39.99	$	16.96
Year ended December 31, 2002
	First Quarter 2002	€	46.50	€	28.75	$	41.56	$	24.81
	Second Quarter 2002	€	48.28	€	27.90	$	44.56	$	24.10
	Third Quarter 2002	€	45.00	€	32.75	$	44.65	$	31.88
	Fourth Quarter 2002	€	43.00	€	10.91	$	43.09	$	11.34
	October 2002	€	44.00	€	31.41	$	43.40	$	30.10
	November 2002	€	36.00	€	27.65	$	34.69	$	27.84
	December 2002	€	35.58	€	9.84	$	34.72	$	11.00
Year ending December 31, 2003
	January 2003	€	15.20	€	9.09	$	15.68	$	10.47
	February 2003	€	11.18	€	8.10	$	12.13	$	8.87
	March 2003	€	8.65	€	6.59	$	9.45	$	7.42
	April 2003	€	11.35	€	8.10	$	12.47	$	8.55
	May 2003 (through May 14, 2003)	€	13.01	€	11.65	$	14.65	$	12.50

        On May 14, 2003, the last reported sale price for our ADSs on The NASDAQ National Market was $14.00 per ADS and the last reported sale price for our shares on the Euronext Nouveau Marché was €12.15 per share.

Item 10. Additional Information

Memorandum and articles of association

General

        This section summarizes the material rights of holders of our shares under French law and the material provisions of our by-laws or statuts. The description of our share capital is only a summary and does not describe everything that our by-laws contain. Copies of our by-laws are publicly available from the registre du commerce et des sociétés in Nanterre, France, and an English translation of our by-laws is attached as exhibit 1 to this annual report. A description of certain limitations affecting shareholders of a French company and the material rights of holders of our ADSs may be found in Amendment No. 1 to our registration statement on Form F-1, registration number 333-11764, dated and filed with the

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Securities and Exchange Commission on June 6, 2000, under the headings "Limitations Affecting Shareholders of a French Company" and "Descriptions of American Depositary Receipts," respectively.

Objects and purposes

        Our objects and purposes, as specified in Article 3 of our by-laws, are, in France and abroad: fundamental and applied research, and the development of systems and products in the areas of radio-transmission, radio-communication, telecommunications, electronics and data processing markets; and, within these sectors: the design, manufacturing and commercialization of components, products and software; any provision of services; the registration and exploitation of patterns, patents, trademarks, and manufacturing processes; the establishment, organization, and delivery of lectures, seminars, debates, conferences and more generally of any activity relating to training schemes; the publishing of books, newspapers, information bulletins, articles and the distribution of any audio-visual aids; the direct or indirect holding of shares within any existing companies or companies to be set up, the business purposes of which is linked, related or similar to that of the company; and more generally, any industrial, commercial, financial, civil, personal property or real estate operations directly or indirectly linked to the business purposes stated above or related or similar to business purposes or likely to facilitate the performance or development thereof.

Directors

        For additional information regarding our board of directors, please see "Item 6—Directors, Senior Management and Employees—Board of Directors and executive officers" and "Compensation of Directors and Officers."

Composition of share capital

        We have only one class of shares. As of April 16, 2003, this class consisted of 15,107,890 authorized ordinary shares, nominal value €1 per share, resulting in a share capital of €15,107,890 in nominal value, all of which shares were outstanding as of such date. All of our outstanding shares are fully paid. Each share is entitled to one vote on all matters submitted to our shareholders.

Dividend and liquidation rights

        We may make dividend distributions to our shareholders from net income in each fiscal year (after deductions for depreciation and reserves), as increased or reduced by any profit or loss carried forward from prior years, and less any contributions to reserves. These distributions are also subject to the requirements of French law and our by-laws.

        Under French law, we must allocate 5% of our net profits in each fiscal year to a legal reserve fund until the amount in that fund is equal to 10% of the nominal amount of our share capital. The legal reserve is distributable only upon our liquidation.

        Upon recommendation of our board of directors, our shareholders may decide to allocate all or a part of any distributable profits among special or general reserves, to carry them forward to the next fiscal year as retained earnings, or to allocate them to the shareholders as dividends. Shareholders holding a certain percentage (2% of a share capital of €15.1 million) of our shares or a duly authorized association of shareholders holding their shares in registered form for at least two years and holding a certain percentage (1%) of our voting rights may require our board of directors to propose the declaration of a dividend at an ordinary general meeting of shareholders. If shareholders at this meeting approve the proposal, dividends are declared.

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        Our by-laws provide that reserves that are available for distribution under French law and our by-laws may be distributed as dividends, subject to shareholder approval and other limitations. We may distribute dividends in shares instead of paying cash dividends.

        If our interim income statement certified by our auditors shows that we have made distributable profits since the end of the preceding fiscal year, our board of directors may, subject to French law and regulations, distribute interim dividends without the approval of shareholders. An interim dividend may not exceed distributed profits.

        Under French law, we must distribute dividends to our shareholders pro rata according to their share holdings. Dividends are payable to holders of shares outstanding on the date of the shareholders' meeting approving the distribution of dividends or, in the case of interim dividends, on the date our board of directors meets and approves the distribution of interim dividends. The actual dividend payment date is decided by our shareholders at an ordinary general meeting, or by our board of directors, if no decision is taken by our shareholders. The payment of the dividends must occur within nine months of the end of our fiscal year. Under French law, dividends not claimed within five years of the date of payment revert to the French State.

        In the event that Wavecom is liquidated, our assets remaining after payment of our debts, liquidation expenses and all of our other remaining obligations will be distributed first to repay the nominal value of our shares. After these payments have been made, any surplus will be distributed pro rata among the holders of shares based on the nominal value of their shareholdings.

Changes in share capital

        We may increase our share capital only with approval of our shareholders at an extraordinary general meeting. There are two methods to increase share capital: the issuance of additional shares (including the creation of a new class of shares) and the increase in the nominal value of existing shares. We may issue additional shares for cash or for assets contributed in kind, upon the conversion of debt securities that we may have issued, by capitalization of our reserves or, subject to certain conditions, in satisfaction of our indebtedness. Although currently we have only one class of shares, French law permits different classes of shares to have different liquidation, voting and dividend rights.

        We may decrease our share capital only with the approval of our shareholders at an extraordinary general meeting. There are two methods to reduce our share capital: the reduction of the number of shares outstanding and the decrease in the nominal value of our shares. The conditions under which the share capital may be reduced will vary depending upon whether the reduction is attributable to losses. We may reduce the number of outstanding shares either by an exchange of shares or by the repurchase and cancellation of our shares. Any decrease must meet the requirements of French company law, which states that all the holders of shares in each class of shares must be treated equally unless the affected shareholders otherwise agree.

Attendance and voting at shareholders' meetings

        French companies may hold either ordinary or extraordinary general meetings of shareholders. Ordinary general meetings are required for matters that are not specifically reserved by law to the extraordinary general meetings: the election of the members of the board of directors, the appointment of statutory auditors, the approval of a management report prepared by the board of directors, the approval of the annual accounts, the declaration of dividends and the issuance of bonds. Extraordinary general meetings are required for approval of amendments to our by-laws, modification of shareholders' rights, mergers, increases or decreases in share capital (including a waiver of preferential subscription rights), the creation of a new class of shares, the authorization of the issuance of investment certificates or securities convertible or exchangeable into shares and for the sale or transfer of substantially all of our assets.

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        Our board of directors is required to convene an annual general meeting of shareholders for approval of the annual accounts. This meeting must be held within six months of the end of our fiscal year. However, the president of the tribunal de commerce, the French commercial court, may order an extension of this six-month period. We may convene other ordinary and extraordinary meetings at any time during the year. Meetings of shareholders may be convened by our board of directors or, if it fails to call a meeting, by our statutory auditors or by a court-appointed agent. A shareholder or shareholders holding at least 5% of our share capital, a duly authorized association of shareholders holding their shares in registered form for at least two years and holding a certain percentage (1%) of our voting rights, or the Employee Committee or another interested party under certain circumstances, may request that the court appoint an agent. The notice of a meeting must state the agenda for the meeting.

        French law requires that a preliminary notice of a listed company's general shareholders' meeting be published in the Bulletin des Annonces Légales Obligatoires ("BALO") at least 30 days prior to the meeting. The preliminary notice must first be sent to the French securities authority, the Commission des Opérations de Bourse ("COB") with an indication of the date it is to be published in the BALO. The COB also recommends that such preliminary notice be published in a newspaper of national circulation in France. The preliminary notice must include the agenda of the meeting and a draft of the resolutions that will be submitted to a shareholders' vote. Within 10 days of publication, one or more shareholders holding a certain percentage (2% of a share capital of €15.1 million) of our share capital, a duly authorized association of shareholders holding their shares in registered form for at least two years and holding a certain percentage of our voting rights (1%), or the Employee Committee may propose additional resolutions.

        Notice of a general shareholders' meeting must be sent by mail at least 15 days before the meeting to all holders of registered shares who have held their shares for more than one month. However, in the case where quorum was not met and the original meeting was adjourned, this time period is reduced to six days. Notice of the meeting must also be published in BALO, after having first been sent to the COB. The notice must include the agenda of the meeting and a draft of the resolutions that will be submitted to a shareholders' vote.

        Attendance and the exercise of voting rights at both ordinary and extraordinary general meetings of shareholders are subject to certain conditions. Under our by-laws, in order to participate in any general meeting, a holder of registered shares must have the shares registered in its name in a shareholder account maintained by or on behalf of Wavecom at least one day prior to the meeting. Similarly, a holder of bearer shares must obtain a certificate (certificat d'immobilisation) from the accredited financial intermediary (intermédiaire financier habilité) with whom the holder has deposited its shares. This certificate must indicate the number of bearer shares held and evidence the holding of such shares in its account until the date of the meeting. The certificate must be deposited at a place specified in the notice of the meeting at least one day before the meeting.

        Subject to the above restrictions, all of our shareholders have the right to participate in our general meetings, either in person or by proxy. Shareholders may vote, either in person, by proxy or by mail, and their votes are counted in proportion to the number of shares they hold. A shareholder may grant a proxy to his or her spouse, to another shareholder or, if the shareholder is a corporation, to a legal representative. A shareholder may grant a proxy to us by returning a blank proxy form. In this last case, the chairman of the shareholders' meeting will vote the shares in favor of all resolutions proposed by the board of directors and against all others. Proxy forms will be sent to shareholders upon request. In order to be counted, proxies must be received prior to the general shareholders' meeting at our registered office or at another address indicated in the notice convening the meeting. We must send our shareholders forms to vote by mail and these forms must be received by us at least three days prior to the date of a meeting in order to be valid. Under French law, our shares held by entities controlled directly or indirectly by Wavecom are not entitled to voting rights. There is no

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requirement that a shareholder have a minimum number of shares in order to be able to attend or be represented at an extraordinary general meeting.

        Under French law, a quorum requires the presence, in person or by proxy (including those voting by mail) of shareholders having at least (1) 25% of the shares entitled to vote in the case of an ordinary general shareholders' meeting or at an extraordinary general meeting where shareholders are voting on a capital increase by capitalization of reserves, profits or share premium, or (2) 33.3% of the shares entitled to vote in the case of any other extraordinary general shareholders' meeting. If a quorum is not present at any meeting, the meeting is adjourned. There is no quorum requirement when an ordinary general meeting is reconvened, but the reconvened meeting may consider only questions which were on the agenda of the adjourned meeting. When an extraordinary general meeting is reconvened, the quorum required is 25% of the shares entitled to vote, except where the reconvened meeting is considering capital increases through capitalization of reserves, profits or share premium. For these matters, no quorum is required at the reconvened meeting. If a quorum is not present at a reconvened meeting requiring a quorum, then the meeting may be adjourned for a maximum of two months.

        At an ordinary general meeting, approval of any resolution requires the affirmative vote of a simple majority of the votes of the shareholders present or represented by proxy. The approval of any resolution at an extraordinary general meeting requires the affirmative vote of a two-thirds majority of the votes cast, except that any resolution to approve a capital increase by capitalization of reserves only requires the affirmative vote of a simple majority of the votes cast. Notwithstanding these rules, a unanimous vote is required to increase shareholders' liabilities. Abstention from voting by those present or represented by proxy is counted as a vote against any resolution submitted to a vote.

        In addition to the right to obtain certain information regarding Wavecom, any shareholder may, during the two-week period preceding a shareholders' meeting, submit written questions relating to the agenda for the meeting to our board of directors. Our board of directors is required to respond to these questions during the meeting.

        As set forth in our by-laws, shareholders' meetings are held at our registered office or at any other location specified in the written notice.

Preferential subscription rights

        Holders of our shares have preferential rights to subscribe on a pro rata basis for an additional number of our shares or any of our other equity securities or other securities giving a right, directly or indirectly, to equity securities issued by us for cash. Shareholders may waive their preferential rights, either individually or, under certain circumstances, as a group at an extraordinary general meeting. During the subscription period relating to a particular offering of shares, shareholders may transfer their preferential subscription rights that they have not previously waived. To the extent permitted under French law, we intend to seek shareholder approval to waive preferential subscription rights at each annual general meeting of shareholders.

Form and holding of shares

Form of shares

        Our by-laws provide that our shares may be held in either registered or bearer form at the option of the shareholder. Shares traded on the Euronext Nouveau Marché are cleared and settled through Euroclear, a continuous net settlement system. We may use the procedure known as titres au porteur identifiable according to which Euroclear will, upon our request, disclose to us the name, nationality, address and number of shares held by each shareholder. This information may be requested only by us and may not be communicated to third parties.

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Holding of shares

        In accordance with French law concerning the "dematerialization" of securities, the ownership rights of shareholders are represented by book entries instead of share certificates. Registered shares are entered into an account maintained by us or by a representative that we have nominated, while shares in bearer form must be held in an account maintained by an accredited financial intermediary on the shareholder's behalf.

        With respect to all shares in registered form we maintain a share account with Euroclear which is administered by BNP Paribas Group, acting through Paribas. In addition, we maintain accounts in the name of each shareholder either directly or, at a shareholder's request, through such shareholder's accredited intermediary, in separate accounts maintained by BNP Paribas Group, acting through Paribas on our behalf. Each shareholder's account shows the name and number of shares held and, in the case of shares registered through an accredited financial intermediary, the fact that they are so held. BNP Paribas Group, acting through Paribas, as a matter of course, issues confirmations to each registered shareholder as to shares registered in a shareholder's account, but these confirmations do not constitute documents of title.

        Shares held in bearer form are held and registered on the shareholder's behalf in an account maintained by an accredited financial intermediary and are credited to an account at Euroclear maintained by the intermediary. Each accredited financial intermediary maintains a record of shares held through it and will issue certificates of inscription for the shares that it holds. Transfers of shares held in bearer form only may be made through accredited financial intermediaries and Euroclear.

Repurchase and redemption of shares

        Under French law, we may not acquire our shares except:

(1)

to reduce our share capital under certain circumstances with the approval of our shareholders at an extraordinary general meeting,



(2)

to provide shares for distribution to employees under a profit- sharing or share option plan, and



(3)

for a specific purpose (including stabilization of quotations on a French regulated stock exchange) approved by our shareholders at an ordinary general meeting, such shareholders' authorization being given for a period to be decided by the shareholders' resolution and which may not exceed 18 months.

        The amounts repurchased under (2) and (3) may not, in either case, result in us holding more than 10% of our issued shares. In the event that such repurchases result in us holding more than 10% of our issued shares, we are required to transfer any shares in excess of the 10% threshold within one year. French law requires that we cancel any shares in excess of this 10% limit that have not been transferred within the one-year period. Shares repurchased under (3) may be cancelled by an extraordinary general shareholders' meeting, although no more than 10% of our registered capital may be cancelled in any 24-month period.

        With respect to (3) above, at a general meeting of shareholders held on April 29, 1999, our shareholders authorized us to purchase our shares representing up to 10% of our share capital until October 29, 2000. At a general meeting of shareholders held on December 20, 2000, our shareholders renewed this authorization for an additional 18-month period until June 20, 2002. At a general meeting of shareholders held on June 17, 2002, our shareholders renewed this authorization for an additional 18-month period until December 16, 2003. A Board meeting held January 28, 2003 has used this authorization, and a prospectus of our trading program in our own shares was submitted to the COB (French Stock Market Authority) which gave its approval no 03-052 dated February 10, 2003. We are required to notify the COB on a monthly basis of our trading program in our own shares. We are also

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required to report all other trades we make in our shares to the COB and, on a monthly basis, to the Conseil des Marchés Financiers ("CMF"), the self-regulatory organization that has general regulatory authority over the French stock exchanges and whose members include representatives of French stockbrokers.

        When we purchase our own shares, they must be held in registered form and be fully paid. These shares are deemed to be outstanding under French law, but are not entitled to any dividends or voting rights, and we may not exercise preferential subscription rights. Our shareholders, at an extraordinary general meeting, may decide not to take such shares into account in determining the preferential subscription rights attached to the other shares. In the absence of such a decision, the rights attached to any shares held by us must either be sold on the market before the end of the subscription period or distributed to other shareholders on a pro rata basis.

        As of March 31, 2003, we had repurchased 156,345 shares at prices ranging from €7.60 to €8.69. All transactions took place during the month of March 2003.

Cross shareholdings and holding of our shares by our subsidiaries

        French law prohibits a company from holding our shares if we hold more than 10% of that company's share capital and we may not own any interest in a French company holding more than 10% of our share capital. In the event of a cross shareholding that violates this rule, the company owning the smaller percentage of shares in the other company must sell its interest. Until sold, these shares are deprived of their voting rights. Failure by the officers and directors of a company to sell these shares is a criminal offense.

        In the event that one of our subsidiaries holds our shares, these shares are deprived of their voting rights. However, French law does not require the subsidiary to sell the shares.

Requirement for holdings exceeding certain percentages

        French law provides that any individual or entity, acting alone or in concert with others, that holds, directly or indirectly, more than 5%, 10%, 20%, 33²/3%, 50% or 66²/3% of our outstanding voting shares or the voting rights attached to our shares, or that increases or decreases its shareholding or voting rights thereof by any such percentage, must notify us by registered letter (with return receipt) within 15 calendar days of crossing such threshold, of the number of shares and voting rights it holds. Such individual or entity must also notify the CMF by registered letter (with return receipt) within five trading days of crossing such threshold. Any shareholder who fails to comply with these requirements may have all or part of its voting rights suspended for up to five years by the Commercial Court at the request of our Chairman, any of our shareholders or the COB, and may be subject to a fine.

        In addition, Article 7.2 of our by-laws provide that every shareholder (including a holder of ADSs) who, directly or indirectly, acting alone or in concert with others, acquires ownership or control of shares representing 5%, or any multiple of 5%, of our share capital or voting rights, or whose holding falls below any such limit, shall be required to notify us of such fact by registered letter (with return receipt) within 15 days of such acquisition or disposition. Failure to comply with such notification provisions will result in the suspension of the voting rights attached to the shares exceeding such 5% threshold held by such shareholder for all shareholders' meetings until the end of a two-year period following the date on which their owner complies with the notification requirements if requested by one or more shareholders holding shares representing at least 5% of our share capital or voting rights.

        French law and COB regulations impose additional reporting requirements on persons who acquire more than 10% or 20% of the outstanding shares or voting rights of a listed company. These persons must file a report with the company, the COB and the CMF within fifteen calendar days of the date they cross the threshold. In the report, the acquirer must specify its intentions for the following 12-month period, including whether or not it intends to continue its purchases, to acquire control of

53

the company in question or to nominate candidates for the board of directors. The CMF makes the notice public. The acquirer must also publish a press release stating its intentions in a financial newspaper of national circulation in France. The acquirer may amend its stated intentions, provided that it does so on the basis of significant changes in its own situation or that of its shareholders. Upon any change of intention, it must file a new report.

        Under CMF regulations, and subject to limited exemptions granted by the CMF, any person or persons acting in concert that own in excess of one third of the share capital or voting rights of a French listed company must initiate a public tender offer for the balance of the share capital of such company.

        To permit holders to give the required notice, we are required to publish in the BALO no later than 15 calendar days after the annual ordinary general meeting of shareholders information with respect to the total number of voting rights outstanding as of the date of such meeting. In addition, if the number of outstanding voting rights changes by 5% or more between two annual ordinary general meetings, we are required to publish in the BALO, within 15 calendar days of such change, the number of voting rights outstanding and provide the CMF with written notice of such information. The CMF publishes the total number of voting rights so notified by all listed companies in a weekly notice (avis), noting the date each such number was last updated.

Material Contracts

        This section provides a summary of all material contracts to which we are a party and that are to be performed in whole or in part after the date hereof or that have otherwise been entered into during the two immediately preceding financial years. We have filed each of the agreements with the U.S. Securities and Exchange Commission, and copies of the agreements are in some case available on the SEC's website (www.sec.gov) or, if not, then they may be obtained from the SEC itself.

        In July 1999 we entered into an agreement relating to the development and manufacture of GSM modules with Amtal International Limited. Amtal, acting as agent for TCL Industrial Holdings Limited, agreed to purchase an initial order of 200,000 WISMO modules. The WISMO modules provided pursuant to this agreement are for use in mobile telephones. We commenced shipment under the agreement in July 2000 and completed the initial shipment in early 2001. We continued to ship WISMO modules to Amtal under the agreement through 2002. The agreement was terminated in October 2002. In November 2002, we began selling directly to TCL. In February 2000, we entered into an agreement relating to the development and manufacture of a GSM hand held portable with NEC Corporation. The contract called for an initial order by NEC of 600,000 WISMO modules to be delivered within the first 12 months of production. The WISMO modules to be provided pursuant to this agreement are based on the WISMO 2C dual-band GSM modules and are for use in mobile telephones. The agreement provides for us paying NEC liquidated damages in the event that certain development schedule milestones are not met. The price to be paid per WISMO module shall be reviewed each quarter and may be amended with the written agreement of both parties. The agreement may be terminated with 90 days prior written notice if either party fails to perform a material obligation of the Agreement and such failure is not remedied within 30 days. We began delivering product to NEC Corporation in 2001.

        In June 1999, we entered into a contract for manufacturing and related services with Solectron-France S.A. Pursuant to this agreement, Solectron manufactures, assembles and tests our WISMO module lines. We are required to provide Solectron with certain specified components necessary for the manufacturing of WISMO modules and Solectron provides other specified components. The agreement was set to expire on June 30, 2002 but was extended by an amendment. We are currently in the process of renegotiating the terms of the extended agreement.

        In February 2000 we entered into an agreement with Funkanlagen. This agreement calls for an initial order of 100,000 WISMO modules to be delivered over a 14-month period. The WISMO modules

54

provided pursuant to this agreement are for use in telemetry applications. We commenced shipment under the agreement in March 2000 and completed the initial shipment by the end of 2001. We are continuing to ship WISMO modules to Funkanlagen under the agreement. We are required to give Funkanlagen 60 days prior notice of any price modifications for our products. The agreement may be terminated by either party by providing written notice of termination 180 days prior to the effective date of termination.

        In January 1999, October 2001, January 2002, May 2002, November 2002 and May 2003, we entered into crosslicense agreements or similar agreements with Motorola Inc., Philips N.V., Siemens A.G., Qualcomm Inc., NEC and Alcatel, respectively. For a summary of each of these agreements, please see "Item 4—Information on the Company—Intellectual Property".

Exchange Controls

        See "Limitations Affecting Shareholders of a French Company" in Amendment No. 1 to our registration statement on Form F-1, registration number 333-11764, dated and filed with the Securities and Exchange Commission on June 6, 2000.

Taxation

French Taxation

        The following discussion generally summarizes the material French tax consequences of purchasing, owning and disposing of shares and ADSs. This discussion is based on the laws in force on the date of this annual report, and is subject to any changes in applicable French laws or in any applicable double taxation conventions or treaties with France and another country or territory occurring after this date.

        There are currently no procedures available for non-U.S. residents who are holders of ADSs or shares to claim or receive from the French tax authorities any tax treaty benefits with respect to dividends. These benefits include payment of the avoir fiscal and potential reduced withholding tax rates, that a holder may be entitled to receive under a treaty between France and the holder's country of residence. Those considering the purchase of shares or of ADSs, including non-U.S. residents, are urged to consult their own tax advisors concerning the consequences of purchase, ownership and disposition of ADSs.

Taxation on sale or disposition of shares or ADSs

        Non-residents of France are generally not subject to any French income tax or capital gains tax on the sale or disposition of shares or ADSs, unless they have held, either individually or jointly with family members, directly or indirectly, more than 25% of the dividend rights (bénéfices sociaux) of the company at any time during the five preceding years. This rule may be modified by more favorable provisions of a tax treaty. Foreign states, international organizations and certain public bodies are generally not French residents for French tax purposes.

        If a transfer of a listed company's shares is evidenced by a written agreement, that agreement is, in principle, subject to registration formalities, including a 1% registration duty assessed on the market value of the shares (subject to a maximum assessment of €3,049 per transfer). Generally, no such duty is due if the agreement providing the transfer of a listed company's shares is effected by means of a written agreement that is executed outside France. In general, no stock exchange stamp tax is payable on the sale of shares by non-French residents. Prospective investors in shares or ADSs should consult their own advisors concerning the applicability of French transfer tax to any agreement evidencing the transfer of their shares or ADSs.

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Taxation of dividends on shares

        Under French law, our dividends are paid out of after-tax income. French residents are entitled to a tax credit, known as the avoir fiscal, equal to 50% of any dividend we pay. However, the 2003 Finance Law provides that, subject to certain limited exceptions, the rate of the avoir fiscal is reduced to 10% in 2003 of the dividend paid when used or received by persons other than individuals and companies owning at least 5% of the share capital of the distributing company. Dividends paid to non-French residents normally are subject to a 25% French withholding tax and non-residents are not eligible for the benefit of the avoir fiscal. Non-resident holders that are entitled to and comply with the procedures for claiming benefits under an applicable tax treaty may benefit from a reduced rate of withholding tax and may be entitled to a tax credit in their country of residence equal to the amount of the tax withheld in France. They also may be entitled to receive a refund of the avoir fiscal, as described below.

        France has entered into treaties with the following countries, territories and Territoires d'Outre-Mer under which qualifying residents are entitled to obtain, from the French tax authorities, a reduction (generally to 15%) of all or part of the French withholding tax and a refund of the avoir fiscal (net of applicable withholding tax). In the case of German tax residents, a tax credit in an amount equal to, and in lieu of the applicable avoir fiscal is available. Treaties with some of the countries or territories listed below contain specific limitations applicable to corporate entities' eligibility to the benefit of the avoir fiscal or limit the right to such a refund strictly to individual residents as opposed to corporate entities.

Countries
Australia	Mexico
Austria	Netherlands
Belgium	New Zealand
Bolivia	Niger
Brazil	Norway
Burkina Faso	Pakistan
Cameroon	Senegal
Canada	Singapore
Finland	South Korea
Gabon	Spain
Ghana	Sweden
Germany	Switzerland
Iceland	Togo
India	Turkey
Israel	United Kingdom
Italy	United States of America
Ivory Coast	Venezuela
Japan
Luxembourg	Territoires d'Outre Mer and Others
Malaysia	Mayotte
Mali	New Caledonia
Malta	Saint-Pierre et Miquelon
Mauritius

        Dividends paid to non-residents of France benefiting from the avoir fiscal in accordance with a tax treaty (other than German residents) will be subject at the time of payment to withholding tax at the reduced rate, as provided in the applicable treaty rather than to the 25% French withholding tax, provided that they establish their entitlement to the reduced rate before the payment of the dividend.

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        French companies that distribute dividends out of profits which were not taxed at the ordinary corporate rate, or which have been earned and taxed more than five years before the distribution of the dividend must pay an equalization tax called précompte equal to 50% of the net dividend before withholding tax. When a tax treaty does not provide for a refund of the avoir fiscal or when the non-resident investor is not entitled to such refund but otherwise is entitled to the benefits of a tax treaty, that investor may obtain from the French tax authorities a refund, net of applicable withholding tax, of the précompte paid in cash by the company, if any.

Estate and gift tax

        France imposes estate and gift tax on the shares of a French company acquired by inheritance or gift from a non-resident of France. France has entered into estate and gift tax treaties with a number of countries under which, assuming certain conditions are met, residents of the treaty countries may be exempted from estate and gift taxes or may obtain a tax credit. Prospective investors in shares or ADSs should consult their own advisors concerning the applicability of French estate and gift tax to their investment in Wavecom and the availability of, and the conditions for claiming exemption under an applicable treaty.

Wealth tax

        In the absence of a more favorable tax treaty, the French wealth tax (impôt de solidarité sur la fortune) does not apply to non-French resident individual investors owning directly or indirectly less than 10% of the company's share capital.

Taxation of U.S. Investors

        The following discussion generally summarizes the material U.S. federal tax consequences and the material French tax consequences of the purchase, ownership and disposition of shares or ADSs by holders who are for United States federal income tax purposes:

•

citizens or residents of the United States,



•

corporations or other entities treated as such, organized in or under the laws of the United States or of any political subdivision thereof,



•

estates, the income of which is subject to U.S. federal income taxation regardless of the source of such income, or



•

trusts, the administration of which are subject to the primary supervision of U.S. courts and one or more persons just described have the authority to control all substantial decisions of the trusts,

and, solely for purposes of the discussion of French tax consequences below, only the above-described holders:

•

whose ownership of shares or ADSs is not effectively connected with a permanent establishment or fixed base in France,



•

who, in the case of individuals or other non-corporate holders, other than partnerships or trusts, are residents of the United States,



•

that, in the case of United States corporations other than regulated investment companies, do not own, directly or indirectly, 10% or more of our outstanding voting share capital,



•

that, in the case of United States corporations that are regulated investment companies, do not own, directly or indirectly, 10% or more of our outstanding voting share capital if less than 20% of such corporation's shares are owned by persons who are not citizens or residents of the United States,

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•

that in the case of partnerships or trusts that are treated as residents of the United States as defined by the convention between the United States of America and France for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital dated August 31, 1994, to the extent that its partners, beneficiaries or grantors are themselves individuals or other non-corporate entities that are residents of the United States, or United States corporations, other than regulated investment companies, that do not own, directly or indirectly, 10% or more of our outstanding voting share capital.

        This discussion may not describe all of the tax considerations related to the purchase, ownership and disposition of shares or ADSs that may be relevant to an investor in light of that investor's particular tax situation. In particular, this discussion deals with holders that hold shares or ADSs as capital assets, as that term is defined in the U.S. Internal Revenue Code, and does not address the tax considerations relevant to investors that are subject to special tax rules, such as financial institutions, insurance companies, tax-exempt organizations, securities dealers, persons subject to the alternative minimum tax, persons who are owners of an interest in a partnership or other pass-through entity that is a holder of shares or ADSs, persons that will hold shares or ADSs as part of an integrated investment, including a straddle, hedging or conversion transaction, comprised of shares or ADSs and one or more other positions for tax purposes and persons that have a functional currency other than the U.S. dollar. For a discussion of French tax matters relating to the holdings of shares or ADSs generally, see "French Taxation".

        The statements on United States tax law are based on the tax laws and practice of the United States, and the statements on French tax law are based upon the tax laws and practice of France, in effect on the date of this annual report as well as on the U.S.-French income tax convention, all of which are subject to change. In addition, the statements are based in part upon the representations of the Bank of New York and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms. Owners and prospective purchasers of shares or ADSs should consult their own advisors as to the tax consequences of the purchase, ownership and disposition of shares or ADSs in light of their particular circumstances, including the effect of any state or local and other foreign tax laws.

French Taxation

        The following discussion generally summarizes the material French tax consequences to holders of the acquisition, ownership and disposition of the shares or ADSs.

        Holders of ADSs deemed to be owners of shares.    For purposes of the U.S.-French income tax convention, owners of ADSs will be treated as the owners of the shares represented by such ADSs. Exchanges, deposits and withdrawals of shares for ADSs or ADSs for shares by a holder will not result in the imposition of French tax.

        Dividends.    Dividends paid to non-residents of France generally are subject to French withholding tax at a 25% rate and are not eligible for the benefit of the avoir fiscal. The avoir fiscal is a tax credit available to French residents equal to 50% of the amount of dividends received from French companies such as ours. However, subject to certain limited exceptions, the 2003 Finance Law provides that the rate of the avoir fiscal is reduced to 10% in 2003 of the dividend paid when used or received by persons other than individuals and corporations owning at least 5% of the distributing company. Such persons may also be entitled to an additional tax credit equal to (i) 80% of the précompte, paid in cash if the avoir fiscal is calculated at a 10% rate. Under the U.S.-French income tax convention, the rate of French withholding tax on dividends paid to eligible holders is reduced to 15%. Such holders are also entitled to a payment equal to the avoir fiscal at the rate of [25% (for 2001), 15% (for 2002),] 10% (for 2003) or 50%, if the holder is an individual, less a 15% withholding tax. Subject to certain conditions, such holders may also benefit from the additional tax credit equal to 50%, 70% or 80% of the

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précompte as previously mentioned. Dividends paid to a holder will be immediately subject to the reduced rate of withholding of 15% at the time of payment, provided that such holder establishes before the date of payment that it is a resident of the United States under the U.S.-French income tax convention and, if it is not an individual, that it is the owner of all the rights relating to the full ownership of the shares or ADSs, including, but not limited to, dividend rights. A holder generally will be entitled to receive a payment of the avoir fiscal only if such holder, or its partners, beneficiaries or grantors, if the holder is a partnership, estate or trust, is subject to U.S. federal income tax on the avoir fiscal payment and the dividend to which it relates.

        Some entities are not entitled to the full avoir fiscal. Tax-exempt U.S. pension funds, various other tax-exempt entities, not-for-profit organizations and individuals (with respect to dividends beneficially owned by such individuals and derived from an investment retirement account) that own, directly and indirectly, less than 10% of our capital, and that satisfy certain filing formalities:

(1)

are entitled to a payment, subject to French withholding tax, equal to 30/85 of the gross avoir fiscal, and



(2)

are eligible for the imposition of the reduced withholding tax rate of 15% on dividends.

        Currently, to benefit from the reduced rate of French withholding tax immediately upon payment of a dividend and to receive the payment of the avoir fiscal or the partial payment of the avoir fiscal, a holder must complete and file French Treasury Form RF 1A EU-No. 5052, Application for Refund, before the date of payment of the relevant dividend together with, if such holder is not an individual, an affidavit attesting that it is the beneficial owner of all the rights attached to the full ownership of such shares or ADSs including but not limited to dividend rights, or, if such holder is not the owner of all such rights, certain information concerning the holder of the rights other than the dividend rights. If completion of the French Treasury Form and the attached affidavit is not possible prior to the payment of dividends, the holder may, however, be eligible for the reduced rate of 15% at the time the dividends are paid if the holder duly and timely completes and provides to the French tax authorities prior to the payment of dividends a simplified certificate, stating that:

•

the holder is a U.S. resident within the meaning of the convention,



•

the holder has no permanent establishment or fixed based in France with which the holding giving rise to the dividend is effectively connected,



•

the holder owns all the rights attached to the full ownership of the securities or shares, including but not limited to dividend rights, and



•

the holder meets all the requirements of the convention for obtaining the benefit of the reduced rate of withholding tax and the refund of the French avoir fiscal. Finally, tax-exempt pension funds with a right to obtain a refund or a partial refund of avoir fiscal must also establish that they qualify as pension funds under the U.S. Internal Revenue Code.

        The French Treasury Form RF 1A EU-No. 5052, Application for Refund, together with instructions, will be provided by the depositary to any ADR holder upon request. Copies are also available from the U.S. Internal Revenue Service. The depositary will arrange for the filing with the French tax authorities of all forms or certificates completed by holders and returned to the depositary in time for prompt filing with the French tax authorities. If the French Treasury Form is not timely filed, the holder may claim a refund of the excess withholding tax and may claim the avoir fiscal by filing the French Treasury Form before December 31 of the year following the year in which the related dividend is paid.

        The avoir fiscal or partial avoir fiscal is generally expected to be paid to holders within 12 months of filing the French Treasury Form RF 1A EU-No. 5052, Application for Refund, but not before January 15 following the end of the calendar year in which the dividend is paid.

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        Amounts distributed as dividends by French companies out of profits which have not been taxed at the ordinary corporate income tax rate or which have been earned and taxed more than five years before the distribution are subject to a payment of an equalization tax called précompte by such companies equal to 50% of the net amount distributed. A holder not entitled to the full or partial avoir fiscal generally may obtain from the French tax authorities a refund of any précompte, at the rate of 50%, paid in cash, as opposed to any précompte paid by offsetting French and/or foreign tax credit, in respect of the dividends less the French withholding tax at the rate of 5 or 15%. Holders entitled to the refund of the précompte must apply for such refund by filing a French Treasury Form RF 1B EU-No. 5053 before the end of the year following the year in which the dividend was paid. The form, together with instructions, is available from the U.S. Internal Revenue Service or at the Centre des Impôts des Non-Résidents at 9, rue d'Uzés, 75094 Paris Cedex 2.

        Sales of shares or ADSs.    Under the U.S.-French income tax convention, no French tax is levied on any capital gain derived from the sale of shares or ADSs by a holder.

        Estate and gift tax.    Under the estate and gift tax convention between the United States and France dated November 24, 1978, a transfer of shares or ADSs by gift or by reason of the death of a holder entitled to benefits under that convention will not be subject to French gift or inheritance tax, unless the donor or the decedent was domiciled in France at the time of making the gift, or of his or her death, or the shares or ADSs were used or held for use in the conduct of a business or profession through a permanent establishment or fixed base in France.

        Wealth tax.    The French Wealth Tax (impôt de solidarité sur la fortune) does not apply to a holder, provided that the holder does not own, individually or with related persons, directly or indirectly, shares or ADSs which collectively represent the right to at least 10% of the corporate earnings and the shares or ADSs are not part of the assets of a permanent establishment or a fixed base located in France.

        Transfer taxes.    Transfers of a listed company's shares will not be subject to French registration or transfer taxes, unless the transfer is effected by means of a written agreement that is executed within France. Should such written agreement be executed within France, it would be subject to transfer taxes at the rate of 1% to a maximum of €3,049 per transaction. A stock exchange stamp tax may be due in some cases.

United States Taxation

        The following discussion generally summarizes the material U.S. federal income tax consequences to U.S. holders (as defined above) of the acquisition, ownership and disposition of the ADSs or shares.

        Holders of ADSs deemed to be owners of shares.    For purposes of the U.S. Internal Revenue Code, a U.S. holder of ADSs will be treated as the owner of the underlying shares represented by such ADSs. Exchanges, deposits and withdrawals of shares for ADSs or ADSs for shares by a U.S. holder will not result in recognition of gain or loss for U.S. federal income tax purposes.

        Dividends.    Distributions, other than a mere pro rata distribution of shares, made by us with respect to our shares, including shares represented by ADSs, and including the amount of any French taxes withheld there from, will be includable in the gross income of a U.S. holder as dividend income from a source outside the United States to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. Avoir fiscal and précompte payments will be considered dividends to the same extent. Such dividends will not be eligible for the dividends received deduction generally allowed to corporations. To the extent, if any, that the amount of any such distribution exceeds our current and accumulated earnings and profits as determined for U.S. federal income tax purposes, it will be treated first as a tax-free return of the U.S. holder's tax basis in its shares or ADSs to the extent thereof, and then, to the extent in excess of such tax basis, as capital gain. Dividends paid in euro will be includable in income in a U.S. dollar amount based on the prevailing

60

U.S. dollar-euro exchange rate on the date of receipt by the depositary or the date of receipt by the U.S. holder of shares, whether or not the payment is converted into U.S. dollars at that time. Any gain or loss recognized upon a subsequent sale or conversion of the euro will be U.S. source ordinary income or loss. A U.S. holder may also recognize foreign currency gain or loss, which will be U.S. source ordinary income or loss, on a subsequent conversion or other disposition of the refund of the excess withholding tax initially withheld from a dividend payment if the refund is converted into U.S. dollars at an exchange rate different than the rate used to translate the U.S. holder's dividend income. Any French tax withheld from a dividend will be treated as a foreign tax creditable, subject to the limitations discussed below, against the U.S. federal income tax liability of a U.S. holder. Amounts creditable against U.S. tax are permitted, at the election of the U.S. holder, to be deducted. Under the U.S. Internal Revenue Code, the amount of foreign tax eligible for credit against the U.S. federal income tax liability of a U.S. holder is limited to the amount of U.S. tax attributable to the U.S. holder's taxable income from sources outside the United States. For purposes of computing this limitation, the amount of foreign tax eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends paid by us will be "passive income" or in the case of certain U.S. holders, "financial services income". Prospective investors should consult their own tax advisors regarding the availability of such a credit.

        Sale of ADSs or shares.    Upon a sale or exchange of ADSs or shares, a U.S. holder will recognize gain or loss for U.S. federal income tax purposes equal to the difference between the amount realized upon the disposition and such U.S. holder's adjusted tax basis in the ADSs or shares. Subject to the discussion below under the heading "Passive Foreign Investment Company", such gain or loss will generally be a capital gain or loss. Capital gains recognized on the sale or exchange by individuals of capital assets are subject to a 20% maximum tax rate if the capital assets have been held for more than one year or 18% for capital assets acquired after 2000 and held for more than five years. Gains on the sale of ADSs or shares held for one year or less will be treated as short-term capital gain and taxed as ordinary income at the U.S. holder's marginal income tax rate. Capital losses may only be used to offset capital gains, except that U.S. individuals may deduct up to $3,000 of net capital losses against ordinary income. Prospective U.S. investors should consult their own tax advisors regarding the availability of such an offset.

        No French tax is imposed on the capital gains of a U.S. holder arising from the sale or exchange of ADSs or shares provided that certain requirements of the U.S-French income tax convention are satisfied. See "French Taxation—Sales of Shares or ADSs". In the event that French tax is imposed on capital gains from the sale or exchange of ADSs or shares, U.S. holders should consult their own tax advisors with respect to their ability based on their particular circumstances to credit such tax against their U.S. federal income.

Passive Foreign Investment Company Considerations

        If, during any taxable year, 75% or more of our gross income consists of certain types of passive income, or the average value during a taxable year of our passive assets (generally assets that generate passive income) is 50% or more of the average value of all of our assets, we will be treated as a "passive foreign investment company", or PFIC, under U.S. federal income tax law for such year and succeeding years. Based on an analysis of our financial position, including an estimate of the value of our assets, we believe that we have not been a PFIC for any preceding taxable year and expect that we will not become a PFIC during the current taxable year. Our determination of PFIC status may be challenged by the Internal Revenue Service. We intend to use reasonable efforts to avoid becoming a PFIC, but can give no assurance that we will be successful. If we determine that we are a PFIC, we will take reasonable steps to notify U.S. shareholders.

61

        If we were classified as a PFIC, unless a U.S. shareholder made one of the elections described below in a timely manner, a special tax regime would apply to both:

•

any "excess distribution", which would be the U.S. shareholder's share of distributions in any year that are greater than 125% of the average annual distributions received by the shareholder in the three preceding years or the shareholder's holding period, if shorter; and



•

any gain realized on the sale or other disposition of the ordinary shares.

        Under this regime, any excess distribution and realized gain would be treated as ordinary income and would be subject to tax as if the excess distribution or gain had been realized rateably over the U.S. shareholder's holding period for the ordinary shares. As a result of this treatment:

•

the amount allocated to the taxable year in which the U.S. shareholder realizes the excess distribution or gain would be taxed as ordinary income;



•

the amount allocated to each prior year, with certain exceptions, would be taxed as ordinary income at the highest applicable tax rate in effect for that year; and



•

the interest charge generally applicable to underpayments of tax would be imposed on the taxes deemed to have been payable in those previous years.

        If a U.S. shareholder makes a mark-to-market election with respect to the ordinary shares, the shareholder will not be subject to the PFIC rules described above. Instead, in general, the shareholder will include as ordinary income each year the excess, if any, of the fair market value of the shares at the end of the taxable year over the adjusted basis in the shares. The U.S. shareholder will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of the shares over their fair market value at the end of the taxable year, but only to the extent of the net amount of income previously included as a result of the mark-to-market election. The U.S. shareholder's basis in the shares will be adjusted to reflect any such income or loss amounts. Any gain realized upon disposition of the shares will also be taxed as ordinary income.

        The special PFIC tax rules described above also will not apply to a U.S. shareholder if the shareholder makes a QEF election, that is, the shareholder elects to have us treated as a qualified electing fund for U.S. federal income tax purposes. If we determine that we are a PFIC, we will provide U.S. shareholders with such information as such shareholders may require from us in order to make an effective QEF election.

        If a U.S. shareholder makes a QEF election, the shareholder will be required to include in gross income for U.S. federal income tax purposes the shareholder's pro rata share of our ordinary earnings and net capital gain for each of our taxable years that we are a PFIC, regardless of whether or not the shareholder receives any distributions from us. The U.S. shareholder's basis in ordinary shares will be increased to reflect undistributed amounts which are included in the shareholder's gross income. Distributions of previously includible income will result in a corresponding reduction of basis in the ordinary shares and will not be taxed again as a distribution to the shareholder.

        U.S. shareholders are urged to consult their own tax advisers concerning the potential application of the PFIC rules to their ownership and disposition of ordinary shares.

Information reporting and backup withholding

        Dividend payments with respect to ADSs or shares and proceeds from the sale, exchange or redemption of ADSs or shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding (currently at a 30% rate). Backup withholding will not apply to you, however, if you furnish a correct taxpayer identification number or certificate of foreign status and make any other required certification or if you are otherwise exempt from backup withholding. If you are required to establish your exempt status, you generally must provide such

62

certification on U.S. Internal Revenue Service Form W-9 in the case of U.S. persons and on U.S. Internal Revenue Service Form W-8BEN (or suitable substitute form) in the case of non-U.S. persons.

        Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information.

Documents on Display

        We are subject to the reporting requirements of the U.S. Securities Exchange Act of 1934 (the "Exchange Act") applicable to foreign private issuers. In connection with the Exchange Act, we file reports, including this annual report on Form 20-F, and other information with the Securities and Exchange Commission. Such reports and other information are available on the SEC's Edgar website at www.sec.gov, and may also be inspected and copied at prescribed rates at the public reference facilities maintained by the SEC at its Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports and other information may be obtained, upon written request, from The Bank of New York, as depositary, at its office located at 101 Barclay Street, New York, NY 10286.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        The following discusses our exposure to market risk related to changes in interest rates, equity prices and foreign currency exchange rates. This discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors including those set forth in the Risk Factors section.

        As of December 31, 2002, all of our cash and cash equivalents were classified as available-for-sale. The principal portion of our investments are not subject to interest rate risk; however, declines in interest rates over time will reduce our interest income. A hypothetical 10% move in interest rates would have an insignificant effect on our financial position, results of operations and cash flows. We do not have any investments in equity or debt securities traded in the public markets, nor do we currently use derivative financial instruments. Therefore, we do not currently have any direct equity price risk.

        We conduct a significant portion of our business in currencies other than the Euro, the currency in which we report our financial statements. Assets and liabilities of our subsidiaries are translated into Euros at exchange rates in effect as of the applicable balance sheet date, and any resulting translation adjustments are included as an adjustment to shareholders' equity. Revenues and expenses generated from these subsidiaries are translated at average exchange rates during the month the transactions occur. Gains and losses from these currency transactions are included in net earnings. Historically, we have generated a significant portion of our revenues and incurred a significant portion of our expenses in U.S. dollars and Hong Kong dollars. As a result, our operating results have been in the past, and may be in the future, adversely impacted by currency exchange rate fluctuations on the Euro value of foreign currency (predominantly the U.S. dollar)—denominated revenues and expenses. We cannot predict the effect of exchange rate fluctuations upon our future operating results. As of December 31, 2002, we were not engaged in a significant or speculative currency hedging program to cover our currency transaction or translation exposure. In January 2003, we began to use a combination of options and forward exchange contracts in order to minimize the risk to our net U.S. dollar position over the coming months.

        See also Item 5: "Operating and Financial Review and Prospect—Impact of currency fluctuations".

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

        Not applicable

63

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

        Not applicable

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

Use of Proceeds

        We successfully completed a public offering of our securities in June 2000, with net proceeds to Wavecom of €96.5 million.

        In 2001, we used approximately €4.9 million to purchase property and equipment. In 2002, we used approximately €27.3 million to purchase property and equipment.

ITEM 15. CONTROLS AND PROCEDURES

        (a)   Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act) as of a date within 90 days of the filing date of this annual report on Form 20-F, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and are operating in an effective manner.

        (b)   Changes in internal controls. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the most recent evaluation.

ITEM 18. FINANCIAL STATEMENTS

        See the financial statements beginning on page F-1.

ITEM 19. EXHIBITS

1	Statuts (by-laws) of the Registrant, updated as of February 7, 2003 (English Translation).*
2.1	Form of Deposit Agreement among the Registrant, The Bank of New York, as Depositary, and the Holders of American Depositary Shares issued thereunder (filed as Exhibit 4.1 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).
2.2	Form of American Depositary Receipt (filed as Exhibit 4.2 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).
4.1	GSM Essential Properties Cross License Agreement, dated January 6, 1999, between the Registrant and Motorola, Inc. (filed as Exhibit 10.3 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).**
4.2	Agreement relating to the sale of GSM modules, dated July 7, 1999 between Amtal International Limited and Wavecom Asia Pacific Limited (filed as Exhibit 10.3 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).**
4.3	Agreement relating to the development and manufacture of a GSM hand held portable, dated February 11, 2000 between NEC Corporation and Wavecom S.A (filed as Exhibit 10.2 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**

64

4.4	Contract for Manufacturing and Related Services, dated June 17, 1999 between Wavecom S.A. and Solectron-France S.A. (filed as Exhibit 10.3 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**
4.5	Agreement between Funkanlagen and Wavecom S.A. dated February 25, 2000 (filed as Exhibit 10.4 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**
4.6	GSM/DCS 1800/1900 Patent License Agreement between Wavecom S.A. and Koninklijke Philips Electronics N.V., dated October 9, 2001 (filed as Exhibit 4.6 to the Registrant's Annual Report on Form 20-F, filed with the Commission on June 28, 2002).**
4.7	Agreement relating to a cross-license of essential GSM patents between Wavecom S.A. and Siemens Aktiengesellschaft, effective as of October 31 2001 (filed as Exhibit 4.7 to the Registrant's Annual Report on Form 20-F, filed with the Commission on June 28, 2002).**
4.8	GSM patent non assertion agreement with NEC Corporation effective November 19, 2002.*&
4.9	Patent License Agreement with Thomson Licensing S.A. and Alcatel S.A., effective January 1, 2003.*&
8	List of subsidiaries of the Registrant.*
10	Consent of Ernst & Young Audit.*
99.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350*
99.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350*

*

Filed herewith.

**

The registrant has received confidential treatment of portions of this agreement.

&

The registrant has requested confidential treatment of portions of this agreement.

65

SIGNATURES

        Wavecom S.A. hereby confirms 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.

	WAVECOM S.A.
	By:	/s/  DEBORAH CHOATE Deborah Choate Chief Financial Officer
Date: May 21, 2003.

66

CERTIFICATIONS

I, Aram Hékimiam, Chief Executive Officer, certify that:

1.

I have reviewed this annual report on Form 20-F of Wavecom S.A.;



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 functions):



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 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.

Date: May 21, 2003 By: /s/  ARAM HÉKIMIAN Aram Hékimian
Chief Executive Officer
(Principal Executive Officer)

67

CERTIFICATIONS

I, Deborah Choate, Chief Financial Officer, certify that:

1.

I have reviewed this annual report on Form 20-F of Wavecom S.A.;



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 functions):



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 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.

Date: May 21, 2003 By: /s/  DEBORAH CHOATE Deborah Choate
Chief Financial Officer
(Principal Financial Officer)

68

WAVECOM S.A.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Wavecom S.A.

        We have audited the accompanying consolidated balance sheets of Wavecom S.A. as of December 31, 2000, 2001 and 2002, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2002. These consolidated financial statements are the responsibility of Wavecom's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wavecom, S.A. at December 31, 2000, 2001 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

ERNST & YOUNG Audit

represented by
John Mackey

Paris, France
February 10, 2003, except for note 15 for which the date is April 4, 2003

F-2

WAVECOM S.A.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

		Years ended December 31,
		2000			2001			2002
Revenues:
	Product sales	€	63,055		€	317,571		€	549,543
	Technology development and other services		2,518			5,093			1,546
	Total revenues		65,573			322,664			551,089
Cost of revenues:
	Cost of goods sold		51,457			254,658			371,919
	Cost of services		4,522			4,718			4,709
	Total cost of revenues		55,979			259,376			376,628
Gross profit			9,594			63,288			174,461
Operating expenses:
	Research and development		16,133			32,634			64,093
	Sales and marketing		5,836			12,416			26,600
	General and administrative		5,598			13,297			26,163
	Deferred compensation amortization		1,758			1,711			1,587
	Amortization of goodwill		47			278			—
	Total operating expenses		29,372			60,336			118,443
Operating income (loss)			(19,778	)		2,952			56,018
Interest expense			(255	)		(523	)		(527	)
Interest income			3,000			4,350			3,686
Foreign exchange gain (loss)			989			142			(10,857	)
Provision for loss on long-term investments			—			(716	)		—
Income (loss) before minority interest and income taxes			(16,044	)		6,205			48,320
Minority interests			(6	)		(804	)		(323	)
Income (loss) before income taxes			(16,038	)		7,009			48,643
Income tax expense (benefit)			(1,534	)		(2,299	)		6,556
Net income (loss)		€	(14,504	)	€	9,308		€	42,087
Basic net income (loss) per share		€	(1.03	)	€	0.63		€	2.82
Diluted net income (loss) per share		€	(1.03	)	€	0.61		€	2.74
Number of shares used for computing:
	—basic net income (loss) per share		14,081,178			14,726,647			14,943,048
	—diluted net income (loss) per share		14,081,178			15,359,226			15,348,985

See notes to financial statements

F-3

WAVECOM S.A.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

			December 31,
			2000			2001			2002
ASSETS
Current assets:
	Cash and cash equivalents		€	69,224		€	128,972		€	119,416
	Short-term investments			26,807			3,008			15,112
	Accounts receivable (less allowance for doubtful accounts of €477, €328 and €243 at December 31, 2000, 2001 and 2002, respectively)			26,774			46,219			85,921
	Inventory, net			11,330			13,858			30,205
	Value added tax recoverable			1,733			22,251			6,430
	Prepaid expenses and other current assets			2,847			12,720			9,335
	Deferred tax assets, current portion			—			—			3,889
		Total current assets		138,715			227,028			270,308
Property and equipment, net				10,067			15,666			29,624
Goodwill, net of accumulated amortization of €47, €326 and €326 at December 31, 2000, 2001 and 2002, respectively				1,279			5,716			4,807
Long-term investments, net of provision for loss of €716 at December 31, 2001 and 2002				4,078			3,476			14,152
Other assets				4,159			8,061			5,102
Deferred tax assets				—			—			8,041
		Total assets	€	158,298		€	259,947		€	332,034
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Overdraft facility		€	529		€	—		€	—
	Accounts payable			32,627			111,926			99,937
	Accrued compensation			3,302			5,755			10,488
	Other accrued expenses			6,201			15,525			36,367
	Current portion of loans			634			488			—
	Current portion of capitalized lease obligations			794			201			214
	Deferred revenue and advances received from customers			4,200			2,648			4,100
	Income tax payable			—			—			13,605
	Other liabilities			670			521			179
		Total current liabilities		48,957			137,064			164,890
Long-term portion of capitalized lease obligations				166			228			287
Other long-term liabilities				—			410			—
		Total long-term liabilities		166			638			287
Minority interests				1,165			361			38
Commitments and contingencies
Shareholders' equity:
	Shares, €1 nominal value; 14,682,281 shares issued and outstanding at
		December 31, 2000; 14,810,614 shares issued and outstanding at
		December 31, 2001; 15,107,890 shares issued and outstanding at
		December 31, 2002		14,682			14,811			15,108
Additional paid in capital				132,993			135,013			135,954
Deferred compensation				(3,606	)		(2,991	)		(975	)
Retained earnings (deficit)				(34,979	)		(25,671	)		16,416
Accumulated other comprehensive income (loss)				(1,080	)		722			316
		Total shareholders' equity		108,010			121,884			166,819
		Total liabilities and shareholders' equity	€	158,298		€	259,947		€	332,034

See notes to financial statements

F-4

WAVECOM S.A

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(in thousands of euro, except share data)

			Shares												Accumulated Other Comprehensive Income (loss)
						Additional paid in capital			Deferred Compensation			Retained Earnings (Deficit)						Total Shareholders' Equity
			Shares	Amount
Balance at December 31, 1999			13,423,469	€	13,423	€	37,297		€	(5,632	)	€	(20,475	)	€	43		€	24,656
	Forfeiture of options and founders' warrants						(268	)		268
	Amortization of deferred compensation									1,758									1,758
	Issuance of shares in connection with the public offering on Nasdaq and the Nouveau Marché at €98.50 per share (net of offering costs)		1,050,000		1,050		95,497												96,547
	Issuance of shares in connection with the exercise of 109,842 founders' warrants and 12,494 options at an exercise price of €2.29		122,336		122		158												280
	Issuance of shares in connection with the exercise of 79,171 founders' warrants and 7,305 options at an exercise price of €4.57		86,476		87		309												396
	Comprehensive loss:
	Net loss												(14,504	)					(14,504	)
	Foreign currency translation															(1,123	)		(1,123	)
		Total comprehensive loss											(14,504	)		(1,123	)		(15,627	)
Balance at December 31, 2000			14,682,281		14,682		132,993			(3,606	)		(34,979	)		(1,080	)		108,010
	Forfeiture of options and founders' warrants						(99	)		99
	Deferred compensation arising from shares of Arguin Communications issued to minority shareholders						1,862			(1,862	)
	Amortization of deferred compensation									2,378									2,378
	Issuance of shares in connection with the exercise of 75,557 founders' warrants and 12,480 options at an exercise price of €2.29		88,037		88		113												201
	Issuance of shares in connection with the exercise of 36,743 founders' warrants and 3,553 options at an exercise price of €4.57		40,296		41		144												185
	Comprehensive income:
	Net income												9,308						9,308
	Foreign currency translation															1,802			1,802
		Total comprehensive income											9,308			1,802			11,110
Balance at December 31, 2001			14,810,614		14,811		135,013			(2,991	)		(25,671	)		722			121,884
	Forfeiture of options and founders' warrants						(5	)		5
	Deferred compensation arising from shares of Arguin Communications issued to minority shareholders						190			(190	)
	Amortization of deferred compensation									2,201									2,201
	Issuance of shares in connection with the exercise of 154,075 founders' warrants and 25,026 options at an exercise price of €2.29		179,101		179		231												410
	Issuance of shares in connection with the exercise of 98,173 founders' warrants and 15,318 options at an exercise price of €4.57		113,491		113		405												518
	Issuance of shares in connection with the exercise of 4,684 options at an exercise price of €26.68		4,684		5		120												125
	Comprehensive income:
	Net income												42,087						42,087
	Foreign currency translation															(406	)		(406	)
		Total comprehensive income											42,087			(406	)		41,681
Balance at December 31, 2002			15,107,890	€	15,108	€	135,954		€	(975	)	€	16,416		€	316		€	166,819

See notes to financial statements

F-5

WAVECOM S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except share data)

				Years ended December 31,
				2000			2001			2002
Cash flows from operating activities:
Net income (loss)				€	(14,504	)	€	9,308		€	42,087
	Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
	Depreciation and amortization of property and equipment				3,113			5,042			13,373
	Provision for loss on long-term investments				—			716			—
	Amortization of goodwill				47			278			—
	Amortization of deferred stock compensation				1,758			1,711			2,200
	Minority interests				(6	)		(804	)		(323	)
	Deferred taxes				—			—			(11,931	)
	Increase (decrease) in cash from:
		Accounts receivable			(20,415	)		(15,685	)		(49,192	)
		Inventory			(6,329	)		(2,431	)		(17,539	)
		Value added tax recoverable			(960	)		(20,518	)		15,821
		Research tax credit reimbursed			—			—			813
		Prepaid expenses and other current assets			(1,893	)		(9,951	)		2,970
		Accounts payable and other accrued expenses			27,077			85,409			21,234
		Accrued compensation			1,571			2,105			5,083
		Deferred revenue and advances received from customers			2,983			(1,668	)		1,887
		Income tax payable			—			—			13,605
		Other payables			(802	)		70			(99	)
		Other			(219	)		(3,584	)		1,878
			Net cash provided (used) by operating activities		(8,579	)		49,998			41,867
Cash flows from investing activities:
	Acquisition of equity interest in Arguin Communications for $229 cash paid net of $270 cash acquired				41			—			—
	Capital contribution by minority shareholders of Arguin Communications				346			—			—
	Acquisition of equity interest in Cambridge Silicon Radio				(1,197	)		—			—
	Acquisition of Iconn Wireless				—			(4,719	)		—
	Arguin acquisition, net of cash acquired				—			462			—
	Disposal (acquisition) of short-term investments				(26,807	)		23,799			(12,104	)
	Acquisition of long-term investments				(4,078	)		(113	)		(10,676	)
	Purchases of property and equipment				(8,333	)		(10,330	)		(27,307	)
	Proceeds from sale of property and equipment				—			—			177
			Net cash provided (used) by investing activities		(40,028	)		9,099			(49,910	)
Cash flows from financing activities:
	Net increase (decrease) in overdrafts and lines of credit				529			(529	)		—
	Proceeds from loans				340			—			—
	Repayment of loans				(76	)		(146	)		(488	)
	Principal payments on capital lease obligations				(1,049	)		(815	)		(237	)
	Proceeds from public offering, net				97,223			—			—
	Exercise of stock options and founders' warrants				—			386			1,054
			Net cash provided (used) by financing activities		96,967			(1,104	)		329
Effect of exchange rate changes on cash and cash equivalents					(1,216	)		1,755			(1,842	)
Net increase (decrease) in cash and cash equivalents					47,144			59,748			(9,556	)
Cash and cash equivalents, beginning of period					22,080			69,224			128,972
Cash and cash equivalents, end of period				€	69,224		€	128,972		€	119,416

See notes to financial statements

F-6

WAVECOM S.A

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Nature of business and summary of significant accounting policies

Nature of business

        Wavecom is organized as a société anonyme, or limited liability company, under the laws of the Republic of France. Wavecom was founded in 1993 and is publicly traded on Euronext Paris (Nouveau Marché) in France and on the Nasdaq National Market exchange in the U.S. Wavecom develops, markets and sells a line of digital wireless standard modules, known as WISMO modules, for use in mobile telephones and other wireless applications based on GSM, GPRS and CDMA mobile communications standards. A WISMO module is a compact standardized device that contains substantially all of the software, hardware and other technology needed to enable wireless communications. Wavecom also develops, markets and sells a line of wireless modems. WISMO modules are distributed through Wavecom's direct sales force; wireless modems are sold by the direct sales force as well as by distributors.

Basis of presentation

        The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying footnotes. Actual results could differ from those estimates. The consolidated financial statements include the accounts of Wavecom S.A., its wholly-owned subsidiaries Wavecom, Inc., a Delaware corporation, Wavecom Asia Pacific Ltd., a Hong Kong corporation, both of which commenced operations in 1998, Wavecom Korea Co. Ltd and Wavecom Deutschland GmbH, branches transformed into subsidiaries in 2002, and Arguin Communications Inc (61,88% controlling interest purchased in October 2000). Inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation.

Foreign currency

        The reporting currency of Wavecom, for all years presented, is the euro (€).

        The functional currency of each subsidiary is the local currency. In accordance with Statement of Financial Accounting Standards No. 52, all accounts in the financial statements are translated into euro from the functional currency at exchange rates as follows: (1) asset and liability accounts at year-end rates, (2) income statement accounts at weighted average exchange rates for the year, and (3) shareholders' equity accounts at historical exchange rates. Translation differences are recorded in shareholders' equity.

        Realized and unrealized foreign currency transaction gains and losses are reflected in net income.

        Wavecom has not undertaken hedging transactions to cover its currency exposure at December 31, 2002.

Revenue recognition

        Revenue is recognized when all of the following circumstances are satisfied: persuasive evidence of an agreement exists, the price is fixed or determinable, collection is reasonably assured and delivery has occurred.

        Revenue from product sales is recognized at the time the units are shipped.

F-7

        Revenue from technical support and product development services and other service revenue is recognized when the service is performed, there is no material continuing performance obligation and collection is probable. Under certain technology development agreements, where significant technological risk factors exist, costs are expensed as incurred and revenues are recognized when all obligations under the agreement have been met.

Shipping and handling costs

        Shipping and handling costs incurred by the Company are reflected in cost of goods sold.

Research and development

        Wavecom charges all research and development costs to expense as incurred.

Advertising costs

        The Company expenses advertising costs as incurred. Advertising expenses totaled €1,715,000 for the year ended 2002. Amounts in 2000 and 2001 were not significant.

Net income (loss) per share

        Net income (loss) per share amounts are computed using the weighted average number of shares outstanding.

        In accordance with SFAS 128 Earnings per Share, basic and diluted earnings per share are presented. Basic earnings per share excludes the dilutive effects of options and warrants, and reflects only the actual ordinary shares outstanding. The effect of options and warrants outstanding in 2000 have been excluded from the 2000 calculation of diluted earnings per share as Wavecom reported a net loss in the year ended December 31, 2000, and their effect is anti-dilutive. In 2001 and 2002, diluted earnings per share includes the effects of dilutive options and warrants as if they had been exercised.

Concentration of risk

        Financial instruments that potentially subject Wavecom to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

        Wavecom has cash investment policies that limit investments to short-term low-risk instruments. Wavecom's cash is held principally in euros and United States dollars and concentrated primarily in three major banks in Paris and one major bank in Hong Kong.

        As of December 31, 2002, Wavecom sub-contracts the manufacturing and assembly of its products to three suppliers located in France, Romania and China. Wavecom believes that alternate sub-contractors can be identified if the current manufacturers were unable to meet Wavecom's requirements.

        Wavecom sells its products to customers in a variety of industries principally in Asia/Pacific, Europe, North America and Africa. Wavecom performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. To date, such losses have been within management's expectations. Wavecom generally requires no collateral, but does request advance payments or letters of credit in order to secure payment in certain circumstances.

        Accounts receivable (before allowance for doubtful accounts) at December 2000, 2001 and 2002 totaled €27,251,000, €46,547,000 and €86,164,000, respectively.

F-8

        A summary of the activity in the allowance for doubtful accounts is as follows (amounts in thousands):

Year ended December 31,	Beginning balance		Additions charged to expenses		Recovered receivables		Ending balance
2000	€	708	€	64	€	295	€	477
2001		477		164		313		328
2002		328		119		204		243

        For the years ended December 31, 2000, 2001 and 2002, certain customers represented revenues in excess of 10% of Wavecom's total consolidated revenues. The amounts of annual revenues, and corresponding year-end amounts receivable, from these customers were as follows (in thousands):

	2000				2001				2002
	Revenues		Receivable		Revenues		Receivable		Revenues		Receivable
Customer A	€	4,798	€	1,598	€	106,162	€	15,817	€	368,402	€	56,633
Customer B		9,716		6,277		114,130		12,780		42,047		594

        Sales to customers by geographic region are summarized as follows (in thousands):

	Years ended December 31,
	2000		2001		2002
China	€	6,901	€	126,860	€	396,030
Korea		9,716		114,180		47,835
Rest of Asia		4,703		28,662		8,294
Germany		9,235		16,135		13,919
Italy		7,832		8,791		11,345
France		2,113		6,028		9,401
United Kingdom		8,054		3,976		5,940
Rest of Europe		8,846		8,891		20,409
Americas		1,950		3,509		25,082
Rest of world		6,223		5,632		12,834
	€	65,573	€	322,664	€	551,089

        Geographic region is determined by the customer's invoice address and may not indicate the final destination of product usage.

        Substantially all of the Company's long-lived assets are located in France.

Cash and cash equivalents

        Wavecom considers all highly liquid investments with insignificant interest risk, and purchased with an original maturity of three months or less, to be cash equivalents. At December 31, 2000, 2001 and 2002, Wavecom had amounts of €66,459,000, €83,680,000 (of which €12,794,000 was denominated in U.S. dollars) and €92,826,000, respectively, invested in money market accounts with no fixed maturity, earning interest at short-term variable rates. At December 31, 2000, 2001 and 2002, the book value of these cash equivalents approximated their market value.

        At December 31, 2000, securities had been pledged for a total amount of €2,371,000 representing guaranties of a multi currency overdraft (€1,531,000) and an import documentary credit (€840,000).

F-9

Short-term investments

        As of December 31, 2000, 2001 and 2002, the Company held deposit certificates of €2,881,000, €2,994,000 and €15,112,000, respectively. As of December 31, 2000, the Company held commercial paper for an amount of €23,723,000 which matured in January 2001, earning interest at fixed rates ranging from 4.82% to 5.19%. These investments were classified as available-for-sale and were carried at cost which approximated market value at December 31, 2000, 2001 and 2002.

Inventory

        Inventories are valued at the lower of cost or market.

Value added tax recoverable

        Value added tax recoverable consists of value added tax paid by Wavecom to vendors and suppliers located in the European Union and recoverable from the tax authorities. Value added tax recoverable is collected on a monthly basis. As of December 2000, 2001 and 2002, the Company had value added tax credits, immediately recoverable, of €1,159,000, €20,600,000 and €2,350,000, respectively.

Property and equipment

        Property and equipment is stated at cost. The leases are capitalized in accordance with Financial Accounting Standards Board Statement No 13 Accounting for leases (SFAS 13). Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:

Laboratory equipment	3-5 years
Computer equipment and purchased software	1-3 years
Furniture and office equipment	5 years
Leasehold improvements	10 years, or lease term if less

        Amortization of capitalized leased equipment is included in depreciation expense.

        Wavecom reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the undiscounted net cash flow over the remaining life of the long-lived assets in measuring whether the carrying value is recoverable. An impairment loss would be measured by reducing the carrying value to fair value, based on a discounted cash flow analysis.

Goodwill

        Goodwill represents the excess purchase price of net tangible and intangible assets acquired in business combinations over their estimated fair value. In accordance with Financial Accounting Standards Board statement No 142, Goodwill and Other Intangible Assets (SFAS 142), the Company ceased amortizing goodwill on a straight-line basis as of January 1, 2002. Goodwill will be tested for impairment on an annual basis and whenever indicators of impairment arise. During 2002, the Company performed the first of the required impairment tests of goodwill, which resulted in a finding that no impairment to goodwill existed.

Long-term investments

        In October 2000, the Company purchased convertible preferred shares representing less than 1% of the capital of Cambridge Silicon Radio (C.S.R.), a British company, for €1,197,000. The cost method has been used to account for this investment because the Company does not have the ability to exercise significant influence over the investee's operating and financial policies. During 2001 the Company

F-10

recorded a provision for €716,000 to reflect the estimated decline in value of the investment. The estimated loss was determined based on a valuation used in recent financing rounds for C.S.R. No additional impairment charges were considered necessary during the year ended December 31, 2002.

        Bank guarantees of €2,868,000 and €13,110,000 were issued in December 2000 and in July 2002 in favor of the owners of newly-leased office space, in order to secure annual lease payments. At December 31, 2000 and 2001, investments in commercial paper were pledged as security for €2,881,000 and €2,994,000 respectively, for the duration of a 7-year lease. At December 31, 2002, investments in commercial paper of €13,671,000 have been pledged as security for the duration of a 9-year lease. These investments have been classified as long-term assets in the balance sheet.

Accrued royalties

        Wavecom's products are designed to conform to certain wireless industry standards. Certain essential technologies are patented and Wavecom uses these essential technologies under licensing agreements for which Wavecom pays royalties. Wavecom has concluded licensing agreements with four patent holders for technologies deemed to be essential for Wavecom's products and is in the process of negotiating with other patent holders. Wavecom's management considers that it is probable that these other patent holders may claim that the technology covered by their patents is essential to Wavecom's products.

        The estimated cost of royalties, which may be due to other patent holders in connection with their technologies as well as yet unasserted claims, have been accrued in the financial statements, based on a percentage of consolidated product revenues. The ultimate royalty paid by the company may differ from the amounts accrued.

Warranty accrual

        The company offers a warranty for all its products. The specific terms and conditions of those warranties vary depending upon the product sold and the customer. Wavecom accrues for the costs of providing warranty service at the time the product is shipped and the sale recorded. The provision is calculated based on a statistical rate which is continually revised for specific warranty issues and actual experience. An additional accrual is recorded to cover known repair risks not included in the statistical provision.

        Factors that affect Wavecom's warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. Wavecom periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Deferred revenue and advances received from customers

        Deferred revenue includes amounts invoiced to customers in accordance with the terms of technology development contracts, but deferred by the Company as the corresponding work has not yet been completed. Advances include cash received in advance of product shipments.

Fair value of financial instruments

        At December 31, 2000, 2001 and 2002, the carrying values of current financial instruments such as cash equivalents, accounts receivable, accounts payable, other receivables and accrued liabilities approximated their market values, based on the short-term maturities of these instruments. There was no long-term debt at December 31, 2000, 2001 or 2002. Other long-term liabilities at December 31, 2002 are not material.

F-11

Income taxes

        In accordance with Statement of Financial Accounting Standards No. 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Employee stock options and warrants

        Wavecom accounts for stock options and warrants granted to employees in accordance with the provisions of Accounting Principles Board Statement No. 25, Accounting for Stock Issued to Employees. Under APB 25, no compensation expense is recognized for stock options and warrants issued to employees with an exercise price equal to the fair value of the underlying shares. Options and warrants issued with an exercise price less than the fair value result in deferred compensation which is amortized to expense over the vesting period.

        Statement of Financial Accounting Standards No. 123, Accounting for Stock Based Compensation, provides an alternative to APB 25 in accounting for stock-based compensation issued to employees. SFAS 123 provides for a fair-value-based method of accounting for employee stock options and similar equity instruments. Companies that elect to continue to account for stock-based compensation arrangements under APB 25 are required by SFAS 123 to disclose the pro forma effect on net income and net income per share as if the fair-value-based method proposed by SFAS 123 had been adopted. The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

        The fair value for these options and founders' warrants was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2000, 2001 and 2002: risk-free interest rates of 5.10% for 2000, 4.94% for 2001 and 4.00% for 2002, no expected dividends, volatility factors of 0.92 for 2000, 1.17 for 2001 and 0.74 for 2002, and a weighted average expected life of the options and founders' warrants of 5 years.

		Years ended December 31
		2000			2001			2002
		(In millions, except per share data)
Net income (loss), as reported		€	(14,504	)	€	9,308		€	42,087
Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects			1,754			2,378			2,200
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(8,787	)		(27,600	)		(32,183	)
Pro forma net income (loss)		€	(21,537	)	€	(15,914	)	€	12,104
Earnings per share:
	Basic—as reported	€	(1.03	)	€	0.63		€	2.82
	Basic—pro forma	€	(1.53	)	€	(1.08	)	€	0.81
	Diluted—as reported	€	(1.03	)	€	0.61		€	2.74
	Diluted—pro forma	€	(1.53	)	€	(1.08	)	€	0.79

F-12

Comprehensive income

        Wavecom reports comprehensive income and its components in accordance with Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. SFAS 130 requires foreign currency translation adjustments, to be included in other comprehensive income.

Segment reporting

        In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, Disclosures About Segments of an Enterprise and Related Information, which established standards for the way public companies report information about operating segments in annual financial statements and required that those companies report selected information about operating segments in interim financial reports issued to shareholders. It also established standards for related disclosures about products and services, geographic areas and major customers. Management has determined that Wavecom operates as a single segment, as management internally evaluates the performance of the enterprise as a whole and not on the basis of separate business units.

Recent accounting pronouncements

        In June 2001, the Financial Accounting Standards Board issued SFAS 143, Accounting for Asset Retirement Obligations. SFAS 143 requires the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. An entity shall measure changes in the liability for an asset retirement obligation due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. That amount shall be recognized as an increase in the carrying amount of the liability and as an expense classified as an operating item in the statement of income. SFAS 143 will become effective for Wavecom beginning on January 1, 2003. Wavecom does not anticipate that adoption of SFAS 143 will have a material impact on its results of operations or its financial position.

        In June 2002, the Financial Accounting Standards Board issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities.This statement addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, and nullifies EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to exit an Activity (including Certain Costs Incurred in a Restructuring)". Under SFAS 146 the cost associated with an exit or disposal activity is recognized in the periods in which it is incurred rather than at the date the company committed to the exit plan. This statement becomes effective for exit or disposal activities initiated after December 31, 2002 with earlier application encouraged. Wavecom does not anticipate that adoption of SFAS 146 will have a material impact on its results of operations or its financial position.

        On November 25, 2002, the Financial Accounting Standards Board announced the issuance of Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, which expands on the accounting guidance of Statements No. 5, 57, and 107 and incorporates without change the provisions of FASB Interpretation No. 34, which has been superseded by this Interpretation. Given observed differences in practice, this Interpretation clarifies the requirements for a guarantor's accounting and interim and annual financial statement disclosures of certain guarantees issued and outstanding. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. This Interpretation does not prescribe a specific approach for subsequently measuring the guarantor's recognized liability over the term of the related guarantee. The incremental disclosure requirements in this Interpretation are effective, and have been adopted by Wavecom, for the financial statements ending December 31, 2002. The initial recognition and measurement provisions of this Interpretation are applicable to guarantees issued or modified after

F-13

December 31, 2002. Wavecom does not anticipate that adoption of Interpretation No. 45 will have a material impact on its results of operations or its financial position.

        In November 2002, the Emerging Issues Task Force reached consensus on EITF Issue 00-21 Accounting for Revenue Arrangements with Multiple Deliverables. This Issue addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. In some arrangements, the different revenue-generating activities (deliverables) are sufficiently separable, and there exists sufficient evidence of their fair values to separately account for some or all of the deliverables (that is, there are separate units of accounting). In other arrangements, some or all of the deliverables are not independently functional, or there is not sufficient evidence of their fair values to account for them separately. This Issue addresses when and, if so, how an arrangement involving multiple deliverables should be divided into separate units of accounting. This Issue does not change otherwise applicable revenue recognition criteria. However, this Issue does provide guidance with respect to the effect of certain customer rights due to vendor nonperformance on the recognition of revenue allocated to delivered units of accounting. This Issue also addresses the impact on the measurement and/or allocation of arrangement consideration of customer cancellation provisions and consideration that varies as a result of future actions of the customer or the vendor. Finally, this Issue provides guidance with respect to the recognition of the cost of certain deliverables that are excluded from the revenue accounting for an arrangement. The provisions of this Issue become effective for fiscal periods beginning after June 15, 2003. Wavecom is currently reviewing this Issue to measure the potential impact on its results of operations and financial position.

2.     Acquisitions

Iconn Wireless

        In December 2001, the subsidiary Wavecom Inc acquired Iconn Wireless, a company based in San Diego, California, enabling Wavecom to acquire technology and know-how for Code Division Multiple Access (CDMA) technology. Wavecom purchased Iconn Wireless for €5,270,000 including €625,000 in tangible and intangible assets. The difference between the purchase price and the amount of identifiable assets (€4,645,000) was allocated to goodwill but is not amortized, in accordance with SFAS No 142. In connection with the acquisition, €1,339,000 in cash was placed in escrow by Wavecom. The cash was paid to the employees as certain technology milestones were achieved in 2002, and the company recognized the related charges as research and development expenses.

Arguin Communications Inc

        In October 2000, Wavecom purchased a majority interest of 51% of the voting rights in Arguin Communications Inc, headquartered in San Diego, California, increased to 61,88% in January 2001, which enabled Wavecom to have strategic control over the future technology to be developed by Arguin Communications Inc.

        The Company purchased Arguin Communications Inc for €3,454,000 in cash including €691,000 for the purchase of existing shares (€229,000 paid in October 2000 and €462,000 paid in January 2001) and €2,763,000 to subscribe to a share capital increase. The total amount of this share capital increase, including minority interests, was €3,109,000. The net assets purchased included €270,000 in cash. The purchase price exceeded the fair value of the net tangible assets by €1,323,000, which was allocated to goodwill and previously was being amortized over 5 years. In accordance with the provisions of SFAS 142, amortization of goodwill ceased as of December 31, 2001. Deferred compensation of €1,862,000 and €190,000 was recognized in 2001 and 2002, respectively, in connection with the issuance of shares of Arguin Communications to the majority shareholders. Amortization related to these shares amounted to €667,000 and €613,000 in the year ended December 31, 2001 and 2002, respectively.

F-14

        Results of operations of Arguin Communications Inc. and Iconn Wireless are included in Wavecom's operating results from their respective dates of acquisition. Pro Forma results of operations reflecting these acquisitions have not been presented because the results of operations of the acquired companies, either individually or collectively, are not material to Wavecom's results of operations.

3.     Inventory

        Components of inventory are:

	December 31,
	2000		2001		2002
	(in thousands)
Purchased components and raw materials	€	8,902	€	70	€	17,890
Finished goods		2,806		15,785		19,708
		11,708		15,855		37,598
Provision for obsolete inventory		378		1,997		7,393
	€	11,330	€	13,858	€	30,205

        Beginning in the second half year of 2001, all components used in the production process were purchased, by Wavecom's contract manufacturers who bore the risk of ownership.

        In June 2002, Wavecom amended the contract with two of its contract manufacturer to reflect its increased role in negotiating terms and conditions directly with component suppliers, as well as the overall evolution of Wavecom industrial and purchasing organization. As a result of the changes in the contract terms, Wavecom believes that it bears the risk of ownership of the components to be used for the products, although these components continue to be legally owned by the contract manufacturer. Therefore, at December 31, 2002, inventory includes these components, with a corresponding liability due to the contract manufacturer.

        At December 31, 2002, the inventory of finished goods also includes €4,440,000 held by contract manufacturers for which Wavecom bears the risk of ownership. The company had no such inventory in the previous years.

4.     Property and equipment

        Property and equipment includes:

	December 31,
	2000		2001		2002
	(in thousands)
Laboratory and testing equipment	€	10,787	€	15,203	€	29,309
Computer equipment and software		5,178		7,835		17,604
Furniture and office equipment		1,118		2,288		2,801
Leasehold improvements		716		2,445		4,998
Other		650		1,288		1,363
		18,449		29,059		56,075
Accumulated depreciation and amortization		8,382		13,393		26,451
	€	10,067	€	15,666	€	29,624

        Depreciation expense in the years ended December 2000, 2001 and 2002 totaled €3,136,000, €5,068,000 and €13,365,000, respectively.

F-15

        Equipment purchased under capital leases in the years ended December 31, 2000, 2001 and 2002 totaled €149,000, €291,000 and €321,000 respectively. The cost of such equipment included in property and equipment at December 31, 2000, 2001 and 2002 totaled €4,489,000, €4,755,000 and €4,937,000 respectively. Accumulated amortization of this equipment totaled €3,601,000, €4,343,000 and €4,433,000 at December 31, 2000, 2001 and 2002, respectively.

5.     Prepaid expenses and other current assets

        Prepaid expenses and other current assets include:

	December 31,
	2000		2001		2002
	(in thousands)
Research tax credit: current portion		—	€	813		—
Suppliers' credit note accruals	€	1,193		5,717		—
Prepaid expenses		1,205		4,245	€	8,023
Iconn Wireless amounts held in escrow		—		1,339		—
Other current assets		449		606		1,312
Total prepaid expenses and other current assets	€	2,847	€	12,720	€	9,335

        Credit notes from suppliers are accrued at the end of each period, based on amounts which have been negotiated and accepted by Wavecom's contract manufacturers. These amounts are recorded as reductions of cost of goods sold. Settlements of the credit notes were received during the following year.

        Prepaid expenses includes primarily prepaid rent and other operating expenses. At December 31, 2002, it also included €2,009,000 in prepaid advertising expenses.

6.     Goodwill and intangible assets

        Goodwill was approximately €1,279,000, €5,716,000 and €4,807,000 as of December 31, 2000, 2001 and 2002 respectively, net of accumulated amortization of approximately €47,000, €326,000 and €274,000 at December 31, 2000, 2001 and 2002, respectively. All goodwill is denominated in U.S. dollars and translated into euros at the exchange rate at each balance sheet date.

        During 2002 the Company performed the first of the required annual impairment tests of goodwill, which resulted in a finding that no impairment to goodwill existed. This test consisted of a comparison of the fair value of the reporting unit with its carrying amount, including the goodwill. The fair value of the reporting unit was determined based on the income approach, which estimates the fair value based on the future discounted cash flows. Based on the analysis, the Company determined that the fair value was in excess of the carrying amount of the reporting unit.

        The changes in the carrying amount of goodwill from December 31, 2000 through December 31, 2002, are as follows (in thousands):

	December 31,
	2000			2001			2002
Balance as of the beginning of the year				€	1,279		€	5,716
Add: Goodwill acquired during the year	€	1,323			4,645			—
Less: Amortization of goodwill		(47	)		(279	)		—
Impact of foreign currency fluctuations on goodwill		3			71			(909	)
Balance as of the end of the year	€	1,279		€	5,716		€	4,807

F-16

        The following table sets forth net income per share and ADS adjusted to exclude goodwill amortization recognized prior to the adoption of FAS 142 on January 1, 2002 (in thousands, except for per share and ADS amounts):

	Year Ended December 31,
	2000			2001		2002
Reported net income (loss)	€	(14,504	)	€	9,308	€	42,087
Add back: goodwill amortization		47			278		—
Adjusted net income	€	(14,457	)	€	9,586	€	42,087
Net income (loss) per share—basic:
Reported	€	(1.03	)	€	0.63	€	2.82
Add back: goodwill amortization		—			0.02		—
Adjusted	€	(1.03	)	€	0.65	€	2.82
Net income (loss) per share—diluted:
Reported	€	(1.03	)	€	0.61	€	2.74
Add back: goodwill amortization		—			0.02		—
Adjusted	€	(1.03	)	€	0.63	€	2.74

        Other intangible assets are not material to the financial statements.

7.     Debts

        The following table presents a summary of Wavecom's debt:

	December 31,
	2000		2001		2002
	(in thousands)
Short-term debt:
Overdraft facility	€	529		—		—
Interest-free loan from government agency		634	€	488		—
Current portion of capital lease obligation		794		201		€214
Total short-term debt and current portion of long-term debt	€	1,957	€	689	€	214
Long-term debt:
Long-term portion of capital lease obligation	€	166	€	228	€	287
Total long-term debt, less current portion	€	166	€	228	€	287

Overdraft facilities

        At December 31, 2002, Wavecom had multi-currency overdraft facilities with one French bank for borrowings of up to €1,000,000. The overdraft facilities bore interest at market rate plus margins of 1.5% from January to September 2002 and 0.85% for the fourth quarter of 2002. The average effective rate for the year ended December 31,2002 relating to this credit line was 4.45%. The average effective rate at December 31, 2002 was 4.29%. Wavecom had not used these overdraft facilities at December 31, 2002.

        At December 31, 2001, Wavecom had multi-currency overdraft facilities with a French bank for borrowings of up to €2,287,000. The overdraft facilities bore interest at market rate plus a margin of

F-17

1.5%. The average effective rate at December 31, 2001 was 3.02%. Wavecom had not used these overdraft facilities at December 31, 2001. A multi-currency overdraft facilities of €2,286,000 bearing interest at market rate plus a margin of 0.5% and the attached pledge of securities relating to this facility where terminated before December 31, 2001.

        At December 31, 2000 Wavecom had multi-currency overdraft facilities with two French banks allowing for borrowings of up to €4,573,000. The overdraft facilities bore interest at market rate plus margins ranging from 0.5% to 1.5% which corresponded to an effective rate of 7.8% at December 31, 2000 and an average effective rate of 6.88% for the year then ended. One of the facilities (€2,286,000) was secured for 67% of its total amount by pledged securities. At December 31, 2000, €529,000 was drawn on this facility.

Other debts

        Wavecom received an interest-free loan from Coface (€294,000 at December 31, 1999, increased by €340,000 in 2000), an export credit agency of the French government. Timing of repayment of the loan is based upon the actual sales generated by Wavecom's United States subsidiary. Wavecom repaid €146,000 of the loan in the year ended December 31, 2001 and the remaining €488,000 during the year ended December 31, 2002.

        The only significant debt covenants relate to short-term financing arrangements and require repayment in the event of default or liquidation of Wavecom.

Leasing

        Future minimum lease payments under capitalized lease obligations for the years ending December 31 are as follows (in thousands):

2003	€	201
2004		152
2005		98
2006		24
Total minimum lease payments		475
Less amount representing interest		(26	)
Present value of net minimum lease payments		501
Less current portion		214
Long-term portion	€	287

Interest

        Interest paid in the years ended December 31, 2000, 2001 and 2002 totaled approximately €240,000, €447,000 and €515,000, respectively.

F-18

8.     Other accrued expenses

        Other accrued expenses consist principally of accruals for royalties, warranty costs and various other tax and general expense.

	December 31,
	2000		2001		2002
	(in thousands)
Accrued royalties	€	5,078	€	9,375	€	29,214
Warranty accrual		114		2,392		3,810
Other accrued expenses		1,009		3,758		3,343
Total	€	6,201	€	15,525	€	36,367

        Changes of accrued royalties, warranty accrual and other accrued expenses during the period are as follows (in thousands):

	Balance at December 31, 2001		Accruals issued during the period		Settlements made during the period		Changes in liability for pre-existing accruals during the period, including expirations		Balance at December 31, 2002
Accrued royalties	€	9,375	€	20,636	€	797			€	29,214
Warranty accrual		2,392		13,017		11,599				3,810
Other accrued expenses		3,758		3,255		2,562	€	1,108		3,343
Total	€	15,525	€	36.908	€	14,958	€	1,108	€	36,367

9.     Shareholders' equity

        At December 31, 2002, 15,107,890 shares were issued and outstanding with a nominal value of €1 per share.

General

        In June 2000, Wavecom issued 1,050,000 shares in an secondary public offering simultaneously on the Nasdaq National Market and French Nouveau Marché stock markets. The shares were issued at €98.50 per share for a net cash contribution of €96,547,000.

Preemptive subscription rights

        Shareholders have preemptive rights to subscribe on a pro rata basis for additional shares issued by Wavecom for cash. Shareholders may waive such preemptive subscription rights at an extraordinary general meeting under certain circumstances. Preemptive subscription rights, if not previously waived, are transferable during the subscription period relating to a particular offering of shares.

Dividend rights

        Dividends may be distributed from the statutory retained earnings and additional paid in capital, subject to the requirements of French law and Wavecom's by-laws. There were no distributable retained earnings at December 31, 2002. Dividend distributions by Wavecom, if any, will be made in euro.

Stock option and warrant plans

        The shareholders of Wavecom authorize the board of directors to grant founders' warrants to employees of the French parent company, stock options to employees of subsidiaries and warrants to members of the board of directors. Under the terms of the plans, the options and warrants give the

F-19

right to purchase one share per option or warrant at an exercise price to be based on the stock market price of Wavecom shares on the grant date.

        Options and founders' warrants granted in 2000, 2001 and 2002 vest 25% per year over 4 years. The rights to exercise the warrants granted to Board members vest 33¹/3% per year over 3 years.

        Options expire 10 years after the grant date. Founders' warrants, which were issued to employees of the French parent company, expire after five years, as required by law. Any founders' warrants remaining unexercised at the expiration date automatically convert to stock options with a five-year term remaining. Founders' warrants were issued to French employees due to the existence of certain tax advantages (for both the employee and Wavecom) available in connection with the issuance of founders' warrants which are not available for stock option holders in France. Other than the expiration dates, the terms of the founders' warrants are identical to the stock options. Warrants granted to Board members expire after five years.

F-20

        A summary of the founders' warrants and warrants to Board members is as follows:

	Founders' warrants to employees of the French parent company										Warrants to members of the board of directors
Shareholders' meeting date	09/21/98	02/25/99	03/15/00		06/27/00		12/20/00	06/29/01	12/19/01	06/17/02	03/15/00	06/27/00	06/29/01	06/17/02
Total of warrants authorized	495 000	530 800	300 000		100 000		400 000	600 000	250 000	590 000	15 000	15 000	30 000	20 000
Board of directors date	N/A	N/A	03/30/00	06/27/00	06/27/00	07/24/00	12/20/00	06/29/01	12/19/01	07/09/02	N/A	N/A	N/A	N/A
Total of warrants granted	495 000	530 800	157 200	101 300	50 860	41 000	400 000	467 151	233 500	395 360	15 000	15 000	30 000	20 000
Exercise price	€2.29	€4.57	€139.52	€103.23	€103.23	€136.62	€69.86	€34.66	€41.09	€39.18	€150.72	€103.23	€34.66	€42.46
Total of warrants exercised	339 474	214 087	—	—	—	—	—	—	—	—	—	—	—	—
Total of warrants cancelled at December 31, 2002	29 159	39 184	27 400	2 500	8 220	13 500	61 140	17 096	24 000	—	—	—	—	—
Total of warrants cancelled during the year ended	—	1 860	6 300	—	1 890	—	3 500	13 001	24 000	—	—	—	—	—
Total of warrants granted and not exercised at December 31, 2002	126 367	277 529	129 800	98 800	42 640	27 500	338 860	450 055	209 500	395 360	15 000	15 000	30 000	20 000
Total of warrants exercisable at December 31, 2002	126 367	237 179	89 065	61 706	26 518	16 575	168 384	167 644	52 375	—	15 000	10 000	10 000	—
Expiration date(1)	09/20/03	02/24/04	03/14/05		06/26/05		12/19/05	06/28/06	12/18/06	06/16/07	03/14/05	06/26/05	06/28/06	06/16/07

(1)

Founders' warrants not exercised at the expiration date will be converted into stock options

F-21

        A summary of the stock options is as follows:

	STOCK OPTIONS
Shareholders' meeting date	09/21/98			02/25/99				03/15/00						06/27/00				12/20/00				06/29/01			12/19/01			06/17/02
Total of stock options authorized	650 000			600 000				300 000						100 000				800 000				1 200 000			450 000			840 000
Board of directors date	09/21/98			02/09/99			04/27/99	03/30/00			06/27/00			06/27/00		07/24/00		12/20/00			03/14/01	06/29/01			12/19/01			07/09/02
Total of stock options granted	495 000	(1)	50 000	530 800	(1)	37 500	1 500	157 200	(1)	5 700	101 300	(1)	24 710	50 860	(1)	41 000	(1)	400 000	(1)	90 590	61 000	467 151	(1)	97 395	233 500	(1)	193 500	395 360	(1)	174 095
Exercise price	€2.29		€2.29	€4.57		€4.57	€4.57	€139.52		€139.52	€103.23		€103.23	€103.23		€136.62		€69.86		€69.86	€26.68	€34.66		€34.66	€41.09		€41.09	€39.18		€39.18
Total of stock options exercised			50 000			26 176	—			—			—							—	4 684			—			—
Total of stock options cancelled at December 31, 2002(2)	368 633		—	253 271		1 500	—	27 400		1 200	2 500		360	8 220		13 500		61 140		4 940	10 000	17 096		3 820	24 000		17 000			13 625
Total of stock options granted and not exercised at December 31, 2002	126 367		—	277 529		9 824	1 500	129 800		4 500	98 800		24 350	42 640		27 500		338 860		85 650	46 316	450 055		93 575	209 500		176 500	395 360		160 470
Total of stock options exercisable at December 31, 2002	—		—	—		6 824				3 087			15 211			—				42 825	18 636	—		35 043	—		44 125	—		—
Expiration date(1)	09/20/08			02/24/09				03/14/10						06/26/10				12/19/10				06/28/11			12/18/11			06/16/12

(1)

Options which will become exercisable after 5 years to the extent which the related founders' warrants expire unexercisable

(2)

Stock options cancelled, to be granted by futur board of directors

F-22

EXHIBIT INDEX

Number	Name
1	Statuts (by-laws) of the Registrant, updated as of February 7, 2003 (English Translation).*
2.1	Form of Deposit Agreement among the Registrant, The Bank of New York, as Depositary, and the Holders of American Depositary Shares issued thereunder (filed as Exhibit 4.1 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).
2.2	Form of American Depositary Receipt (filed as Exhibit 4.2 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).
4.1	GSM Essential Properties Cross License Agreement, dated January 6, 1999, between the Registrant and Motorola, Inc. (filed as Exhibit 10.3 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).**
4.2	Agreement relating to the sale of GSM modules, dated July 7, 1999 between Amtal International Limited and Wavecom Asia Pacific Limited (filed as Exhibit 10.3 to the Registrant's Registration Statement on Form F-1, File No. 333-10372).**
4.3	Agreement relating to the development and manufacture of a GSM hand held portable, dated February 11, 2000 between NEC Corporation and Wavecom S.A (filed as Exhibit 10.2 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**
4.4	Contract for Manufacturing and Related Services, dated June 17, 1999 between Wavecom S.A. and Solectron-France S.A. (filed as Exhibit 10.3 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**
4.5	Agreement between Funkanlagen and Wavecom S.A. dated February 25, 2000 (filed as Exhibit 10.4 to the Registrant's Annual Report on Form 20-F, filed with the Commission on May 24, 2000).**
4.6	GSM/DCS 1800/1900 Patent License Agreement between Wavecom S.A. and Koninklijke Philips Electronics N.V., dated October 9, 2001 (filed as Exhibit 4.6 to the Registrant's Annual Report on Form 20-F, filed with the Commission on June 28, 2002).**
4.7	Agreement relating to a cross-license of essential GSM patents between Wavecom S.A. and Siemens Aktiengesellschaft, effective as of October 31 2001 (filed as Exhibit 4.7 to the Registrant's Annual Report on Form 20-F, filed with the Commission on June 28, 2002).**
4.8	GSM patent non assertion agreement with NEC Corporation as of November 19, 2002.*&
4.9	Patent License Agreement with Thomson Licensing S.A. and Alcatel S.A., effective January 1, 2003.*&
8	List of subsidiaries of the Registrant
10	Consent of Ernst & Young Audit.
99.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350*
99.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350*

*

Filed herewith.

**

The registrant has received confidential treatment of portions of this agreement.

&

The registrant has requested confidential treatment of portions of this agreement.

EX-1

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EXHIBIT 1

WAVECOM SA

Capital: euros 15,107,890
Registered offices: 12, boulevard Garibaldi
92442 Issy-Les-Moulineaux Cedex
RCS Nanterre 391.838.042

ARTICLES OF ASSOCIATION ("STATUTS") AS OF FEBRUARY 7, 2003

ENGLISH VERSION

(Unofficial translation/Information purposes only)

ARTICLE 1—LEGAL FORM

        The owners of the shares created hereby and the shares which may be created afterwards constitute a corporation (Société anonyme) which is governed by the provisions of the French Commercial Code and by these articles of association.

ARTICLE 2—CORPORATE NAME

        The name of the company is: WAVECOM

        In all deeds and documents emanating from the company and addressed to third parties, this name must always be preceded or immediately followed by the words "société anonyme" or the initials "SA" and by the mention of the amount of the capital.

ARTICLE 3—CORPORATE PURPOSES

        The objects of the company are, in France and abroad:

—

fundamental and applied research, the development of systems and products in the areas of radio-transmission, radio-communication, telecommunications, electronics and data processing markets.

        Within these sectors:

—

the design, manufacturing and commercialization of components, products and software,

—

any provision of services,

—

the registration and exploitation of patterns, patents, trademarks, and manufacturing processes,

—

the establishment, organization, and delivery of lectures, seminars, debates, conferences and more generally of any activity relating to training schemes,

—

the publishing of books, newspapers, information bulletins, articles and the distribution of any audio-visual aids,

—

the direct or indirect holding of shares within any existing companies or companies to be set up, the business purposes of which is linked, related or similar to that of the company,

—

and more generally, any industrial, commercial, financial, civil, personal property or real estate operations directly or indirectly linked to the business purposes hereabove stated or related or similar to business purposes or likely to facilitate the performance or development thereof.

2

ARTICLE 4—REGISTERED OFFICE

        The registered office of the company is at:

Immeuble Le Verdi
12, boulevard Garibaldi
92442—Issy-Les-Moulineaux Cedex
France

        It may be transferred to any other place within the same district (département) or any adjacent district by decision of the board of directors subject to the ratification of this decision by the next ordinary general meeting of the shareholders. It may also be transferred to any other place pursuant to a resolution of the extraordinary general meeting.

        If the transfer is decided by the board, the latter is authorized to proceed with the requested formalities of publication and registration provided it mentions that the transfer is subject to the abovementioned ratification.

ARTICLE 5—DURATION

        The duration of the company shall be of ninety nine (99) years from the date of registration with the Registry of Commerce and Companies, except in the event of early dissolution or extension decided by the extraordinary general meeting.

ARTICLE 6—CAPITAL

        The capital of the company amounts to 15,107,890 Euros.

        It is divided into 15,107,890 shares of 1 Euro each, all subscribed and entirely paid up.

        Mr. Bernard Gilly is receiving special benefits as a result of the grant by each of the shareholders' meetings of March 15^th, 2000 and June 29^th, 2001 of 15,000 warrants, each warrant entitling its holder to subscribe to one share; said benefit consists of the grant of free warrants and the use of a fixed strike price per share, which is the average market value of a share for the last twenty business days prior to March 14^th, 2000 and June 28^th, 2001.

        Mr. Stephen Imbler is receiving special benefits as a result of the grant by each of the shareholders' meetings of June 27^th, 2000 and June 29^th, 2001 of 15,000 warrants, each warrant entitling its holder to subscribe to one share; said benefit consists of the grant of free warrants and the use of a fixed strike price per share which is the average market value of a share for the last twenty business days prior to June 26^th, 2000 and June 28^th, 2001.

        Mr. Bernard Gilly is receiving special benefits as a result of the grant by each of the shareholders' meetings of June 17, 2002 of 10,000 warrants, each warrant entitling its holder to subscribe to one share; said benefit consists of the grant of free warrants and the use of a fixed strike price per share, which is the average market value of a share for the last twenty business days prior to June 16, 2002.

        Mr. Stephen Imbler is receiving special benefits as a result of the grant by each of the shareholders' meetings of June 17, 2002 of 10,000 warrants, each warrant entitling its holder to subscribe to one share; said benefit consists of the grant of free warrants and the use of a fixed strike price per share, which is the average market value of a share for the last twenty business days prior to June 16, 2002.

3

ARTICLE 7—FORM AND TRANSFER OF SHARES—IDENTIFICATION OF SHAREHOLDERS

7.1   

        The shares which are entirely paid up may be either nominative or bearer shares at the shareholder's discretion, however subject to the legal texts in force concerning the form of the shares held by certain individuals or legal bodies.

        They are registered into account in accordance with the conditions and modalities provided for by applicable law and regulations.

        Nevertheless, certificates or documents certifying shares may be created in the conditions provided for by the law.

        The shares registered into account are freely transferable from account to account.

        For the transfer of shares, the transferee needs to be accepted only if the shares are not entirely paid up yet.

        The costs for the transfer shall be borne by the transferees.

        The shares which are not freed from payable payments cannot be transferred.

7.2   

        Any person—individual or legal, acting alone or jointly—who acquires—directly or indirectly, through one or several legal bodies, in or over which it has control, as defined by article L.233-3 of the French Commercial Code—a percentage equal to 5% of the stock capital or the voting rights, or any multiple of this percentage, must inform the company of the total number of shares or voting rights it possesses by way of a registered mail (with acknowledgement of receipt) sent to the registered office within fifteen days starting from the reaching of one of these thresholds.

        This duty of information shall apply whenever the percentage of stock capital or voting rights falls below one of the above mentioned thresholds.

        Whenever these rules are not abided by and upon request of one or several shareholder(s) possessing more than 5% of the stock capital or voting rights, the shares or certificates of voting rights in excess of the percentage which should have been declared, are deprived from the voting right for all shareholders meetings to be held until the expiration of a two-year period following the date of regularization of the notice.

7.3   

        If a shareholder is not a resident of France, (pursuant to article 102 of the French Civil Code), an agent can be registered on his behalf, either under one collective account or several individual accounts for each shareholder.

        Upon opening an account, the registered agent has to declare either to the company or the agreed financial agent, its quality of agent acting for third parties, as referred to in the provisions fixed by decree.

7.4   

        As regards the bearer shares, the company may, pursuant to the laws and regulations in force, ask any authorized body, or any body in charge of the compensation of shares—at any time and against payment of fees—the name (or if it is a legal body, the company's name), nationality, date of birth (or date of incorporation) and address of shareholders conferring immediately or after, the right to vote in

4

its shareholders meetings, as well as the number of shares held by each of them, and, if any, the restrictions applicable to these shares.

        All information will be collected by the body above mentioned from its affiliated account holders, and be reported to it within a delay fixed by decree. This information will then be transmitted to the company within a five-day period from its reception.

        After the procedure provided for in the preceding paragraphs has been implemented, and considering the information supplied to it by the body above mentioned, the company, either directly or through such body, will be entitled to ask to the persons mentioned in such list and which the company considers to be registered on behalf of third parties, all information concerning the holders of shares, as referred as to the first paragraph of this article.

7.5   

        As regards the nominative shares giving immediate or deferred access to the capital, the agent registered in accordance with article 7.3 hereof, must, within a delay fixed by Conseil d'Etat decree, reveal the shareholders' identity, upon first demand from the company or its agent.

7.6   

        In any case, any legal body holding more than 2.5% of the company's voting rights has to reveal to the company, upon first demand, the identity of any individual or legal person holding directly or indirectly the third part of its stock capital or of its voting rights.

ARTICLE 8—RIGHTS AND OBLIGATIONS ATTACHED TO THE SHARES

        The rights and obligations remain attached to the share and are transferred to whoever may own the share.

        The property of a share is necessarily associated with the adhesion of the shareholder to the company's articles of association, and to the decisions of the shareholders meetings.

        In addition to the voting right provided for by law, each share grants a right to a share in the profits, the company's assets and the liquidation premium in proportion to the number of shares and the face value of the existing shares.

        Each time it shall be necessary to hold several shares or securities in order to exercise a right, the shareholders will make their own business of grouping the necessary number of shares or securities.

        In accordance with the conditions provided for by article L.228-19 of the French Commercial Code, the company may request to purchase back either the totality of its own preferred shares without voting rights or certain categories of them, each category being determined by the date of issuance.

ARTICLE 9—PAYING UP OF THE SHARES

        The payment in cash of shares subscribed because of an increase in capital shall be made as decided by the extraordinary general meeting.

        The initial payment shall not amount to less than (i) at the time of the subscription, half the face value of the shares and (ii) at the time of an increase in capital, a quarter of the face value of the shares. It includes—if any—the totality of the share issuance premium.

        The remainder shall be paid up at the request of the board of directors in one or several time(s) within a five-year period from the date when the increase in capital has been completed.

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        The called portions and the date at which the matching sums shall be paid are notified to each shareholder at least fifteen days before the date when these sums are due.

        Any delay in the payment of the sums due shall automatically give rise to an interest at the legal rate in commercial matters increased by three points, calculated day per day on a basis of three hundred and sixty days (360), commencing on due date, without prejudice to the personal proceedings that the company may take against the defaulting shareholder and to the forced measures of enforcement provided by law.

ARTICLE 10—BOARD OF DIRECTORS

        The company is managed by a board of directors made up of individuals or legal persons whose number is determined by the ordinary shareholders meeting within the limits provided for by the law.

        A legal entity must, at the time of its appointment, designate an individual who will be its permanent representative at the board of directors. The duration of the office of this permanent representative is the same as that of the director legal body he represents. In the event the legal body revokes its permanent representative, it must replace said representative immediately. The same rules apply in case of death or resignation of the permanent representative.

        Each director must own at least one share during his term of office. However there is no minimal obligation if the director is, at the same time, linked to the company with an employment contract.

        If—at the time of his/her appointment—the director does not own the requested number of shares or if during his/her term, he/she no longer owns the requested number of shares, he/she is considered to have automatically resigned, if he/she has failed to regularize his/her situation within three months.

        The directors' term of office is for three years; one year being the period in between two consecutive annual ordinary general meetings. The office of a director shall terminate at the end of the ordinary general meeting of shareholders which meets on the accounts of the preceding fiscal year and is held in the year during which the office of said director comes to an end.

        The board renews itself on a rotating basis so that this renewal be as equal as possible and in any case be completely achieved for each period of three years. The renewal takes place by rank of seniority. However, if need be, the shareholders meeting may decide that the order of departure is determined by drawing lots during a board meeting.

        The directors may always be re-elected, they may also be revoked at any time by the ordinary shareholders meeting.

        An individual person cannot be entitled to hold more than five director offices in companies registered in France; the offices held in controlled companies (as defined by article L. 233-16 of the French Commercial Code) by the company (WAVECOM), are not taken into account for the purpose hereof.

        In case of death or resignation of one or several director(s), the board of directors may make (a) provisional appointment(s), even between two shareholders meetings.

        The provisional appointments made pursuant to the previous paragraph shall be ratified by the soonest ordinary shareholders meeting.

        Failing ratification, the resolutions and acts completed beforehand by the board remain nonetheless valid.

        When the number of directors has fallen below the requested minimum number, the remaining directors shall summon immediately the ordinary shareholders meeting, with a view to reach the full complement of the board.

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        The director who has been appointed in replacement of another director whose office has not expired remains in office only for the remaining duration of the office of his predecessor.

        An employee of the company may be appointed as a director. His/her contract of employment must however correspond to an effective work. In this case, he does not lose the benefit of his employment contract.

        The number of directors who are linked to the company with an employment contract can exceed neither one third of the directors in office nor five persons.

        The directors cannot be more than sixty five years old. In case one of the directors reaches this limit during his/her office, the oldest director is automatically considered as having resigned at the closest ordinary shareholders meeting.

ARTICLE 11—MEETINGS OF THE BOARD

11.1 

        The meetings of the board of directors take place as often as the interests of the company require.

11.2 

        The chairman summons the directors to the meetings of the board. The notification of the meetings may be made by all means, whether oral or written.

        Furthermore, if there has not been a board meeting for two months, members of the board representing at least one third of the members of the board, or the chief executive officer, may validly summon the board. In such a case, they must indicate the agenda for the meeting.

        In case a Labour Committee exists, the representatives of this committee—appointed pursuant to the Labour Code—must be invited to every meeting of the board.

        The meeting takes place either at the registered office or at any other place in France or abroad.

11.3 

        For the resolutions of the board of directors to be valid, at least half of its members must be present.

        Within the limits set out by article L. 225-37, paragraph 3 of the French Commercial Code and subject to (i) the issuance of the application decrees and (ii) the setting up of internal rules, the board will be entitled to take into account for its quorum and majority rules, the participation of directors by means of videoconference.

        Any decision granting options to purchase new or existing shares of the Company to a director who is also an employee, to the president or to the chief executive officer of the company (when he is also a director), within the framework of an authorization given by the extraordinary shareholders meeting, pursuant to articles L. 225-177 et seq. of the French Commercial Code, shall be taken by a majority vote among the directors who are present or represented. The concerned director as well as any other director who may be granted similar options cannot take part in the vote.

        The resolutions of the board shall be taken at a majority vote; in case of a split decision, the president has casting vote.

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11.4 

        Any director may grant a proxy—even by letter, telegram, telex or fax—to any other director to represent him/her at a board meeting; however, each director is not allowed to have more than one proxy per meeting.

11.5 

        The copies or abstracts of the minutes of the board of directors are certified by the chairman of the board, a chief executive officer, the director temporarily delegated in the duties of president or by a representative duly authorized for that purpose.

ARTICLE 12—POWERS OF THE BOARD

        The board of directors defines the orientations of the company's activity and supervises their implementation. Within the limits set out by the corporate purpose, and the powers expressly granted by law to the general shareholders meetings, the board may deliberate upon the business of the company and take any decisions thereabout.

ARTICLE 13—GENERAL MANAGEMENT OF THE COMPANY—CHAIRMAN

        The board elects one of its members as chairman of the board, who is compulsorily an individual. The board determines the duration of the office of the chairman: it cannot exceed that of the office of a director. The board may revoke the chairman at any time. The remuneration of the chairman is decided by the board of directors.

        The chairman represents the board and organizes its works. The general shareholders meeting must be informed of these works, by the chairman. The chairman is responsible for the good functioning of the company's organs and, in particular, has to check the ability of the board members to perform their mission.

        Pursuant to article 706-43 of the French criminal proceedings Code, the chairman may validly delegate to any person he/she chooses the powers to represent the company within the framework of criminal proceedings which might be taken against the company.

        The chairman cannot be over 65 years old. In case the chairman would reach this limit during his/her office, he/she would automatically be considered as having resigned. However, his/her office is extended until the closest board of directors meeting, during which his successor shall be appointed. Subject to this provision, the chairman of the board may always be re-elected.

ARTICLE 13 bis—CHIEF EXECUTIVE OFFICER

        The general management of the company is performed, under his responsibility, either by the chairman of the board or by another individual, elected by the board and bearing the title of chief executive officer.

        The choice between these two methods of management belongs to the board and must be made as provided for by these bylaws.

        Shareholders and third parties will be informed of this choice in the conditions established by a decree.

        The chief executive officer is vested with the most extensive powers to act under all circumstances on behalf of the company, within the limits set out by the corporate purpose, and subject to the powers expressly granted by law to the board of directors and the general meeting.

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        The chief executive officer represents the company towards the third parties. The company is bound by the acts of the chief executive officer overcoming the corporate purpose, unless it proves that the third party knew such act overcame the corporate purpose or could not ignore so in light of the circumstances; the sole publication of the bylaws not being enough to constitute a sufficient evidence thereof.

        The remuneration of the chief executive officer is decided by the board of directors. The chief executive officer can be revoked at any time by the board of directors. If this revocation is not justified, damages can be allocated to the chief executive officer, excepted when the chief executive officer is also the chairman of the board.

        The chief executive officer shall not hold another chief executive officer mandate in a company located in France except if (i) this company is controlled (as referred to in article L. 233-16 of the French Commercial Code) by the company (WAVECOM) and (ii) if this controlled company's shares are not quoted on a regulated market.

        The chief executive officer cannot be over 65 years old. In case the chief executive officer would reach this limit during his/her office, he/she would automatically be considered as having resigned. However, his/her office is extended until the closest board of directors meeting, during which his/her successor shall be appointed.

ARTICLE 14—DEPUTY CHIEF EXECUTIVE

        Upon the chief executive officer's proposal, the board of directors may appoint one or several individual(s) as deputy chief executive(s) with the aim of assisting the chief executive officer.

        The deputy chief executive may be revoked at any time by the board, upon proposal of the chief executive officer.

        In agreement with the chief executive officer, the board of directors shall determine the scope and duration of the powers delegated to the deputy chief executive. The remuneration of the deputy chief executive is decided by the board of directors.

        Towards third parties, the deputy chief executive has the same powers as the chief executive officer, among which the ability to represent the company in court.

        The deputy chief executive officer cannot be over 65 years old. In case the deputy chief executive officer would reach this limit during his/her office, he/she would automatically be considered as having resigned. However, his/her office is extended until the closest board of directors meeting, during which his/her successor shall be appointed.

        In any case, the maximum number of deputy chief executive(s) cannot exceed five.

ARTICLE 15—AGREEMENTS SUBJECT TO AUTHORIZATION

15.1 

        Securities, endorsement of drafts and guarantees provided for by the company shall be authorized by the board of directors in compliance with the conditions provided for by the law.

15.2 

        Any agreement to be entered into—either directly or indirectly or through an intermediary—between the company and one of its directors, chief executive officer or deputy chief executive, one of its shareholders holding more than 5% of the voting rights or, if it is a company, the company controlling it (as referred to in the article L. 233-3 of the French Commercial Code) is subject to a

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prior authorization of the board of directors. The same authorization applies to the agreements in which these persons are directly or indirectly interested.

        Such prior authorization is not required for agreements concerning usual operations which have been entered into on usual conditions. However, such agreements have to be reported to the chairman by the concerned person. Furthermore, the lists and the purposes of these agreements shall be communicated by the chairman to the board of directors and to the statutory auditors.

        The same shall apply for agreements between the company and another company, whenever one of the directors, chief executive officer(s) or deputy chief executive(s) of the company is the owner, a partner with unlimited liability, a manager, director, chief executive officer, member of the management committee (directoire) or supervisory board (conseil de surveillance) of said company.

        This prior authorization of the board of directors is required pursuant to the conditions provided for by law. It being sprecified that said director shall not be taken into account for the quorum calculation and that his/her vote shall not be taken into consideration for the calculation of the majority.

ARTICLE 16—PROHIBITED AGREEMENTS

        Directors who are not legal bodies are prohibited from taking out loans from the company, under any form whatsoever, from getting an overdraft on a current account or otherwise, and benefiting from a guarantee from the company for the agreements they have entered into with third parties.

        The same prohibition applies to chief executive officers, deputy chief executive officers and to permanent representatives of the directors legal bodies. It also applies to spouses, ascendants and descendants of the persons referred to in the previous paragraph, as well as to any interposed person.

ARTICLE 17—STATUTORY AUDITORS

        Audits of the company shall be carried out, as provided for by law, by one or several statutory auditor(s) who fulfill(s) the eligibility conditions. When the legal conditions are met, the company shall appoint two statutory auditors at least.

        Each statutory auditor is appointed by the ordinary shareholders meeting.

        The ordinary shareholders meeting appoints one or several substitute statutory auditor(s) to replace the auditor(s) who has/have tenure in case of refusal, impediment, resignation or death.

        In case the ordinary shareholders meeting fails to elect a statutory auditor, any shareholder may require that an auditor be judicially appointed, the chairman of the board of directors having been duly called. The office of the judicially appointed auditor shall expire when the ordinary shareholders meeting of shareholders has appointed the statutory auditor(s).

ARTICLE 18—SHAREHOLDERS MEETINGS

        The general meetings of shareholders shall be convened and held as provided for by law.

        In case of emergency, the Labor Committee may go to court in order to ask for the appointment of an agent who will be in charge of convening the general shareholders meeting.

        The Labor Committee may also require the registration of resolutions proposals on the agenda.

        Two members of the Labor Committee, one from the cadres techniciens et agents de maîtrise category, and one from the employés et ouvriers category, may be appointed by the committee in order to assist to the shareholders meetings. Upon their demand, they must be listened to during for all deliberations requiring an unanimous vote from the shareholders.

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        The shareholders meetings are held at the registered office or at any other place mentioned in the convening notices.

        The right to participate to the meetings is subject:

—

with respect to owners of nominative shares, to the registration of the shares under the name of the shareholder on the company registries at least one working day before the date of the shareholders meeting,

—

with respect to owners of bearer shares, to the deposit—at least one working day before the date of the shareholders meeting, in the conditions provided for in article 136 of the decree of March 23^rd, 1967, at the place indicated in the notification of the meeting—of a certificate delivered by their account keeper and certifying the indisponibility of the shares registered in account until the date of the meeting.

        In case the shareholder does not personally attend the meeting, the latter may choose one of the three following possibilities:

—

to give a proxy to another shareholder or to his/her spouse, or

—

to vote by mail, or

—

to address a proxy to the company without indicating any mandate in the conditions provided for by the applicable laws and regulations.

        The meetings are presided over by the chairman of the board of directors or, if he/she is absent, by a director duly delegated for that purpose by the board. Otherwise, the assembly elects its own president.

        The duties of canvasser are carried out by the two members who are present, who accept these duties and who enjoy the greatest number of votes. The officers of the meeting appoint the secretary who may not be a shareholder.

        An attendance sheet is drawn up, in accordance with the law.

        The ordinary shareholders meeting can make valid resolutions only if the shareholders who are present or represented upon first convening notice hold at least one fourth of the voting shares. Upon second convening notice, it may take valid resolutions, no matter how many shareholders are present or represented.

        The resolutions of the ordinary shareholders meeting shall be carried out at the majority vote of the shareholders who are present or represented.

        The extraordinary shareholders meeting can make valid resolutions only if the shareholders who are present or represented upon first convening notice hold at least one third of the voting shares. Upon second convening notice, the extraordinary shareholders meeting can make valid resolutions only if the shareholders who are present or represented hold at least one fourth of the voting shares.

        The resolutions of the extraordinary shareholders meeting shall be taken at a two-third majority of the shareholders who are present or represented.

        The minutes of the meeting are drawn up and the copies or extracts thereof are validly certified by the president of the board, a director carrying out the duties of a general manager or by the secretary of the meeting.

        Ordinary and extraordinary meetings shall carry out their respective powers under the conditions provided for by the law.

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ARTICLE 19—FISCAL YEAR

        Each financial year is of one year beginning on January 1^st and ending on December 31^st.

ARTICLE 20—PROFIT—LEGAL RESERVE FUND

        Out of the profit of any fiscal year—reduced by prior losses, if any—an amount equal to at least 5% thereof is first deducted in order to form the legal reserve fund provided by law. This deduction is no longer required when the legal reserve fund amounts to one tenth of the capital of the company.

        The distributable profit is the profit of a fiscal year, reduced by prior losses and by the funds injected into the reserves as provided for by the previous paragraph, increased by the profits carried forward.

ARTICLE 21—ALLOCATION AND DISTRIBUTION OF PROFITS

        If the accounts of the fiscal year, as approved by the ordinary shareholders meeting, show a distributable profit, as defined by law, the ordinary shareholders meeting decides to allocate it either to one or several reserve fund(s) for a use which it shall determine, to carry it forward or to distribute it as dividends.

        The shareholders meeting may decide upon the distribution of amounts paid out of reserves which it may dispose of, and shall explicitly designate the reserves from which the payments were made. However, the dividends shall be set off by priority on the distributable profit of the fiscal year.

        The shareholders meeting shall determine the terms of payment of dividends; for want of such a determination, these terms shall be determined by the board of directors.

        However the payment of the dividends shall take place within a maximum period of nine months following the closing date of the fiscal year.

        When deciding upon the results of the year, the shareholders meeting may grant to each shareholder, for all or part of the distributable dividend, an option between payment in cash or in shares.

        In the same way, the ordinary shareholders meeting, deciding pursuant to the conditions set up in article L. 232-12 of the French Commercial Code may grant to each shareholder an advance on dividends and—for all or part of said advance—an option between payment of the advance in cash or in shares.

        The offer of payment in shares, the price and conditions of issuance of these shares, as well as the request for payment in shares, the conditions of completion of the increase of capital share are governed by laws and regulations in force.

        When a balance sheet, which has been drawn up during or at the end of the fiscal year, and certified by the statutory auditor(s), shows that the company, since the closing of the previous fiscal year, after making the necessary depreciations and provisions and deducting the prior losses, if any, as well as the amounts which are to be allocated to the reserve fund provided for by law or by these bylaws and taking into account the profits carried forward, has made profits, the board of directors may decide to distribute interim dividends prior to the approval of the accounts of the fiscal year; it may also determine their amount and the date when they should be distributed. The amount of such interim dividends cannot exceed the amount of the profits as defined in this paragraph. In such a case, the board of directors shall not be able to use the option described in the above mentioned paragraphs.

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ARTICLE 22—ACCELERATED DISSOLUTION

        The extraordinary shareholders meeting may, at any time, decide the accelerated dissolution of the company.

ARTICLE 23—EQUITY INFERIOR TO HALF OF THE SHARE CAPITAL

        If—as a consequence of the losses showed by the company's accounts, the net assets (capitaux propres) of the company are reduced below one half of the stock capital of the company, the board of directors must, within four months from the approval of the accounts showing this loss, convene an extraordinary general meeting of shareholders in order to decide whether the company should be dissolved before its statutory term.

        If the dissolution is not declared, the stock capital must—at the latest at the closing of the second fiscal year following that which has showed the losses and subject to the legal provisions concerning the minimum capital of sociétés anonymes be reduced by an amount at least equal to the losses which could not be charged on reserves, if during that period the net assets have not been restored up to an amount at least equal to one half of the capital.

        Failing a meeting of the shareholders meeting as well as when the meeting has not been able validly to take its resolutions, any person with an interest to do so may file a claim before a court for the dissolution of the company.

ARTICLE 24—CONSEQUENCES OF THE DISSOLUTION—LIQUIDATION

        The company is in liquidation at the time of its dissolution, whatever the reason. Its legal personality remains for the needs of the liquidation until it is closed.

        During the liquidation, the general meeting keeps the same powers as when the company existed.

        The shares remain negotiable until the liquidation is closed.

        The dissolution of the company is opposable to third parties only as from the date when the dissolution is published at the Registry of Commerce and Companies.

ARTICLE 25—APPOINTMENT OF LIQUIDATORS—POWERS

        Upon expiration of the duration of the company or in case of accelerated dissolution, a general shareholders meeting shall decide the terms and conditions of liquidation and appoint one or several liquidator(s) whose powers shall be determined by the general meeting. The liquidator(s) will exercise his/her their duties according to the law. The appointment of the liquidators puts an end to the office of the directors, the chairman, the chief executive officer and deputy chief executive officer.

ARTICLE 26—LIQUIDATION

        After payment of the liabilities, the net assets remaining are first used to repay to the shareholders the amount of capital paid for their shares which has not been amortized.

        Any excess, if any, shall be divided between all shares.

        The shareholders are convened at the end of the liquidation operations in order to decide upon the definitive balance, the discharge of the liquidators and to record the closing of the liquidation.

        The closing of the liquidation is published in accordance with the law.

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ARTICLE 27—NOTICES

        All notices required or permitted under these articles of association shall be delivered by registered mail, with acknowledgement of receipt, or by a process server. Simultaneously, a copy shall be sent to the addressee by ordinary mail.

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EXHIBIT 1

ARTICLES OF ASSOCIATION

EX-4.8

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EXHIBIT 4.8

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

GSM PATENT NON ASSERTION AGREEMENT

THIS AGREEMENT is made effective the 19th day of November, 2002 (the "Effective Date")

BETWEEN

WAVECOM S.A., a company duly incorporated in France and having its principal office at 12, Boulevard Garibaldi 92442 Issy-les-Moulineaux Cedex France (hereinafter called "WAVECOM"),

AND

NEC Corporation, a company duly incorporated in Japan and having its principal office at 7-1, Shiba 5-chome, Minato-Ku, Tokyo 108-8001, Japan (hereinafter called "NEC")

        WAVECOM and NEC shall individually be referred to as a "Party" and collectively as the "Parties".

WHEREAS, NEC has declared to ETSI the ownership of essential patents relating to the GSM Standard, as defined below;

WHEREAS, WAVECOM is a company engaged in the design, manufacture and sale of certain products defined below;

WHEREAS, ETSI, to which both NEC and Wavecom are members, provides some rules framing the conditions under which GSM patent licenses are granted to interested parties, namely the ETSI IPR Policy;

WHEREAS, the Parties wishes to settle the GSM related patents licensing issues for their mutual benefits and shall seek ways to resolve any potential disputes related to their patents.

NOW, THEREFORE, in consideration of the mutual rights and obligations set forth in this Agreement, the Parties agree as follows:

1.     DEFINITIONS

        Whenever used in this Agreement, the terms set forth in this article 1 (Definition) shall have the meanings set forth below. Where the context so indicates, a word in the singular form shall include the plural and vice-versa.

        1.1    "Affiliates" of a Party shall mean any corporation or other legal entity (i) the majority (more than 50%) of whose shares or other securities entitled to vote for election of directors (or other managing authority) is now or hereafter owned or controlled by, or owing or controlling, or under common ownership or control with such Party either directly or indirectly or (ii) which does not have outstanding shares or security but the majority (more than 50%) of the equity interest in which is now or hereafter owned or controlled by, or owing or controlling, or under common ownership or control with such Party either directly or indirectly, but only for so long as such ownership or control exists.

        1.2    "GSM Standard" shall mean the technical specifications as promulgated by European Telecommunications Standard Institute and known as the Global System for Mobile Communication, including future modifications and extensions thereof, including GPRS, IS-136, EDGE, DCS 1800/1900. For purposes of the Agreement, UMTS and/or any 3G standards are not GSM Standard(s).

        1.3    "Product" shall mean Handset Product and Module.

15

        1.4    "Handset Product" shall mean any handset product implementing, enabling or using a feature or a function under the GSM Standard.

        1.5    "Module" shall mean any product, other than Handset Product, which enables or uses a feature or a function under the GSM Standard or any part of same, including complete assemblies, subassemblies and chips. Module includes any Modem,—defined as a stand alone voice and/or data communication device operating according to the GSM Standard, which comprises in a common housing a SIM card holder and interfaces to external voice and / or data sources, power supply and antenna—, Board,—defined as a voice and / or data communication device on a printed circuit board with at least one integrated circuit operating according to the GSM Standard which is designed to be integrated into specific devices such as Mobile Phones, Modems et al—or Chip,—defined as a "pure" or "hybrid" integrated circuit operating according to the GSM Standard, for communication implementing any GSM Standard.

        1.6    "Patent" shall mean any patent, including any utility patent, design patent, patent of addition, certificate of addition, certificate or model of utility, issued, applied for or which may claim a priority date on or before December 31, [**] and which one Party has the right to license to the other Party without payment of royalties or any other consideration to any third party.

        1.7    "NEC GSM Related Patent" shall mean any Patent of NEC or its Affiliates having claims which are relevant to the GSM Standard. NEC GSM Related Patent shall not mean nor include any claim of Patent which is related to semiconductor materials, semiconductor structure and semiconductor manufacturing processes. NEC GSM Related Patent includes, but is not limited to, each and every patent which has been or should have been declared to ETSI as an essential patent in the view of the GSM Standard, and the patents listed in the Exhibit A hereto.

        1.8    "NEC GSM Essential Patent" shall mean any NEC GSM Related Patent having claims the infringement of which by Modules cannot be technically avoided in remaining compliant with the GSM Standard.

        1.9    "WAVECOM GSM Related Patent" shall mean any Patent of WAVECOM or its Affiliates having claims which are relevant to the GSM Standard. WAVECOM GSM Related Patent shall not mean nor include any claim of Patent which is related to semiconductor materials, semiconductor structure and semiconductor manufacturing processes.

        1.10    "Customer" shall mean any customer, including distributor, of a Product made by or have made for NEC, WAVECOM or its/their Affiliates.

        1.11    "Manufacturer" shall mean any third party manufacturer of the Products designed by NEC, WAVECOM or its/their Affiliates.

        1.12    "Telecommunication Standard Patents" means Patents applied or issued in relation to a current and/or future telecommunication standard.

2.     NON ASSERTION OF RIGHTS

        2.1    In consideration of articles 2.3, 2.4, 2.5, and 3 of this Agreement:

        (a)   NEC agrees that NEC and its Affiliates will not assert, during the term of this Agreement, directly or indirectly, any cause of action based, in whole or in part, upon the purported infringement by WAVECOM, its Affiliates and/or its or their Manufacturers, of any NEC GSM Related Patents against such parties, as a result of the use, development, making, manufacturing, installation, testing, reparation, offer for sale, sale, lease, importation, distribution or other transfer, directly or indirectly, of Modules which are made by WAVECOM or its Affiliates, or designed by WAVECOM or its Affiliates and made for WAVECOM or its Affiliates by the Manufactures, on, before or after the Effective Date of this Agreement; and,

16

        (b)   NEC agrees that NEC and its Affiliates will not assert, during the term of this Agreement, directly or indirectly, any cause of action based, in whole or in part, upon the purported infringement by Customers of WAVECOM or its Affiliates, of any NEC GSM Essential Patents against the Customers, as a result of the use, installation, testing, reparation, offer for sale, sale, lease, importation, distribution or other transfer, directly or indirectly, of Modules which are made by WAVECOM or its Affiliates, or designed by WAVECOM or its Affiliates and made for WAVECOM or its Affiliates by the Manufactures, on, before or after the Effective Date of this Agreement.

        The non-assertion immunity against such Manufacturer or Customer under this article 2.1 is subject to that such Manufacturer or Customer will not assert its patent(s) to NEC or its Affiliates.

        It is understood and agreed that assertion of NEC GSM Related Patents or NEC GSM Essential Patents by NEC or its Affiliates to a Manufacturer or Customer of WAVECOM or its Affiliates shall not be construed as a breach of this Agreement by NEC or its Affiliates unless WAVECOM sends a written notice to NEC within thirty (30) days from the assertion by NEC or its Affiliates to such Manufacturer or Customer specifying (i) the name of asserting party and asserted party, (ii) the patent number(s) asserted, and (iii) the fact that such Manufacturer or Customer in question is the third party properly subject to the non-assertion immunity under this article 2.1. Further, if NEC or its Affiliates, as the case may be, withdraw the assertion in question within thirty (30) days from the receipt of the written notice from WAVECOM, such assertion by NEC or its Affiliates also shall not be construed as a breach of this Agreement.

        2.2    In consideration of articles 2.3, 2.4, 2.5 and 3 of this Agreement, NEC agrees that, similar to article 2.1 above, no purchaser or transferee of any NEC GSM Related Patents from NEC or its Affiliates and no assignee of the right to enforce any NEC GSM Related Patent from NEC or its Affiliates, will assert, as if it were NEC or its Affiliates, as the case may be, during the term of this Agreement, any NEC GSM Related Patents sold, transferred or assigned, against the parties specified in article 2.1 above as to their respective activities as specified therein.

        2.3.    WAVECOM agrees that WAVECOM and its Affiliates will not assert, during the term of this Agreement, directly or indirectly, any cause of action based, in whole or in part, upon the purported infringement by NEC, its Affiliates, its or their Customers, and/or its or their Manufacturers, of any WAVECOM GSM Related Patents against such parties, as a result of the use, development, making, manufacturing, installation, testing, reparation, offer for sale, sale, lease, importation, distribution or other transfer, directly or indirectly, of Products which are made by NEC or its Affiliates, or designed by NEC or its Affiliates and made for NEC or its Affiliates by the Manufactures, on, before or after the Effective Date of this Agreement.

        The non-assertion immunity against such Manufacturer or Customer under this article 2.3 is subject to that such Manufacturer or Customer will not assert its patent(s) to WAVECOM or its Affiliates.

        It is understood and agreed that assertion of WAVECOM GSM Related Patents by WAVEWCOM or its Affiliates to a Manufacturer or Customer of NEC or its Affiliates shall not be construed as a breach of this Agreement by WAVECOM or its Affiliates unless NEC sends a written notice to WAVECOM within thirty (30) days from the assertion by WAVECOM or its Affiliates to such Manufacturer or Customer specifying (i) the name of asserting party and asserted party, (ii) the patent number(s) asserted, and (iii) the fact that such Manufacturer or Customer in question is the third party properly subject to the non-assertion immunity under this article 2.3. Further, if WAVECOM or its Affiliates, as the case may be, withdraw the assertion in question within thirty (30) days from the receipt of the written notice from NEC, such assertion by WAVECOM or its Affiliates also shall not be construed as a breach of this Agreement.

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        2.4.    WAVECOM agrees that, similar to article 2.3 above, no purchaser or transferee of any WAVECOM GSM Related Patents from WAVECOM or its Affiliates and no assignee of the right to enforce any WAVECOM GSM Related Patent from WAVECOM or its Affiliates, will assert, as if it were NEC or its Affiliates, as the case may be, during the term of this Agreement, any WAVECOM GSM Related Patents sold, transferred or assigned against the parties specified in article 2.3 above as to their respective activities as specified therein.

        2.5    WAVECOM agrees to grant a nonexclusive, royalty-free and, worldwide license to NEC and its Affiliates under [**] Telecommunication Standard Patents owned or controlled by WAVECOM or its Affiliates (counting such patent, all divisions, reissues, re-examinations, continuations, continuations-in-part, renewals, extensions thereof and any foreign counterparts thereof as a single patent) which will be selected by NEC within [**] years from the Effective Date of this Agreement ("Selected Telecommunication Patents"), to make, have made, use, sell or otherwise dispose of the products claimed in Selected Telecommunication Patents and to practice the method claimed in Selected Telecommunication Patents. Upon NEC's request, WAVECOM will send NEC the list of its published patents and applications fallen into the definition of Telecommunication Standard Patents.

3.     CONSIDERATION

        3.1    WAVECOM agrees to pay to NEC the total sum of [**] United States Dollars (US$[**]) as a compensation for the use of NEC GSM Related Patents and NEC GSM Essential Patent prior to January 1, 2002.

        3.2    The amount set forth in article 3.1 above shall be paid by WAVECOM to NEC within thirty (30) days of the Effective Date of this Agreement.

        3.3    In addition to the above initial fee, and in consideration of the license rights and non-assertion obligations provided in this Agreement, WAVECOM shall pay NEC royalty on all Modules used, sold, leased or otherwise disposed of by WAVECOM or its Affiliates at the following royalty rates

        (a)   [**] percent ([**]%): for the Modules used, sold, leased or otherwise disposed of from January 1, 2002 through December 31, 2004; and

        (b)   [**] percent ([**]%): for the Modules used, sold, leased or otherwise disposed of on or after January 1, 2005.

        Such royalty rate shall be applied to the NET SELLING PRICES as defined in article 3.4 below. A Module shall be considered sold when invoiced or, if not invoiced or free, when delivered or disposed of. For convenience and ease of the parties, it is hereby agreed that a royalty shall be due and payable on a worldwide basis regardless of the place of manufacture or sale of a Module.

        3.4    The expression "NET SELLING PRICE" shall mean (i) if sold to a buyer other than an Affiliate of the WAVECOM in an arm's length transaction, the invoice value of the Modules or of parts thereof, after deduction of (a) discounts given in the ordinary course of business that are actually granted, (b) credits or allowances given or made for rejection or return of previously sold Modules, (c) insurance fees, packing, transportation charges, duties and sales taxes actually incurred and paid by WAVECOM or its Affiliates in connection with the delivery of such Modules, and (ii) in all other cases, the fair market values thereof. The word "fair market values" used herein shall mean invoice prices of Modules which would be realized if the same type of Modules had been sold in same quantities to an un-affiliated buyer in an arm's length transaction at the same period, such price not to include the amount of deductible items according to (i) in the preceding sentence.

        3.5    Royalties shall be payable only once for each Modules used, sold, leased or otherwise disposed of by WAVECOM. If a Customer of WAVECOM or its Affiliates is granted patent licenses

18

under NEC GSM Related Patents by NEC with respect to Modules supplied by WAVECOM or its Affiliates (a "Licensed Customer"), NEC may select royalty-accruing point for such Modules whether at the time of sale by WAVECOM, or its Affiliates, or by such Licensed Customer. Accordingly, WAVECOM shall deliver a written notice to NEC (the "Licensed Customer Notice"), in substantially the form of Exhibit C attached hereto, informing NEC of the identity of said Licensed Customer and NEC shall choose which of the two licenses under which a royalty shall be paid to NEC by completing and returning the Customer Notice to WAVECOM; provided, however, that NEC shall motivate its decision to choose either WAVECOM or the Licensed Customer, and provided that if NEC does not complete and return the Licensed Customer Notice within twenty five (25) days of its receipt by NEC, NEC shall be deemed to have selected this Agreement as the license under which royalties are accrued and to have selected WAVECOM as the licensees responsible for payment of any royalties. Any such Licensed Customer Notice shall be considered confidential information subject to section 8 (Publicity) hereof. When NEC selects the time of sale by the Licensed Customer as royalty-accruing point and such Licensed Customer has appropriately paid the consideration under an agreement between NEC and such Licensed Customer regarding such Modules, WAVECOM does not need to pay royalties set forth in article 3.3 regarding such Modules. NEC shall not assert NEC GSM Related Patents against WAVECOM or its Affiliates regarding such Modules. Upon request from NEC, WAVECOM will provide relevant information which is reasonably necessary to implement this article 3.5.

        3.6    In the view of continuous changes in the GSM/GPRS market, if the number GSM/GPRS patent families declared to the ETSI increases to [**] patent families or more, Wavecom shall have the right to request from NEC a renegotiation of the financial terms of this Agreement and the Parties shall enter into good faith negotiations. However, this request cannot happen before a period of [**] years from the Effective Date.

4      REPORTS AND PAYMENTS

        4.1    Within thirty (30) days after the end of each quarterly period, WAVECOM shall furnish to NEC (i) a written statement, in the form attached hereto as Exhibit B with respect to all Modules, used, sold, leased or otherwise disposed of by WAVECOM and its Affiliates during such quarterly period, and (ii) a copy of the conversion rate which is used by WAVECOM in its calculation of the royalties for such quarterly period pursuant to article 4.4(2). If no such Modules have been so used, sold, leased or otherwise disposed of, WAVECOM shall nevertheless furnish NEC the statement showing that fact. The first royalty statement under this article 4.1 shall include the relevant information regarding Modules used, sold, leased or otherwise disposed by WAVECOM and its Affiliates before the Effective Date.

        4.2    Within thirty (30) days after NEC sends an invoice to WAVECOM, WAVECOM shall pay NEC the royalties payable for the reported period specified in article 4.1 above to which the invoice applies hereunder.

        4.3    Within thirty (30) days after the expiration or any termination of this Agreement, WAVECOM shall furnish to NEC a statement specified in article 4.1 above for the unreported period and, within thirty (30) days after NEC sends an invoice to WAVECOM, shall pay NEC royalties accrued during such unreported period.

        4.4    Bank Account etc.:

        (1)   All payments to NEC hereunder shall be in United States dollars and shall be effected by telegraphic transfer to the bank account specified below or otherwise to be specified in writing by NEC;

[**]

19

        (2)   Where sales are made in non US$ currency, they will be converted by the respective conversion rate published in the Wall Street Journal as of the last business day of the reporting period; and

        (3)   The invoices to be sent by NEC to WAVECOM hereunder may be sent, either by facsimile, mail, courier or hand delivery, or by any other appropriate means, to WAVECOM address specified in article 10.2 hereof.

        4.5    WAVECOM shall pay NEC an interest on any overdue payment, commencing on the day such payment becomes due, at an annual rate of ten percent (10%). If such interest rate exceeds the maximum legal rate in the jurisdiction where a claim therefor is being asserted, the interest rate shall be reduced to such maximum legal rate.

        4.6    Any taxes, duties or imposts other than income or profits taxes assessed or imposed upon the sum due hereunder in Japan, shall be borne and discharged by WAVECOM and no part thereof shall be deducted from the amounts payable to NEC under any clause of this Agreement, said amounts to be net to NEC, free of any and all deductions. Notwithstanding the foregoing, in the event sums payable under this Agreement become subject to income or profits taxes under the tax laws of any country and applicable treaties between Japan and such country, WAVECOM may, if and to the extent required by law, withhold from each payment the amount of said income or profits taxes due and required to be withheld from each payment. WAVECOM will promptly furnish and make available to NEC relevant receipts regarding the payment of any country taxes paid over to any country's government on behalf of NEC. Such tax receipts will clearly indicate the amounts that have been withheld from the gross amounts due to NEC. Any and all other taxes, levies, charges or fees will be paid by WAVECOM.

        4.7    WAVECOM shall keep full, clear and accurate records with respect to all Modules made, have made, used, sold, leased or otherwise disposed of by WAVECOM and/or its Affiliates. NEC shall have the right, through an independent accounting firm(s) selected by NEC, to make an examination and audit not more than once annually, during normal business hours and by prior appointment, of all such records and such other records and accounts, as may under recognized accounting practices contain information bearing upon the amount of royalty payable to it under this Agreement. Such independent accounting firm(s) shall be bound in writing to maintain the confidentiality of and not to disclose the contents of such records and accounts accessed, except to the extent necessary to disclose the results of the audit to NEC, or as otherwise required by law or legal process. Any information so revealed to NEC by the independent accounting firm(s) shall be kept in confidence and used solely for the purpose of verifying Wavecom's compliance with this Agreement. Any information acquired by NEC from such audit shall be considered confidential information subject to the terms and conditions of article 8 (publicity) below. Prompt adjustment shall be made by the proper party to compensate or refund for any errors or omissions disclosed by such examination or audit. In the event such examination or audit reveals an underpayment, in excess of ten percent (10%), of royalties for the period under such examination or audit, WAVECOM shall bear the cost of such examination of audit.

5.     WARRANTY AND WARRANTY DISCLAIMER

        5.1.    Authority.    Each Party represents and warrants that it has full capacity, power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement.

        5.2    The Parties warrants that any of their Affiliates shall undertake all obligations contained herein such as if such Affiliates were directly named as a party to this Agreement.

        5.3    Disclaimer of Warranty    EXCEPT FOR THE FOREGOING LIMITED WARRANTIES, THE PARTIES MAKES NO WARRANTY WHATSOEVER THAT THE USE OF A PATENT OF THE PARTY OR ITS AFFILIATES DOES NOT INFRINGE OR MAY CAUSE INFRINGEMENT

20

OF PATENT RIGHTS OWNED OR CONTROLLED BY THIRD PARTIES. IN ADDITION, THE PARTIES DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE

6.     LIMITATION OF LIABILITY

        IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS, USE, DATA OR OTHER ECONOMIC ADVANTAGE) HOWEVER IT ARISES, WHETHER FOR BREACH OF THIS AGREEMENT, INCLUDING BREACH OF WARRANTY, OR IN TORT (INCLUDING NEGLIGENCE), EVEN IF THAT PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

7.     TERM AND TERMINATION

        7.1    This Agreement shall become effective on the Effective Date and shall remain in effect until expiration of the last to expire NEC GSM Related Patent and WAVECOM GSM Related Patent. Notwithstanding the foregoing, the license granted to NEC and its Affiliates under article 2.5 shall remain in effect until the last to expire the patents granted thereunder.

        7.2    In the event that either Party fails to perform its obligations and undertakings under this Agreement, and such default is not cured within thirty (30) days after written notice from the Party not in default, or if such breach is not curable, then the non defaulting Party shall have the right to forthwith terminate this Agreement upon written notice.

        7.3    Notwithstanding anything to the contrary in this Agreement, each Party and their respective Affiliates shall have the right, subject to article 4.3, to use, offer for sale, sale, lease, import, distribute or otherwise transfer, directly or indirectly, any Products or Modules, as the case may be, in the process of manufacture or in finished goods inventory upon the termination of this Agreement.

8.     PUBLICITY

        Either Party may disclose the existence of this Agreement but the financial terms of this Agreement shall be maintained in confidence and the Parties shall not divulge any part thereof to any third party except:

(a)

with the prior written consent of the other Party; or



(b)

to any governmental body having jurisdiction to request and read the same; or



(c)

as otherwise may be required by law or legal processes; or



(d)

to auditors and accountants representing either Party, provided that, in case of such divulgence pursuant to this article 8(d), to the extent permissible by law, such divulging party shall impose equivalent confidentiality obligations on the recipient in writing prior to such divulgence; or



(e)

to its Affiliates provided that, in case of such divulgence pursuant to this article 8(e), to the extent permissible by law, such divulging party shall impose equivalent confidentiality obligations on the recipient in writing prior to such divulgence.

        Notwithstanding the above, no disclosure of this Agreement shall be made pursuant to article 8(b) and 8(c) without the disclosing Party first giving the other Party sufficient time to seek a protective order or otherwise assure the confidentiality of this Agreement as that other Party shall deem appropriate.

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        Notwithstanding anything to the contrary in this Agreement, the provision of this article 8 shall survive termination or expiration of this Agreement.

9.     NON ASSIGNMENT

        The rights and liabilities of the Parties hereto will bind and inure to the benefit of their respective successors, executors and administrators, as the case may be. Neither Party may assign or delegate its obligations, other than as specified herein, under this Agreement either in whole or in part, without the prior written consent of the other Party. Any attempted assignment in violation of the provisions of this article 9 will be void.

10.   GENERAL PROVISIONS

10.1

Nothing in this Agreement shall be construed as:

•

imposing on the Parties any obligation to file any patent application or to secure any NEC GSM Related Patent, WAVECOM GSM Related Patents or Selected Telecommunication Patents or maintain any of such Patent in force;

•

imposing on either Party any obligation to furnish any manufacturing or technical information under this Agreement;

•

conferring any license or right with respect to any trademark, trade or brand name, a corporate name of either Party or any of their Affiliates.

        10.2    Notices.    All notices required or permitted under this Agreement will be in writing, will reference this Agreement and will be deemed given: (i) when delivered personally; (ii) when sent by confirmed telex or facsimile; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a commercial overnight carrier, with written verification of receipt. All communications will be sent to the addresses set forth below to or such other address as may be designated by a Party by giving written notice to the other Party pursuant to this article 10.2:

NEC Corporation		WAVECOM S.A.
7-1 Shiba 5-chome, Minato-ku Tokyo 108-8001, Japan		12, Bd Garibaldi 92442 Issy-les-Moulineaux, Cedex, France
Attn: General Manager Intellectual Property Licensing Division		Attn: V.P. Group Corporate Development & Communications
Facsimile: +81-3-3456-4903		Facsimile: +33 (0)1 46 29 56 60
With a copy to:	General Manager Mobile Terminals Division 4035, Ikebe-Cho, Tsuzuki-Ku, Yokohama 224-8555 Japan	With a copy to: General Counsel, urgent Notice
Facsimile: +81-45-939-2345		Facsimile: +33 (0)1 46 29 94 11

        10.3    Entire Agreement, Amendment.    This Agreement sets forth the entire agreement between the Parties relating to its subject matter and supersedes all prior or contemporaneous agreements, warranties or representations, written or oral, between the Parties relating to subject matter hereof. No modifications, additions or deletions shall be binding upon either Party unless accepted in writing by an authorised representative of each Party.

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        10.4    No Waiver.    All rights and remedies conferred under this Agreement or by any other instrument or law shall be cumulative, and may be exercised singularly or concurrently. Failure by either Party to enforce any provision of this Agreement shall not be deemed a waiver of future enforcement of that or any other provision.

        10.5    Severability.    If any term or provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, this fact shall not invalidate the rest of this Agreement, which shall remain in full force and effect if such invalid or unenforceable term or provision had not been part of this Agreement.

        10.6    Survival.    The terms and conditions of articles 6, 7.3, 8, 10.2, 10.5 10.6, 10.8, 10.9 and 10.10 shall survive termination or expiration of this Agreement.

        10.7    Independent Contractors.    Nothing in this Agreement shall constitute the Parties as entering upon a joint venture or partnership or shall constitute either Party hereto the agent of the other Party for any purpose or in any sense whatsoever.

        10.8    Controlling Law.    This Agreement shall be governed by and construed in accordance with the laws of Japan. The language of this Agreement is the English language and any communication between the parties shall be in English.

        10.9    Disputes.    The Parties shall use their best efforts to settle by way of direct negotiations any dispute which may occur between them in connection with this Agreement and in connection with any Patent dispute. Such efforts shall include escalation of such dispute to the corporate officer level of each Party.

        10.10    Jurisdiction    Any dispute or controversy arising between the Parties out of or in connection with this Agreement, its validity, performance, whether during or after its term, shall be finally resolved by arbitration in accordance with the rules of the Japanese Arbitration Association. The arbitration shall be held in Tokyo (Japan). The arbitration panel shall consist of three (3) arbitrators, one arbitrator appointed by each Party, and a third neutral arbitrator appointed by the other two arbitrators. All arbitration proceedings shall be conducted in the English language. The award rendered thereby shall be final and binding on the Parties hereto. The prevailing Party in the arbitration proceeding shall be entitled to recover its reasonable attorneys' fees, costs and expenses including travel-related expenses.

IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their duly authorised representatives on the date of last signature below:

NEC Corporation	WAVECOM S.A.
By: Hideyuki OGATA	By: Hervé GAGNARD
Title: General Manager of the Intellectual Property Licensing	Title: V.P. Group Corporate Development & Communications Division
Date:	Date:
Signature:	Signature:

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Exhibit A

The list of Representatives of NEC GSM Related Patents

Pat./Appln No.	Inventor(s)	Short Title
Foreign Counterparts

**Confidential Materials omitted and filed separately with the
Securities and Exchange Commission.**

24

Exhibit B

Form of Royalty Statement

Royalty Statement

Subject Agreement: GSM Patent Agreement between NEC and WAVECOM effective as of the 19^th day of November 2002

1)

Reporting Period: From                               through                              

2)

Royalty Calculation:

NET SELLING PRICES (US$) Quantities Royalty Rate(*) Amount of Royalty (US$)

        Names of customers(**):             ,             ,             ,             ,             ,

(*)

[**]%: For the Modules used, sold, leased or otherwise disposed of from January 1, 2002 through December 31, 2004



[**]

%: For the Modules used, sold, leased or otherwise disposed of on or after January 1, 2005.



(**)

Only when the request from NEC provided in article 3.5 is made

3)

Remittance:

Amount of Royalties	: US$
Withholding Tax	: US$
Amount to be Remitted	: US$

Certified by:		(Signature)
		(Printed Name)
		(Title)
		(Company Name)
		(Date)
		(Address)
	/	(Facsimile No. / Telephone No.)

25

Exhibit C

Licensed Customer Notice

        Wavecom proposes to sell Modules to                         , whom WAVECOM believes may currently have a license under NEC GSM Essential Patent to use, develop, make, manufacture, install, test, repair, offer for sale, sale, lease, import, distribute or other transfer, directly or indirectly, of Modules. Pursuant to section 3.5 of the GSM Patent Non assertion Agreement between NEC and WAVECOM effective as of 19^th of November 2002 (the "Agreement"), WAVECOM hereby notifies NEC of such proposed sale and requests NEC complete and return to WAVECOM the following form. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

        To be completed by NEC

        Pursuant to the above notice and to section 3.5 of the Agreement, NEC hereby selects the following party as holding the contract under which royalties are to be accrued and as the party from whom NEC shall collect royalties in connection with the use, development, make, manufacture, installation, test, repair, offer for sale, sale, lease, importation, distribution or otherwise transfer, directly or indirectly, of WAVECOM Modules or the Licensed Customer's products (tick one of the following):

1.

WAVECOM



2.

NEC's comments, if any:

        In the event NEC has not completed and returned this Licensed Customer Notice to WAVECOM within twenty five (25) days of receipt thereof by NEC, then NEC shall be deemed to have selected option 1 above.

NEC Corporation	WAVECOM S.A.
By:	By:
Title:	Title:
Date:	Date:
Signature:	Signature:

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QuickLinks

EXHIBIT 4.8

GSM PATENT NON ASSERTION AGREEMENT
Exhibit A
Exhibit B
Exhibit C

EX-4.9

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EXHIBIT 4.9

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

PATENT LICENSE CONTRACT

        The present Patent License Contract (hereinafter designated as the "Contract"), dated on the effective Date (as defined below), is concluded between:

        Wavecom S.A., a corporation with a capital of 15 107 890 euros, registered in the Nanterre Trade and Companies Register under N^oB 391 838 042, regularly constituted and validly existing under French law, having its registered office and its principal establishment at 12, boulevard Garibaldi, 92442 Issy-les-Moulineaux, France, represented by Mr Hervé GAGNARD, Group Vice President, Corporate Development, duly authorised under the terms of this Contract,

        Hereinafter referred to as "Wavecom",

        and:

        THOMSON Licensing S.A., a corporation with a capital of 42 000 000 euros, registered in the Nanterre Trade and Companies Register under N^o 383 461 191, regularly constituted and validly existing under French law, having its registered office and its principal establishment at 46, quai A. Le Gallo, 92100 Boulogne-Billancourt, France, represented by Mrs Béatrix DE RUSSE, acting by virtue of the powers granted to her by Mr Didier HUCK, the company's President and Chief Executive Officer (Chairman), and hence duly authorised under the terms of this Contract,

        Hereinafter referred to as "THOMSON".

        In the presence of:

        Alcatel S.A., a corporation with a capital of 2 529 416 996 euros, registered in the Paris Trade and Companies Register under N^o 351213624, regularly constituted and validly existing under French law, having its registered office and principal establishment at 54 rue la Boétie, 75008 Paris, France,

        Hereinafter referred to as ("Alcatel"),

        Wavecom and THOMSON being referred to, hereinafter separately or together, as a "Party" or as the "Parties", respectively.

PREAMBLE

        Alcatel owns and controls certain patent rights relating to cellular telephone terminals (particularly GSM and GPRS);

        Alcatel and THOMSON have established strategic collaboration between them in 1998, and Alcatel has acquired a certain percentage in THOMSON's share capital;

        As part of the foregoing strategic collaboration, Alcatel, in its own behalf and in behalf of its Subsidiaries (as defined below), granted to THOMSON, inter alia, (i) the exclusive right to grant licenses to certain third parties under the patent rights of Alcatel and of its Subsidiaries relative to GSM Equipment (as defined below and including but not limited to the Licensed Products (as defined below) as such and the Kits of Licensed Products (as defined below)), and (ii) if appropriate, the exclusive right to collect the amounts due in connection with prior unlicensed use of the said patent rights by the said third parties.

27

        Wavecom designs, develops and markets hardware and software products in the field of wireless radio communication, and particularly GSM/GPRS products;

        Wavecom wishes to obtain the right to manufacture, have manufactured, distribute and sell the said GSM/GPRS products (but to the exclusion of the GSM Equipment) worldwide, to the extent protected by the above-mentioned patent rights of Alcatel and/or of its Subsidiaries.

        Wavecom has requested THOMSON to grant a license to it, in accordance with the rules of the European telecommunications standards Institute («ETSI»), under the foregoing patent rights of Alcatel and/or of the Alcatel Subsidiaries;

        THOMSON is prepared to grant such a license to Wavecom in exchange for payment by WAVECOM of a certain amount taking account the geographical coverage of the Alcatel patents and the fact that the bulk of Wavecom sales of its GSM/GPRS products is to customers in the People's Republic of China manufacturing for the local market.

        NOW THEREFORE, in consideration of the premises and the faithful performance of the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

1.     DEFINITIONS

        For the purpose of the present Contract, the following terms when used with a capital initial letter shall have the respective meanings set forth below:

        1.1   "Licensed Products" designates the Wavecom products, implementing, or making it possible to implement, all or part of the GSM Specifications (as defined below), such as in particular modems, Modules (as defined below), subassemblies of Modules or components of Modules, completely assembled and ready for use, and the Kits of Licensed Products, compatible with and conforming in toto or in part to the GSM Specifications (as defined below). Notwithstanding the foregoing, the foregoing definition excludes the following, which may not be considered as Licensed Products: (i) products conforming to the UMTS (Universal Mobile Telecommunication Systems) specifications, as periodically published particularly by ETSI, and (ii) the GSM Equipment.

        1.2   "Module" designates a grouping of at least two electronic components assembled on a substratum in accordance with defined topography and implementing or making it possible to implement all or part of the GSM Specifications (as defined below).

        1.3   "Kits of Licensed Products" designates kits of Licensed Products that are partly disassembled or completely disassembled;

        1.4   "Essential Patents" designates the patents and/or patent applications, including the certificates of addition and the applications for extension of the said patents in any country whatsoever, for which the implementation of at least one of the claims in the Licensed Products uses all or part of the GSM Specifications.

        1.5   "Licensed Patents" designates the Essential Patents, as well as the patents and patent applications and the extension applications for the said patents in any country whatsoever, and the utility certificates, that are or should have been declared by Alcatel to the ETSI as Essential Patents on GSM Specifications, and all of the patents compatible with or conforming to the GSM Specifications, including but not limited to the patents and/or patent applications identified in Appendix 1 to the present Contract, (i) that belong or come to belong to Alcatel or its Subsidiaries or are or come to be controlled by Alcatel or its Subsidiaries on the Effective Date (as defined below) of the present Contract [**], and (ii) for which Alcatel and/or its Subsidiaries have the right, [**], to grant a license under the terms of the present Contract, without paying remuneration of any kind to a third party (with the exception of possible compensation granted to the inventor or to the inventors of the patent concerned).

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        Appendix 1 shall be updated, by means of a list sent by THOMSON to Wavecom and at the latter's request, no more than once a year.

        1.6   "GSM Specifications" designates the specifications, including the upgrades, future extensions and future modifications, that (i) define a network intended both for digitised voice and a variety of user-data services (ii) allow for connection to public switched (wireline) telephone networks, to the public data transmission networks known as "packet switched" and (iii) are described in greater detail in documents published periodically by the ETSI. For the purpose of this Contract, shall constitute part of the GSM Specifications, the GPRS specifications (Global Packet Radio Service), as well as the IS-136, EDGE and DCS/PCS 1800/1900 specifications; and shall not be considered as GSM Specifications the UMTS specifications (Universal Mobile Telecommunication Systems), as periodically published, in particular by the ETSI.

        1.7   "Improvement" designates any patentable improvement made, during the Duration of the Contract, in the Licensed Patents or any certificate of addition legally dependent on such patents or one or another of their claims.

        1.8   "Subsidiary" (or "Subsidiaries") designates any company of which more than fifty percent (50%) of the shares or partnership shares granting the right to vote for directors or for persons performing functions similar to directors' functions is held, directly or indirectly, but this only for the period of the holding of the above-mentioned interest in the said company or the set of the said companies.

        1.9   "Effective Date" designates the retroactive date of 1 January 2003.

        1.10 "Duration of the Contract" designates the period between the Effective Date of the Contract and 31^st December 2008.

        1.11 "Third Party Entities" designates the independent entities that distribute the Licensed Products, particularly distributors, commission agents or resellers.

        1.12 "Subcontractors" designates the independent entities that manufacture the Licensed Products at the order and in behalf of WAVECOM and in connection with its detailed specifications.

        1.13 "GSM Equipment" designates wireless radio communication equipment (including but not limited to cellular telephony terminals or PDAs) that incorporate the Licensed Products as an element, as well as kits of the said GSM terminals partly disassembled or completely disassembled. Hence by virtue of the definition of the "Licensed Products", the "GSM Equipment" includes, inter alia, the finished terminals known as "GSM/GPRS terminals", and therefore excludes modems.

2.     WAIVER AND LICENSE GRANT

        2.1   In consideration for payment by Wavecom of the amount set forth in Article 3.1. below, THOMSON hereby explicitly waives, in the name and on behalf of Alcatel and of its Subsidiaries, all claims that Alcatel and/or its Subsidiaries may have against Wavecom, its Subsidiaries, their Subcontractors, their customers, and/or their Third Party Entities, in connection with the manufacture by Wavecom, its Subsidiaries, and/or the Subcontractors, and in connection with the use or sale by Wavecom and/or its Subsidiaries, their customers, and/or their Third Party Entities, of the Licensed Products covered by the Licensed Patents prior to the Effective Date.

        2.2   Subject to the provisions of Article 7.2. relative to a limited right granted to Wavecom to assign the present Contract, THOMSON hereby grants to Wavecom and to the Wavecom Subsidiaries a non-exclusive and non-transferable license to the Licensed Patents, for the Duration of the Contract

29

(except in case of early termination), to the exclusion of the right of granting sublicenses, and authorising Wavecom and its Subsidiaries to:

(i)

use, repair, operate, manufacture or have others manufacture the Licensed Products; and



(ii)

lend, offer for sale, sell or any other way dispose of the Licensed Products worldwide.

        To that end, WAVECOM shall be entitled to call on any Subcontractor for manufacture of the Licensed Products and on any Third Party Entities for the supply or sale of the Licensed Products, worldwide.

        2.3   It is explicitly agreed that the license granted does not extend to manufacture or sell by Wavecom or by its Subsidiaries of GSM Equipments, but is limited to the part of the GSM Equipments corresponding to the Licensed Products.

        2.4   The Parties agree to apply the principle known as "exhaustion of the rights". THOMSON hereby explicitly waives, in the name and on behalf of Alcatel and of its Subsidiaries, any claims that Alcatel and/or its Subsidiaries may have against the customers of Wavecom or customers of the Wavecom Subsidiaries in connection with Use by the said customers of the Licensed Products covered by the Licensed Patents for the Duration of the Contract (except in case of early termination). At THOMSON's written request, Wavecom shall have to prove that the entities in question mentioned above are indeed customers of Wavecom and/or its Subsidiaries.

        For the purpose of the present Article 2.4, the term "Use" refers to use of the Licensed Products, integration of the Licensed Products into and/or the combination of the Licensed Products with GSM Equipments, and the sale or an offer to sell the said GSM Equipments. THOMSON's waiver under the present Article 2.4 applies subject to the explicit condition that, with respect to the GSM Equipment or combinations, the said waiver vis-à-vis the above-mentioned customers is strictly limited to the Licensed Patents already implemented in the Licensed Products.

        2.5   Any Improvement made by Alcatel and/or its Subsidiaries during the Duration of the Contract (except in case of early termination) and which is the object of filing of one or several patent applications shall be included by right within the field of application of the license granted by THOMSON to Wavecom without any compensation other than the compensation provided for under the present Contract.

3.     PRICE—Payment determination and conditions

        3.1   In consideration of the waivers granted under this Contract by THOMSON and for the license granted by THOMSON in Article 2.2 above, Wavecom shall pay to THOMSON a non-refundable, fixed and lump sum of [**] excluding taxes ([**]HT).

        THOMSON shall invoice Wavecom as follows:

•

[**], namely [**] excluding taxes, on the date of signature of the Contract



•

[**], namely [**] excluding taxes, on [**]



•

[**], namely [**] excluding taxes, on [**]

        Wavecom shall pay the THOMSON's invoices, including VAT at the rates applicable on the date of payment, by bank transfer to the bank account designated by THOMSON in accordance with the information provided below (or any other future designation appearing in the THOMSON's invoices), in accordance with the following schedule, on Wavecom operation date:

•

[**], namely [**] excluding taxes, on [**], subject to receipt of the invoice on [**] at the latest, or otherwise, [**] after receipt of the THOMSON's invoice.

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•

[**], namely [**] Euros excluding taxes, on [**]



•

[**], namely [**] Euros excluding taxes, on [**]

        [**]

        The Wavecom payments shall be made without any offsetting or recovery whatsoever as compensation. The said payments shall not be considered as made until they have been collected and made freely available to THOMSON in the same way as cash.

        3.2   The amounts payable by virtue of the present Contract shall bear annual interest starting with the time of a notice to pay served by Thomson on Wavecom that has produced no effect for a period of two (2) weeks.

        The applicable interest rate shall be the "taux de base" ("basic interest rate") published by the Banque Française pour le Commerce Extérieur (BFCE) plus two percent (2%) as calculated on an overnight basis in accordance with the publication of the BFCE, starting with the due date of the payment that is due under the present Contract.

        If the interest rate is not published or available, Wavecom shall have to pay interest at the rate of one percent (1%) per month starting with the due date of the payment that is due under the present Contract.

4.     TRADEMARKS

        No Party shall be entitled by virtue of the present Contract to use, in its publications, its advertising or otherwise, the trademarks or the trade names of the other Party (or those of Alcatel or of its Subsidiaries) in any way or in any form whatsoever, without the other Party's prior written approval. The Licensed Products shall be marketed under the WAVECOM trademark or trademarks, which are and shall remain its sole property, or under any other trademark that WAVECOM or the Third Party Entities might consider necessary, with the exception of the trademarks of THOMSON, of Alcatel and of their respective Subsidiaries, or of any other trademark that might give rise to confusion with the said trademarks belonging to THOMSON, to Alcatel or to their respective Subsidiaries.

5.     LIMITATIONS

5.1

No provision of the Contract constitutes or may be construed as:

(i)

a warranty or a representation given or made by THOMSON, Alcatel and/or an Alcatel's Subsidiary with respect to the validity or the scope of the Licensed Patents;

(ii)

an obligation for THOMSON, Alcatel and/or an Alcatel Subsidiary to file a patent application, to obtain a patent or to maintain in effect or defend a patent or a patent application; or

(iii)

an obligation incumbent on THOMSON, Alcatel and/or an Alcatel Subsidiary to provide technical information or manufacturing information, or any information concerning pending and unpublished patent applications of THOMSON, Alcatel or an Alcatel Subsidiary (with the exception of any updating of Appendix 1 supplied by THOMSON as indicated in Article 1.5.).

        5.2   If a patent included in the Licensed Patents is declared void or unenforceable, any payment due by Wavecom by virtue of Article 3 prior to the said event shall remain due and shall not be reimbursed to Wavecom.

        5.3   THOMSON warrants that on the Effective Date and for the Duration of the Contract, Alcatel, in its own name and in the name of its Subsidiaries, has granted to THOMSON (i) the exclusive right to grant a license under the Licensed Patents to Wavecom and to the Wavecom

31

Subsidiaries for the Licensed Products, and (ii) the exclusive right to grant the waivers mentioned in Articles 2.1 and 2.4. On the Effective Date and, subject to the explicit conditions set forth in Articles 5.1 and 5.2, for the Duration of the Contract, THOMSON warrants the material existence of the Licensed Patents. With the exception of the foregoing, THOMSON does not make any representation and does not grant any warranty or indemnification of any nature whatsoever, explicit or implicit, in its name or in the name of Alcatel or of one of the Alcatel Subsidiaries.

        5.4   THOMSON, whether in its own name and on its own behalf or in the name and in behalf of Alcatel and of its Subsidiaries, does not assume any liability of any nature whatsoever with respect to the manufacture, use, sale or any other act of disposal by Wavecom or its Subsidiaries, its Subcontractors or Third Party Entities, purchasers or Wavecom assignees, of the Licensed Products including or made by using the Licensed Patents.

        5.5   No provision of the present Contract constitutes or may be construed as a guarantee or a representation given or made by THOMSON, Alcatel or an Alcatel Subsidiary with respect to the commercial usefulness of a Licensed Patent or of a Licensed Product.

        5.6   No provision of the present Contract constitutes or may be construed as a warranty or a representation given or made by THOMSON, Alcatel or an Alcatel Subsidiary that the manufacture, use or sale of the Licensed Products does not infringe on any patent or any other intellectual property right held by any third party whatsoever.

        5.7   THOMSON and ALCATEL represent that they are unaware of any facts that might cast doubt on the rights that are the object of the present Contract.

6.     DURATION AND TERMINATION OF THE CONTRACT

        6.1   The present Contract shall enter into effect, subject to the provisions set forth in Article 9.6. below, as of the Effective Date. Unless it is terminated before its expiration pursuant to the provisions of Article 6, the present Contract shall remain in effect and shall produce all of its effects for the Duration of the Contract.

        6.2   In the event of a substantial failure on the part of one of the Parties in meeting any one whatsoever of its obligations under the present Contract, the other Party shall be entitled to terminate the present Contract by right after a notice to perform, served by means of a notification, has produced no effect for a period of sixty (60) days, without prejudice to any damages and interest or compensation that it might claim. Such a notification shall have to explicit mention the obligation that has not been respected and the intention of calling on the benefit of the present provision. If THOMSON terminates the Contract in case of a substantial failure by Wavecom in meeting any one whatsoever of its obligations in connection with the present Contract, such termination shall not affect any payments the rights to which have fallen due under this Contract (including the interest corresponding thereto) prior to such termination.

        6.3   If one or the other of the Parties becomes insolvent or is subjected to bankruptcy or liquidation proceedings, the other Party shall be entitled, by means of a written notification, to terminate the present Contract immediately and by right.

        6.4   Should a third party not controlling Wavecom (in the meaning of Article 1.8.) as of the Effective Date of the present Contract come to take control or own Wavecom after the Effective Date, THOMSON may, if it so wishes, immediately terminate the present Contract by right by means of a written notification.

        6.5   At the latest six (6) months before the end of the Duration of Contract, the Parties shall meet to jointly consider the possibility of renewing the Contract for a duration and on financial terms that the Parties shall determine in good faith. The Parties agree to take account, in determination of the

32

financial counterpart that the Parties shall determine as being possibly due from Wavecom to THOMSON in connection with renewal of the Contract, of the circumstances existing at the time of negotiation of the Contract renewal, particularly the number of Essential Patents declared to the ETSI by all of the holders of Essential Patents and the possible new geographical distribution of Wavecom sales of Licensed Products.

        6.6   In case of termination (except early termination by THOMSON under Article 6.2 above) or at the time of expiration of the present Contract, WAVECOM shall have (i) a period of nine (9) months starting with the date of termination or of expiration to sell the Licensed Products that it has in stock on the date of notification of such early termination or on the date of expiration of the Contract, as long as Wavecom notifies THOMSON on the said date of the relevant details concerning such stocks, and then notify THOMSON again thereof at the time of each sale during the said period authorised for disposing of the stocks; and (ii) a period of four (4) months to complete or to have others complete the manufacture of the Licensed Products undergoing manufacture, and/or to make or to have others make the Licensed Products for which Wavecom has firm orders on the date of termination or of expiration of the Contract, as long as sale of the said Licensed Products by Wavecom occurs within the period and on the conditions set forth in point (i) above.

7.     ASSIGNMENT

        7.1   THOMSON may freely assign the present Contract to any person, company or entity, provided the terms and conditions of the present Contract are binding on the said assignee and on Alcatel. Upon such an assignment, and provided the assignee has first provided Wavecom with a written commitment to comply with the terms and conditions of the present Contract, Wavecom shall release THOMSON from any obligations under the present Contract.

        7.2   Wavecom may assign the present Contract to one of its Subsidiaries, provided that:

(i)

Wavecom remains personally liable to THOMSON under the present Contract, and



(ii)

the designated assignee is prepared and consents to meet, and is able to meet, all of the Wavecom obligations resulting from the present Contract, and so signifies by delivery to THOMSON, prior to the transfer, of a signed document by which the designated assignee undertakes, in a form and with contents satisfying the THOMSON demands, also to accept and to meet Wavecom's obligations resulting from the present Contract.

        With the exception of the conditions stipulated in the present Article 7.2., neither the present Contract nor the license granted under the present Contract may be assigned or transferred by Wavecom, in toto or in part.

        7.3   At any time during the Duration of the Contract, upon written request of THOMSON, Wavecom shall provide THOMSON with a complete list of its subsidiaries existing at that time conforming to the definition given in article 1.9. concerning "Subsidiaries".

8.     INFRINGEMENT

        8.1   Neither THOMSON, nor Alcatel nor any one of the Alcatel Subsidiaries shall be liable to Wavecom or to the Wavecom Subsidiaries for any infringement or alleged infringement of a patent, patent application or other intellectual property right held by a third party resulting from the manufacture, sale or use of the Licensed Products by or for Wavecom or the Wavecom Subsidiaries.

        8.2   If Wavecom or its Wavecom Subsidiaries become aware of any infringement whatsoever by third parties of one or several Licensed Patents, Wavecom shall have to inform THOMSON of that fact by means of a written notice, it being understood and accepted that THOMSON shall decide, in its

33

sole judgement, as to whether it is opportune to adopt measures to remedy the said infringement and the nature of such measures.

        8.3   No provision of the present Contract may be construed:

(a)

as imposing any obligation on a Party or on Alcatel or on the Alcatel Subsidiaries to file proceedings or actions for infringement of Licensed Patents by virtue of these presents or to become a defendant in any proceedings or action filed by a third party disputing or affecting the validity of one of the said Licensed Patents hereunder; or



(b)

as granting, in any way whatsoever, a license or the right to copy or to imitate the appearance, commercial presentation and/or design of a product of THOMSON, Alcatel, and/or the Alcatel Subsidiaries; or



(c)

as granting, in any way whatsoever, any license whatsoever relating to the rights granted pursuant to Article 2 of this Contract to manufacture, use, sell or dispose in any other way of a product or device other than the Licensed Products; or



(d)

as granting, in any way whatsoever, a license in relation to the patent applications or patents (whether or not they cover the Licensed Products, in toto or in part) filed in the name of THOMSON itself or of the THOMSON Subsidiaries.

        8.4   Notwithstanding Articles 8.2 and 8.3 (a) above, Alcatel and Thomson undertake to actively pursue their policy regarding granting licenses vis-à-vis third parties that do not hold patent rights necessary for the design and/or manufacture and/or marketing of their own GSM/GPRS products, competing with the Licensed Products or the GSM Equipment covered by the Licensed Patents, insofar as that does not risk impairing the interests of Thomson and/or of Alcatel.

9.     MISCELLANEOUS PROVISIONS

9.1

Notification

        Any notification issued in connection with the present Contract shall have to be served by registered mail with receipt. The notification shall become effective on the day following the date of receipt by the addressee, at the following addresses:

For THOMSON, at:	THOMSON Licensing S.A. 46, quai Alphonse Le Gallo 92648 Boulogne Cedex—France A l'attention de Béatrix de Russé Fax: 33 (0) 1 41 86 56 38
For Wavecom, at:	Wavecom S.A. 12 boulevard Garibaldi 92442 Issy-Les-Moulineaux—France A l'attention du Directeur Général With a copy to the Chief Legal Officer

or to other addresses that may be indicated in advance and in writing (in the way set forth above) by one Party to the other.

9.2

Amendment

        This Contract or any provision thereof may be amended or modified only with the Parties' unanimous agreement expressed in a written document signed by a duly authorised officer of each of the Parties and explicitly stipulating the Parties' intention to amend the present Contract.

34

9.3

Absence of Waiver

        If, at any time whatsoever, a Party chooses not to assert its rights resulting from any stipulation whatsoever of the present Contract, the said action or omission in that respect shall not be construed as a waiver of its rights resulting from the stipulation in question or from any other stipulation of the present Contract.

9.4

Construction

        The headings of the Articles constituting this Contract have been used for the sole purpose of convenience in consulting the present Contract, and may not be taken as opposed to the provisions contained in the said Articles.

9.5

Dispute settlement

        The present Contract shall be governed by, subject to and construed in accordance with French law, without application of the rules regarding conflict of laws.

        Any dispute regarding the present Contract, and in particular concerning the existence, validity, construction, application or failure of application of the present Contract, whether the said dispute occurs before or after termination of the present Contract, shall be settled by amicable settlement by the Parties insofar as that is possible. Failing such a settlement, any dispute between the Parties shall be settle solely by the Tribunal de Grande Instance (High Court) of Paris, even in case of the existence of several defendants or of third party notice.

9.6

Governmental Approvals

        In case the present Contract or any clause or aspect whatsoever hereof is subject to a control, authorisation and/or consent of a governmental ministry, department, agency or entity, the present Contract shall not enter into effect or acquire binding force until the time at which the controls, approvals or authorisations have been carried out with a favourable result by each of the governmental entities having or asserting jurisdiction in this connection. In case the competent government entity has refused to issue or been unable to issue a favourable opinion with respect to one of the provisions or to any aspect whatsoever of the present Contract before the ninetieth (90^th) day following the date of signature hereof by the Parties having signed last, the present Contract shall be considered as void ab initio, as if it had not been signed by either Party hereof.

9.7

Binding Force

        The present Contract shall produce its effects and be binding on THOMSON, Alcatel and Wavecom, as well as their successors or assigns authorised in accordance with Article 7 hereof.

9.8

Partial Invalidity of the Present Contract

        If a part or a clause of the present Contract becomes inapplicable or conflicts with the law applicable at any place whatsoever, the validity of the remaining provisions or clauses shall not be affected by the said situation. The said inapplicable provision or clause shall then be replaced, by the Parties' mutual consent, by another applicable provision or clause that corresponds in its effects or comes as close as possible to the effect of the said inapplicable provision or clause.

9.9

Entire Agreement

        The present Contract, together with its Appendix, (i) constitutes the entire understanding between the Parties, (ii) replaces and cancels all prior representations, warranties and agreements between the Parties relating hereto, and (iii) is concluded in accordance with the said understandings.

35

9.10

Administrative Expenses

        Wavecom shall bear all of the expenses and charges resulting from the payments made by virtue of the present Contract, including in particular the stamp fees, taxes and deductions, as well as all additional expenses relating to authorisations and any other administrative expenses connected with the grant of licenses, to the exclusion of payment of the annual amounts, expenses and costs necessary for maintenance of the validity of the Licensed Patents, which are and shall be borne by Alcatel, insofar Alcatel decides to pay the said annual amounts, expenses and maintenance costs.

9.11

Confidentiality

        As further set forth below, Wavecom and THOMSON undertake to maintain confidentiality with respect to the terms and conditions of the present Contract for the Duration of the Contract and during the two (2) years following termination or expiration of the Contract.

        Wavecom and THOMSON shall not disclose information concerning the content of the present Contract except to the employees of Wavecom, of the Wavecom Subsidiaries, of THOMSON or of the THOMSON Subsidiaries, and only insofar as necessary for purposes of proper performance of the Contract.

        Furthermore THOMSON shall be entitled to disclose information, insofar as that is required under its agreement signed with Alcatel, to Alcatel subject to observance by the latter of the confidentiality obligations contained in the present Contract. Furthermore Wavecom, THOMSON and Alcatel shall be entitled to disclose information to their independent sworn Auditors. Pursuant to Article 9.6. of the present Contract, Wavecom and THOMSON are authorised to disclose basic information to the national authorities insofar as such disclosure is required to obtain a necessary authorisation. Notwithstanding any provision to the contrary in the present Contract, the Parties acknowledge that WAVECOM is listed on the NASDAQ and on the New Market, and that it is released from its confidentiality obligation to the extent required for compliance with the said exchanges' rules and regulations, or with any market rules and regulations whatsoever.

        On the occasion of signature of the present Contract, at Wavecom's request, Wavecom and Alcatel shall jointly draw up a press release aimed at strengthening the principles presiding over its negotiation.

        IN WITNESS WHEREOF, each of the Parties to the present Contract and Alcatel have had the present Contract signed in five (5) originals, two (2) for THOMSON, two for Wavecom and one for Alcatel, by their representatives or authorised agents duly empowered for that purpose.

36

        Appendix 1            Extract from the list of Licensed Patents on the Effective Date

THOMSON LICENSING S.A.	WAVECOM S.A.
By: /s/  BÉATRIX DE RUSSÉ Béatrix de Russé	By: /s/  HERVÉ GAGNARD Hervé Gagnard
Acting by virtue of the powers granted to her by Mr Didier HUCK, the Company's President and Chief Executive Officer	Group Vice President, Corporate Development
(name and status)	(name and status)
Paris France                                            2003	Issy-Les-Moulineaux, France                                     2003
(place and date)	(place and date)
For acceptance ALCATEL
By: /s/  ANDRÉ-PASCAL CHAUVIN André-Pascal Chauvin
Vice President Licensing
Paris, France                                            2003

37

Appendix 1

To the Patents License Contract

Extract from the list of Patents under Concession on the Effective Date

**Confidential Materials omitted and filed separately with the
Securities and Exchange Commission.**

38

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EXHIBIT 4.9

PATENT LICENSE CONTRACT

EX-8

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EXHIBIT 8

List of subsidiaries

Name	Jurisdiction
Wavecom Asia Pacific Limited	Hong Kong SAR -PRC
Wavecom Inc	Delaware, USA
Arguin Communications Inc	California, USA
Wavecom Korea Co. Ltd	Korea
Wavecom Deutschland GMBH	Federal Republic of Germany
Wavecom Northern Europe Ltd	United Kingdom

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EXHIBIT 8

List of subsidiaries

EX-10

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EXHIBIT 10

CONSENT OF INDEPENDENT AUDITORS

        We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-11728) pertaining to the Employees Stock Options Plan, Founders Warrants and other Warrants of Wavecom S.A., of our report dated February 10, 2003, except for Note 15 for which the date is April 4, 2003, with respect to the consolidated financial statements of Wavecom, included in its Annual Report (Form 20-F) for the year ended December 31, 2002, filed with the Securities and Exchange Commission.

ERNST & YOUNG Audit

Represented by John Mackey

Paris, France
May 21, 2003

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EXHIBIT 10

CONSENT OF INDEPENDENT AUDITORS

EX-99.1

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EXHIBIT 99.1

WAVECOM S.A.

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 of Wavecom S.A. (the "Company") on Form 20-F for the year ended December 31, 2002 as filed with the Securities and Exchange Commission (the "Report"), I, Aram Hékimian, Chief Executive Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 21, 2003 By: /s/  ARAM HÉKIMIAN Aram Hékimian
Chief Executive Officer
(Principal Executive Officer)

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

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EXHIBIT 99.1

EX-99.2

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EXHIBIT 99.2

WAVECOM S.A.

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 of Wavecom S.A. (the "Company") on Form 20-F for the year ended December 31, 2002 as filed with the Securities and Exchange Commission (the "Report"), I, Deborah Choate, Chief Financial Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 21, 2003 By: /s/  DEBORAH CHOATE Deborah Choate
Chief Financial Officer
(Principal Financial Officer)

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

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EXHIBIT 99.2